SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC
485BPOS, 1994-11-07
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Registration No.	811-3097
		2-69308


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		   X   

Pre-Effective Amendment No.        						        

Post-Effective Amendment No.         27        				
	   X   

REGISTRATION STATEMENT UNDER THE INVEST COMPANY ACT OF 1940	   X   

Amendment No.       27       							   X   

SMITH BARNEY MANAGED MUNICIPALS FUND INC.
fornerly Smith Barney Shearson Managed Municipals Fund Inc.
(Exact name of Registrant as Specified in Charter)

    388 Greenwich Street, New York, New York  10013     
(Address of Principal Executive Offices)  (Zip Code)

Registrant's Telephone Number, including Area Code:  (212) 72   3    -9218

Christina T. Sydor
Secretary

Smith Barney         Managed Municipals Fund Inc.
   388 Greenwich Street
New York, New York 10113    
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment Becomes effective

It is proposed that this filing will become effective:
   
      		immediately upon filing pursuant to Rule 485(b)
  X  		on November 7, 1994 pursuant to Rule 485(b)
      		60 days after filing pursuant to Rule 485(a)
    		on __________________ pursuant to Rule 485(a)
    
                                                                           
                                                                          

The Registrant has previously filed a declaration of indefinite 
registration of its shares pursuant to Rule 24f-2 under the Investment 
Company Act of 1940, as amended.  Registrant's Rule 24f-2 Notice for the 
fiscal year ended February 28, 1994 was filed on April 28, 1994.



SMITH BARNEY          MANAGED MUNICIPALS FUND INC.

FORM N-1A

CROSS REFERENCE SHEET

PURSUANT TO RULE 495(a)

Part A
Item No.


Prospectus Caption


1.  Cover Page

Cover Page


2.  Synopsis

Prospectus Summary


3.  Financial Information

   Financial Highlights    


4.  General Description of 
Registrant

Cover Page; Prospectus 
Summary;        Investment 
Objective and Management Policies; 
Additional Information


5.  Management of the Fund

Management of the Fund; Annual 
Report; Distributor; Additional 
Information


6.  Capital Stock and Other 
Securities

Investment Objective and 
Management Policies;         
Dividends, Distributions and 
Taxes; Additional Information


7.  Purchase of Securities Being 
Offered

       Purchase of Shares; 
Redemption of Shares; Valuation of 
Shares;    Shareholder 
Services    ; 
Distributor;   Minimum Account 
Size     and Additional Information


8.  Redemption of Repurchase

       Purchase of Shares; 
Redemption of Shares;        


9.  Legal Proceedings

Not Applicable





Part B
Item No.

Statement of Additional 
Information Caption


10.  Cover Page

Cover page


11.  Table of Contents

Table of Contents


12.  General Information and 
History

Distributor; Additional 
Information


13.  Investment Objectives and 
Policies

Investment Objective and 
Management Policies

14.  Management of the Fund

Management of the Fund; 
Distributor


15.  Control Persons and Principal 
Holders of                                   
       Securities

Management of the Fund


16.  Investment Advisory and Other 
Services

Management of the Fund; 
Distributor


17.  Brokerage Allocation

Investment Objective and 
Management Policies; 
   Distributor    


18.  Capital Stock and Other 
Securities

Purchase of Shares;    Redemption 
of Shares    ; Taxes


19.  Purchase, Redemption and 
Pricing of           
       Securities Being Offered

Purchase of Shares; Redemption of 
Shares; Distributor; Valuation of 
Shares;    Shareholder Services    


20.  Tax Status
Taxes


21.  Underwriters

Distributor


22.  Calculation of Performance 
Data

Performance Data


23.  Financial Statements

Financial Statements



P R O S P E C T U S 

                                                   SMITH BARNEY
 
                                                        Managed
                                              
                                                     Municipals

                                                      Fund Inc.

                                               NOVEMBER 7, 1994
 
                                  Prospectus begins on page one



[LOGO OF SMITH BARNEY MUTUAL  Smith Barney Mutual Funds  
FUNDS APPEARS HERE]           Investing for your future.  
                              Everyday.                  



 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS                                       
                                               NOVEMBER 7, 1994     
    
 388 Greenwich Street     
    
 New York, New York 10013     
    
 (212) 723-9218     
   
  Smith Barney Managed Municipals Fund Inc. (the "Fund") is a diversified
municipal bond fund that seeks to maximize current interest income exempt 
from
Federal income taxes to the extent consistent with prudent investment 
manage-
ment and preservation of capital.     
   
  This Prospectus sets forth concisely certain information about the Fund,
including sales charges, distribution and service fees and expenses, that 
pro-
spective investors will find helpful in making an investment decision. 
Invest-
ors are encouraged to read this Prospectus carefully and retain it for 
future
reference.     
   
  Additional information about the Fund is contained in a Statement of 
Addi-
tional Information dated November 7, 1994, as amended or supplemented from 
time
to time, that is available upon request and without charge by calling or 
writ-
ing the Fund at the telephone number or address set forth above or by 
contact-
ing a Smith Barney Financial Consultant. The Statement of Additional 
Informa-
tion has been filed with the Securities and Exchange Commission (the "SEC") 
and
is incorporated by reference into this Prospectus in its entirety.     
   
SMITH BARNEY INC.     
Distributor
 
GREENWICH STREET ADVISORS
Investment Adviser
   
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.     
Administrator
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES 
AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 
SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY 
IS
A CRIMINAL OFFENSE.
 
 
                                                                               
1
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 TABLE OF CONTENTS
 
<TABLE>
  <S>                                           <C>
  PROSPECTUS SUMMARY                              3
 --------------------------------------------------
  FINANCIAL HIGHLIGHTS                           10
 --------------------------------------------------
  INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES   13
 --------------------------------------------------
  MUNICIPAL BONDS                                19
 --------------------------------------------------
  VALUATION OF SHARES                            20
 --------------------------------------------------
  DIVIDENDS, DISTRIBUTIONS AND TAXES             21
 --------------------------------------------------
  PURCHASE OF SHARES                             23
 --------------------------------------------------
  EXCHANGE PRIVILEGE                             31
 --------------------------------------------------
  REDEMPTION OF SHARES                           35
 --------------------------------------------------
  MINIMUM ACCOUNT SIZE                           36
 --------------------------------------------------
  PERFORMANCE                                    37
 --------------------------------------------------
  MANAGEMENT OF THE FUND                         38
 --------------------------------------------------
  DISTRIBUTOR                                    40
 --------------------------------------------------
  ADDITIONAL INFORMATION                         41
 --------------------------------------------------
</TABLE>
 
2
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY
 
The following summary is qualified in its entirety by detailed information
appearing elsewhere in this Prospectus and in the Statement of Additional
Information. Cross references in this summary are to headings in the
Prospectus. See "Table of Contents."
   
INVESTMENT OBJECTIVE The Fund is an open-end, diversified, management 
invest-
ment company designed to maximize current interest income which is excluded
from gross income for Federal income tax purposes to the extent consistent 
with
prudent investment management and preservation of capital. The Fund seeks 
to
achieve its objective by investing in a professionally managed portfolio 
con-
sisting principally of intermediate- and long-term municipal securities 
issued
by state or municipal governments and by public authorities ("Municipal
Bonds"). Intermediate- and long-term municipal securities have remaining 
matu-
rities at the time of purchase of between three and twenty years. Under 
normal
market conditions, the Fund will invest at least 80% of its total assets in
such obligations. See "Investment Objective and Management Policies."     
   
ALTERNATIVE PURCHASE ARRANGEMENTSThe Fund offers several classes of shares
("Classes") to investors designed to provide them with the flexibility of
selecting an investment best suited to their needs. The general public is
offered three Classes of shares: Class A shares, Class B shares and Class C
shares, which differ principally in terms of sales charges and rate of 
expenses
to which they are subject. A fourth Class of shares, Class Y shares, is 
offered
only to investors meeting an initial investment minimum of $5,000,000. See
"Purchase of Shares" and "Redemption of Shares."     
   
  Class A Shares. Class A shares are sold at net asset value plus an 
initial
sales charge of up to 4.00% and are subject to an annual service fee of 
0.15%
of the average daily net assets of the Class. The initial sales charge may 
be
reduced or waived for certain purchases. Purchases of Class A shares, which
when combined with current holdings of Class A shares offered with a sales
charge equal or exceed $500,000 in the aggregate, will be made at net asset
value with no sales charge, but will be subject to a contingent deferred 
sales
charge ("CDSC") of 1.00% on redemptions made within 12 months of purchase. 
See
"Prospectus Summary--Reduced or No Initial Sales Charge."     
   
  Class B Shares. Class B shares are offered at net asset value subject to 
a
maximum CDSC of 4.50% of redemption proceeds, declining by 0.50% the first 
year
after purchase and by 1.00% each year thereafter to zero. This CDSC may be
waived for certain redemptions. Class B shares are subject to an     
 
                                                                               
3
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
annual service fee of 0.15% and an annual distribution fee of 0.50% of the
average daily net assets of the Class. The Class B shares' distribution fee 
may
cause that Class to have higher expenses and pay lower dividends than Class 
A
shares.     
   
  Class B Shares Conversion Feature. Class B shares will convert 
automatically
to Class A shares, based on relative net asset value, eight years after the
date of the original purchase. Upon conversion, these shares will no longer 
be
subject to an annual distribution fee. In addition, a certain portion of 
Class
B shares that have been acquired through the reinvestment of dividends and 
dis-
tributions ("Class B Dividend Shares") will be converted at that time. See
"Purchase of Shares--Deferred Sales Charge Alternatives."     
   
  Class C Shares. Class C shares are sold at net asset value with no 
initial
sales charge. They are subject to an annual service fee of 0.15% and an 
annual
distribution fee of 0.55% of the average daily net assets of the Class, and
investors pay a CDSC of 1.00% if they redeem Class C shares within 12 
months of
purchase. The CDSC may be waived for certain redemptions. The Class C 
shares'
distribution fee may cause that Class to have higher expenses and pay lower
dividends than Class A shares. Purchases of Class C shares, which when 
combined
with current holdings of Class C shares of the Fund equal or exceed 
$500,000 in
the aggregate, should be made in Class A shares at net asset value with no
sales charge, and will be subject to a CDSC of 1.00% on redemptions made 
within
12 months of purchase.     
   
  Class Y Shares. Class Y shares are available only to investors meeting an
initial investment minimum of $5,000,000. Class Y shares are sold at net 
asset
value with no initial sales charge or CDSC. They are not subject to any 
service
or distribution fees.     
   
  In deciding which Class of Fund shares to purchase, investors should 
consider
the following factors, as well as any other relevant facts and 
circumstances:
       
  Intended Holding Period. The decision as to which Class of shares is more
beneficial to an investor depends on the amount and intended length of his 
or
her investment. Shareholders who are planning to establish a program of 
regular
investment may wish to consider Class A shares; as the investment 
accumulates
shareholders may qualify for reduced sales charges and the shares are 
subject
to lower ongoing expenses over the term of the investment. As an 
alternative,
Class B and Class C shares are sold without any initial sales charge so the
entire purchase price is immediately invested in the Fund. Any investment 
    
 
4
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
return on these additional invested amounts may partially or wholly offset 
the
higher annual expenses of these Classes. Because the Fund's future return 
can-
not be predicted, however, there can be no assurance that this would be the
case.     
   
  Finally, investors should consider the effect of the CDSC period and any 
con-
version rights of the Classes in the context of their own investment time
frame. For example, while Class C shares have a shorter CDSC period than 
Class
B shares, they do not have a conversion feature, and therefore, are subject 
to
an ongoing distribution fee. Thus, Class B shares may be more attractive 
than
Class C shares to investors with longer term investment outlooks.     
   
  Investors investing a minimum of $5,000,000 must purchase Class Y shares,
which are not subject to any initial sales charge, CDSC or service or 
distribu-
tion fees. The maximum purchase amount for Class A shares is $4,999,999, 
Class
B shares is $249,999 and Class C shares is $499,999. There is no maximum 
pur-
chase amount for Class Y shares.     
   
  Reduced or No Initial Sales Charge. The initial sales charge on Class A
shares may be waived for certain eligible purchasers, and the entire 
purchase
price would be immediately invested in the Fund. In addition, Class A share
purchases, which when combined with current holdings of Class A shares 
offered
with a sales charge equal or exceed $500,000 in the aggregate, will be made 
at
net asset value with no initial sales charge, but will be subject to a CDSC 
of
1.00% on redemptions made within 12 months of purchase. The $500,000 
aggregate
investment may be met by adding the purchase to the net asset value of all
Class A shares held in funds sponsored by Smith Barney Inc. ("Smith 
Barney")
listed under "Exchange Privilege." Class A share purchases may also be 
eligible
for a reduced initial sales charge. See "Purchase of Shares." Because the 
ongo-
ing expenses of Class A shares may be lower than those for Class B and 
Class C
shares, purchasers eligible to purchase Class A shares at net asset value 
or at
a reduced sales charge should consider doing so.     
   
  Smith Barney Financial Consultants may receive different compensation for
selling each Class of shares. Investors should understand that the purpose 
of
the CDSC on the Class B and Class C shares is the same as that of the 
initial
sales charge on the Class A shares.     
   
  See "Purchase of Shares" and "Management of the Fund" for a complete 
descrip-
tion of the sales charges and service and distribution fees for each Class 
of
shares and "Valuation of Shares," "Dividends, Distributions and Taxes" and 
"Ex-
change Privilege" for other differences between the Classes of shares.     
 
                                                                               
5
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
PURCHASE OF SHARES Shares may be purchased through the Fund's distributor,
Smith Barney, a broker that clears securities transactions through Smith 
Barney
on a fully disclosed basis (an "Introducing Broker") or an investment 
dealer in
the selling group. See "Purchase of Shares."     
   
INVESTMENT MINIMUMS Investors in Class A, Class B and Class C shares may 
open
an account by making an initial investment of at least $1,000 for each 
account.
Investors in Class Y shares may open an account for an initial investment 
of
$5,000,000. Subsequent investments of at least $50 may be made for all 
Classes.
The minimum initial investment requirement for Class A, Class B and Class C
shares and the subsequent investment requirement for all Classes through 
the
Systematic Investment Plan described below is $100. There is no minimum 
invest-
ment requirement in Class A for unitholders who invest distributions from a
unit investment trust ("UIT") sponsored by Smith Barney. See "Purchase of
Shares."     
   
SYSTEMATIC INVESTMENT PLAN The Fund offers shareholders a Systematic 
Investment
Plan under which they may authorize the automatic placement of a purchase 
order
each month or quarter for Fund shares in an amount of at least $100. See 
"Pur-
chase of Shares."     
   
REDEMPTION OF SHARES Shares may be redeemed on each day the New York Stock
Exchange, Inc. ("NYSE") is open for business. See "Purchase of Shares" and 
"Re-
demption of Shares."     
   
MANAGEMENT OF THE FUND Greenwich Street Advisors, a division of Smith 
Barney
Mutual Funds Management Inc. ("Greenwich Street Advisors"), serves as the
Fund's investment adviser. Smith Barney Mutual Funds Management Inc. 
("SBMFMI")
provides investment advisory and management services to investment 
companies
affiliated with Smith Barney. SBMFMI is a wholly owned subsidiary of Smith 
Bar-
ney Holdings Inc. ("Holdings"). Holdings is a wholly owned subsidiary of 
The
Travelers Inc. ("Travelers"), a diversified financial services holding 
company
engaged, through its subsidiaries, principally in four business segments:
Investment Services, Consumer Finance Services, Life Insurance Services and
Property & Casualty Insurance Services.     
   
  SBMFMI serves as the Fund's administrator and The Boston Company 
Advisors,
Inc. ("Boston Advisors") serves as the Fund's sub-administrator. Boston 
Advi-
sors is a wholly owned subsidiary of The Boston Company, Inc. ("TBC"), 
which in
turn is an indirect wholly owned subsidiary of Mellon Bank Corporation
("Mellon"). See "Management of the Fund."     
 
 
6
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
EXCHANGE PRIVILEGE Shares of a Class may be exchanged for shares of the 
same
class of certain other funds of the Smith Barney Mutual Funds at the 
respective
net asset values next determined, plus any applicable sales charge 
differen-
tial. See "Exchange Privilege."     
   
VALUATION OF SHARES Net asset value of the Fund for the prior day generally 
is
quoted daily in the financial section of most newspapers and is also 
available
from Smith Barney Financial Consultants. See "Valuation of Shares."     
   
DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income are 
declared
daily and paid on the last business day of the Smith Barney statement 
month.
Distributions of net realized long- and short-term capital gains, if any, 
are
declared and paid annually after the end of the fiscal year in which they 
were
earned. See "Dividends, Distributions and Taxes."     
   
REINVESTMENT OF DIVIDENDS Dividends and distributions paid on shares of any
Class will be reinvested automatically, unless otherwise specified by an
investor, in additional shares of the same Class at current net asset 
value.
Shares acquired by dividend and distribution reinvestments will not be 
subject
to any sales charge or CDSC. Class B shares acquired through dividend and 
dis-
tribution reinvestments will become eligible for conversion to Class A 
shares
on a pro rata basis. See "Dividends, Distributions and Taxes."     
   
RISK FACTORS AND SPECIAL CONSIDERATIONS There can be no assurance that the 
Fund
will achieve its investment objective. The Fund has the right to invest, 
with-
out limit, in "private activity bonds," the income for which may be taxable 
as
a specific preference item for purposes of the Federal alternative minimum 
tax.
See "Investment Objective and Management Policies" and "Dividends, 
Distribu-
tions and Taxes." The Fund generally will invest at least 75% of its assets 
in
securities rated not lower than A, MIG 3 or Prime-1 (P-1) by Moody's 
Investors
Service, Inc. ("Moody's") or A, SP-2 or A-3 by Standard & Poor's 
Corporation
("S&P"), and may invest the remainder of its assets in securities rated as 
low
as C by Moody's or D by S&P. Securities in the fourth highest rating 
category,
though considered to be investment grade, have speculative characteristics.
Securities rated as low as D are extremely speculative and are in actual
default of interest and/or principal payments. There are risks connected 
with
the use of certain portfolio strategies by the Fund, such as the use of 
when-
issued securities, municipal bond index futures contracts and put and call
options on interest rate futures as hedging devices, and municipal leases. 
See
"Investment Objective and Management Policies--Certain Portfolio 
Strategies."
    
                                                                               
7
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
THE FUND'S EXPENSESThe following expense table lists the costs and expenses 
an
investor will incur either directly or indirectly as a shareholder of the 
Fund,
based upon the maximum sales charge or maximum CDSC that may be incurred at 
the
time of purchase or redemption and, unless otherwise noted, the Fund's 
operat-
ing expenses for its most recent fiscal year:     
 
<TABLE>
<CAPTION>
                                                  CLASS A CLASS B CLASS C 
CLASS Y
- ---------------------------------------------------------------------------
- ------
<S>                                               <C>     <C>     <C>     
<C>
SHAREHOLDER TRANSACTION EXPENSES
  Maximum sales charge imposed on purchases
  (as a percentage of offering price)              4.00%   None    None    
None
  Maximum CDSC
  (as a percentage of original cost or redemption
  proceeds, whichever is lower)                    None*   4.50%   1.00%   
None
- ---------------------------------------------------------------------------
- ------
ANNUAL FUND OPERATING EXPENSES
  (as a percentage of average net assets)
  Management fees                                  0.50%   0.50%   0.50%   
0.50%
  12b-1 fees**                                     0.15    0.65    0.70    
None
  Other expenses***                                0.07    0.10    0.07    
0.07
- ---------------------------------------------------------------------------
- ------
TOTAL FUND OPERATING EXPENSES                      0.72%   1.25%   1.27%   
0.57%
- ---------------------------------------------------------------------------
- ------
</TABLE>
   
*   Purchases of Class A shares which when combined with current holdings 
of
    Class A shares offered with a sales charge, equal or exceed $500,000 in 
the
    aggregate, will be made at net asset value with no sales charge, but 
will be
    subject to a CDSC of 1.00% on redemptions made within 12 months.     
   
**  Upon conversion of Class B shares to Class A shares, such shares will 
no
    longer be subject to a distribution fee. Class C shares do not have a
    conversion feature and, therefore, are subject to an ongoing 
distribution
    fee. As a result, long-term shareholders of Class C shares may pay more 
than
    the economic equivalent of the maximum front-end sales charge permitted 
by
    the National Association of Securities Dealers, Inc.     
   
*** For Class C and Class Y shares, "Other expenses" have been estimated 
based
    on expenses incurred by Class A shares because Class C and Class Y 
shares
    were not available for purchase prior to November 7, 1994.     
   
    The sales charge and CDSC set forth in the above table are the maximum
charges imposed on purchases or redemptions of Fund shares and investors 
may
actually pay lower or no charges depending on the amount purchased and, in 
the
case of Class B, Class C and certain Class A shares, the length of time the
shares are held. See "Purchase of Shares" and "Redemption of Shares." Smith
Barney receives an annual 12b-1 service fee of 0.15% of the value of 
average
daily net assets of Class A shares. Smith Barney also receives, with 
respect to
Class B shares, an annual 12b-1 fee of 0.65% of the value of average daily 
net
assets of that Class, consisting of a 0.50% distribution fee and a 0.15% 
serv-
ice     

 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PROSPECTUS SUMMARY (CONTINUED)
   
fee and with respect to Class C shares, Smith Barney receives an annual 
12b-1
fee of 0.70% of the value of average daily net assets of the Class, 
consisting
of a 0.55% distribution fee and a 0.15% service fee. "Other expenses" in 
the
above table include fees for shareholder services, custodial fees, legal 
and
accounting fees, printing costs and registration fees.     
       
          
EXAMPLEThe following example is intended to assist an investor in 
understanding
the various costs that an investor in the Fund will bear directly or 
indirect-
ly. The example assumes payment by the Fund of operating expenses at the 
levels
set forth in the table above. See "Purchase of Shares," "Redemption of 
Shares"
and "Management of the Fund."     
 
<TABLE>
<CAPTION>
                                              1 YEAR 3 YEARS 5 YEARS 10 
YEARS*
- ---------------------------------------------------------------------------
- ---
<S>                                           <C>    <C>     <C>     <C>
An investor would pay the following expenses
on a $1,000 investment, assuming (1) 5.00%
annual return and (2) redemption at the end
of each time period:
 Class A                                       $47     $62     $79     $126
 Class B                                        58      70      79      151
 Class C                                        23      40      70      153
 Class Y                                         6      18      32       71
An investor would pay the following expenses
on the same investment, assuming the same
annual return and
no redemption:
 Class A                                        47      62      79      126
 Class B                                        13      40      69      151
 Class C                                        13      40      70      153
 Class Y                                         6      18      32       71
- ---------------------------------------------------------------------------
- ---
</TABLE>
   
*Ten-year figures assume conversion of Class B shares to Class A shares at 
the
end of the eighth year following the date of purchase.     
   
  The example also provides a means for the investor to compare expense 
levels
of funds with different fee structures over varying investment periods. To
facilitate such comparison, all funds are required to utilize a 5.00% 
annual
return assumption. However, the Fund's actual return will vary and may be
greater or less than 5.00%. THIS EXAMPLE SHOULD NOT BE CONSIDERED A 
REPRESENTA-
TION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS 
THAN
THOSE SHOWN.     
 
                                                                               
9
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 FINANCIAL HIGHLIGHTS
   
Except where otherwise noted, the following information has been audited by
Coopers & Lybrand, independent accountants, whose report thereon appears in 
the
Fund's Annual Report dated February 28, 1994. This information should be 
read
in conjunction with the financial statements and related notes that also 
appear
in the Fund's Annual Report, which is incorporated by reference into the 
State-
ment of Additional Information.     
   
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR:     
 
<TABLE>
<CAPTION>
                          SIX MONTHS        YEAR        YEAR        YEAR        
YEAR        YEAR
                             ENDED         ENDED       ENDED       ENDED       
ENDED       ENDED
                            8/31/94      2/28/94***   2/28/93*    2/28/92     
2/28/91     2/28/90
                          (UNAUDITED)
<S>                       <C>            <C>         <C>         <C>         
<C>         <C>
Operating performance:
Net asset value,
beginning of year             $16.13         $16.71      $15.62      $14.98      
$15.00      $14.83
- ---------------------------------------------------------------------------
- -------------------------
Income from investment
operations:
Net investment income           0.47           0.90        1.00        1.05        
1.06        1.12
Net realized and
unrealized gain/ (loss)
on investments                 (0.47)          0.30        1.64        0.66        
0.04        0.15
- ---------------------------------------------------------------------------
- -------------------------
Total from investment
operations                      0.00           1.20        2.64        1.71        
1.10        1.27
- ---------------------------------------------------------------------------
- -------------------------
Less distributions:
Distributions from net
investment income              (0.48)         (0.87)      (1.00)      
(1.05)      (1.09)      (1.10)
Distributions in excess
of net investment income          --          (0.01)         --          --          
- --          --
Distributions from net
realized gains                    --          (0.90)      (0.52)         --          
- --          --
Return of capital                 --             --       (0.03)      
(0.02)      (0.03)         --
- ---------------------------------------------------------------------------
- -------------------------
Total distributions            (0.48)         (1.78)      (1.55)      
(1.07)      (1.12)      (1.10)
- ---------------------------------------------------------------------------
- -------------------------
Net asset value, end of
year                          $15.65         $16.13      $16.71      $15.62      
$14.98      $15.00
- ---------------------------------------------------------------------------
- -------------------------
Total return++                  0.02%          7.41%      17.92%      
11.79%       7.65%       8.78%
- ---------------------------------------------------------------------------
- -------------------------
Ratios to average net
assets supplemental
data:
Net assets, end of
period
(in 000's)                $1,792,912     $1,847,184  $1,795,160  $1,597,606  
$1,461,345  $1,478,202
Ratio of operating
expenses to average net
assets                          0.72%**        0.72%       0.64%       
0.59%       0.58%       0.58%
Ratio of net investment
income to average net
assets                          5.96%**        5.43%       6.30%       
6.83%       7.15%       7.43%
Portfolio turnover rate           49%           131%        206%        
173%       0.83%        115%
- ---------------------------------------------------------------------------
- -------------------------
</TABLE>
   
  * On November 6, 1992, the Fund commenced selling Class B shares. Shares
    issued prior to November 6, 1992 were designated Class A shares.     
   
 ** Annualized.     
*** Per share amounts have been calculated using the monthly average share
    method, which more appropriately presents the per share data for the 
period
    since the use of the undistributed method does not accord with results 
of
    operations.
 ++ Total return represents aggregate total return for the period indicated 
and
    does not reflect any applicable sales charges.
 
10
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 FINANCIAL HIGHLIGHTS (CONTINUED)
   
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR:     
 
<TABLE>
<CAPTION>
                               YEAR       YEAR      YEAR      YEAR      
YEAR
                              ENDED      ENDED     ENDED     ENDED     
ENDED
                             2/28/89    2/28/88   2/28/87   2/28/86   
2/28/85
<S>                         <C>         <C>       <C>       <C>       <C>
Operating performance:
Net asset value, beginning
of year                         $15.05    $15.88    $15.67    $13.39    
$13.33
- ---------------------------------------------------------------------------
- ----
Income from investment
operations:
Net investment income             1.11      1.13      1.16      1.22      
1.23
Net realized and
unrealized gain/(loss) on
investments                      (0.06)    (0.83)     0.64      2.36      
0.18
- ---------------------------------------------------------------------------
- ----
Total from investment
operations                        1.05      0.30      1.80      3.58      
1.41
- ---------------------------------------------------------------------------
- ----
Less distributions:
Distributions from net
investment income                (1.11)    (1.12)    (1.16)    (1.22)    
(1.23)
Distributions in excess of
net investment income               --        --        --        --        
- --
Distributions from net
realized gains                   (0.16)    (0.01)    (0.43)    (0.08)    
(0.12)
Return of capital                   --        --        --        --        
- --
- ---------------------------------------------------------------------------
- ----
Total distributions              (1.27)    (1.13)    (1.59)    (1.30)    
(1.35)
- ---------------------------------------------------------------------------
- ----
Net asset value, end of
year                            $14.83    $15.05    $15.88    $15.67    
$13.39
- ---------------------------------------------------------------------------
- ----
Total return++                    7.31%     2.33%    12.35%    28.25%    
11.44%
- ---------------------------------------------------------------------------
- ----
Ratios to average net
assets/supplemental data:
Net assets, end of year
(in 000's)                  $1,519,508  $601,172  $788,557  $516,352  
$251,944
Ratio of operating
expenses to average net
assets                            0.66%     0.57%     0.59%     0.66%     
0.69%
Ratio of net investment
income to average net
assets                            7.48%     7.59%     7.42%     8.48%     
9.40%
Portfolio turnover rate             37%       20%       15%       53%       
70%
- ---------------------------------------------------------------------------
- ----
</TABLE>
 
++ Total return represents aggregate total return for the period indicated 
and
   does not reflect any applicable sales charges.
 
                                                                              
11
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 FINANCIAL HIGHLIGHTS (CONTINUED)
 
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
 
<TABLE>
<CAPTION>
                                            SIX MONTHS       YEAR     
PERIOD
                                               ENDED        ENDED     ENDED
                                              8/31/94     2/28/94*** 
2/28/93*
                                            (UNAUDITED)
<S>                                         <C>           <C>        <C>
Operating performance:
Net asset value, beginning of period           $16.13        $16.71   
$15.81
- ---------------------------------------------------------------------------
- ----
Income from investment operations:
Net investment income                            0.42          0.81     
0.32
Net realized and unrealized gain/(loss) on
investments                                     (0.47)         0.31     
1.42
- ---------------------------------------------------------------------------
- ----
Total from investment operations                (0.05)         1.12     
1.74
- ---------------------------------------------------------------------------
- ----
Less distributions:
Distributions from net investment income        (0.43)        (0.79)   
(0.31)
Distributions in excess of net investment
income                                             --         (0.01)      -
- -
Distributions from net realized gains              --         (0.90)   
(0.52)
Return of capital                                  --            --    
(0.01)
- ---------------------------------------------------------------------------
- ----
Total distributions                             (0.43)        (1.70)   
(0.84)
- ---------------------------------------------------------------------------
- ----
Net asset value, end of period                 $15.65        $16.13   
$16.71
- ---------------------------------------------------------------------------
- ----
Total return++                                  (0.25%)        6.86%   
11.26%
- ---------------------------------------------------------------------------
- ----
Ratios to average net assets supplemental
data:
Net assets, end of period (in 000's)         $451,880      $349,633   
61,355
Ratio of operating expenses to average net
assets                                           1.24%**       1.25%    
1.24%**
Ratio of net investment income to average
net assets                                       5.44%**       4.90%    
5.70%**
Portfolio turnover rate                            49%          131%     
206%
- ---------------------------------------------------------------------------
- ----
</TABLE>
 
  * The Fund commenced selling Class B shares on November 6, 1992.
 ** Annualized.
*** Per share amounts have been calculated using the monthly average share
    method, which more appropriately presents the per share data for the 
period
    since the use of the undistributed method does not accord with results 
of
    operations.
   
 ++ Total return represents aggregate total return for the period indicated
    and does not reflect any applicable sales charges.     
   
Prior to November 7, 1994, the Fund did not offer Class C or Class Y shares
and, accordingly, no comparable financial information is available at this 
time
for those Classes.     
 
12
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
       
       
       
       
       
  The Fund seeks to maximize current interest income exempt from Federal 
income
taxes to the extent consistent with prudent investment management and the 
pres-
ervation of capital by investing in a professionally managed, diversified 
port-
folio consisting of municipal securities that pay interest which is 
excluded
from gross income for Federal income tax purposes and that are issued by or 
on
behalf of the states, territories and possessions of the United States and 
the
District of Columbia and their political subdivisions, agencies and
instrumentalities, or multi-state agencies or authorities, generally known 
as
"Municipal Bonds." This investment objective may not be changed without the
approval of the holders of a majority of the Fund's outstanding shares. 
There
is no guarantee that the Fund's investment objective will be achieved.
 
  The Fund will operate subject to a fundamental investment policy 
providing
that, under normal market conditions, the Fund will invest at least 80% of 
its
net assets in Municipal Bonds. For temporary defensive purposes, the Fund 
may
invest without limit in "Temporary Investments" as described below.
   
  The Fund generally will invest at least 75% of its total assets in 
obliga-
tions rated no lower than A, MIG 3 or Prime-1 (P-1) by Moody's or A, SP-2 
or A-
3 by S&P. If notes are not rated, the issuer's bond rating must be at least 
A
as determined by Moody's or S&P. The balance of the Fund's assets may be
invested in securities rated as low as C by Moody's or D by S&P, or 
comparable
unrated securities. Securities in the fourth higher rating category, though
considered to be investment grade, have speculative characteristics. 
Securities
rated as low as D are extremely speculative and are in actual default of 
inter-
est and/or principal payments. The Fund's average weighted maturity will 
vary
from time to time based on the judgment of Greenwich Street Advisors. The 
Fund
intends to focus on intermediate- and long-term obligations; that is, 
obliga-
tions with remaining maturities at the time of purchase of between three 
and
twenty years. It should be emphasized that ratings are relative and 
subjective
and are not absolute standards of quality. Although these ratings are 
initial
criteria for selection of portfolio investments, the Fund also will make 
its
own evaluation of these securities. Among the factors that will be 
considered
are the long-term ability of the issuers to pay principal and interest and 
gen-
eral economic trends.     
 
  While the market values of low-rated and comparable unrated securities 
tend
to react less to fluctuations in interest rate levels than the market 
values of
 
                                                                              
13
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
 
higher-rated securities, the market values of certain low-rated and 
comparable
unrated municipal securities also tend to be more sensitive than higher-
rated
securities to short-term corporate and industry developments and changes in
economic conditions (including recession) in specific regions or localities 
or
among specific types of issuers. In addition, low-rated securities and 
compara-
ble unrated securities generally present a higher degree of credit risk. 
During
an economic downturn or a prolonged period of rising interest rates, the 
abil-
ity of issuers of low-rated and comparable unrated securities to service 
their
payment obligations, meet projected goals or obtain additional financing 
may be
impaired. The risk of loss due to default by such issuers is significantly
greater because low-rated and comparable unrated securities generally are
unsecured and frequently are subordinated to the prior payment of senior
indebtedness. The Fund may incur additional expenses to the extent it is
required to seek recovery upon a default in the payment of principal or 
inter-
est on its portfolio holdings.
 
  While the market for municipal securities is considered to be generally 
ade-
quate, the existence of limited markets for particular low-rated and 
comparable
unrated securities may diminish the Fund's ability to (a) obtain accurate 
mar-
ket quotations for purposes of valuing such securities and calculating its 
net
asset value and (b) sell the securities at fair value either to meet 
redemption
requests or to respond to changes in the economy or in the financial 
markets.
The market for certain low-rated and comparable unrated securities has not
fully weathered a major economic recession. Any such recession, however, 
would
likely disrupt severely the market for such securities and adversely affect 
the
value of the securities and the ability of the issuers of these securities 
to
repay principal and pay interest thereon.
 
  Fixed-income securities, including low-rated securities and comparable
unrated securities, frequently have call or buy-back features that permit 
their
issuers to call or repurchase the securities from their holders, such as 
the
Fund. If an issuer exercises these rights during periods of declining 
interest
rates, the Fund may have to replace the security with a lower yielding 
securi-
ty, thus resulting in a decreased return to the Fund.
 
  A description of the rating systems of Moody's and S&P is contained in 
the
Statement of Additional Information.
 
  The Fund may invest without limit in "municipal leases," which are 
obliga-
tions issued by state and local governments or authorities to finance the
acquisition of equipment or facilities. The interest on such obligations 
is, in
the opin-
 
14
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
       
ion of counsel to the issuers, excluded from gross income for Federal 
income
tax purposes. Although lease obligations do not constitute general 
obligations
of the municipality for which the municipality's taxing power is pledged, a
lease obligation is ordinarily backed by the municipality's covenant to 
budget
for, appropriate and make the payments due under the lease obligation. 
However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment 
purchase
payments in future years unless money is appropriated for such purpose on a
yearly basis. In addition to the "non-appropriation" risk, these securities
represent a relatively new type of financing that has not yet developed the
depth of marketability associated with more conventional bonds. Although 
"non-
appropriation" lease obligations are often secured by the underlying 
property,
disposition of the property in the event of foreclosure might prove 
difficult.
There is no limitation on the percentage of the Fund's assets that may be
invested in municipal lease obligations. In evaluating municipal lease 
obliga-
tions, Greenwich Street Advisors will consider such factors as it deems 
appro-
priate which may include: (a) whether the lease can be canceled; (b) the 
abil-
ity of the lease obligee to direct the sale of the underlying assets; (c) 
the
general creditworthiness of the lease obligor; (d) the likelihood that the
municipality will discontinue appropriating funding for the leased property 
in
the event such property is no longer considered essential by the 
municipality;
(e) the legal recourse of the lease obligee in the event of such a failure 
to
appropriate funding; (f) whether the security is backed by a credit 
enhancement
such as insurance; and (g) any limitations which are imposed on the lease 
obli-
gor's ability to utilize substitute property or services rather than those 
cov-
ered by the lease obligation.
 
  The Fund may invest without limit in private activity bonds. Interest 
income
on certain types of private activity bonds issued after August 7, 1986 to
finance nongovernmental activities is a specific tax preference item for 
pur-
poses of the Federal individual and corporate alternative minimum taxes. 
Indi-
vidual and corporate shareholders may be subject to a Federal alternative 
mini-
mum tax to the extent that the Fund's dividends are derived from interest 
on
these bonds. Dividends derived from interest income on all Municipal Bonds 
are
a component of the "current earnings" adjustment item for purposes of the 
Fed-
eral corporate alternative minimum tax.
 
  The Fund may invest without limit in debt obligations which are repayable 
out
of revenue streams generated from economically related projects or 
facilities
or debt obligations whose issuers are located in the same state. Sizeable
investments in such obligations could involve an increased risk to the Fund
should
 
                                                                              
15
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
   
any of such related projects or facilities experience financial 
difficulties.
In addition, the Fund may invest up to 15% of its total assets in 
securities
with contractual or other restrictions on resale and other instruments 
which
are not readily marketable. Notwithstanding the foregoing, the Fund shall 
not
invest more than 10% of its assets in securities (excluding those subject 
to
Rule 144A under the Securities Act of 1993, as amended, that are determined 
to
be liquid by Greenwich Street Advisors) that are restricted. The Fund also 
is
authorized to borrow up to 10% of its total assets (including the amount 
bor-
rowed) valued at market less liabilities (not including the amount 
borrowed) to
meet anticipated redemptions and to pledge its assets to the same extent in
connection with such borrowings.     
 
  Further information about the Fund's investment policies, including a 
list of
those restrictions on the Fund's investment activities that cannot be 
changed
without shareholder approval, appears in the Statement of Additional 
Informa-
tion.
 
 CERTAIN PORTFOLIO STRATEGIES
 
  In attempting to achieve its investment objective, the Fund may employ, 
among
others, the following portfolio strategies.
 
  When-Issued Securities.New issues of Municipal Bonds frequently are 
offered
on a when-issued basis, which means that delivery and payment for such 
securi-
ties normally take place within 45 days after the date of the commitment to
purchase. The payment obligation and the interest rate that will be 
received on
when-issued securities are fixed at the time the buyer enters into the 
commit-
ment. As a result, the yields obtained on such securities may be higher or
lower than the yields available in the market on the dates when the 
instruments
actually are delivered to the buyers. In addition, during the period before
delivery and payment, there is no accrual of interest and there may be 
fluctua-
tions in the price of the securities. The Fund will establish a segregated
account with the Fund's custodian consisting of cash, obligations issued or
guaranteed by the United States government or its agencies or 
instrumentalities
("U.S. government securities") or other high grade debt obligations in an
amount equal to the purchase price of the Fund's when-issued commitments. 
Plac-
ing securities rather than cash in the segregated account may have a 
leveraging
effect on the Fund's net assets. The Fund generally will make commitments 
to
purchase such Municipal Bonds on a when-issued basis only with the 
intention of
actually acquiring the securities, but the Fund may sell the securities 
before
the settlement date if it is deemed advisable.
 
16
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
          
  Temporary Investments.Under normal market conditions, the Fund may hold 
up to
20% of its total assets in cash or money market instruments, including 
taxable
money market instruments ("Temporary Investments"). In addition, when 
Greenwich
Street Advisors believes that market conditions warrant, including when 
accept-
able Municipal Bonds are unavailable, the Fund may take a temporary 
defensive
posture and invest without limitation in Temporary Investments. Securities 
eli-
gible for short-term investment by the Fund are tax-exempt notes of 
municipal
issuers having, at the time of purchase, a rating within the three highest
grades of Moody's or S&P or, if not rated, having an issue of outstanding
Municipal Bonds rated within the three highest grades of Moody's or S&P, 
and
certain taxable short-term instruments having quality characteristics 
compara-
ble to those for Municipal Bonds. To the extent the Fund holds Temporary
Investments, it may not achieve its investment objective. Since its 
commence-
ment of operations, the Fund has not found it necessary to make taxable 
Tempo-
rary Investments, and it is not expected that such action will be 
necessary.
       
  Financial Futures and Options Transactions.To hedge against a decline in 
the
value of Municipal Bonds it owns or an increase in the price of Municipal 
Bonds
it proposes to purchase, the Fund may enter into financial futures 
contracts
and invest in options on financial futures contracts that are traded on a
domestic exchange or board of trade. The futures contracts or options on
futures contracts that may be entered into by the Fund will be restricted 
to
those that are either based on an index of Municipal Bonds or relate to 
debt
securities the prices of which are anticipated by Greenwich Street Advisors 
to
correlate with the prices of the Municipal Bonds owned or to be purchased 
by
the Fund.     
 
  In entering into a financial futures contract, the Fund will be required 
to
deposit with the broker through which it undertakes the transaction an 
amount
of cash or cash equivalents equal to approximately 5% of the contract 
amount.
This amount, which is known as "initial margin," is subject to change by 
the
exchange or board of trade on which the contract is traded, and members of 
the
exchange or board of trade may charge a higher amount. Initial margin is in 
the
nature of a performance bond or good faith deposit on the contract that is
returned to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. In accordance with a process 
known
as "marking-to-market," subsequent payments, known as "variation margin," 
to
and from the broker will be made daily as the price of the index or 
securities
underlying the futures contract fluctuates, making the long and short 
positions
in the futures contract more or less valuable. At any time prior to the 
expira-
 
                                                                              
17
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
       
tion of a futures contract, the Fund may elect to close the position by 
taking
an opposite position, which will operate to terminate the Fund's existing 
posi-
tion in the contract.
 
  A financial futures contract provides for the future sale by one party 
and
the purchase by the other party of a certain amount of a specified property 
at
a specified price, date, time and place. Unlike the direct investment in a
futures contract, an option on a financial futures contract gives the 
purchaser
the right, in return for the premium paid, to assume a position in the 
finan-
cial futures contract at a specified exercise price at any time prior to 
the
expiration date of the option. Upon exercise of an option, the delivery of 
the
futures position by the writer of the option to the holder of the option 
will
be accompanied by delivery of the accumulated balance in the writer's 
futures
margin account, which represents the amount by which the market price of 
the
futures contract exceeds, in the case of a call, or is less than, in the 
case
of a put, the exercise price of the option on the futures contract. The 
poten-
tial loss related to the purchase of an option on financial futures 
contracts
is limited to the premium paid for the option (plus transaction costs). The
value of the option may change daily and that change would be reflected in 
the
net asset value of the Fund.
   
  Regulations of the Commodity Futures Trading Commission applicable to the
Fund require that its transactions in financial futures contracts and 
options
on financial futures contracts be engaged in for bona fide hedging 
purposes, or
if the Fund enters into futures contracts for speculative purposes, that 
the
aggregate initial margin deposits and premiums paid by the Fund will not 
exceed
5% of the market value of its assets. In addition, the Fund will, with 
respect
to its purchases of financial futures contracts, establish a segregated 
account
consisting of cash or cash equivalents in an amount equal to the total 
market
value of the futures contracts, less the amount of initial margin on 
deposit
for the contracts. The Fund's ability to trade in financial futures 
contracts
and options on financial futures contracts may be limited to some extent by 
the
requirements of the Internal Revenue Code of 1986, as amended (the "Code")
applicable to a regulated investment company that are described below under
"Dividends, Distributions and Taxes."     
       
  Although the Fund intends to enter into financial futures contracts and
options on financial futures contracts that are traded on a domestic 
exchange
or board of trade only if an active market exists for those instruments, no
assurance can be given that an active market will exist for them at any 
partic-
ular time. If closing a futures position in anticipation of adverse price 
move-
ments is
 
18
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)     
 
not possible, the Fund would be required to make daily cash payments of 
varia-
tion margin. In those circumstances, an increase in the value of the 
portion of
the Fund's investments being hedged, if any, may offset partially or 
completely
losses on the futures contract. No assurance can be given, however, that 
the
price of the securities being hedged will correlate with the price 
movements in
a futures contract and, thus, provide an offset to losses on the futures 
con-
tract or option on the futures contract. In addition, in light of the risk 
of
an imperfect correlation between securities held by the Fund that are the 
sub-
ject of a hedging transaction and the futures or options used as a hedging
device, the hedge may not be fully effective because, for example, losses 
on
the securities held by the Fund may be in excess of gains on the futures 
con-
tract or losses on the futures contract may be in excess of gains on the 
secu-
rities held by the Fund that were the subject of the hedge. In an effort to
compensate for the imperfect correlation of movement in the price of the 
secu-
rities being hedged and movements in the price of futures contracts, the 
Fund
may enter into financial futures contracts or options on financial futures 
con-
tracts in a greater or lesser dollar amount than the dollar amount of the 
secu-
rities being hedged if the historical volatility of the futures contract 
has
been less or greater than that of the securities. This "over hedging" or 
"under
hedging" may adversely affect the Fund's net investment results if market 
move-
ments are not as anticipated when the hedge is established.
 
  If the Fund has hedged against the possibility of an increase in interest
rates adversely affecting the value of securities it holds and rates 
decrease
instead, the Fund will lose part or all of the benefit of the increased 
value
of securities that it has hedged because it will have offsetting losses in 
its
futures or options positions. In addition, in those situations, if the Fund 
has
insufficient cash, it may have to sell securities to meet daily variation 
mar-
gin requirements on the futures contracts at a time when it may be 
disadvanta-
geous to do so. These sales of securities may, but will not necessarily, be 
at
increased prices that reflect the decline in interest rates.
 
 MUNICIPAL BONDS
       
  The term "Municipal Bonds" generally is understood to include debt 
obliga-
tions issued to obtain funds for various public purposes, the interest on 
which
qualifies, in the opinion of bond counsel to the issuer, as excluded from 
gross
income for Federal income tax purposes. In addition, Municipal Bonds may
 
                                                                              
19
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 MUNICIPAL BONDS (CONTINUED)     
 
include "private activity bonds" if the proceeds from such bonds are used 
for
the construction, equipment, repair or improvement of privately operated 
indus-
trial or commercial facilities, and the interest paid on such bonds may be
excluded from gross income for Federal income tax purposes. Current Federal 
tax
laws place substantial limitations on the aggregate amount of such bonds 
that
any given state may issue.
 
 CLASSIFICATIONS
 
  The two principal classifications of Municipal Bonds are "general 
obligation"
and "revenue" bonds. General obligation bonds are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of 
principal
and interest. Revenue bonds are payable from the revenues derived from a 
par-
ticular facility or class of facilities or, in some cases, from the 
proceeds of
a special excise or other specific revenue source, but not from the general
taxing power. Sizeable investments in such obligations could involve an
increased risk to the Fund should any of such related facilities experience
financial difficulties. Private activity bonds are in most cases revenue 
bonds
and generally do not carry the pledge of the credit of the issuing 
municipali-
ty. There are, of course, variations in the security of Municipal Bonds, 
both
within a particular classification and between classifications.
       
 VALUATION OF SHARES
          
  The Fund's net asset value per share is determined as of the close of 
regular
trading on the NYSE, on each day that the NYSE is open, by dividing the 
value
of the Fund's net assets attributable to each Class by the total number of
shares of that Class outstanding.     
 
  Generally, the Fund's investments are valued at market value or, in the
absence of a market value with respect to any securities, at fair value as
determined by or under the direction of the Fund's Board of Directors. 
Short-
term investments that mature in 60 days or less are valued at amortized 
cost
whenever the Directors determine that amortized cost reflects fair value of
those investments. Amortized cost valuation involves valuing an instrument 
at
its cost initially and, thereafter, assuming a constant amortization to 
matu-
rity of any discount or premium, regardless of the impact of fluctuating 
inter-
est rates on the market value of the instrument. Further information 
regarding
the Fund's valuation policies is contained in the Statement of Additional
Information.
 
20
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 DIVIDENDS, DISTRIBUTIONS AND TAXES
    
 DIVIDENDS AND DISTRIBUTIONS     
   
  The Fund declares dividends from its net investment income (that is, 
income
other than its net realized long- and short-term capital gains) on each day
that the Fund is open for business and pays dividends on the last business 
day
of the Smith Barney statement month. Distributions of net realized long- 
and
short-term capital gains, if any, are declared and paid annually after the 
end
of the fiscal year in which they have been earned.     
          
  If a shareholder does not otherwise instruct, dividends and capital gains
distributions will be reinvested automatically in additional shares of the 
same
Class at net asset value, subject to no sales charge or CDSC. The Fund's 
earn-
ings for Saturdays, Sundays and holidays are declared as dividends on the 
next
business day. Shares redeemed during the month are entitled to dividends
declared up to and including the date of redemption. In addition, in order 
to
avoid the application of a 4% nondeductible excise tax on certain 
undistributed
amounts of ordinary income and capital gains, the Fund may make an 
additional
distribution shortly before December 31 of each year of any undistributed 
ordi-
nary income or capital gains and expects to make any other distributions as 
are
necessary to avoid the application of this tax.     
   
  If, for any full fiscal year, the Fund's total distributions exceed net
investment income and net realized capital gains, the excess distributions 
gen-
erally will be treated as a tax-free return of capital (up to the amount of 
the
shareholder's tax basis in his or her shares). The amount treated as a tax-
free
return of capital will reduce a shareholder's adjusted basis in his or her
shares. Pursuant to the requirements of the Investment Company Act of 1940, 
as
amended ("1940 Act") and other applicable laws, a notice will accompany any
distribution paid from sources other than net investment income. In the 
event
the Fund distributes amounts in excess of its net investment income and net
realized capital gains, such distributions may have the effect of 
decreasing
the Fund's total assets, which may increase the Fund's expense ratio.     
   
  The per share dividends on Class B shares and Class C shares may be lower
than the per share dividends on Class A and Y shares principally as a 
result of
the distribution fee applicable with respect to Class B and Class C shares. 
The
per share dividends on Class A shares of the Fund may be lower than the per
share dividends on Class Y principally as a result of the service fee 
applica-
ble to Class A shares. Distributions of capital gains, if any, will be in 
the
same amount for Class A, B, C and Y.     
 
 
                                                                              
21
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)     
    
 TAXES     
 
  The Fund has qualified and intends to continue to qualify each year as a 
reg-
ulated investment company under the Code and will designate and pay exempt-
interest dividends derived from interest earned on qualifying tax-exempt 
obli-
gations. Such exempt-interest dividends may be excluded by shareholders 
from
their gross incomes for Federal income tax purposes although (a) all or a 
por-
tion of such exempt-interest dividends will be a specific preference item 
for
purposes of the Federal individual and corporate alternative minimum taxes 
to
the extent they are derived from certain types of private activity bonds 
issued
after August 7, 1986 and (b) all exempt-interest dividends will be a 
component
of the "current earnings" adjustment item for purposes of the Federal 
corporate
alternative minimum tax. In addition, corporate shareholders may incur a
greater Federal "environmental" tax liability through the receipt of Fund 
divi-
dends and distributions.
   
  Dividends paid from taxable net investment income, if any, and 
distributions
of any net realized short-term capital gains (whether from tax-exempt or 
tax-
able obligations) are taxable to shareholders as ordinary income regardless 
of
how long they have held their Fund shares and whether such dividends or 
distri-
butions are received in cash or reinvested in additional Fund shares. 
Distribu-
tions of net realized long-term capital gains will be taxable to 
shareholders
as long-term capital gains, regardless of how long they have held their 
Fund
shares and whether such distributions are received in cash or reinvested in
Fund shares. Furthermore, as a general rule, a shareholder's gain or loss 
on a
sale or redemption of his or her shares will be a long-term capital gain or
loss if the shareholder has held the shares for more than one year and will 
be
a short-term capital gain or loss if the shareholder has held the shares 
for
one year or less. The Fund's dividends and distributions will not qualify 
for
the dividends-received deduction for corporations.     
 
  Statements as to the tax status of each shareholder's dividends and 
distribu-
tions are mailed annually. Each shareholder will also receive, if 
appropriate,
various written notices after the close of the Fund's prior taxable year as 
to
the Federal income tax status of his or her dividends and distributions 
which
were received from the Fund during the Fund's prior taxable year. These 
state-
ments set forth the dollar amount of income excluded from Federal income 
taxes
and the dollar amount, if any, subject to Federal income taxes. Moreover, 
these
statements will designate the amount of exempt-interest dividends which are 
a
specific preference item for purposes of the Federal individual and 
corporate
alter-
 
22
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)     
 
native minimum taxes. The Fund notifies shareholders annually as to the 
inter-
est excluded from Federal income taxes earned by the Fund with respect to 
those
states and possessions where the Fund has or had investments. Shareholders
should consult their tax advisors about the status of the Fund's dividends 
and
distributions for state and local tax liabilities.
 
 TAX-EXEMPT INCOME VS. TAXABLE INCOME
 
  The table below shows individual taxpayers how to translate the tax 
savings
from investments such as the Fund into an equivalent return from a taxable
investment. The yields used below are for illustration only and are not
intended to represent current or future yields for the Fund, which may be
higher or lower than those shown.
 
<TABLE>
<CAPTION>
                             FEDERAL
                            MARGINAL            TAX-EXEMPT RATE
      TAXABLE INCOME        TAX RATE* 2.00%  3.00%  4.00%  5.00%  6.00%  
7.00%
- ---------------------------------------------------------------------------
- ----
 SINGLE         JOINT                      EQUIVALENT TAXABLE YIELD
<S>        <C>              <C>       <C>    <C>    <C>    <C>    <C>    
<C>
$  22,750  $         38,000   15.00%  2.67%  4.01%  5.35%  6.68%   8.02%  
9.36%
  22,751-
   55,100     38,001-91,850   28.00   3.16   4.73   6.31   7.89    9.47  
11.05
  55,101-
  115,000    91,851-140,000   31.00   3.29   4.94   6.59   8.23    9.88  
11.53
 115,001-
  250,000   140,001-250,000   36.00   3.55   5.33   7.10   8.88   10.65  
12.43
     over
  250,000      over 250,000   39.60   3.76   5.54   7.53   9.41   11.29  
13.17
- ---------------------------------------------------------------------------
- ----
</TABLE>
* The Federal tax rates shown are those currently in effect for 1994. The
  calculations assume that no income will be subject to the Federal 
alternative
  minimum tax.
 
 PURCHASE OF SHARES
    
 GENERAL     
       
          
  The Fund offers four Classes of shares. Class A shares are sold to 
investors
with an initial sales charge and Class B and Class C shares are sold 
without an
initial sales charge but are subject to a CDSC payable upon certain redemp-
tions. Class Y shares are sold without an initial sales charge or a CDSC 
and
are available only to investors investing a minimum of $5,000,000. See 
"Pro-
spectus Summary--Alternative Purchase Arrangements" for a discussion of 
factors
to consider in selecting which Class of shares to purchase.     
   
  Purchases of Fund shares must be made through a brokerage account 
maintained
with Smith Barney, with an Introducing Broker or with an investment
    
       
                                                                              
23
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PURCHASE OF SHARES (CONTINUED)     
   
dealer in the selling group. When purchasing shares of the Fund, investors 
must
specify whether the purchase is for Class A, Class B, Class C or Class Y
shares. No maintenance fee will be charged by the Fund in connection with a
brokerage account through which an investor purchases or holds shares.     
   
  Investors in Class A, Class B and Class C shares may open an account by 
mak-
ing an initial investment of at least $1,000 for each account in the Fund.
Investors in Class Y shares may open an account by making an initial 
investment
of $5,000,000. Subsequent investments of at least $50 may be made for all 
Clas-
ses. For the Fund's Systematic Investment Plan, the minimum initial 
investment
requirement for Class A, Class B and Class C shares and the subsequent 
invest-
ment requirement for all Classes is $100. There are no minimum investment
requirements for Class A shares for employees of Travelers and its 
subsidiar-
ies, including Smith Barney, unitholders who invest distributions from a 
UIT
sponsored by Smith Barney, and Directors of the Fund and their spouses and
children. The Fund reserves the right to waive or change minimums, to 
decline
any order to purchase its shares and to suspend the offering of shares from
time to time. Shares purchased will be held in the shareholder's account by 
the
Fund's transfer agent, The Shareholder Services Group, Inc., a subsidiary 
of
First Data Corporation ("TSSG"). Share certificates are issued only upon a
shareholder's written request to TSSG.     
   
  Purchase orders received by Smith Barney prior to the close of regular 
trad-
ing on the NYSE, on any day the Fund calculates its net asset value, are 
priced
according to the net asset value determined on that day. Orders received by
dealers or Introducing Brokers prior to the close of regular trading on the
NYSE on any day the Fund calculates its net asset value, are priced 
according
to the net asset value determined on that day, provided the order is 
received
by Smith Barney prior to Smith Barney's close of business (the "trade 
date").
Currently, payment for Fund shares is due on the fifth business day (the 
"set-
tlement date") after the trade date. The Fund anticipates that, in 
accordance
with regulatory changes, beginning on or about June 1, 1995, the settlement
date will be the third business day after the trade date.     
       
 SYSTEMATIC INVESTMENT PLAN
   
  Shareholders may make additions to their accounts at any time by 
purchasing
shares through a service known as the Systematic Investment Plan. Under the
Systematic Investment Plan, Smith Barney or TSSG is authorized through 
preau-
thorized transfers of $100 or more to charge the regular bank account or 
other
    
24
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PURCHASE OF SHARES (CONTINUED)     
   
financial institution indicated by the shareholder on a monthly or 
quarterly
basis to provide systematic additions to the shareholder's Fund account. A
shareholder who has insufficient funds to complete the transfer will be 
charged
a fee of up to $25 by Smith Barney or TSGG. The Systematic Investment Plan 
also
authorizes Smith Barney to apply cash held in the shareholder's Smith 
Barney
brokerage account or redeem the shareholder's shares of a Smith Barney 
money
market fund to make additions to the account. Additional information is 
avail-
able from the Fund or a Smith Barney Financial Consultant.     
 
 INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
 
  The sales charges applicable to purchases of Class A shares of the Fund 
are
as follows:
 
<TABLE>
<CAPTION>
                          SALES CHARGE   SALES CHARGE   DEALERS REALLOWANCE
                            AS % OF         AS % OF           AS % OF
  AMOUNT OF INVESTMENT   OFFERING PRICE AMOUNT INVESTED   OFFERING PRICE
 --------------------------------------------------------------------------
  <S>                    <C>            <C>             <C>
  Less than $25,000           4.00%          4.17%             3.60%
  $25,000--$49,999            3.50%          3.63%             3.15%
  $50,000--$99,999            3.00%          3.09%             2.70%
  $100,000--$249,999          2.50%          2.56%             2.25%
  $250,000--$499,999          1.50%          1.52%             1.35%
  $500,000 and over              *              *                *
 --------------------------------------------------------------------------
</TABLE>
    
 * Purchases of Class A shares, which when combined with current
   holdings of Class A shares offered with a sales charge equal
   or exceed $500,000 in the aggregate, will be made at net asset
   value without any initial sales charge, but will be subject to
   a CDSC of 1.00% on redemptions made within 12 months of
   purchase. The CDSC on Class A shares is payable to Smith
   Barney, which compensates Smith Barney Financial Consultants
   and other dealers whose clients make purchases of $500,000 or
   more. The CDSC is waived in the same circumstances in which
   the CDSC applicable to Class B and Class C shares is waived.
   See "Deferred Sales Charge Alternatives" and "Waivers of
   CDSC."     
   
  Members of the selling group may receive up to 90% of the sales charge 
and
may be deemed to be underwriters of the Fund as defined in the Securities 
Act
of 1933, as amended.     
   
  The reduced sales charges shown above apply to the aggregate of purchases 
of
Class A shares of the Fund made at one time by "any person," which includes 
an
individual, his or her spouse and children, or a trustee or other fiduciary 
of
a single trust estate or single fiduciary account. The reduced sales charge
minimums may also be met by aggregating the purchase with the net asset 
value
of all Class A shares held in funds sponsored by Smith Barney that are 
offered
with a sales charge listed under "Exchange Privilege."     
 
                                                                              
25
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PURCHASE OF SHARES (CONTINUED)     
    
 INITIAL SALES CHARGE WAIVERS     
   
  Purchases of Class A shares may be made at net asset value without a 
sales
charge in the following circumstances: (a) sales of Class A shares to 
Directors
of the Fund and employees of Travelers and its subsidiaries, or to the 
spouses
and children of such persons (including the surviving spouse of a deceased
Director or employee, and retired Directors or employees); (b) offers of 
Class
A shares to any other investment company in connection with the combination 
of
such company with the Fund by merger, acquisition of assets or otherwise; 
(c)
purchases of Class A shares by any client of a newly employed Smith Barney
Financial Consultant (for a period up to 90 days from the commencement of 
the
Financial Consultant's employment with Smith Barney), on the condition the 
pur-
chase of Class A shares is made with the proceeds of the redemption of 
shares
of a mutual fund which (i) was sponsored by the Financial Consultant's 
prior
employer, (ii) was sold to the client by the Financial Consultant and (iii) 
was
subject to a sales charge; (d) shareholders who have redeemed Class A 
shares in
the Fund (or Class A shares of another fund of the Smith Barney Mutual 
Funds
that are offered with a sales charge equal to or greater than the maximum 
sales
charge of the Fund) and who wish to reinvest their redemption proceeds in 
the
Fund, provided the reinvestment is made within 60 calendar days of the 
redemp-
tion; (e) accounts managed by registered investment advisory subsidiaries 
of
Travelers; and (f) investments of distributions from a UIT sponsored by 
Smith
Barney. In order to obtain such discounts, the purchaser must provide 
suffi-
cient information at the time of purchase to permit verification that the 
pur-
chase would qualify for the elimination of the sales charge.     
 
 RIGHT OF ACCUMULATION
   
  Class A shares of the Fund may be purchased by "any person" (as defined
above) at a reduced sales charge or at net asset value determined by 
aggregat-
ing the dollar amount of the new purchase and the total net asset value of 
all
Class A shares of the Fund and of funds sponsored by Smith Barney which are
offered with a sales charge listed under "Exchange Privilege" then held by 
such
person and applying the sales charge applicable to such aggregate. In order 
to
obtain such discount, the purchaser must provide sufficient information at 
the
time of purchase to permit verification that the purchase qualifies for the
reduced sales charge. The right of accumulation is subject to modification 
or
discontinuance at any time with respect to all shares purchased thereafter.
    
26
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PURCHASE OF SHARES (CONTINUED)     
 
 
 GROUP PURCHASES
   
  Upon completion of certain automated systems, a reduced sales charge or 
pur-
chase at net asset value will also be available to employees (and partners) 
of
the same employer purchasing as a group, provided each participant makes 
the
minimum initial investment required. The sales charge applicable to 
purchases
by each member of such a group will be determined by the table set forth 
above
under "Initial Sales Charge Alternatives--Class A Shares," and will be 
based
upon the aggregate sales of Class A shares of Smith Barney Mutual Funds 
offered
with a charge to, and share holdings of, all members of the group. To be 
eligi-
ble for such reduced sales charges or to purchase at net asset value, all 
pur-
chases must be pursuant to an employer or partnership-sanctioned plan 
meeting
certain requirements. One such requirement is that the plan must be open to
specified partners or employees of the employer and its subsidiaries, if 
any.
Such plan may, but is not required to, provide for payroll deductions. 
Smith
Barney may also offer a reduced sales charge or net asset value purchase 
for
aggregating related fiduciary accounts under such conditions that Smith 
Barney
will realize economies of sales efforts and sales related expenses. An 
individ-
ual who is a member of a qualified group may also purchase Class A shares 
at
the reduced sales charge applicable to the group as a whole. The sales 
charge
is based upon the aggregate dollar value of Class A shares offered with a 
sales
charge that have been previously purchased and are still owned by the 
group,
plus the amount of the current purchase. A "qualified group" is one which 
(a)
has been in existence for more than six months, (b) has a purpose other 
than
acquiring Fund shares at a discount and (c) satisfies uniform criteria 
which
enable Smith Barney to realize economies of scale in its costs of 
distributing
shares. A qualified group must have more than 10 members, must be available 
to
arrange for group meetings between representatives of the Fund and the 
members,
and must agree to include sales and other materials related to the Fund in 
its
publications and mailings to members at no cost to Smith Barney. In order 
to
obtain such reduced sales charge or to purchase at net asset value, the 
pur-
chaser must provide sufficient information at the time of purchase to 
permit
verification that the purchase qualifies for the reduced sales charge. 
Approval
of group purchase reduced sales charge plans is subject to the discretion 
of
Smith Barney.     
 
 LETTER OF INTENT
   
  A Letter of Intent for amounts of $50,000 or more provides an opportunity 
for
an investor to obtain a reduced sales charge by aggregating investments 
over
    
                                                                              
27
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PURCHASE OF SHARES (CONTINUED)     
   
a 13 month period, provided that the investor refers to such Letter when 
plac-
ing orders. For purposes of a Letter of Intent, the "Amount of Investment" 
as
referred to in the preceding sales charge table includes purchases of all 
Class
A shares of the Fund and other funds of the Smith Barney Mutual Funds 
offered
with a sales charge over a 13 month period based on the total amount of
intended purchases plus the value of all Class A shares previously 
purchased
and still owned. An alternative is to compute the 13 month period starting 
up
to 90 days before the date of execution of a Letter of Intent. Each 
investment
made during the period receives the reduced sales charge applicable to the
total amount of the investment goal. If the goal is not achieved within the
period, the investor must pay the difference between the sales charges 
applica-
ble to the purchases made and the charges previously paid, or an 
appropriate
number of escrowed shares will be redeemed. New Letters of Intent will be
accepted beginning January 1, 1995. Please contact a Smith Barney Financial
Consultant or TSSG to obtain a Letter of Intent application.     
    
 DEFERRED SALES CHARGE ALTERNATIVES     
   
  "CDSC Shares" are sold at net asset value next determined without an 
initial
sales charge so that the full amount of an investor's purchase payment may 
be
immediately invested in the Fund. A CDSC, however, may be imposed on 
certain
redemptions of these shares. "CDSC Shares" are : (a) Class B shares; (b) 
Class
C shares; and (c) Class A shares which when combined with Class A shares
offered with a sales charge currently held by an investor equal or exceed
$500,000 in the aggregate.     
   
  Any applicable CDSC will be assessed on an amount equal to the lesser of 
the
cost of the shares being redeemed or their net asset value at the time of
redemption. CDSC Shares that are redeemed will not be subject to a CDSC to 
the
extent that the value of such shares represents: (a) capital appreciation 
of
Fund assets; (b) reinvestment of dividends or capital gain distributions; 
(c)
with respect to Class B shares, shares redeemed more than five years after
their purchase; or (d) with respect to Class C shares and Class A shares 
that
are CDSC Shares, shares redeemed more than 12 months after their purchase. 
    
   
  Class C and Class A shares that are CDSC Shares are subject to a 1.00% 
CDSC
if redeemed within 12 months of purchase. In circumstances in which the 
CDSC is
imposed on Class B shares, the amount of the charge will depend on the 
number
of years since the shareholder made the purchase payment from which the 
amount
is being redeemed. Solely for purposes of determining the     
 
28
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PURCHASE OF SHARES (CONTINUED)
   
number of years since a purchase payment, all purchase payments made during 
a
month will be aggregated and deemed to have been made on the last day of 
the
preceding Smith Barney statement month. The following table sets forth the
rates of the charge for redemptions of Class B shares by shareholders.     
 
<TABLE>
<CAPTION>
      YEAR SINCE PURCHASE
       PAYMENT WAS MADE     CDSC
- ---------------------------------
      <S>                   <C>
      First                 4.50%
      Second                4.00%
      Third                 3.00%
      Fourth                2.00%
      Fifth                 1.00%
      Sixth                 0.00%
      Seventh               0.00%
      Eighth                0.00%
- ---------------------------------
</TABLE>
   
  Class B shares will convert automatically to Class A shares eight years 
after
the date on which they were purchased and thereafter will no longer be 
subject
to any distribution fees. There will also be converted at that time such
proportion of Class B Dividend Shares owned by the shareholder as the total
number of his or her Class B shares converting at the time bears to the 
total
number of outstanding Class B shares (other than Class B Dividend Shares) 
owned
by the shareholder. Shareholders who held Class B shares of Smith Barney
Shearson Short-Term World Income Fund (the "Short-Term World Income Fund") 
on
July 15, 1994 and who subsequently exchange those shares for Class B shares 
of
the Fund will be offered the opportunity to exchange all such Class B 
shares
for Class A shares of the Fund four years after the date on which those 
shares
were deemed to have been purchased. Holders of such Class B shares will be
notified of the pending exchange in writing approximately 30 days before 
the
fourth anniversary of the purchase date and, unless the exchange has been
rejected in writing, the exchange will occur on or about the fourth 
anniversary
date. See "Prospectus Summary--Alternative Purchase Arrangements--Class B
Shares Conversion Feature."     
          
  The length of time that CDSC Shares acquired through an exchange have 
been
held will be calculated from the date that the shares exchanged were 
initially
acquired in one of the other Smith Barney Mutual Funds, and Fund shares 
being
redeemed will be considered to represent, as applicable, capital 
appreciation
or dividend and capital gain distribution reinvestments in such other 
funds.
For Federal income tax purposes, the amount of the CDSC will     
 
                                                                              
29
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PURCHASE OF SHARES (CONTINUED)
 
reduce the gain or increase the loss, as the case may be, on the amount 
real-
ized on redemption. The amount of any CDSC will be paid to Smith Barney.
   
  To provide an example, assume an investor purchased 100 Class B shares at 
$10
per share for a cost of $1,000. Subsequently, the investor acquired 5 addi-
tional shares through dividend reinvestment. During the fifteenth month 
after
the purchase, the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the net asset value had appreciated 
to
$12 per share, the value of the investor's shares would be $1,260 (105 
shares
at $12 per share). The CDSC would not be applied to the amount which 
represents
appreciation ($200) and the value of the reinvested dividend shares ($60).
Therefore, $240 of the $500 redemption proceeds ($500 minus $260) would be
charged at a rate of 4.00% (the applicable rate for Class B shares) for a 
total
deferred sales charge of $9.60.     
    
 WAIVERS OF CDSC     
   
  The CDSC will be waived on: (a) exchanges (see "Exchange Privilege");(b)
automatic cash withdrawals in amounts equal to or less than 1.00% per month 
of
the value of the shareholder's shares at the time the withdrawal plan 
commences
(see below) (provided, however, that automatic cash withdrawals in amounts
equal to or less than 2.00% per month of the value of the shareholder's 
shares
will be permitted for withdrawal plans that were established prior to 
November
7, 1994); (c) redemptions of shares within 12 months following the death or
disability of the shareholder; (d) involuntary redemptions; and (e) 
redemptions
of shares in connection with a combination of the Fund with any investment 
com-
pany by merger, acquisition of assets or otherwise. In addition, a 
shareholder
who has redeemed shares from other funds of the Smith Barney Mutual Funds 
may,
under certain circumstances, reinvest all or part of the redemption 
proceeds
within 60 days and receive pro rata credit for any CDSC imposed on the 
prior
redemption.     
 
  CDSC waivers will be granted subject to confirmation (by Smith Barney in 
the
case of shareholders who are also Smith Barney clients or by TSSG in the 
case
of all other shareholders) of the shareholder's status or holdings, as the 
case
may be.
       
       
       
30
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 EXCHANGE PRIVILEGE
   
  Except as otherwise noted below, shares of each Class may be exchanged at 
the
net asset value next determined for shares of the same Class in the 
following
funds of the Smith Barney Mutual Funds, to the extent shares are offered 
for
sale in the shareholder's state of residence. Exchanges of Class A, Class B 
and
Class C shares are subject to minimum investment requirements and all 
shares
are subject to the other requirements of the fund into which exchanges are
made, and a sales charge differential may apply.     
 
 FUND NAME
     
  Growth Funds     
      
   Smith Barney Aggressive Growth Fund Inc.     
      
   Smith Barney Appreciation Fund Inc.     
      
   Smith Barney European Fund     
      
   Smith Barney Fundamental Value Fund Inc.     
    
   Smith Barney Funds, Inc.--Capital Appreciation Portfolio
        
   Smith Barney Global Opportunities Fund     
      
   Smith Barney Precious Metals and Minerals Fund Inc.     
      
   Smith Barney Special Equities Fund     
      
   Smith Barney Telecommunications Growth Fund     
      
   Smith Barney World Funds, Inc.--European Portfolio     
      
   Smith Barney World Funds, Inc.--International Equity Portfolio     
      
   Smith Barney World Funds, Inc.--Pacific Portfolio     
        
          
  Growth and Income Funds     
      
   Smith Barney Convertible Fund     
      
   Smith Barney Funds, Inc.--Income and Growth Portfolio     
      
   Smith Barney Growth and Income Fund     
      
   Smith Barney Premium Total Return Fund     
           
   Smith Barney Strategic Investors Fund     
      
   Smith Barney Utilities Fund     
           
   Smith Barney World Funds, Inc.--International Balanced Portfolio     
           
  Income Funds     
     
  **Smith Barney Adjustable Rate Government Income Fund     
      
   Smith Barney Diversified Strategic Income Fund     
     
  *Smith Barney Funds, Inc.--Income Return Account Portfolio     
 
                                                                              
31
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 EXCHANGE PRIVILEGE (CONTINUED)     
      
   Smith Barney Funds, Inc.--Monthly Payment Government Portfolio     
    
 ++Smith Barney Funds, Inc.--Short-Term U.S. Treasury Securities Portfolio 
    
      
   Smith Barney Funds, Inc.--U.S. Government Securities Portfolio     
      
   Smith Barney Funds, Inc.--Utility Portfolio     
      
   Smith Barney Global Bond Fund     
      
   Smith Barney Government Securities Fund     
      
   Smith Barney High Income Fund     
      
   Smith Barney Investment Grade Bond Fund     
     
  *Smith Barney Limited Maturity Treasury Fund     
          
   Smith Barney Managed Governments Fund Inc.     
        
        
        
           
   Smith Barney World Funds, Inc.--Global Government Bond Portfolio     
        
       
       
       
       
       
          
  Municipal Bond Funds     
       
        
           
   Smith Barney Arizona Municipals Fund Inc.     
           
   Smith Barney California Municipals Fund Inc.     
      
   Smith Barney Florida Municipals Fund     
     
  *Smith Barney Intermediate Maturity California Municipals Fund     
     
  *Smith Barney Intermediate Maturity New York Municipals Fund     
     
  *Smith Barney Limited Maturity Municipals Fund     
      
   Smith Barney Massachusetts Municipals Fund     
     
  *Smith Barney Muni Funds--California Limited Term Portfolio     
      
   Smith Barney Muni Funds--California Portfolio     
     
  *Smith Barney Muni Funds--Florida Limited Term Portfolio     
      
   Smith Barney Muni Funds--Florida Portfolio     
      
   Smith Barney Muni Funds--Georgia Portfolio     
     
  *Smith Barney Muni Funds--Limited Term Portfolio     
       
        
        
        
           
   Smith Barney Muni Funds--National Portfolio     
      
   Smith Barney Muni Funds--New Jersey Portfolio     
      
   Smith Barney Muni Funds--New York Portfolio     
      
   Smith Barney Muni Funds--Ohio Portfolio     
      
   Smith Barney Muni Funds--Pennsylvania Portfolio     
           
   Smith Barney New Jersey Municipals Fund Inc.     
      
   Smith Barney New York Municipals Fund Inc.     
      
   Smith Barney Oregon Municipals Fund     
      
   Smith Barney Tax-Exempt Income Fund     
        
       
       
       
32
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 EXCHANGE PRIVILEGE (CONTINUED)     
 
 
  Money Market Funds
 
   +Smith Barney Exchange Reserve Fund
  ++Smith Barney Money Funds, Inc.--Cash Portfolio
  ++Smith Barney Money Funds, Inc.--Government Portfolio
 ***Smith Barney Money Funds, Inc.--Retirement Portfolio
     
  ++Smith Barney Municipal Money Market Fund, Inc.     
     
  ++Smith Barney Muni Funds--California Money Market Portfolio     
     
  ++Smith Barney Muni Funds--New York Money Market Portfolio.     
- ---------------------------------------------------------------------------
- -----
  * Available for exchange with Class A, Class C and Class Y shares of the 
Fund.
   
 ** Available for exchange with Class A, Class B and Class Y shares of the
    Fund.     
   
*** Available for exchange with Class A shares of the Fund.     
  + Available for exchange with Class B and Class C shares of the Fund.
   
 ++ Available for exchange with Class A and Class Y shares of the Fund. 
    
          
  Class A Exchanges. Class A shares of Smith Barney Mutual Funds sold 
without a
sales charge or with a maximum sales charge of less than the maximum 
charged by
other Smith Barney Mutual Funds will be subject to the appropriate "sales
charge differential" upon the exchange of such shares for Class A shares of 
a
fund sold with a higher sales charge. The "sales charge differential" is 
lim-
ited to a percentage rate no greater than the excess of the sales charge 
rate
applicable to purchases of shares of the mutual fund being acquired in the
exchange over the sales charge rate(s) actually paid on the mutual fund 
shares
relinquished in the exchange and on any predecessor of those shares. For 
pur-
poses of the exchange privilege, shares obtained through automatic 
reinvestment
of dividends and capital gains distributions are treated as having paid the
same sales charges applicable to the shares on which the dividends or 
distribu-
tions were paid; however, if no sales charge was imposed upon the initial 
pur-
chase of shares, any shares obtained through automatic reinvestment will be
subject to a sales charge differential upon exchange.     
   
  Class B Exchanges. In the event a Class B shareholder (unless such share-
holder was a Class B shareholder of the Short-Term World Income Fund on 
July
15, 1994) wishes to exchange all or a portion of his or her shares in any 
of
the funds imposing a higher CDSC than that imposed by the Fund, the 
exchanged
Class B shares will be subject to the higher applicable CDSC. Upon an 
exchange,
the new Class B shares will be deemed to have been purchased on the same 
date
as the Class B shares of the Fund that have been exchanged.     
 
                                                                              
33
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 EXCHANGE PRIVILEGE (CONTINUED)     
 
 
  Class C Exchanges. Upon an exchange, the new Class C shares will be 
deemed to
have been purchased on the same date as the Class C shares of the Fund that
have been exchanged.
   
  Class Y Exchanges. Class Y shareholders of the Fund who wish to exchange 
all
or a portion of their Class Y shares for Class Y shares in any of the funds
identified above may do so without imposition of any charge.     
   
  Additional Information Regarding the Exchange Privilege. Although the
exchange privilege is an important benefit, excessive exchange transactions 
can
be detrimental to the Fund's performance and its shareholders. Greenwich 
Street
Advisors may determine that a pattern of frequent exchanges is excessive 
and
contrary to the best interests of the Fund's other shareholders. In this 
event,
Greenwich Street Advisors will notify Smith Barney and Smith Barney may, at 
its
discretion, decide to limit additional purchases and/or exchanges by a 
share-
holder. Upon such a determination, Smith Barney will provide notice in 
writing
or by telephone to the shareholder at least 15 days prior to suspending the
exchange privilege and during the 15 day period the shareholder will be
required to (a) redeem his or her shares in the Fund or (b) remain invested 
in
the Fund or exchange into any of the funds of the Smith Barney Mutual Funds
ordinarily available, which position the shareholder would be expected to 
main-
tain for a significant period of time. All relevant factors will be 
considered
in determining what constitutes an abusive pattern of exchanges.     
   
  Exchanges will be processed at the net asset value next determined, plus 
any
applicable sales charge differential. Redemption procedures discussed below 
are
also applicable for exchanging shares, and exchanges will be made upon 
receipt
of all supporting documents in proper form. If the account registration of 
the
shares of the fund being acquired is identical to the registration of the
shares of the fund exchanged, no signature guarantee is required. A capital
gain or loss for tax purposes will be realized upon the exchange, depending
upon the cost or other basis of shares redeemed. Before exchanging shares,
investors should read the current prospectus describing the shares to be
acquired. The Fund reserves the right to modify or discontinue exchange 
privi-
leges upon 60 days' prior notice to shareholders.     
 
34
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 REDEMPTION OF SHARES
 
  The Fund is required to redeem the shares of the Fund tendered to it, as
described below, at a redemption price equal to their net asset value per 
share
next determined after receipt of a written request in proper form at no 
charge
other than any applicable CDSC. Redemption requests received after the 
close of
regular trading on the NYSE are priced at the net asset value next 
determined.
   
  If a shareholder holds shares in more than one Class, any request for 
redemp-
tion must specify the Class being redeemed. In the event of a failure to 
spec-
ify which Class, or if the investor owns fewer shares of the Class than 
speci-
fied, the redemption request will be delayed until the Fund's transfer 
agent
receives further instructions from Smith Barney, or if the shareholder's
account is not with Smith Barney, from the shareholder directly. The 
redemption
proceeds will be remitted on or before the seventh day following receipt of
proper tender, except on any days on which the NYSE is closed or as 
permitted
under the 1940 Act in extraordinary circumstances. The Fund anticipates 
that,
in accordance with regulatory changes, beginning on or about June 1, 1995, 
pay-
ment will be made on the third business day after receipt of proper tender.
Generally, if the redemption proceeds are remitted to a Smith Barney 
brokerage
account, these funds will not be invested for the shareholder's benefit 
without
specific instruction and Smith Barney will benefit from the use of 
temporarily
uninvested funds. Redemption proceeds for shares purchased by check, other 
than
a certified or official bank check, will be remitted upon clearance of the
check, which may take up to ten days or more.     
          
  Shares held by Smith Barney as custodian must be redeemed by submitting a
written request to a Smith Barney Financial Consultant. Shares other than 
those
held by Smith Barney as custodian may be redeemed through an investor's 
Finan-
cial Consultant, Introducing Broker or a dealer in the selling group or by 
sub-
mitting a written request for redemption to:     
          
   Smith Barney Managed Municipals Fund Inc.     
   Class A, B, C or Y (please specify)
      
   c/o The Shareholder Services Group, Inc.     
   P.O. Box 9134
   Boston, Massachusetts 02205-9134
   
  A written redemption request must (a) state the Class and number or 
dollar
amount of shares to be redeemed, (b) identify the shareholder's account 
number
and (c) be signed by each registered owner exactly as the shares are regis-
tered. If the shares to be redeemed were issued in certificate form, the 
cer-
tificates must     
 
                                                                              
35
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 REDEMPTION OF SHARES (CONTINUED)     
   
be endorsed for transfer (or be accompanied by an endorsed stock power) and
must be submitted to TSSG together with the redemption request. Any 
signature
appearing on a redemption request, share certificate or stock power must be
guaranteed by an eligible guarantor institution such as a domestic bank, 
sav-
ings and loan institution, domestic credit union, member bank of the 
Federal
Reserve System or member firm of a national securities exchange. TSSG may
require additional supporting documents for redemptions made by 
corporations,
executors, administrators, trustees or guardians. A redemption request will 
not
be deemed properly received until TSSG receives all required documents in
proper form.     
 
 AUTOMATIC CASH WITHDRAWAL PLAN
   
  The Fund offers shareholders an automatic cash withdrawal plan, under 
which
shareholders who own shares with a value of at least $10,000 may elect to
receive cash payments of at least $100 monthly or quarterly. The withdrawal
plan will be carried over on exchanges between funds or Classes of the 
Fund.
Any applicable CDSC will not be waived on amounts withdrawn by a 
shareholder
that exceed 1.00% per month of the value of the shareholder's shares 
subject to
the CDSC at the time the withdrawal plan commences. (With respect to 
withdrawal
plans in effect prior to November 7, 1994, any applicable CDSC will be 
waived
on amounts withdrawn that do not exceed 2.00% per month of the 
shareholder's
shares subject to the CDSC.) For further information regarding the 
automatic
cash withdrawal plan, shareholders should contact a Smith Barney Financial 
Con-
sultant.     
 
 MINIMUM ACCOUNT SIZE
 
 
  The Fund reserves the right to involuntarily liquidate any shareholder's
account in the Fund if the aggregate net asset value of the shares held in 
the
Fund account is less than $500. (If a shareholder has more than one account 
in
this Fund, each account must satisfy the minimum account size.) The Fund, 
how-
ever, will not redeem shares based solely on market reductions in net asset
value. Before the Fund exercises such right, shareholders will receive 
written
notice and will be permitted 60 days to bring accounts up to the minimum to
avoid automatic redemption.
       
       
36
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 PERFORMANCE
 
 YIELD
 
  From time to time, the Fund may advertise the 30-day "yield" and 
"equivalent
taxable yield" of each Class of shares. The yield refers to the income 
gener-
ated by an investment in those shares over the 30-day period identified in 
the
advertisement and is computed by dividing the net investment income per 
share
earned by the Class during the period by the maximum public offering price 
per
share on the last day of the period. This income is "annualized" by 
assuming
the amount of income is generated each month over a one-year period and is 
com-
pounded semi-annually. The annualized income is then shown as a percentage 
of
the net asset value.
 
  The equivalent taxable yield demonstrates the yield on a taxable 
investment
necessary to produce an after-tax yield equal to the Fund's tax-exempt 
yield
for each Class. It is calculated by increasing the yield shown for the 
Class to
the extent necessary to reflect the payment of taxes at specified tax 
rates.
Thus, the equivalent taxable yield always will exceed the Fund's yield. For
more information on equivalent taxable yields, refer to the table under 
"Divi-
dends, Distributions and Taxes."
 
 TOTAL RETURN
          
  From time to time the Fund may include the Fund's total return, average
annual total return and current dividend return in advertisements and/or 
other
types of sales literature. These figures are computed separately for Class 
A,
Class B, Class C and Class Y shares of the Fund. These figures are based on
historical earnings and are not intended to indicate future performance. 
Total
return is computed for a specified period of time assuming deduction of the
maximum sales charge, if any, from the initial amount invested and 
reinvestment
of all income dividends and capital gain distributions on the reinvestment
dates at prices calculated as stated in this Prospectus, then dividing the
value of the investment at the end of the period so calculated by the 
initial
amount invested and subtracting 100%. The standard average annual total 
return,
as prescribed by the SEC, is derived from this total return, which provides 
the
ending redeemable value. Such standard total return information may also be
accompanied with nonstandard total return information for differing periods
computed in the same manner but without annualizing the total return or 
taking
sales charges into account. The Fund calculates current dividend return for
each Class by annualizing the most recent monthly distribution and dividing 
by
the net asset value or the maximum public offering price (including sales
charge) on the last     
 
                                                                              
37
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 PERFORMANCE (CONTINUED)     
   
day of the period for which current dividend return is presented. The 
current
dividend return for each Class may vary from time to time depending on 
market
conditions, the composition of its investment portfolio and operating 
expenses.
These factors and possible differences in the methods used in calculating 
cur-
rent dividend return should be considered when comparing a Class' current
return to yields published for other investment companies and other 
investment
vehicles. The Fund may also include comparative performance information in
advertising or marketing its shares. Such performance information may 
include
data from Lipper Analytical Services, Inc. or similar independent services 
that
monitor the performance of mutual funds, or other industry publications. 
The
Fund will include performance data for Class A, Class B, Class C and Class 
Y
shares in any advertisement or information including performance data of 
the
Fund.     
       
       
       
 MANAGEMENT OF THE FUND
 
 BOARD OF DIRECTORS
   
  Overall responsibility for management and supervision of the Fund rests 
with
the Fund's Board of Directors. The Directors approve all significant 
agreements
between the Fund and the companies that furnish services to the Fund, 
including
agreements with the Fund's distributor, investment adviser, administrator, 
sub-
administrator, custodian and transfer agent. The day-to-day operations of 
the
Fund are delegated to the Fund's investment adviser, administrator and sub-
administrator. The Statement of Additional Information contains background
information regarding each Director and executive officer of the Fund.     
 
 INVESTMENT ADVISER--GREENWICH STREET ADVISORS
   
  Greenwich Street Advisors, located at 388 Greenwich Street, New York, New
York 10013, serves as the Fund's investment adviser. Greenwich Street 
Advisors
(through predecessor entities) has been in the investment counseling 
business
since 1934 and is a division of SBMFMI. SBMFMI is a registered investment
adviser whose principal executive offices are located at 388 Greenwich 
Street,
New York, New York 10013. Greenwich Street Advisors renders investment 
advice
to investment companies that had aggregate assets under management as of
September 30, 1994, in excess of $45.8 billion.     
 
 
38
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 MANAGEMENT OF THE FUND (CONTINUED)
   
  Subject to the supervision and direction of the Fund's Board of 
Directors,
Greenwich Street Advisors manages the Fund's portfolio in accordance with 
the
Fund's stated investment objective and policies, makes investment decisions 
for
the Fund, places orders to purchase and sell securities and employs profes-
sional portfolio managers and securities analysts who provide research 
services
to the Fund. For investment advisory services rendered, the Fund pays 
Greenwich
Street Advisors a fee at the following annual rates of average daily net
assets: 0.35% up to $500 million; 0.32% of the next $1 billion; and 0.29% 
in
excess of $1.5 billion. For the fiscal year ended February 28, 1994, 
Greenwich
Street Advisors was paid investment advisory fees equal to 0.32% of the 
value
of the average daily net assets of the Fund.     
 
 PORTFOLIO MANAGEMENT
 
  Joseph P. Deane, Vice President, Investment Officer of the Fund since 
Novem-
ber 1, 1988 and Managing Director of Greenwich Street Advisors, is 
responsible
for managing the day-to-day operations of the Fund, including the making of
investment decisions.
   
  Management's discussion and analysis, and additional performance 
regarding
the Fund during the fiscal year ended February 28, 1994 is included in the
Annual Report dated February 28, 1994. A copy of the Annual Report may be
obtained upon request and without charge from a Smith Barney Financial 
Consul-
tant or by writing or calling the Fund at the address or phone number 
listed on
page one of this Prospectus.     
    
 ADMINISTRATOR--SBMFMI     
   
  SBMFMI serves as the Fund's administrator and generally assists in all
aspects of the Fund's administration and operation. SBMFMI provides 
investment
management and administration services to investment companies that had 
aggre-
gate assets under management as of September 30, 1994 in excess of $9.5 
bil-
lion. For administration services rendered, the Fund pays SBMFMI a fee at 
the
following annual rates of average daily net assets: 0.20% up to $500 
million;
0.18% of the next $1 billion; and 0.16% of net assets in excess of $1.5 
bil-
lion.     
          
 SUB-ADMINISTRATOR--BOSTON ADVISORS     
   
  Boston Advisors, located at One Boston Place, Boston, Massachusetts 
02108,
serves as the Fund's sub-administrator. Boston Advisors provides investment
    
                                                                              
39
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 MANAGEMENT OF THE FUND (CONTINUED)     
   
management, investment advisory and/or administrative services to 
investment
companies that had aggregate assets under management as of September 30, 
1994,
in excess of $48.6 billion.     
   
  Boston Advisors calculates the net asset value of the Fund's shares and 
gen-
erally assists SBMFMI in all aspects of the Fund's administration and 
opera-
tion. Under a sub-administration agreement dated July 20, 1994, Boston 
Advisors
is paid a portion of the administration fee paid by the Fund to SBMFMI at a
rate agreed upon from time to time between Boston Advisors and SBMFMI. 
Prior to
July 20, 1994, Boston Advisors served as the Fund's administrator. For the 
fis-
cal year ended February 28, 1994, Boston Advisors was paid 0.18% in sub-
invest-
ment advisory and/or administration fees.     
 
 DISTRIBUTOR
   
  Smith Barney is located at 388 Greenwich Street, New York, New York 
10013.
Smith Barney distributes shares of the Fund as principal underwriter and as
such conducts a continuous offering pursuant to a "best efforts" 
arrangement
requiring Smith Barney to take and pay for only such securities as may be 
sold
to the public. Pursuant to a plan of distribution adopted by the Fund under
Rule 12b-1 under the 1940 Act (the "Plan"), Smith Barney is paid a service 
fee
with respect to Class A, Class B and Class C shares of the Fund at the 
annual
rate of 0.15% of the average daily net assets of the respective Class. 
Smith
Barney is also paid a distribution fee with respect to Class B and Class C
shares at the annual rate of 0.50% and 0.55%, respectively, of the average
daily net assets attributable to those Classes. Class B shares which 
automati-
cally convert to Class A shares eight years after the date of original 
purchase
will no longer be subject to a distribution fee. The fees are used by
Smith Barney to pay its Financial Consultants for servicing shareholder
accounts and, in the case of Class B and Class C shares, to cover expenses 
pri-
marily intended to result in the sale of those shares. These expenses 
include:
advertising expenses; the cost of printing and mailing prospectuses to 
poten-
tial investors; payments to and expenses of Smith Barney Financial 
Consultants
and other persons who provide support services in connection with the 
distribu-
tion of shares; interest and/or carrying charges; and indirect and overhead
costs of Smith Barney associated with the sale of Fund shares, including 
lease,
utility, communications and sales promotion expenses.     
 
40
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
    
 DISTRIBUTOR (CONTINUED)     
          
  The payments to Smith Barney Financial Consultants for selling shares of 
a
Class include a commission or fee paid by the investor or Smith Barney at 
the
time of sale and, with respect to Class A, Class B and Class C shares, a 
con-
tinuing fee for servicing shareholder accounts for as long as a shareholder
remains a holder of that Class. Smith Barney Financial Consultants may 
receive
different levels of compensation for selling different Classes of shares. 
    
   
  Payments under the Plan are not tied exclusively to the distribution and
shareholder service expenses actually incurred by Smith Barney and the 
payments
may exceed distribution expenses actually incurred. The Fund's Board of 
Direc-
tors will evaluate the appropriateness of the Plan and its payment terms on 
a
continuing basis and in so doing will consider all relevant factors, 
including
expenses borne by Smith Barney, amounts received under the Plan and 
proceeds of
the CDSC.     
 
 ADDITIONAL INFORMATION
   
  The Fund was incorporated under the laws of the State of Maryland on
September 16, 1980, and is registered with the SEC as a diversified, open-
end
management investment company. Each Class of the Fund represents an 
identical
interest in the Fund's investment portfolio. As a result, the Classes have 
the
same rights, privileges and preferences, except with respect to: (a) the 
desig-
nation of each Class; (b) the effect of the respective sales charges for 
each
Class; (c) the distribution and/or service fees borne by each Class; (d) 
the
expenses allocable exclusively to each Class; (e) voting rights on matters
exclusively affecting a single Class; (f) the exchange privilege of each 
Class;
and (g) the conversion feature of the Class B shares. The Board of 
Directors
does not anticipate that there will be any conflicts among the interests of 
the
holders of the different Classes. The Directors, on an ongoing basis, will 
con-
sider whether any such conflict exists and, if so, take appropriate action.
    
  The Fund does not hold annual shareholder meetings. There normally will 
be no
meetings of shareholders for the purpose of electing Directors unless and 
until
such time as less than a majority of the Directors holding office have been
elected by shareholders. The Directors will call a meeting for any purpose 
upon
written request of shareholders holding at least 10% of the Fund's 
outstanding
 
                                                                              
41
 
   
SMITH BARNEY     
Managed Municipals Fund Inc.
 
 ADDITIONAL INFORMATION (CONTINUED)
   
shares and the Fund will assist shareholders in calling such a meeting as
required by the 1940 Act. When matters are submitted for shareholder vote,
shareholders of each Class will have one vote for each full share owned and 
a
proportionate, fractional vote for any fractional share held of that Class.
Generally, shares of the Fund will be voted on a Fund-wide basis on all 
matters
except matters affecting only the interests of one Class.     
   
  Boston Safe Deposit and Trust Company is an indirect wholly owned 
subsidiary
of Mellon, and is located at One Boston Place, Boston, Massachusetts 02108, 
and
serves as custodian of the Fund's investments.     
 
  TSSG, is located at Exchange Place, Boston, Massachusetts 02109, and 
serves
as the Fund's transfer agent.
   
  The Fund sends to each of its shareholders a semi-annual report and an
audited annual report, which include listings of the investment securities 
held
by the Fund at the end of the reporting period. In an effort to reduce the
Fund's printing and mailing costs, the Fund plans to consolidate the 
mailing of
its semi-annual and annual reports by household. This consolidation means 
that
a household having multiple accounts with the identical address of record 
will
receive a single copy of each report. Shareholders who do not want this 
consol-
idation to apply to their account should contact their Financial 
Consultants or
the Fund's transfer agent.     
       
                            -----------------------
   
  No person has been authorized to give any information or to make any 
repre-
sentations in connection with this offering other than those contained in 
this
Prospectus and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund or the 
distribu-
tor. This Prospectus does not constitute an offer by the Fund or the 
distribu-
tor to sell or a solicitation of an offer to buy any of the securities 
offered
hereby in any jurisdiction to any person to whom it is unlawful to make 
such an
offer or solicitation in any such jurisdiction.     
 
42
 
                                                                SMITH 
BARNEY
                                                                -----------
- -


                                                    A Member of 
TravelersGroup
                                          [LOGO OF TRAVELERS GROUP APPEARS 
HERE]



                                                                Smith 
Barney 
                                                                     
Managed 
                                                                  
Municipals
                                                                   Fund 
Inc.

                                                        388 Greenwich 
Street
                                                    New York, New York 
10013


[RECYCLING LOGO APPEARS HERE] Recycled 
                              Recyclable                          FUND 5 
175
                                                                   FD0261 
J4   



   
Smith Barney 
MANAGED MUNICIPALS FUND INC. 
388 Greenwich Street 
New York, New York 10013 
(212) 723-9218 

STATEMENT OF ADDITIONAL INFORMATION                       NOVEMBER 7, 1994 

This Statement of Additional Information expands upon and supplements the 
information contained in the current Prospectus of Smith Barney Managed 
Municipals Fund Inc. (the "Fund") dated November 7, 1994, as amended or 
supplemented from time to time, and should be read in conjunction with the 
Fund's Prospectus. The Fund's Prospectus may be obtained from a Smith Bar- 
ney Financial Consultant or by writing or calling the Fund at the address 
or telephone number set forth above. This Statement of Additional Informa- 
tion, although not in itself a prospectus, is incorporated by reference 
into the Prospectus in its entirety. 
    

                             TABLE OF CONTENTS 

For ease of reference, the same section headings are used in both the Pro- 
spectus and this Statement of Additional Information, except where shown 
below. 

   
<TABLE>
<S>                                                                         
<C>
Management of the Fund                                                        
1 
Investment Objective and Management Policies                                  
5 
Municipal Bonds                                                              
10 
Purchase of Shares                                                           
12 
Redemption of Shares                                                         
13 
Distributor                                                                  
14 
Valuation of Shares                                                          
15 
Exchange Privilege                                                           
15 
Performance Data (See in the Prospectus "The Fund's Performance")            
16 
Taxes (See in the Prospectus "Dividends, Distributions and Taxes")           
19 
Additional Information                                                       
21 
Financial Statements                                                         
21 
Appendix                                                                    
A-1 
</TABLE>
    

                          MANAGEMENT OF THE FUND 

The executive officers of the Fund are employees of certain of the organi- 
zations that provide services to the Fund. These organizations are the 
following: 


   
<TABLE>
<CAPTION>
NAME                                             SERVICE 
<S>                                              <C>
Smith Barney Inc. 
  ("Smith Barney")                               Distributor 
Smith Barney Mutual Funds Management Inc. 
  ("SBMFM")                                      Investment Adviser and 
Administrator 
The Boston Company Advisors, Inc. 
  ("Boston Advisors")                            Sub-Administrator 
Boston Safe Deposit and Trust Company 
  ("Boston Safe")                                Custodian 
The Shareholder Services Group, Inc. 
  ("TSSG"), 
  a subsidiary of First Data Corporation         Transfer Agent 
</TABLE>
    

These organizations and the functions they perform for the Fund are dis- 
cussed in the Prospectus and in this Statement of Additional Information. 

DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND 

The names of the Directors and executive officers of the Fund, together 
with information as to their principal business occupations during the 
past five years, are shown below. Each Director who is an "interested per- 
son" of the Fund, as defined in the Investment Company Act of 1940, as 
amended (the "1940 Act"), is indicated by an asterisk. 

Herbert Barg, Director. Private investor. His address is 273 Montgomery 
Avenue, Bala Cynwyd, Pennsylvania 19004. 

   
*Alfred J. Bianchetti, Director. Retired; formerly Senior Consultant to 
Dean Witter Reynolds Inc. His address is 19 Circle End Drive, Ramsey, New 
Jersey 17466. 
    

Martin Brody, Director. Vice Chairman of the Board of Restaurant Associ- 
ates Industries, Corp.; a Director of Jaclyn, Inc. His address is HMK As- 
sociates, Three ADP Boulevard, Roseland, New Jersey 07068. 

Dwight B. Crane, Director. Professor, Graduate School of Business Adminis- 
tration, Harvard University; a Director of Peer Review Analysis, Inc. His 
address is Graduate School of Business Administration, Harvard University, 
Boston, Massachusetts 02163. 

   
James J. Crisona, Director. Attorney; formerly Justice of the Supreme 
Court of the State of New York. His address is 118 East 60th Street, New 
York, New York 10022. 

Burt N. Dorsett, Director. Managing Partner of Dorsett McCabe Management, 
Inc., an investment counselling firm; Director of Research Corporation 
Technologies Inc., a non-profit patent-clearing and licensing firm. His 
address is 201 East 62nd Street, New York, New York 10021. 
    

Robert A. Frankel, Director. Management Consultant; retired Vice President 
of The Reader's Digest Association, Inc. His address is 102 Grand Street, 
Croton-on-Hudson, New York 10520. 
   
    

   
Elliot S. Jaffe, Director. Chairman of the Board and President of The 
Dress Barn, Inc. His address is 88 Hamilton Avenue, Stamford, Connecticut 
06904. 
    

Dr. Paul Hardin, Director. Chancellor of the University of North Carolina 
at Chapel Hill; a Director of The Summit Bancorporation. His address is 
University of North Carolina, 103 S. Building, Chapel Hill, North Carolina 
27599. 

Stephen E. Kaufman, Director. Attorney. His address is 277 Park Avenue, 
New York, New York 10017. 

Joseph J. McCann, Director. Financial Consultant; formerly, Vice President 
of Ryan Homes, Inc., Pittsburgh, Pennsylvania. His address is 200 Oak Park 
Place, Pittsburgh, Pennsylvania 15243. 

   
*Heath B. McLendon, Chairman of the Board and Investment Officer. Execu- 
tive Vice President of Smith Barney and Chairman of Smith Barney Strategy 
Advisers Inc.; prior to July 1993, Senior Executive Vice President of 
Shearson Lehman Brothers Inc. ("Shearson Lehman Brothers"); Vice Chairman 
of Shearson Asset Management; a Director of PanAgora Asset Management, 
Inc. and PanAgora Asset Management Limited. His address is 388 Greenwich 
Street, New York, New York 10013. 

Cornelius C. Rose, Jr., Director. President, Cornelius C. Rose Associates, 
Inc., financial consultants, and Chairman and Director of Performance 
Learning Systems, an educational consultant. His address is Fair Oaks, En- 
field, New Hampshire 03748. 

Stephen J. Treadway, President. Executive Vice President and Director of 
Smith Barney; Director and President of SBMFM; and Trustee of Corporate 
Realty Income Trust I. His address is 388 Greenwich Street, New York, New 
York 10013. 

Richard P. Roelofs, Executive Vice President. Managing Director of Smith 
Barney; President of Smith Barney Strategy Advisers Inc.; prior to July 
1993, Senior Vice President of Shearson Lehman Brothers; Vice President of 
Shearson Lehman Investment Strategy Advisors Inc. His address is 388 
Greenwich Street, New York, New York 10013. 

Joseph P. Deane, Vice President and Investment Officer. Investment Officer 
of SBMFM; prior to July 1993, Managing Director of Shearson Lehman Advi- 
sors. His address is 388 Greenwich Street, New York, New York 10013. 

David Fare, Investment Officer. Investment Officer of SBMFM; prior to July 
1993, Vice President of Shearson Lehman Advisors. His address is 388 
Greenwich Street, New York, New York 10013. 

Lewis E. Daidone, Treasurer. Managing Director and Chief Financial Officer 
of Smith Barney; Director and Senior Vice President of SBMFM. His address 
is 388 Greenwich Street, New York, New York 10013. 

Christina T. Sydor, Secretary. Managing Director of Smith Barney; General 
Counsel and Secretary of SBMFM. Her address is 388 Greenwich Street, New 
York, New York 10013. 

Each Director also serves as a director, trustee or general partner of 
other mutual funds for which Smith Barney serves as distributor. As of Oc- 
tober 31, 1994, the Directors and officers of the Fund, as a group, owned 
less than 1.00% of the outstanding common stock of the Fund. 

No officer, director or employee of Smith Barney or any Smith Barney af- 
filiates will receive any compensation from the Fund for serving as an of- 
ficer or Director of the Fund. The Fund pays each Director who is not an 
officer, director or employee of Smith Barney or any of its affiliates a 
fee of $2,000 per annum plus $500 per meeting attended and reimburses them 
for travel and out-of-pocket expenses. For the fiscal year ended February 
28, 1994, such fees and expenses totalled $66,951. 

INVESTMENT ADVISER AND ADMINISTRATOR -- SBMFM 
SUB-ADMINISTRATOR -- BOSTON ADVISORS 

SBMFM serves as investment adviser to the Fund pursuant to a written 
agreement dated July 30, 1993 (the "Advisory Agreement"), which was first 
approved by the Board of Directors, including a majority of those Direc- 
tors who are not "interested persons" of the Fund or Smith Barney, on 
April 7, 1993. The services provided by SBMFM under the Advisory Agreement 
are described in the Prospectus. SBMFM bears all expenses in connection 
with the performance of its services and pays the salary of any officer or 
employee who is employed by both it and the Fund. SBMFM is a wholly owned 
subsidiary of Smith Barney Holdings Inc. ("Holdings"). Holdings is a 
wholly owned subsidiary of The Travelers Inc. ("Travelers"). 

As compensation for SBMFM's services, the Fund pays a fee paid monthly at 
the following annual rates of average daily net assets: 0.35% up to $500 
million; 0.32% of the next $1 billion; and 0.29% in excess of $1.5 bil- 
lion. For the 1994, 1993 and 1992 fiscal years, the Fund paid Mutual Man- 
agement Corp., a wholly owned subsidiary of Holdings and previously the 
Fund's investment adviser and/or Shearson Lehman Advisors, the Fund's in- 
vestment adviser prior to Mutual Management Corp., $6,502,360, $5,458,117 
and $5,074,028, respectively, in investment advisory fees. 

SBMFM also serves as administrator to the Fund pursuant to a written 
agreement (the "Administration Agreement") dated April 20, 1994, which was 
most recently approved by the Fund's Board of Directors, including a ma- 
jority of Directors who are not "interested persons" of the Fund or Smith 
Barney, on July 20, 1994. As compensation for SBMFM's services rendered, 
the Fund pays a fee paid monthly at the following annual rates of average 
daily net assets: 0.20% up to $500 million; 0.18% of the next $1 billion; 
and 0.16% in excess of $1.5 billion. 

Prior to April 20, 1994, Boston Advisors served as administrator to the 
Fund. Boston Advisors currently serves as sub-administrator to the Fund 
under a written agreement (the "Sub-Administration Agreement") dated April 
20, 1994, which was most recently approved by the Fund's Board of Direc- 
tors, including a majority of Directors who are not "interested persons" 
of the Fund or Boston Advisors, on July 20, 1994. Prior to the close of 
business on May 21, 1993, Boston Advisors also acted in the capacity as 
the Fund's sub-investment adviser and administrator. Boston Advisors is a 
wholly owned subsidiary of The Boston Company, Inc. ("TBC"), a financial 
services holding company, which is in turn a wholly owned subsidiary of 
Mellon Bank Corporation ("Mellon"). 

As compensation for Boston Advisors' services rendered, the Fund paid a 
fee computed daily and paid monthly at the following annual rates: 0.20% 
of the value of the Fund's average daily net assets up to $500 million; 
0.18% of the value of its average daily net assets of the next $1 billion; 
and 0.16% of the value of average daily net assets in excess of $1.5 bil- 
lion. For the 1994, 1993 and 1992 fiscal years, the Fund paid Boston Advi- 
sors, $3,656,475, $3,083,709 and $2,869,731, respectively, in sub- 
investment advisory and/or administration fees. 

Certain of the services provided to the Fund by SBMFM and Boston Advisors 
pursuant to the Administration Agreement are described in the Prospectus 
under "Management of the Fund." In addition to those services, SBMFM and 
Boston Advisors pay the salaries of all officers and employees who are em- 
ployed by both SBMFM and Boston Advisors and the Fund, maintains office 
facilities for the Fund, furnishes the Fund with statistical and research 
data, clerical help and accounting, data processing, bookkeeping, internal 
auditing and legal services and certain other services required by the 
Fund, prepares reports to the Fund's shareholders and prepares tax returns 
and reports to and filings with the Securities and Exchange Commission 
(the "SEC") and state blue sky authorities. SBMFM and Boston Advisors bear 
all expenses in connection with the performance of their services. 

The Fund bears expenses incurred in its operation, including: taxes, in- 
terest, brokerage fees and commissions, if any; fees of Directors who are 
not officers, directors, shareholders or employees of Smith Barney; SEC 
fees and state blue sky qualification fees; charges of custodians; trans- 
fer and dividend disbursing agent fees; certain insurance premiums; out- 
side auditing and legal expenses; costs of any independent pricing ser- 
vice; costs of maintaining corporate existence; costs of investor services 
(including allocated telephone and personnel expenses); costs of preparing 
and printing of prospectuses for regulatory purposes and for distribution 
to existing shareholders, costs of shareholders' reports and shareholder 
meetings; and meetings of the officers or Board of Directors of the Fund. 

SBMFM and Boston Advisors have agreed that if in any fiscal year the ag- 
gregate expenses of the Fund (including fees pursuant to the Advisory 
Agreement, Administration and Sub-Administration Agreements, but excluding 
interest, taxes, brokerage and, with the prior written consent of the nec- 
essary state securities commissions, extraordinary expenses) exceed the 
expense limitation of any state having jurisdiction over the Fund, SBMFM 
and Boston Advisors will, to the extent required by state law, reduce 
their fees by the amount of such excess expenses, such amount to be allo- 
cated between them in the proportion that their respective fees bear to 
the aggregate of such fees paid by the Fund. Such fee reductions, if any, 
will be reconciled on a monthly basis. The most restrictive state limita- 
tion currently applicable to the Fund would require a fee reduction in any 
year that such expenses exceed 2.50% of the first $30 million of average 
daily net assets, 2.00% of the next $70 million of average daily net as- 
sets and 1.50% of the remaining average daily net assets. No fee reduction 
was required for the 1994, 1993 and 1992 fiscal years. 
    

COUNSEL AND AUDITORS 

Willkie Farr & Gallagher serves as legal counsel to the Fund. The Direc- 
tors who are not "interested persons" of the Fund have selected Stroock & 
Stroock & Lavan as their counsel. 

   
KPMG Peat Marwick, independent accountants, 345 Park Avenue, New York, New 
York 10154, serve as auditors of the Fund and render an opinion on the 
Fund's financial statements annually. 
    

               INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 

The Prospectus discusses the Fund's investment objective and the policies 
it employs to achieve its objective. The following discussion supplements 
the description of the Fund's investment objective and management policies 
in the Prospectus. For purposes of this Statement of Additional Informa- 
tion, intermediate- and long-term debt obligations issued by or on behalf 
of states, territories and possessions of the United States and the Dis- 
trict of Columbia and their political subdivisions, agencies or instrumen- 
talities, or multistate agencies or authorities, are collectively referred 
to as "Municipal Bonds." 

RATINGS AS INVESTMENT CRITERIA 

   
In general, the ratings of Moody's Investors Service, Inc. ("Moody's") and 
Standard & Poor's Corporation ("S&P") represent the opinions of those 
agencies as to the quality of the Municipal Bonds and short-term invest- 
ments which they rate. It should be emphasized, however, that such ratings 
are relative and subjective, are not absolute standards of quality and do 
not evaluate the market risk of securities. These ratings will be used by 
the Fund as initial criteria for the selection of portfolio securities, 
but the Fund also will rely upon the independent advice of SBMFM to evalu- 
ate potential investments. Among the factors that will be considered are 
the long-term ability of the issuer to pay principal and interest and gen- 
eral economic trends. To the extent the Fund invests in lower-rated and 
comparable unrated securities, the Fund's achievement of its investment 
objective may be more dependent on SBMFM's credit analysis of such securi- 
ties than would be the case for a portfolio consisting entirely of higher- 
rated securities. The Appendix contains further information concerning the 
ratings of Moody's and S&P and their significance. 

Subsequent to its purchase by the Fund, an issue of Municipal Bonds may 
cease to be rated or its rating may be reduced below the rating given at 
the time the securities were acquired by the Fund. Neither event will re- 
quire the sale of such Municipal Bonds by the Fund, but SBMFM will con- 
sider such event in its determination of whether the Fund should continue 
to hold such Municipal Bonds. In addition, to the extent the ratings 
change as a result of changes in such organizations in their rating sys- 
tems or due to a corporate restructuring of Moody's or S&P, the Fund will 
attempt to use comparable ratings as standards for its investments in ac- 
cordance with its investment objective and policies. 
    

The Fund may invest up to 25% of its total assets in securities rated 
below A, MIG 3 or Prime-1 (P-1) by Moody's or A, SP-2 or A-3 by S&P, or in 
unrated securities of comparable quality. Such securities (a) will likely 
have some quality and protective characteristics that, in the judgment of 
rating organizations, are outweighed by large uncertainties or major risk 
exposures to adverse conditions and (b) are predominantly speculative with 
respect to the issuer's capacity to pay interest and repay principal in 
accordance with the terms of the obligation. 

TEMPORARY INVESTMENTS 

When the Fund is maintaining a defensive position, the Fund may invest in 
short-term investments ("Temporary Investments") consisting of (a) the 
following tax-exempt securities: notes of municipal issuers having, at the 
time of purchase, a rating within the three highest grades of Moody's or 
S&P or, if not rated, having an issue of outstanding Municipal Bonds rated 
within the three highest grades by Moody's or S&P and (b) the following 
taxable securities: obligations of the United States government, its agen- 
cies or instrumentalities ("U.S. government securities"), repurchase 
agreements, other debt securities rated within the three highest grades by 
Moody's and S&P, commercial paper rated in the highest grade by either of 
such rating services, and certificates of deposit of domestic banks with 
assets of $1 billion or more. The Fund may invest in Temporary Investments 
for defensive reasons in anticipation of a market decline. At no time will 
more than 20% of the Fund's total assets be invested in Temporary Invest- 
ments unless the Fund has adopted a defensive investment policy. The Fund 
intends, however, to purchase tax-exempt Temporary Investments pending the 
investment of the proceeds of the sale of portfolio securities or shares 
of the Fund's common stock, or in order to have highly liquid securities 
available to meet anticipated redemptions. Since the commencement of its 
operations, the Fund has not found it necessary to purchase taxable Tempo- 
rary Investments. 

   
Repurchase Agreements. The Fund may engage in repurchase agreements with 
banks which are the issuers of instruments acceptable for purchase by the 
Fund and with certain dealers on the Federal Reserve Bank of New York's 
list of reporting dealers. A repurchase agreement is a contract under 
which the buyer of a security simultaneously commits to resell the secu- 
rity to the seller at an agreed-upon price on an agreed-upon date. Under 
the terms of a typical repurchase agreement, the Fund would acquire an un- 
derlying debt obligation for a relatively short period (usually not more 
than one week) subject to an obligation of the seller to repurchase, and 
the Fund to resell, the obligation at an agreed-upon price and time, 
thereby determining the yield during the Fund's holding period. This ar- 
rangement results in a fixed rate of return that is not subject to market 
fluctuations during the Fund's holding period. The value of the underlying 
securities will be at least equal at all times to the total amount of the 
repurchase obligation, including interest. Repurchase agreements could in- 
volve certain risks in the event of default or insolvency of the other 
party, including possible delays or restrictions upon the Fund's ability 
to dispose of the underlying securities, the risk of a possible decline in 
the value of the underlying securities during the period in which the Fund 
seeks to assert its rights to them, the risk of incurring expenses associ- 
ated with asserting those rights and the risk of losing all or part of the 
income from the agreement. SBMFM or Boston Advisors, acting under the su- 
pervision of the Fund's Board of Directors, reviews on an ongoing basis 
the value of the collateral and the creditworthiness of those banks and 
dealers with which the Fund enters into repurchase agreements to evaluate 
potential risks. 
    

INVESTMENT RESTRICTIONS 

The Fund has adopted the following investment restrictions for the protec- 
tion of shareholders. Restrictions 1 through 8 cannot be changed without 
approval by the holders of a majority of the outstanding shares of the 
Fund, defined as the lesser of (a) 67% of the Fund's shares present at a 
meeting if the holders of more than 50% of the outstanding shares of the 
Fund are present or represented by proxy or (b) more than 50% of the 
Fund's outstanding shares. The remaining restrictions may be changed by 
the Board of Directors at any time. The Fund may not: 

    1. With respect to 75% of the value of its total assets, invest more 
    than 5% of its total assets in securities of any one issuer, except 
    securities issued or guaranteed by the United States government, or 
    purchase more than 10% of the outstanding voting securities of such 
    issuer. 

    2. Issue senior securities as defined in the 1940 Act and any rules 
    and orders thereunder, except insofar as the Fund may be deemed to 
    have issued senior securities by reason of: (a) borrowing money or 
    purchasing securities on a when-issued or delayed-delivery basis; (b) 
    purchasing or selling futures contracts and options on futures con- 
    tracts and other similar instruments; and (c) issuing separate classes 
    of shares. 

    3. Invest more than 25% of its total assets in securities, the issu- 
    ers of which are in the same industry. For purposes of this limita- 
    tion, U.S. government securities and securities of state or municipal 
    governments and their political subdivisions are not considered to be 
    issued by members of any industry. 

    4. Borrow money, except that the Fund may borrow from banks for tem- 
    porary or emergency (not leveraging) purposes, including the meeting 
    of redemption requests which might otherwise require the untimely dis- 
    position of securities, in an amount not exceeding 10% of the value of 
    the Fund's total assets (including the amount borrowed) valued at mar- 
    ket less liabilities (not including the amount borrowed) at the time 
    the borrowing is made. Whenever borrowings exceed 5% of the value of 
    the Fund's total assets, the Fund will not make additional invest- 
    ments. 

    5. Make loans. This restriction does not apply to: (a) the purchase 
    of debt obligations in which the Fund may invest consistent with its 
    investment objectives and policies; (b) repurchase agreements; and (c) 
    loans of its portfolio securities. 

    6. Engage in the business of underwriting securities issued by other 
    persons, except to the extent that the Fund may technically be deemed 
    to be an underwriter under the Securities Act of 1933, as amended, in 
    disposing of portfolio securities. 

    7. Purchase or sell real estate, real estate mortgages, real estate 
    investment trust securities, commodities or commodity contracts, but 
    this shall not prevent the Fund from: (a) investing in securities of 
    issuers engaged in the real estate business and securities which are 
    secured by real estate or interests therein; (b) holding or selling 
    real estate received in connection with securities it holds; or (c) 
    trading in futures contracts and options on futures contracts. 

    8. Purchase any securities on margin (except for such short-term cred- 
    its as are necessary for the clearance of purchases and sales of port- 
    folio securities) or sell any securities short (except against the 
    box). For purposes of this restriction, the deposit or payment by the 
    Fund of initial or maintenance margin in connection with futures con- 
    tracts and related options and options on securities is not considered 
    to be the purchase of a security on margin. 

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

   
    10. Invest more than 5% of the value of its total assets in the secu- 
    rities of issuers having a record, including predecessors, of less 
    than three years of continuous operation, except U.S. government secu- 
    rities. (For purposes of this restriction, issuers include predeces- 
    sors, sponsors, controlling persons, general guarantors and origina- 
    tors of underlying assets which have less than three years of continu- 
    ous operation or relevant business experiences.) 
    

    11. Invest in companies for the purpose of exercising control. 

    12. Invest in securities of other investment companies, except as they 
    may be acquired as part of a merger, consolidation or acquisition of 
    assets and except for the purchase, to the extent permitted by Section 
    12 of the 1940 Act, of shares of registered unit investment trusts 
    whose assets consist substantially of Municipal Bonds. 

    13. Purchase or sell oil and gas interests. 

    14. Engage in the purchase and sale of put, call, straddle or spread 
    options or in writing of such options, except that the Fund may pur- 
    chase and sell options on interest rate futures contracts. 

Certain restrictions listed above permit the Fund without shareholder ap- 
proval to engage in investment practices that the Fund does not currently 
pursue. The Fund has no present intention of altering its current invest- 
ment practices as otherwise described in the Prospectus and this Statement 
of Additional Information and any future change in those practices would 
require Board approval and appropriate disclosure to investors. 

For the purposes of Investment Restriction 3, private activity bonds, 
where the payment of principal and interest is the ultimate responsibility 
of companies within the same industry, are grouped together as an "indus- 
try." 

   
If any percentage restriction described above is complied with at the time 
of investment, a later increase or decrease in percentage resulting from a 
change in the value of the assets will not constitute a violation of such 
restriction. In order to permit the sale of the Fund's shares in certain 
states, the Fund may make commitments more restrictive than the restric- 
tions listed above. Should the Fund determine that any such commitment is 
no longer in the best interests of the Fund and its shareholders, it will 
revoke the commitment by terminating sales of its shares in the state in- 
volved. 
    

PORTFOLIO TRANSACTIONS 

Newly issued securities normally are purchased directly from the issuer or 
from an underwriter acting as a principal. Other purchases and sales usu- 
ally are placed with those dealers from which it appears that the best 
price or execution will be obtained; those dealers may be acting as either 
agents or principals. The purchase price paid by the Fund to underwriters 
of newly issued securities usually includes a concession paid by the is- 
suer to the underwriter, and purchases of after-market securities from 
dealers normally are executed at a price between the bid and asked prices. 
For the fiscal year ended February 28, 1994, the Fund paid $167,464 in 
brokerage commissions. For the fiscal years ended February 28, 1993 and 
February 29, 1992, the Fund paid no brokerage commissions. 

   
Allocation of transactions, including their frequency, to various dealers 
is determined by SBMFM in its best judgment and in a manner deemed fair 
and reasonable to shareholders. The primary considerations are the avail- 
ability of the desired security and the prompt execution of orders in an 
effective manner at the most favorable prices. Subject to these consider- 
ations, dealers which provide supplemental investment research and statis- 
tical or other services to SBMFM may receive orders for transactions by 
the Fund. Information so received enables SBMFM to supplement its own re- 
search and analysis with the views and information of other securities 
firms. Such information may be useful to SBMFM in serving both the Fund 
and its other clients, and, conversely, supplemental information obtained 
by the placement of business of other clients may be useful to SBMFM in 
carrying out its obligations to the Fund. 

The Fund will not purchase Municipal Bonds during the existence of any un- 
derwriting or selling group relating thereto of which SBMFM is a member, 
except to the extent permitted by the SEC. Under certain circumstances, 
the Fund may be at a disadvantage because of this limitation in comparison 
with other investment companies which have a similar investment objective 
but which are not subject to this limitation. 

While investment decisions for the Fund are made independently from those 
of the other accounts managed by SBMFM, investments of the type the Fund 
may make also may be made by such other accounts. When the Fund and one or 
more other accounts managed by SBMFM are prepared to invest in, or desire 
to dispose of, the same security, available investments or opportunities 
for sales will be allocated in a manner believed by SBMFM to be equitable 
to each. In some cases this procedure may adversely affect the price paid 
or received by the Fund or the size of the position obtained or disposed 
of by the Fund. 
    

PORTFOLIO TURNOVER 

While the Fund's portfolio turnover rate (the lesser of purchases or sales 
of portfolio securities during the year, excluding purchases or sales of 
short-term securities, divided by the monthly average value of portfolio 
securities) is generally not expected to exceed 100%, it has in the past 
exceeded 100%. The rate of turnover will not be a limiting factor, how- 
ever, when the Fund deems it desirable to sell or purchase securities. 
This policy should not result in higher brokerage commissions to the Fund, 
as purchases and sales of portfolio securities are usually effected as 
principal transactions. Securities may be sold in anticipation of a rise 
in interest rates (market decline) or purchased in anticipation of a de- 
cline in interest rates (market rise) and later sold. In addition, a secu- 
rity may be sold and another security of comparable quality purchased at 
approximately the same time to take advantage of what the Fund believes to 
be a temporary disparity in the normal yield relationship between the two 
securities. These yield disparities may occur for reasons not directly re- 
lated to the investment quality of particular issues or the general move- 
ment of interest rates, such as changes in the overall demand for, or sup- 
ply of, various types of tax-exempt securities. For the 1994 and 1993 fis- 
cal years, the Fund's portfolio turnover rates were 131% and 206%, 
respectively. This higher level of turnover was due to significant changes 
in the portfolio in response to the unusual volatility experienced in mu- 
nicipal bond markets during this period. 

                              MUNICIPAL BONDS 

GENERAL INFORMATION 

Municipal Bonds generally are understood to include debt obligations is- 
sued to obtain funds for various public purposes, including construction 
of a wide range of public facilities, refunding of outstanding obliga- 
tions, payment of general operating expenses and extensions of loans to 
public institutions and facilities. Private activity bonds that are issued 
by or on behalf of public authorities to finance various privately oper- 
ated facilities are included within the term Municipal Bonds if the inter- 
est paid thereon qualifies as excluded from gross income (but not neces- 
sarily from alternative minimum taxable income) for Federal income tax 
purposes in the opinion of bond counsel to the issuer. 

In order to be classified as a diversified investment company under the 
1940 Act, the Fund may not, with respect to 75% of its assets, invest more 
than 5% of its total assets in the securities of any one issuer (except 
U.S. government securities) or own more than 10% of the outstanding voting 
securities of any one issuer. For the purposes of diversification under 
the 1940 Act, the identification of the issuer of Municipal Bonds depends 
upon the terms and conditions of the security. When the assets and reve- 
nues of an agency, authority, instrumentality or other political subdivi- 
sion are separate from those of the government creating the issuing entity 
and the security is backed only by the assets and revenues of such entity, 
such entity is deemed to be the sole issuer. Similarly, in the case of a 
private activity bond, if that bond is backed only by the assets and reve- 
nues of the nongovernmental user, then such nongovernmental user is deemed 
to be the sole issuer. If, however, in either case, the creating govern- 
ment or some other entity guarantees a security, such a guarantee would be 
considered a separate security and is to be treated as an issue of such 
government or other entity. 

The yield on Municipal Bonds is dependent on a variety of factors, includ- 
ing general economic and monetary conditions, general money market fac- 
tors, general conditions of the Municipal Bond market, the financial con- 
dition of the issuer, the size of a particular offering, maturity of the 
obligation offered and the rating of the issue. 

Municipal Bonds also may be subject to the provisions of bankruptcy, in- 
solvency and other laws affecting the rights and remedies of creditors, 
such as the Federal Bankruptcy Code, and laws, if any, which may be en- 
acted by Congress or state legislatures extending the time for payment of 
principal or interest, or both, or imposing other constraints upon en- 
forcement of such obligations or upon the ability of municipalities to 
levy taxes. The possibility also exists that, as a result of litigation or 
other conditions, the power or ability of any one or more issuers to pay, 
when due, the principal of and interest on, its or their Municipal Bonds 
may be materially and adversely affected. 

WHEN-ISSUED SECURITIES 

The Fund may purchase Municipal Bonds on a "when-issued" basis (i.e., for 
delivery beyond the normal settlement date at a stated price and yield). 
The payment obligation and the interest rate that will be received on the 
Municipal Bonds purchased on a when-issued basis are each fixed at the 
time the buyer enters into the commitment. Although the Fund will purchase 
Municipal Bonds on a when-issued basis only with the intention of actually 
acquiring the securities, the Fund may sell these securities before the 
settlement date if it is deemed advisable as a matter of investment strat- 
egy. 

Municipal Bonds are subject to changes in value based upon the public's 
perception of the creditworthiness of the issuers and changes, real or an- 
ticipated, in the level of interest rates. In general, Municipal Bonds 
tend to appreciate when interest rates decline and depreciate when inter- 
est rates rise. Purchasing Municipal Bonds on a when-issued basis, there- 
fore, can involve the risk that the yields available in the market when 
the delivery takes place actually may be higher than those obtained in the 
transaction itself. To account for this risk, a segregated account of the 
Fund consisting of cash or liquid debt securities equal to the amount of 
the when-issued commitments will be established at the Fund's custodian 
bank. For the purpose of determining the adequacy of the securities in the 
account, the deposited securities will be valued at market or fair value. 
If the market or fair value of such securities declines, additional cash 
or securities will be placed in the account on a daily basis so that the 
value of the account will equal the amount of such commitments by the 
Fund. Placing securities rather than cash in the segregated account may 
have a leveraging effect on the Fund's net assets. That is, to the extent 
the Fund remains substantially fully invested in securities at the same 
time it has committed to purchase securities on a when-issued basis, there 
will be greater fluctuations in its net assets than if it had set aside 
cash to satisfy its purchase commitments. Upon the settlement date of the 
when-issued securities, the Fund will meet its obligations from then- 
available cash flow, sale of securities held in the segregated account, 
sale of other securities or, although it normally would not expect to do 
so, from the sale of the when-issued securities themselves (which may have 
a value greater or less than the Fund's payment obligations). Sales of se- 
curities to meet such obligations may involve the realization of capital 
gains, which are not exempt from Federal income taxes. 

When the Fund engages in when-issued transactions, it relies on the seller 
to consummate the trade. Failure of the seller to do so may result in the 
Fund's incurring a loss or missing an opportunity to obtain a price con- 
sidered to be advantageous. 

MUNICIPAL LEASES 

Municipal leases are municipal securities that may take the form of a 
lease or an installment purchase contract issued by state and local gov- 
ernment authorities to obtain funds to acquire a wide variety of equipment 
and facilities such as fire and sanitation vehicles, computer equipment 
and other capital assets. These obligations have evolved to make it possi- 
ble for state and local government authorities to acquire property and 
equipment without meeting constitutional and statutory requirements for 
the issuance of debt. Thus, municipal leases have special risks not nor- 
mally associated with Municipal Bonds. These obligations frequently con- 
tain "non-appropriation" clauses that provide that the governmental issuer 
of the municipal lease has no obligation to make future payments under the 
lease or contract unless money is appropriated for such purposes by the 
legislative body on a yearly or other periodic basis. In addition to the 
non-appropriation risk, municipal leases represent a type of financing 
that has not yet developed the depth of marketability associated with Mu- 
nicipal Bonds; moreover, although the obligations will be secured by the 
leased equipment, the disposition of the equipment in the event of fore- 
closure might prove difficult. In order to limit the risks, the Fund will 
purchase either (a) municipal leases that are rated in the four highest 
categories by Moody's or S&P or (b) unrated municipal leases that are pur- 
chased principally from domestic banks or other responsible third parties 
that have entered into an agreement with the Fund providing the seller 
will either remarket or repurchase the municipal leases within a short pe- 
riod after demand by the Fund. 

                            PURCHASE OF SHARES 

VOLUME DISCOUNTS 

   
The schedule of sales charges on Class A shares described in the Prospec- 
tus applies to purchases made by any "purchaser," which is defined to in- 
clude the following: (a) an individual; (b) an individual's spouse and his 
or her children purchasing shares for his or her own account; (c) a 
trustee or other fiduciary purchasing shares for a single trust estate or 
single fiduciary account; (d) a pension, profit-sharing or other employee 
benefit plan qualified under Section 401(a) of the Internal Revenue Code 
of 1986, as amended (the "Code"), and qualified employee benefit plans of 
employers who are "affiliated persons" of each other within the meaning of 
the 1940 Act; (e) tax-exempt organizations enumerated in Section 501(c)(3) 
or (13) of the Code; and (f) a trustee or other professional fiduciary 
(including a bank, or an investment adviser registered with the SEC under 
the Investment Advisers Act of 1940, as amended) purchasing shares of the 
Fund for one or more trust estates or fiduciary accounts. Purchasers who 
wish to combine purchase orders to take advantage of volume discounts 
should contact their Smith Barney Financial Consultants. 
    

COMBINED RIGHT OF ACCUMULATION 

   
Reduced sales charges, in accordance with the schedule in the Prospectus, 
apply to any purchase of Class A shares if the aggregate investment in 
Class A shares of the Fund and in Class A shares of other funds of the 
Smith Barney Mutual Funds that are offered with an initial sales charge, 
including the purchase being made, of any purchaser is $25,000 or more. 
The reduced sales charge is subject to confirmation of the shareholder's 
holdings through a check of appropriate records. The Fund reserves the 
right to terminate or amend the combined right of accumulation at any time 
after notice to shareholders. For further information regarding the right 
of accumulation, shareholders should contact a Smith Barney Financial Con- 
sultant. 
    

DETERMINATION OF PUBLIC OFFERING PRICE 

   
The Fund offers its shares to the public on a continuous basis. The public 
offering price for Class A and Class Y shares of the Fund is equal to the 
net asset value per share at the time of purchase, plus for Class A shares 
an initial sales charge based on the aggregate amount of the investment. 
The public offering price for Class B and Class C shares (and Class A 
share purchases, including applicable right of accumulation, equalling or 
exceeding $500,000), is equal to the net asset value per share at the time 
of purchase and no sales charge is imposed at the time of purchase. A con- 
tingent deferred sales charge ("CDSC"), however, is imposed on certain re- 
demptions of Class B and Class C shares, and Class A shares when purchased 
in amounts exceeding $500,000. The method of computation of the public of- 
fering price is shown in the Fund's financial statements, which are incor- 
porated by reference into this Statement of Additional Information. 
    

                           REDEMPTION OF SHARES 

The right of redemption may be suspended or the date of payment postponed 
(a) for any period during which the New York Stock Exchange, Inc. ("NYSE") 
is closed (other than for customary weekend and holiday closings), (b) 
when trading in markets the Fund normally utilizes is restricted, or an 
emergency exists, as determined by the SEC, so that disposal of the Fund's 
investments or determination of net asset value is not reasonably practi- 
cable or (c) for such other periods as the SEC by order may permit for 
protection of the Fund's shareholders. 

DISTRIBUTION IN KIND 

If the Fund's Board of Directors determines that it would be detrimental 
to the best interests of the remaining shareholders of the Fund to make a 
redemption payment wholly in cash, the Fund may pay, in accordance with 
rules adopted by the SEC, any portion of a redemption in excess of the 
lesser of $250,000 or 1% of the Fund's net assets by a distribution in 
kind of portfolio securities in lieu of cash. Portfolio securities issued 
in a distribution in kind will be readily marketable, although sharehold- 
ers receiving distributions in kind may incur brokerage commissions when 
subsequently disposing of those securities. 

AUTOMATIC CASH WITHDRAWAL PLAN 

   
An automatic cash withdrawal plan (the "Withdrawal Plan") is available to 
shareholders who own shares with a value of at least $10,000 and who wish 
to receive specific amounts of cash monthly or quarterly. Withdrawals of 
at least $100 may be made under the Withdrawal Plan by redeeming as many 
shares of the Fund as may be necessary to cover the stipulated withdrawal 
payment. Any applicable CDSC will not be waived on amounts withdrawn by 
shareholders that exceed 1.00% per month of the value of a shareholder's 
shares at the time the Withdrawal Plan commences. (With respect to With- 
drawal Plans in effect prior to November 7, 1994, any applicable CDSC will 
be waived on amounts withdrawn that do not exceed 2.00% per month of the 
value of a shareholder's shares at the time the Withdrawal Plan com- 
mences.) To the extent withdrawals exceed dividends, distributions and ap- 
preciation of a shareholder's investment in the Fund, there will be a re- 
duction in the value of the shareholder's investment, and continued with- 
drawal payments will reduce the shareholder's investment and may 
ultimately exhaust it. Withdrawal payments should not be considered as in- 
come from investment in the Fund. Furthermore, as it generally would not 
be advantageous to a shareholder to make additional investments in the 
Fund at the same time he or she is participating in the Withdrawal Plan, 
purchases by such shareholders in amounts of less than $5,000 ordinarily 
will not be permitted. 

Shareholders who wish to participate in the Withdrawal Plan and who hold 
their shares in certificate form must deposit their share certificates 
with TSSG as agent for Withdrawal Plan members. All dividends and distri- 
butions on shares in the Withdrawal Plan are reinvested automatically at 
net asset value in additional shares of the Fund. Effective November 7, 
1994, Withdrawal Plans should be set up with any Smith Barney Financial 
Consultant. A shareholder who purchases shares directly through TSSG may 
continue to do so and applications for participation in the Withdrawal 
Plan must be received by TSSG no later than the eighth day of the month to 
be eligible for participation beginning with that month's withdrawal. For 
additional information, shareholders should contact a Smith Barney Finan- 
cial Consultant. 
    

                                DISTRIBUTOR 

   
Smith Barney serves as the Fund's distributor on a best efforts basis pur- 
suant to a written agreement dated July 30, 1993 (the "Distribution Agree- 
ment"), which was most recently approved by the Fund's Board of Directors 
on July 20, 1994. For the 1992, 1993 and 1994 fiscal years, Smith Barney 
or its predecessor Shearson Lehman Brothers received $5,689,320, 
$54,735,968 and $4,194,780, respectively, in sales charges for the sale of 
the Fund's Class A shares, and did not reallow any portion thereof to 
dealers. For the period from November 6, 1992 through February 28, 1993 
and for the fiscal year ended February 28, 1994 Smith Barney or Shearson 
Lehman Brothers received $2,721 and $264,245, respectively, representing 
CDSC on redemption of the Fund's Class B shares. 

When payment is made by the investor before settlement date, unless other- 
wise noted by the investor, the funds will be held as a free credit bal- 
ance in the investor's brokerage account and Smith Barney may benefit from 
the temporary use of the funds. The investor may designate another use for 
the funds prior to settlement date, such as an investment in a money mar- 
ket fund (other than Smith Barney Exchange Reserve Fund) of the Smith Bar- 
ney Mutual Funds. If the investor instructs Smith Barney to invest the 
funds in a fund of the Smith Barney Mutual Funds, the amount of the in- 
vestment will be included as part of the average daily net assets of both 
the Fund and the money market fund, and affiliates of Smith Barney which 
serve the funds in an investment advisory or administrative capacity will 
benefit by receiving investment management fees from both such investment 
companies, computed on the basis of their average daily net assets. The 
Fund's Board of Directors has been advised of the benefits to Smith Barney 
resulting from these settlement procedures and will take such benefits 
into consideration when reviewing the Advisory, Administration and Distri- 
bution Agreements for continuance. 
    

DISTRIBUTION ARRANGEMENTS 

   
To compensate Smith Barney for the services it provides and for the ex- 
pense it bears under the Distribution Agreement, the Fund has adopted a 
services and distribution plan (the "Plan") pursuant to Rule 12b-1 under 
the 1940 Act. Under the Plan, the Fund pays Smith Barney a service fee, 
accrued daily and paid monthly, calculated at the annual rate of 0.15% of 
the value of the Fund's average daily net assets attributable to the Class 
A, Class B and Class C shares. In addition, Class B and Class C pay dis- 
tribution fees primarily intended to compensate Smith Barney for its ini- 
tial expense of paying its Financial Consultants a commission upon sales 
of the respective shares. The Class B distribution fee is calculated at 
the annual rate of 0.50% of the value of the Fund's average net assets at- 
tributable to the shares of the Class. The Class C distribution fee is 
calculated at the annual rate of 0.55% of the value of the Fund's average 
net assets attributable to the shares of the Class. For the period from 
November 6, 1992 through February 28, 1993, the Class A and Class B shares 
incurred $790,591 and $12,635, respectively, in service fees. For the same 
period, the Class B shares incurred $42,119 in distribution fees. For the 
fiscal year ended February 28, 1994, the Class A and Class B shares in- 
curred $2,749,652 and $303,293, respectively, in service fees. For the 
same period, the Class B shares incurred $1,010,976 in distribution fees. 

Under its terms, the Plan continues from year to year, provided such con- 
tinuance is approved annually by vote of the Board of Directors, including 
a majority of the Directors who are not interested persons of the Fund and 
who have no direct or indirect financial interest in the operation of the 
Plan or in the Distribution Agreement (the "Independent Directors"). The 
Plan may not be amended to increase the amount of the service and distri- 
bution fees without shareholder approval, and all amendments of the Plan 
also must be approved by the Directors and the Independent Directors in 
the manner described above. The Plan may be terminated at any time with 
respect to a Class, without penalty, by vote of a majority of the Indepen- 
dent Directors or by vote of a majority of the outstanding voting securi- 
ties of the Class (as defined in the 1940 Act). Pursuant to the Plan, 
Smith Barney will provide the Board of Directors with periodic reports of 
amounts expended under the Plan and the purpose for which such expendi- 
tures were made. 
    

                            VALUATION OF SHARES 

   
Each Class' net asset value per share is calculated on each day, Monday 
through Friday, except days on which the NYSE is closed. The NYSE cur- 
rently is scheduled to be closed on New Year's Day, President's Day, Good 
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and 
Christmas, and on the preceding Friday or subsequent Monday when one of 
these holidays falls on a Saturday or Sunday, respectively. Because of the 
differences in distribution fees and Class-specific expenses, the per 
share net asset value of each Class may differ. The following is a de- 
scription of the procedures used by the Fund in valuing its assets. 
    

The valuation of the Fund's assets is made by Boston Advisors after con- 
sultation with an independent pricing service (the "Service") approved by 
the Board of Directors. When, in the judgment of the Service, quoted bid 
prices for investments are readily available and are representative of the 
bid side of the market, these investments are valued at the mean between 
the quoted bid and asked prices. Investments for which, in the judgment of 
the Service, there is no readily obtainable market quotation (which may 
constitute a majority of the portfolio securities) are carried at fair 
value as determined by the Service. For the most part, such investments 
are liquid and may be readily sold. The Service may employ electronic data 
processing techniques and/or a matrix system to determine valuations. The 
procedures of the Service are reviewed periodically by the officers of the 
Fund under the general supervision and responsibility of the Board of Di- 
rectors, which may replace any such Service at any time if it determines 
it to be in the best interests of the Fund to do so. 

                            EXCHANGE PRIVILEGE 

   
Except as noted below, shareholders of any fund of the Smith Barney Mutual 
Funds may exchange all or part of their shares for shares of the same 
Class of other funds in the Smith Barney Mutual Funds, to the extent such 
shares are offered for sale in the shareholder's state of residence, on 
the basis of relative net asset value per share at the time of exchange as 
follows: 
    

    A. Class A shares of any fund purchased with a sales charge may be 
    exchanged for Class A shares of any of the other funds and the sales 
    charge differential, if any, will be applied. Class A shares of any 
    fund may be exchanged without a sales charge for shares of the funds 
    that are offered without a sales charge. Class A shares of any fund 
    purchased without a sales charge may be exchanged for shares sold with 
    a sales charge, and the appropriate sales charge differential will be 
    applied. 

    B. Class A shares of any fund acquired by a previous exchange of 
    shares purchased with a sales charge may be exchanged for Class A 
    shares of any of the other funds, and the sales charge differential, 
    if any, will be applied. 

   
    C. Class B shares of any fund may be exchanged without a sales 
    charge. Class B shares of the Fund exchanged for Class B shares of an- 
    other fund will be subject to the higher applicable CDSC of the two 
    funds and, for purposes of calculating CDSC rates and conversion peri- 
    ods, will be deemed to have been held since the date the shares being 
    exchanged were deemed to be purchased. 

Dealers other than Smith Barney must notify TSSG of the investor's prior 
ownership of Class A shares of Smith Barney High Income Fund and the ac- 
count number in order to accomplish an exchange of shares of Smith Barney 
High Income Fund under paragraph B above. 

The exchange privilege enables shareholders to acquire shares of the same 
Class in a fund with different investment objectives when they believe 
that a shift between funds is an appropriate investment decision. Prior to 
any exchange, the shareholder should obtain and review a copy of the cur- 
rent prospectus of each fund into which an exchange is being considered. 
Prospectuses may be obtained from a Smith Barney Financial Consultant. 

Upon receipt of proper instructions and all necessary supporting docu- 
ments, shares submitted for exchange are redeemed at the then-current net 
asset value and, subject to any applicable CDSC, the proceeds are immedi- 
ately invested, at a price as described above, in shares of the fund being 
acquired. Smith Barney reserves the right to reject any exchange request. 
The exchange privilege may be modified or terminated at any time after 
written notice to shareholders. 
    

                             PERFORMANCE DATA 

   
From time to time, the Fund may quote yield or total return of a Class in 
advertisements or in reports and other communications to shareholders. The 
Fund may include comparative performance information in advertising or 
marketing the Fund's shares. Such performance information may include the 
following industry and financial publications: Barron's, Business Week, 
CDA Investment Technologies, Inc., Changing Times, Forbes, Fortune, Insti- 
tutional Investor, Investors Daily, Money, Morningstar Mutual Fund Values, 
The New York Times, USA Today and The Wall Street Journal. To the extent 
any advertisement or sales literature of the Fund describes the expenses 
or performance of any Class it will also disclose such information for the 
other Classes. 
    

YIELD 

The 30-day yield figure described below is calculated according to a for- 
mula prescribed by the SEC. The formula can be expressed as follows: 

                        YIELD = 2[(a-b/cd +1)6 -1] 

Where:           a = dividends and interest earned during the period. 

                 b   = expenses accrued for the period (net of reimburse- 
                      ment). 

c   = the average daily number of shares outstanding dur- 
                      ing the period that were entitled to receive 
                      dividends. 

                 d   = the maximum offering price per share on the last day 
                      of the period. 

For the purpose of determining the interest earned (variable "a" in the 
formula) on debt obligations that were purchased by the Fund at a discount 
or premium, the formula generally calls for amortization of the discount 
or premium; the amortization schedule will be adjusted monthly to reflect 
changes in the market values of the debt obligations. 

The Fund's equivalent taxable 30-day yield for a Class is computed by di- 
viding that portion of the Class' 30-day yield which is tax-exempt by one 
minus a stated income tax rate and adding the product to that portion, if 
any, of the Class' yield that is not tax-exempt. 

The yield on municipal securities is dependent upon a variety of factors, 
including general economic and monetary conditions, conditions of the mu- 
nicipal securities market, size of a particular offering, maturity of the 
obligation offered and rating of the issue. Investors should recognize 
that, in periods of declining interest rates, the Fund's yield for each 
Class of shares will tend to be somewhat higher than prevailing market 
rates, and in periods of rising interest rates the Fund's yield for each 
Class of shares will tend to be somewhat lower. In addition, when interest 
rates are falling, the inflow of net new money to the Fund from the con- 
tinuous sale of its shares will likely be invested in portfolio instru- 
ments producing lower yields than the balance of the Fund's portfolio, 
thereby reducing the current yield of the Fund. In periods of rising in- 
terest rates, the opposite can be expected to occur. 

   
The Fund's yield for Class A and Class B shares for the 30-day period 
ended February 28, 1994 was 4.26% and 3.92%, respectively. The equivalent 
taxable yield for the same period was 6.17% and 5.68%, respectively assum- 
ing the payment of Federal income taxes at a rate of 31%. 
    

AVERAGE ANNUAL TOTAL RETURN 

"Average annual total return" figures, as described below, are computed 
according to a formula prescribed by the SEC. The formula can be expressed 
as follows: 

                              P (1+T)n = ERV 

Where:           P     = a hypothetical initial payment of $1,000. 

                 T     = average annual total return. 

                 n     = number of years. 

                 ERV = Ending Redeemable Value of a hypothetical $1,000 
                        investment made at the beginning of a 1-, 5-, or 
                        10-year period at the end of the 1-, 5-, or 10- 
                        year period (or fractional portion thereof), as- 
                        suming reinvestment of all dividends and distribu- 
                        tions. 

   
The following total return figures assume that the maximum 4.00% sales 
charge has been deducted from the investment at the time of purchase and 
have been restated to show the change in the maximum sales charge. The 
Fund's average total return for Class A shares were as follows for the pe- 
riods indicated: 

 3.11% for the one-year period beginning March 1, 1993 through February 
       28, 1994; 

 9.74% per annum during the five-year period beginning on March 1, 1989 
       through February 28, 1994; 

10.87% per annum during the ten-year period beginning on March 1, 1984 
       through February 28, 1994; and 

11.77% per annum during the period from commencement of operations (March 
       4, 1981) through February 28, 1994. 
    

The Fund's average total return for Class B shares assuming the maximum 
applicable CDSC was as follows for the periods indicated: 

 2.51% for the one year period beginning March 1, 1993 through February 
28, 1994; 

11.12% per annum during the period from commencement (November 6, 1992) 
through February 28, 1994. 

The Fund's average total return for Class B shares without the CDSC was as 
follows for the periods indicated: 

 6.86% for the one year period beginning March 1, 1993 through February 
28, 1994. 

14.04% per annum during the period from commencement (November 6, 1992) 
through February 28, 1994. 

AGGREGATE TOTAL RETURN 

Aggregate total return figures, as described below, represent the cumula- 
tive change in the value of an investment in the Class for the specified 
period and are computed by the following formula: 

                                ERV - P / P 

Where:           P   = a hypothetical initial payment of $10,000. 

                 ERV = Ending Redeemable Value of a hypothetical $10,000 
                       investment made at the beginning of a 1-, 5-, or 
                       10-year period at the end of the 1-, 5-, or 10- 
                       year period (or fractional portion thereof), as- 
                       suming reinvestment of all dividends and distribu- 
                       tions. 

   
The aggregate total returns for Class A shares were as follows for the pe- 
riods indicated: 

  7.41% for the one-year period beginning March 1, 1993 through February 
28, 1994; 

65.80% for the five-year period beginning March 1, 1989 through February 
28, 1994; and 

192.34% for the ten-year period beginning March 1, 1984 through February 
28, 1994. 

These aggregate total return figures do not assume that the maximum 4.00% 
sales charge has been deducted from the investment at the time of pur- 
chase. If the sales charge had been deducted at the time of purchase, the 
aggregate total return for its Class A shares for those same periods would 
have been 3.11%, 59.17%, and 180.65%, respectively. The total return fig- 
ures have been restated to show the change in the maximum sales charge. 
    

The Fund's aggregate total return for Class B shares was as follows for 
the periods indicated: 

 6.86% for the one year period beginning March 1, 1993 through February 
28, 1994. 

18.89% for the period from November 6, 1992 through February 28, 1994. 

   
These figures do not assume that the maximum 4.50% CDSC assessed by the 
Fund has been deducted from the investment at the time of purchase. If the 
maximum CDSC had been deducted at the time of purchase, the Fund's aggre- 
gate total return for the same periods would have been 2.51% and 14.89%, 
respectively. 
    

It is important to note that the total return figures set forth above are 
based on historical earnings and are not intended to indicate future per- 
formance. Each Class' net investment income changes in response to fluctu- 
ation in interest rates and the expenses of the Fund. Performance will 
vary from time to time depending upon market conditions, the composition 
of the Fund's portfolio and operating expenses and the expenses exclu- 
sively attributable to the Class. Consequently, any given performance quo- 
tation should not be considered representative of the Class' performance 
for any specified period in the future. Because performance will vary, it 
may not provide a basis for comparing an investment in the Class with cer- 
tain bank deposits or other investments that pay a fixed yield for a 
stated period of time. Investors comparing a Class' performance with that 
of other mutual funds should give consideration to the quality and matu- 
rity of the respective investment companies' portfolio securities. 

                                   TAXES 

As described above and in the Prospectus, the Fund is designed to provide 
shareholders with current income which is excluded from gross income for 
Federal income tax purposes. The Fund is not intended to constitute a bal- 
anced investment program and is not designed for investors seeking capital 
gains or maximum tax-exempt income irrespective of fluctuations in princi- 
pal. Investment in the Fund would not be suitable for tax-exempt institu- 
tions, qualified retirement plans, H.R. 10 plans and individual retirement 
accounts because such investors would not gain any additional tax benefit 
from the receipt of tax-exempt income. 

The following is a summary of selected Federal income tax considerations 
that may affect the Fund and its shareholders. The summary is not intended 
as a substitute for individual tax advice and investors are urged to con- 
sult their own tax advisors as to the tax consequences of an investment in 
the Fund. 

   
The Fund has qualified and intends to continue to qualify each year as a 
regulated investment company under the Code. Provided that the Fund (a) is 
a regulated investment company and (b) distributes at least 90% of its 
taxable net investment income (including, for this purpose, its net real- 
ized short-term capital gains) and 90% of its tax-exempt interest income 
(reduced by certain expenses), the Fund will not be liable for Federal in- 
come taxes to the extent its taxable net investment income and its net re- 
alized long-term and short-term capital gains, if any, are distributed to 
its shareholders. Any such taxes paid by the Fund would reduce the amount 
of income and gains available for distribution to shareholders. 
    

Because the Fund will distribute exempt-interest dividends, interest on 
indebtedness incurred by a shareholder to purchase or carry Fund shares is 
not deductible for Federal income tax purposes. If a shareholder receives 
exempt-interest dividends with respect to any share and if such share is 
held by the shareholder for six months or less, then any loss on the sale 
or exchange of such share may, to the extent of such exempt-interest divi- 
dends, be disallowed. In addition, the Code may require a shareholder, if 
he or she receives exempt-interest dividends, to treat as Federal taxable 
income a portion of certain otherwise non-taxable social security and 
railroad retirement benefit payments. Furthermore, that portion of any 
exempt-interest dividend paid by the Fund which represents income derived 
from private activity bonds held by the Fund may not retain its tax-exempt 
status in the hands of a shareholder who is a "substantial user" of a fa- 
cility financed by such bonds, or a "related person" thereof. Moreover, as 
noted in the Fund's Prospectus, (a) some or all of the Fund's dividends 
may be a specific preference item, or a component of an adjustment item, 
for purposes of the Federal individual and corporate alternative minimum 
taxes and (b) the receipt of Fund dividends and distributions may affect a 
corporate shareholder's Federal "environmental" tax liability. In addi- 
tion, the receipt of Fund dividends and distributions may affect a foreign 
corporate shareholder's Federal "branch profits" tax liability and the 
Federal "excess net passive income" tax liability of a shareholder of a 
Subchapter S corporation. Shareholders should consult their own tax advi- 
sors as to whether they are (a) substantial users with respect to a facil- 
ity or related to such users within the meaning of the Code or (b) subject 
to a Federal alternative minimum tax, the Federal environmental tax, the 
Federal branch profits tax, or the Federal "excess net passive income" 
tax. 

As described above and in the Fund's Prospectus, the Fund may invest in 
municipal bond index futures and financial futures contracts and options 
on interest rate futures and financial futures contracts. The Fund antici- 
pates that these investment activities will not prevent the Fund from 
qualifying as a regulated investment company; however, in order to con- 
tinue to qualify as a regulated investment company, the Fund might have to 
limit its investments in futures contracts and options on futures con- 
tracts. As a general rule, these investment activities will increase or 
decrease the amount of long- and short-term capital gains or losses real- 
ized by the Fund and, accordingly, will affect the amount of capital gains 
distributed to the Fund's shareholders. 

For Federal income tax purposes, gain or loss on the futures contracts and 
options described above (collectively referred to as "section 1256 con- 
tracts") is taxed pursuant to a special "mark-to-market system." Under the 
mark-to-market system, these instruments are treated as if sold at the 
Fund's fiscal year end for their fair market value. As a result, the Fund 
will be recognizing gains or losses before they are actually realized. As 
a general rule, gain or loss on section 1256 contracts is treated as 60% 
long-term capital gain or loss and 40% short-term capital gain or loss 
and, accordingly, the mark-to-market system generally will affect the 
amount of capital gains or losses taxable to the Fund and the amount of 
distributions taxable to a shareholder. Moreover, if the Fund invests in 
both section 1256 contracts and offsetting positions in such contracts, 
which together constitute a straddle, then the Fund may be required to 
defer certain realized losses. The Fund expects that its activities with 
respect to section 1256 contracts and offsetting positions in those con- 
tracts will not cause it to be treated as recognizing a materially greater 
amount of capital gains than actually realized and will permit it to use 
substantially all of its losses in those fiscal years in which such losses 
actually occur. 

While the Fund does not expect to realize a significant amount of net 
long-term capital gains, any such gains realized will be distributed as 
described in the Fund's Prospectus. Such distributions ("capital gain div- 
idends"), if any, will be taxable to shareholders as long-term capital 
gains, regardless of how long they have held Fund shares, and will be des- 
ignated as capital gain dividends in a written notice mailed by the Fund 
to the shareholders after the close of the Fund's prior taxable year. If a 
shareholder receives a capital gain dividend with respect to any share and 
if the share has been held by the shareholder for six months or less, then 
any loss (to the extent not disallowed pursuant to the six-month rule de- 
scribed above relating to exempt-interest dividends) on the sale or ex- 
change of such share, to the extent of the capital gain dividend, shall be 
treated as a long-term capital loss. 

If a shareholder incurs a sales charge when acquiring shares of the Fund, 
disposes of those shares within 90 days and then acquires shares in a mu- 
tual fund for which the otherwise applicable sales charge is reduced by 
reason of a reinvestment right (that is, exchange privilege), the original 
sales charge will not be taken into account in computing gain/loss on 
original shares to the extent the subsequent sales charge is reduced. In- 
stead, it will be added to the tax basis in the newly acquired shares. 
Furthermore, the same rule also applies to a disposition of the newly ac- 
quired shares made within 90 days of the second acquisition. This provi- 
sion prevents a shareholder from immediately deducting the sales charge by 
shifting his or her investment within a family of mutual funds. 

Each shareholder will receive after the close of the calendar year an an- 
nual statement as to the Federal income tax status of his or her dividends 
and distributions from the Fund for the prior calendar year. These state- 
ments also will designate the amount of exempt-interest dividends that is 
a specific preference item for purposes of the Federal individual and cor- 
porate alternative minimum taxes. Each shareholder also will receive, if 
appropriate, various written notices after the close of the Fund's prior 
taxable year as to the Federal income tax status of his or her dividends 
and distributions which were received from the Fund during the Fund's 
prior taxable year. Shareholders should consult their tax advisors as to 
any state and local taxes that may apply to these dividends and distribu- 
tions. The dollar amount of dividends excluded from Federal income taxa- 
tion and the dollar amount subject to Federal income taxation, if any, 
will vary for each shareholder depending upon the size and duration of 
each shareholder's investment in the Fund. To the extent the Fund earns 
taxable net investment income, it intends to designate as taxable divi- 
dends the same percentage of each day's dividend as its taxable net in- 
vestment income bears to its total net investment income earned for the 
year. 

Investors considering buying shares of the Fund just prior to a record 
date for a capital gain distribution should be aware that, regardless of 
whether the price of the Fund shares to be purchased reflects the amount 
of the forthcoming distribution payment, any such payment will be a dis- 
tribution payment. 

If a shareholder fails to furnish a correct taxpayer identification num- 
ber, fails to fully report dividend and interest income, or fails to cer- 
tify that he or she has provided a correct taxpayer identification number 
and that he or she is not subject to such withholding, the shareholder may 
be subject to a 31% "backup withholding" tax with respect to (a) taxable 
dividends and distributions and (b) any proceeds of any redemptions of 
Fund shares. An individual's taxpayer identification number is his or her 
social security number. The backup withholding tax is not an additional 
tax and may be credited against a shareholder's regular Federal income tax 
liability. 

The foregoing is only a summary of certain tax considerations generally 
affecting the Fund and its shareholders, and is not intended as a substi- 
tute for careful tax planning. Individuals are often exempt from state and 
local personal income taxes on distributions of tax-exempt interest income 
derived from obligations of issuers located in the state in which they re- 
side when these distributions are received directly from these issuers, 
but are usually subject to such taxes on income derived from obligations 
of issuers located in other jurisdictions. Shareholders are urged to con- 
sult their tax advisors with specific reference to their own tax situa- 
tions. 

   
                          ADDITIONAL INFORMATION 

The Fund was incorporated on September 16, 1980 under the name Shearson 
Managed Municipals Inc. Prior to December 15, 1988, the Fund's name was 
Shearson Managed Municipals Inc. On December 15, 1988, November 6, 1992, 
July 30, 1993 and October 14, 1994, the Fund's name was changed to SLH 
Managed Municipals Fund Inc., Shearson Lehman Brothers Managed Municipals 
Fund Inc., Smith Barney Shearson Managed Municipals Fund Inc. and Smith 
Barney Managed Municipals Fund Inc., respectively. 

Boston Safe, an indirect wholly owned subsidiary of Mellon, is located at 
One Boston Place, Boston, Massachusetts 02108, and serves as the custodian 
of the Fund. Under the custody agreement, Boston Safe holds the Fund's 
portfolio securities and keeps all necessary accounts and records. For its 
services, Boston Safe receives a monthly fee based upon the month-end mar- 
ket value of securities held in custody and also receives securities 
transaction charges. The assets of the Fund are held under bank custodian- 
ship in compliance with the 1940 Act. 
    

TSSG is located at Exchange Place, Boston, Massachusetts 02109, and serves 
as the Fund's transfer agent. Under its transfer agency agreement, TSSG 
maintains the shareholder account records for the Fund, handles certain 
communications between shareholders and the Fund and distributes dividends 
and distributions payable by the Fund. For these services, TSSG receives a 
monthly fee computed on the basis of the number of shareholder accounts it 
maintains for the Fund during the month, and is reimbursed for out-of- 
pocket expenses. 

                           FINANCIAL STATEMENTS 

   
The Fund's Semi-Annual and Annual Reports for the semi-annual period ended 
August 31, 1994 and the fiscal year ended February 28, 1994 accompany this 
Statement of Additional Information and are incorporated herein by refer- 
ence in their entirety. 
    

                                 APPENDIX 

Description of S&P and Moody's ratings: 

S&P RATINGS FOR MUNICIPAL BONDS 

S&P's Municipal Bond ratings cover obligations of states and political 
subdivisions. Ratings are assigned to general obligation and revenue 
bonds. General obligation bonds are usually secured by all resources 
available to the municipality and the factors outlined in the rating defi- 
nitions below are weighed in determining the rating. Because revenue bonds 
in general are payable from specifically pledged revenues, the essential 
element in the security for a revenue bond is the quantity and quality of 
the pledged revenues available to pay debt service. 

Although an appraisal of most of the same factors that bear on the quality 
of general obligation bond credit is usually appropriate in the rating 
analysis of a revenue bond, other factors are important, including partic- 
ularly the competitive position of the municipal enterprise under review 
and the basic security covenants. Although a rating reflects S&P's judg- 
ment as to the issuer's capacity for the timely payment of debt service, 
in certain instances it may also reflect a mechanism or procedure for an 
assured and prompt cure of a default, should one occur, i.e., an insurance 
program, Federal or state guarantee or the automatic withholding and use 
of state aid to pay the defaulted debt service. 

                                    AAA 

Prime -- These are obligations of the highest quality. They have the 
strongest capacity for timely payment of debt service. 

General Obligation Bonds -- In a period of economic stress, the issuers 
will suffer the smallest declines in income and will be least susceptible 
to autonomous decline. Debt burden is moderate. A strong revenue structure 
appears more than adequate to meet future expenditure requirements. Qual- 
ity of management appears superior. 

Revenue Bonds -- Debt service coverage has been, and is expected to re- 
main, substantial. Stability of the pledged revenues is also exceptionally 
strong, due to the competitive position of the municipal enterprise or to 
the nature of the revenues. Basic security provisions (including rate cov- 
enant, earnings test for issuance of additional bonds, and debt service 
reserve requirements) are rigorous. There is evidence of superior manage- 
ment. 

                                    AA 

High Grade -- The investment characteristics of general obligation and 
revenue bonds in this group are only slightly less marked than those of 
the prime quality issues. Bonds rated "AA" have the second strongest ca- 
pacity for payment of debt service. 

                                     A 

Good Grade -- Principal and interest payments on bonds in this category 
are regarded as safe. This rating describes the third strongest capacity 
for payment of debt service. It differs from the two higher ratings be- 
cause: 

General Obligation Bonds -- There is some weakness, either in the local 
economic base, in debt burden, in the balance between revenues and expen- 
ditures, or in quality of management. Under certain adverse circumstances, 
any one such weakness might impair the ability of the issuer to meet debt 
obligations at some future date. 

Revenue Bonds -- Debt service coverage is good, but not exceptional. Sta- 
bility of the pledged revenues could show some variations because of in- 
creased competition or economic influences on revenues. Basic security 
provisions, while satisfactory, are less stringent. Management performance 
appears adequate. 

                                    BBB 

Medium Grade -- Of the investment grade ratings, this is the lowest. 

General Obligation Bonds -- Under certain adverse conditions, several of 
the above factors could contribute to a lesser capacity for payment of 
debt service. The difference between "A" and "BBB" ratings is that the 
latter shows more than one fundamental weakness, or one very substantial 
fundamental weakness, whereas the former shows only one deficiency among 
the factors considered. 

Revenue Bonds -- Debt coverage is only fair. Stability of the pledged rev- 
enues could show substantial variations, with the revenue flow possibly 
being subject to erosion over time. Basic security provisions are no more 
than adequate. Management performance could be stronger. 

                             BB, B, CCC AND CC 

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

                                     C 

The rating C is reserved for income bonds on which no interest is being 
paid. 

                                     D 

Bonds rated D are in default, and payment of interest and/or repayment of 
principal is in arrears. 

S&P's letter ratings may be modified by the addition of a plus or a minus 
sign, which is used to show relative standing within the major rating cat- 
egories, except in the AAA-Prime Grade category. 

S&P RATINGS FOR MUNICIPAL NOTES 

Municipal notes with maturities of three years or less are usually given 
note ratings (designated SP-1, -2 or -3) by S&P to distinguish more 
clearly the credit quality of notes as compared to bonds. Notes rated SP-1 
have a very strong or strong capacity to pay principal and interest. Those 
issues determined to possess overwhelming safety characteristics are given 
the designation of SP-1+. Notes rated SP-2 have a satisfactory capacity to 
pay principal and interest. 

MOODY'S RATINGS FOR MUNICIPAL BONDS 

                                    AAA 

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

                                    AA 

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

                                     A 

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

                                    BAA 

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

                                    BA 

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

                                     B 

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

                                    CAA 

Bonds that are rated Caa are of poor standing. These issues may be in de- 
fault or present elements of danger may exist with respect to principal or 
interest. 

                                    CA 

Bonds that are rated Ca represent obligations that are speculative in a 
high degree. These issues are often in default or have other marked short- 
comings. 

                                     C 

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

Moody's applies the numerical modifiers 1, 2 and 3 in each generic rating 
classification from Aa through Baa. The modifier 1 indicates that the se- 
curity ranks in the higher end of its generic rating category; the modi- 
fier 2 indicates a mid-range ranking; and the modifier 3 indicates that 
the issue ranks in the lower end of its generic rating category. 

MOODY'S RATINGS FOR MUNICIPAL NOTES 

Moody's ratings for state and municipal notes and other short-term loans 
are designated Moody's Investment Grade ("MIG") and for variable rate de- 
mand obligations are designated Variable Moody's Investment Grade 
("VMIG"). This distinction is in recognition of the differences between 
short-term credit risk and long-term risk. Loans bearing the designation 
MIG 1 or VMIG 1 are of the best quality, enjoying strong protection by es- 
tablished cash flows of funds for their servicing, superior liquidity sup- 
port or from established and broad-based access to the market for refi- 
nancing or both. Loans bearing the designation MIG 2 or VMIG 2 are of high 
quality, with ample margins of protection although not as large as the 
preceding group. Loans bearing the designation MIG 3 or VMIG 3 are of fa- 
vorable quality, with all security elements accounted for, but lacking the 
undeniable strength of the preceding grades. Liquidity and cash flow may 
be narrow and market access for refinancing is likely to be less well es- 
tablished. 

DESCRIPTION OF S&P A-1+ AND A-1 COMMERCIAL PAPER RATING 

The rating A-1+ is the highest, and A-1 the second highest, commercial 
paper rating assigned by S&P. Paper rated A-1+ must have either the direct 
credit support of an issuer or guarantor that possesses excellent long- 
term operating and financial strengths combined with strong liquidity 
characteristics (typically, such issuers or guarantors would display 
credit quality characteristics which would warrant a senior bond rating of 
"AA-" or higher), or the direct credit support of an issuer or guarantor 
that possesses above average long-term fundamental operating and financing 
capabilities combined with ongoing excellent liquidity characteristics. 
Paper rated A-1 by S&P has the following characteristics: liquidity ratios 
are adequate to meet cash requirements; long-term senior debt is rated "A" 
or better; the issuer has access to at least two additional channels of 
borrowing; basic earnings and cash flow have an upward trend with allow- 
ance made for unusual circumstances; typically, the issuer's industry is 
well established and the issuer has a strong position within the industry; 
and the reliability and quality of management are unquestioned. 

DESCRIPTION OF MOODY'S PRIME-1 COMMERCIAL PAPER RATING 

The rating Prime-1 is the highest commercial paper rating assigned by 
Moody's. Among the factors considered by Moody's in assigning ratings are 
the following: (a) evaluation of the management of the issuer; (b) eco- 
nomic evaluation of the issuer's industry or industries and an appraisal 
of speculative-type risks which may be inherent in certain areas; (c) 
evaluation of the issuer's products in relation to competition and cus- 
tomer acceptance; (d) liquidity; (e) amount and quality of long-term debt; 
(f) trend of earnings over a period of ten years; (g) financial strength 
of a parent company and the relationships which exist with the issuer; and 
(h) recognition by the management of obligations which may be present or 
may arise as a result of public interest questions and preparations to 
meet such obligations. 

   
SMITH BARNEY 
MANAGED MUNICIPALS FUND INC. 
388 Greenwich Street 
New York, New York 10013 

Smith Barney 
MANAGED 
MUNICIPALS 
FUND INC. 
    

STATEMENT OF 
ADDITIONAL INFORMATION 

   
NOVEMBER 7, 1994 
    



SMITH BARNEY          MANAGED MUNICIPALS FUND INC.

PART C

Item 24.	Financial Statements and Exhibits

(a)	Financial Statements:

		Included in Part A:

			Financial Highlights

		Included in Part B:

			    The Registrant's Annual Report for the fiscal year 
ended Feruary 28, 1994 and the report of Independant Accountants are 
incorporated by reference to be Definitive 30b-2 filed on April 28, 1994, 
as Accession # 0000053798-94-000201.  The Registrant's semi annual report 
for the 6 months ended August 31, 1994 is incorporated by reference to the 
Definitive 30b-2 filed on November 4, 1994, as Accession #0000053798-94-
000513.    

		Included in Part C:

			Consent of Independent Auditors

(b)	Exhibits

All references are to the Registrant's Registration Statement on Form N-1A 
(the "Registration Statement) as filed with the Securities and Exchange 
Commission (file Nos. 2-69308 and 
811-3097)

(1)(a)	Articles of Amendment to the Articles of Incorporation dated 
July 30, 1993 is incorporated by reference to Post-Effective Amendment No. 
25 as filed on February 25, 1994 ("Post-Effective Amendment No. 25").

    (b)	    Form of Amendment to Articles of Incorporation, Form of 
Articles Supplementary, Form of Amendment and Articles of Correction  dated 
October 14, 1994, are filed herein.      .

(2)(a)	Registrant's By-Laws are incorporated by reference to Post-
Effective Amendment No. 3 as filed on June 17, 1982 ("Post-Effective 
Amendment No. 3").

    (b)	Amendments to Registrant's By-Laws is incorporated by reference 
to Post-Effective Amendment No. 12, as filed on April 29, 1988 ("Post-
Effective Amendment No. 12").

(3)	Not Applicable.

(4)(a)	Registrant's form of stock certificate for Class A and B shares 
is incorporated by reference to Post-Effective Amendment No. 22 as filed on 
October 23, 1992 ("Post-Effective Amendment No. 22").

   (b)	Registrant's form of stock certificate for Class C and Y shares 
will be filed by Amendment.

 (5)(a)	Investment Advisory Agreement dated July 30, 1993 between the 
Registrant and Greenwich Street Advisors is incorporated by reference to 
Post-Effective Amendment No. 25.

(6)	Distribution Agreement with Smith Barney Shearson Inc. dated July 30, 
1993 is incorporated by reference to Post-Effective Amendment No. 25.

  (7)	Not Applicable.

  (8)	Custody Agreement with Boston Safe Deposit and Trust Company ("Boston 
Safe") is incorporated by reference to Post-Effective Amendment No. 5, as 
filed on April 30, 1984 ("Post-Effective Amendment No. 5")

(9)(a)	Transfer Agency Agreement dated August 2, 1993 between the 
Registrant and TSSG is incorporated by reference to Post-Effective 
Amendment No. 25.


    
        (b)	Administration Agreement dated April 20, 1994, between the 
Registrant and Smith, Barney Advisers, Inc. ("SBA") is filed herein.

     (c)	Sub-Administration Agreement dated April 20, 1994, between the 
Registrant, SBA and The Boston Company Advisors Inc. is filed herein.      

(10)	Not applicable.

(11)(a)	   Consent of Independent Accountants is filed herein.    

(11)(b)	Consent of Morningstar Mutual Fund Values is incorporated by 
reference to Post-Effective Amendment No. 22.

(12)	Not Applicable.

(13)	Not Applicable

(14)	Not Applicable.

(15)	   Amended and Restated Services and Distribution Plan pursuant to 
Rule 12b-1 is filed herein.     

 (16)	Performance Data is incorporated by the reference to Post-Effective 
Amendment No. 16 filed with the Securities and Exchange Commission on June 
28, 1989.


Item 25.		Persons Controlled by or Under Common Control with 
Registrant

			Not Applicable

Item 26.		Number of Holders of Securities

			(1)						(2)
								Number of Record
		Title of Class				Holders as of    September 
23, 1994    
		Common Stock,				
		par value of $.001 per share		   Class A	35,321    
							   Class B	15,389    

Item 27.		Indemnification

		The response to this item is incorporated by reference to
		Post-Effective Amendment No. 22. 
   
Item 28(a).	Business and Other Connections of Investment Adviser

Investment Adviser - - Smith Barney Mutual Funds Management Inc., formerly 
known as Smith, 				 Barney Advisers, Inc. ("SBMFM")

SBFMF was incorporated in December 1968 under the laws of the State of 
Delaware. SBFMF is a wholly owned subsidiary of Smith Barney Holdings Inc. 
(formerly known as Smith Barney Shearson Holdings Inc.), which in turn is a 
wholly owned subsidiary of The Travelers Inc. (formerly known as Primerica 
Corporation) ("Travelers").  SBMFM is registered as an investment adviser 
under the Investment Advisers Act of 1940 (the "Advisers Act").

The list required by this Item 28 of officers and directors of SBMFM 
together with information as to any other business, profession, vocation or 
employment of a substantial nature engaged in by such officers and 
directors during the past two years, is incorporated by reference to 
Schedules A and D of FORM ADV filed by SBMFM pursuant to the Advisers Act 
(SEC File No. 801-8314).

Prior to the close of business on November 7, 1994, Greenwich Street 
Advisors served as investment adviser. Greenwich Street Advisors, through 
its predecessors, has been in the investment counseling business since 1934 
and is a division of Mutual Management Corp. ("MMC").  MMC was incorporated 
in 1978 and is a wholly owned subsidiary of Smith Barney Holdings Inc. 
(formerly known as Smith Barney Shearson Holdings Inc.) ("Holdings"), which 
is in turn a wholly owned subsidiary of The Travelers Inc. (formerly known 
as Primerica Corporation) ("Travelers"). The list required by this Item 28 
of officers and directors of MMC and Greenwich Street Advisors, together 
with information as to any other business, profession, vocation or 
employment of a substantial nature engaged in by such officers and 
directors during the past two fiscal years, is incorporated by reference to 
Schedules A and D of FORM ADV filed by MMC on behalf of Greenwich Street 
Advisors pursuant to the Advisers Act (SEC File No. 801-14437).

Prior to the close of business on July 30, 1993 (the "Closing"), Shearson 
Lehman Advisors, a member of the Asset Management Group of Shearson Lehman 
Brothers Inc. ("Shearson Lehman Brothers"), served as the Registrant's 
investment adviser.  On the Closing, Travelers and Smith Barney Inc. 
(formerly known as Smith Barney Shearson Inc.) acquired the domestic retail 
brokerage and asset management business of Shearson Lehman Brothers, which 
included the business of the Registrant's prior investment adviser.  
Shearson Lehman Brothers was a wholly owned subsidiary of Shearson Lehman 
Brothers Holdings Inc. ("Shearson Holdings").  All of the issued and 
outstanding common stock of Shearson Holdings (representing 92% of the 
voting stock) was held by American Express Company.  Information as to any 
past business vocation or employment of a substantial nature engaged in by 
officers and directors of Shearson Lehman Advisors can be located in 
Schedules A and D of FORM ADV filed by Shearson Lehman Brothers on behalf 
of Shearson Lehman Advisors prior to July 30, 1993.  (SEC FILE NO. 801-
3701)

11/3/94




Item 29.	Principal Underwriters

Smith Barney Inc. ("Smith Barney") currently acts as distributor for Smith 
Barney Managed Municipals Fund Inc., Smith Barney New York Municipals Fund 
Inc., Smith Barney California Municipals Fund Inc., Smith Barney 
Massachusetts Municipals Fund, Smith Barney Global Opportunities Fund, 
Smith Barney Aggressive Growth Fund Inc., Smith Barney Appreciation Fund 
Inc.,  Smith Barney Principal Return Fund, Smith Barney Municipal Money 
Market Fund Inc., Smith Barney Daily Dividend Fund Inc., Smith Barney 
Government and Agencies Fund Inc., Smith Barney Managed Governments Fund 
Inc., Smith Barney New York Municipal Money Market Fund, Smith Barney 
California Municipal Money Market Fund, Smith Barney Income Funds, Smith 
Barney Equity Funds, Smith Barney Investment Funds Inc., Smith Barney 
Precious Metals and Minerals Fund Inc., Smith Barney Telecommunications 
Trust, Smith Barney Arizona Municipals Fund Inc., Smith Barney New Jersey 
Municipals Fund Inc., The USA High Yield Fund N.V., Garzarelli Sector 
Analysis Portfolio N.V., The Advisors Fund L.P., Smith Barney Fundamental 
Value Fund Inc., Smith Barney Series Fund, Consulting Group Capital Markets 
Funds, Smith Barney Income Trust, Smith Barney Adjustable Rate Government 
Income Fund, Smith Barney Florida Municipals Fund, Smith Barney Oregon 
Municipals Fund, Smith Barney Funds, Inc., Smith Barney Muni Funds, Smith 
Barney World Funds, Inc., Smith Barney Money Funds, Inc., Smith Barney Tax 
Free Money Fund, Inc., Smith Barney Variable Account Funds, Smith Barney 
U.S. Dollar Reserve Fund (Cayman), Worldwide Special Fund, N.V., Worldwide 
Securities Limited, (Bermuda), Smith Barney International Fund (Luxembourg) 
and various series of unit investment trusts.

	Smith Barney is a wholly owned subsidiary of Smith Barney Holdings 
Inc. (formerly known as Smith Barney Shearson Holdings Inc.), which in turn 
is a wholly owned subsidiary of The Travelers Inc. (formerly known as 
Primerica Corporation) ("Travelers").   On June 1, 1994, Smith Barney 
changed its name from Smith Barney Inc. to its current name.  The 
information required by this Item 29 with respect to each director, officer 
and partner of Smith Barney is incorporated by reference to Schedule A of 
FORM BD filed by Smith Barney pursuant to the Securities Exchange Act of 
1934 (SEC File No. 812-8510).    


8/30/94
 


Item 30.	Location of Accounts and Records

	(1)	Smith Barney Managed Municipals Fund Inc.
	388 Greenwich Street
New York, New York  10013

(2)	   Smith, Barney Mutual Funds Management Inc.
	388 Greenwich Street
	New York, New York 10013    

(3)	The Boston Company Advisors, Inc.
	One Boston Place
	Boston, Massachusetts  02108

(4)	Boston Safe Deposit and Trust Company
	Wellington Business Center
	One Cabot Road
	Medford, Massachusetts  02155

(5)	The Shareholder Services Group, Inc.
	One Exchange Place
	Boston, Massachusetts  02109

Item 31.		Management Services

			Not Applicable.

Item 32.		Undertakings

			None


   <
		485 (b) Certification

			The Registrant hereby certifies that it meets all 
requirements for 					effectiveness pursuant to Rule 
485 (b)(i)(ix) under the Securities Act of 				1933, as 
amended.

			The Registrant further represents purusant to Rule 
485(b)(2)(iv) that the 				resignation of Robert E. Borgesen 
was not due to any disagreement with the 				Registrant on 
any matter relating to its operations, policies or practices.  Mr. 	
			Borgesen resigned due to health reasons./R>


SIGNATURES


	Pursuant to the requirements of the Securities Act of 1933, as 
amended, and the Investment Company Act of 1940, as amended, the 
Registrant, SMITH BARNEY MANAGED MUNICIPALS FUND INC., has duly caused this 
Amendment to the Registration Statement to be signed on its behalf by the 
undersigned, thereunto duly authorized, all in the City of New York, State 
of New York on November 4, 1994.


	SMITH BARNEY MANAGED MUNICIPALS FUND INC.


                                 By:/s/ Heath B. 
McLendon                      
                                      Heath B. McLendon, Chairman of the 
Board


	Pursuant to the requirements of the Securities Act of 1933, as 
amended, this Amendment to the Registration Statement and the above Power 
of Attorney has been signed below by the following persons in the 
capacities and on the dates indicated.*


Signature				Title					Date


/s/Heath B.McLendon
Heath B. McLendon			Director and				
	11/4/94
					Chairman of the Board



/s/Lewis Daidone
Lewis Daidone				Treasurer (Chief Financial		
	11/4/94
					and Accounting Officer)



Signature				Title					Date



Herbert Barg
Herbert Barg				Director				
	11/4/94



/s/Alfred J. Biancetti			
Alfred J. Bianchetti			Director				
	11/4/94



/s/Martin Brody
Martin Brody				Director				
	11/4/94



/s/Dwight B. Crane
Dwight B. Crane				Director				11/4/94



/s/James J. Crisona
James J. Crisona				Director				11/4/94



/s/Robert A. Frankel
Robert A. Frankel			Director					11/4/94



/s/Paul Hardin	
Dr. Paul Hardin				Director				
	11/4/94



/s/Stephen E. Kaufman
Stephen E. Kaufman			Director				
	11/4/94





/s/Joseph J. McCann     
Joseph J. McCann			Director					11/4/94



________________________		Director
Burt N. Dorsett



________________________		Director
Elliott S. Jaffe



________________________		Director
Cornelius C. Rose, Jr.




*Signed by Lee D. Augsburger, their
duly authorized attorney-in-fact,
pursuant to power of attorney datedOctober 20, 1993

shearson funds smmu n-1a27.doc




    

			SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC.
	(Corporate name was incorrectly changed to Smith Barney Managed 
Municipals, Inc., which is being corrected hereby 
To Smith Barney Managed Municipals Fund Inc.)
CERTIFICATE OF CORRECTION
				Smith Barney Shearson Managed Municipals Fund Inc., 
the name of which was incorrectly changed to Smith Barney Managed 
Municipals, Inc., which is being corrected hereby to Smith Barney Managed 
Municipals Fund Inc., a Maryland 
corporation having its principal office in Maryland in the City of 
Baltimore, Maryland (hereinafter called the "Corporation"), hereby 
certifies to the State Department of Assessments and Taxation of Maryland 
that:
				FIRST:	The title of the document being 
corrected is:


Smith Barney Shearson Managed Municipals Fund Inc. Articles of Amendment
				SECOND:	The only party to the document being 


corrected is Smith Barney Shearson Managed Municipals Fund Inc., the name of 
which was incorrectly changed to Smith Barney Managed Municipals, Inc., which 
is being corrected hereby to Smith Barney Managed Municipals Fund Inc.
				THIRD:	The document being corrected was filed 
with 
the State Department of Assessments and Taxation of Maryland on October 14, 
1994.
				FOURTH:	A.   Article FIRST of the Articles of 
Amendment as filed on October 14, 1994 reads:
The Articles of Incorporation of the Corporation, as amended, are hereby 
further amended by deleting Article SECOND and inserting in lieu thereof the 
following:
	SECOND:   The name of the corporation (hereinafter called the 
"Corporation") is Smith Barney Managed Municipals, Inc.
					B.   As corrected, Article FIRST of the Articles 
of Amendment reads:
The Articles of Incorporation of the Corporation, as amended, are


<PAGE> 2
hereby further amended by deleting Article SECOND and inserting in lieu 
thereof the following:
	SECOND:   The name of the corporation (hereinafter called the 
"Corporation") is Smith Barney Managed Municipals Fund Inc.
	The undersigned Chairman of the Board of the Corporation hereby 
acknowledges the foregoing Certificate of Correction to be the corporate act 
of the Corporation and hereby certifies to the best of his knowledge, 
information and belief that the matters and facts set forth herein with 
respect to the authorization and approval thereof are true in all material 
respects under the penalties of perjury.
	IN WITNESS WHEREOF, the Corporation has caused these presents to be 
signed in its name and on its behalf by its Chairman of the Board and 
witnessed by its Secretary on the     
 day of November, 1994.
SMITH BARNEY SHEARSON MANAGED 
MUNICIPALS FUND INC. (incorrectly named Smith Barney Managed Municipals, Inc., 
being corrected hereby to Smith Barney Managed Municipals Fund Inc.)
By                           Heath B. McLendon


				Chairman of the Board
ATTEST:
Lee D. Augsburger
Assistant Secretar


ARTICLES SUPPLEMENTARY
SMITH BARNEY MANAGED MUNICIPALS FUND INC.
	Smith Barney Managed Municipals Fund Inc., a 
Maryland corporation having its principal office in the 
State of Maryland in Baltimore City (hereinafter called 
the "Corporation"), hereby certifies to the State 
Department of Assessments and Taxation of Maryland that:
FIRST:    The Corporation is authorized to issue 
1,100,000,000 shares of capital stock, par value $.001 
per share, with an aggregate par value of $1,100,000.  
These Articles Supplementary do not increase the total 
authorized capital stock of the Corporation or the 
aggregate par value thereof.  The Board of Directors 
hereby classifies and reclassifies all of the unissued 
shares of capital stock of all classes of the 
Corporation in such manner that the Corporation's 
capital stock will be classified into five classes, each 
with a par value of $.001 per share, designated Class A 
Common Stock, Class B Common Stock, Class C Common 
Stock, Class Y Common Stock and Class Z Common Stock.  
The Corporation shall be authorized to issue up to 
1,100,000,000 shares of each such class of capital stock 
less, at any time, the total number of shares of all 
other such classes of capital stock then issued and 
outstanding.  At no time may the Corporation cause to be 
issued and outstanding more than 1,100,000,000 shares of 
its capital stock of all such classes in the aggregate 
unless such number be hereafter increased in accordance 
with the Maryland General Corporation Law.
	SECOND:  The shares of Class A Common Stock, Class 
B Common Stock and Class C Common Stock classified 
hereby shall have the preferences, conversion and other 
rights, voting powers, restrictions, limitations as to 
dividends, qualifications and terms and conditions of 
redemption as currently set forth in the charter of the 
Corporation with respect to those classes of capital 
stock.  The Class Y Common Stock and Class Z Common 
Stock classified hereby shall have the preferences, 
conversion and other rights, voting powers, 
restrictions, limitations as to dividends, 
qualifications, and terms and conditions of redemption 
as set forth in Article V, being also referred to as 
Article FIFTH, of the Corporation's Articles of 
Incorporation and shall be subject to all provisions of 
its Articles of Incorporation relating to stock of the 
Corporation generally.


<PAGE> 2
	THIRD:  The Board of Directors of the Corporation 
has classified the shares described above pursuant to 
authority contained in the Corporation's charter.
	FOURTH:   These Articles Supplementary will become 
effective at 9:01 A.M. on November 7, 1994.
	The undersigned Chairman of the Board of the 
Corporation acknowledges these Articles Supplementary to 
be the corporate act of the Corporation and states that 
to the best of his knowledge, information and belief, 
the matters and facts set forth in these Articles with 
respect to authorization and approval are true in all 
material respects and that this statement is made under 
penalties of perjury.
	IN WITNESS WHEREOF, Smith Barney Managed Municipals 
Fund Inc. has caused these Articles Supplementary to be 
signed and filed in its name and on its behalf by its 
Chairman of the Board, and witnessed by its Assistant 
Secretary on            , 1994.
		SMITH BARNEY MANAGED


			MUNICIPALS FUND INC.
By:                           Heath B. McLendon, 
Chairman of the Board
WITNESS:
Lee D. Augsburger,
Assistant Secretary


SMITH BARNEY MANAGED MUNICIPALS FUND INC. ARTICLES OF 
AMENDMENT
	Smith Barney Managed Municipals Fund Inc., a 
Maryland corporation having its principal office in the 
State of Maryland in Baltimore City (hereinafter called 
the "Corporation"), hereby certifies to the State 
Department of Assessments and Taxation of Maryland that:
	FIRST:    The charter of the Corporation is hereby 
amended to provide that the Corporation's "Class D 
Common Stock" is hereby redesignated as "Class C Common 
Stock."
	SECOND:   The foregoing amendment to the charter of 
the Corporation was approved by a majority of the entire 
Board of Directors of the Corporation; the charter 
amendment is limited to a change expressly permitted by 
Section 2-605 of Title 2 of Subtitle 6 of the Maryland 
General Corporation Law to be made without action by the 
stockholders, and the Corporation is registered as an 
open-end company under the Investment Company Act of 
1940.
THIRD:    These Articles of Amendment will become 
effective at 9:00 A.M. on November 7, 1994.
	The undersigned Chairman of the Board of the 
Corporation acknowledges these Articles of Amendment to 
be the corporate act of the Corporation and states to 
the best of his knowledge, information and belief that 
the matters and facts set forth in these Articles with 
respect to authorization and approval are true in all 
material respects and that this statement is made under 
the penalties of perjury.
	IN WITNESS WHEREOF, Smith Barney Managed Municipals 
Fund Inc. has caused these Articles of Amendment to be 
signed in its name and on its behalf by its Chairman of 
the Board, and witnessed by its Assistant Secretary on                  
, 1994.
SMITH BARNEY MANAGED MUNICIPALS


FUND INC.
By:                              Heath B. McLendon,


Chairman of the Board
WITNESS:
Lee D. Augsburger,
Assistant Secretary


SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC.
ARTICLES OF AMENDMENT
	Smith Barney Shearson Managed Municipals Fund Inc., a 
Maryland corporation having its principal office in the State of 
Maryland in Baltimore City (hereinafter called the "Corporation"), 
hereby certifies to the State Department of Assessments and 
Taxation of Maryland that:
	FIRST:    The Articles of Incorporation of the Corporation, 
as amended, are hereby further amended by deleting Article SECOND 
and inserting in lieu thereof the following:
		SECOND:  The name of the corporation 
	(hereinafter called the "Corporation")is
	Smith Barney Managed Municipals, Inc.
	SECOND:   The foregoing amendment to the charter of the 
Corporation was approved by a majority of the entire Board of 
Directors of the Corporation; the charter amendment is limited to a 
change expressly permitted by Section 2-605 of Title 2 of Subtitle 
6 of the Maryland General Corporation Law to be made without action 
by the stockholders, and the Corporation is registered as an open-
end company under the Investment Company Act of 1940.
	The undersigned Chairman acknowledges these Articles of 
Amendment to be the corporate act of the Corporation and states to 
the best of his knowledge, information and belief that the matters 
and facts set forth in these Articles with respect to authorization 
and approval are true in all material respects and that this 
statement is made under the penalties of perjury.
	IN WITNESS WHEREOF, Smith Barney Shearson Managed Municipals 
Fund Inc. has caused these Articles of Amendment to be signed in 
its name and on its behalf by its Chairman and witnessed by its 
Assistant Secretary on October   , 1994.
SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC.
By:                              Heath B. McLendon, Chairman
WITNESS:
Lee D. Augsburger
Assistant Secretary





SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC.

ADMINISTRATION AGREEMENT



									April 20, 1994



Smith, Barney Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105

Dear Sirs:

	Smith Barney Shearson Managed Municipals Fund Inc. (the "Fund"), a 
corporation organized under the laws of the State of Maryland, confirms its 
agreement with Smith, Barney Advisers, Inc. ("SBA") as follows:

	1.	Investment Description; Appointment

		The Fund desires to employ its capital by investing and 
reinvesting in investments of the kind and in accordance with the 
limitations specified in its Articles of Incorporation dated September 8, 
1980 as amended from time to time (the "Articles of Incorporation"), in its 
Prospectus and Statement of Additional Information as from time to time in 
effect and in such manner and to such extent as may from time to time be 
approved by the Board of Directors of the Fund (the "Board").  Copies of 
the Fund's Prospectus, Statement of Additional Information and Articles of 
Incorporation have been or will be submitted to SBA.  Greenwich Street 
Advisors, a Division of Mutual Management Corp. ("Greenwich Street 
Advisors") serves as the Fund's investment adviser, and the Fund desires to 
employ and hereby appoints SBA to act as its administrator.  SBA accepts 
this appointment and agrees to furnish the services to the Fund for the 
compensation set forth below.  SBA is hereby authorized to retain third 
parties and is hereby authorized to delegate some or all of its duties and 
obligations hereunder to such persons provided that such persons shall 
remain under the general supervision of SBA.

	2.	Services as Administrator

		Subject to the supervision and direction of the Board, SBA 
will: (a) assist in supervising all aspects of the Fund's operations except 
those performed by the Fund's investment adviser under its investment 
advisory agreement; (b) supply the Fund with office facilities (which may 
be in SBA's own offices), statistical and research data, data processing 
services, clerical, accounting and bookkeeping services, including, but not 
limited to, the calculation of (i) the net asset value of shares of the 
Fund, (ii) applicable contingent deferred sales charges and similar fees 
and charges and (iii) distribution fees, internal auditing and legal 
services, internal executive and administrative services, and stationary 
and office supplies; and (c) prepare reports to shareholders of the Fund, 
tax returns and reports to and filings with the Securities and Exchange 
Commission (the "SEC") and state blue sky authorities.

	3.	Compensation

		In consideration of services rendered pursuant to this 
Agreement, the Fund will pay SBA on the first business day of each month a 
fee for the previous month at an annual rate of .20 of 1.00% of the Fund's 
average daily net assets.  The fee for the period from the date the Fund's 
initial registration statement is declared effective by the SEC to the end 
of the month during which the initial registration statement is declared 
effective shall be prorated according to the proportion that such period 
bears to the full monthly period.  Upon any termination of this Agreement 
before the end of any month, the fee for such part of a month shall be 
prorated according to the proportion which such period bears to the full 
monthly period and shall be payable upon the date of termination of this 
Agreement.  For the purpose of determining fees payable to SBA, the value 
of the Fund's net assets shall be computed at the times and in the manner 
specified in the Fund's Prospectus and Statement of Additional Information 
as from time to time in effect.

	4.	Expenses

		SBA will bear all expenses in connection with the performance 
of its services under this Agreement.  The Fund will bear certain other 
expenses to be incurred in its operation, including:  taxes, interest, 
brokerage fees and commissions, if any; fees of the members of the Board of 
the Fund who are not officers, directors or employees of Smith Barney 
Shearson Inc. or its affiliates or any person who is an affiliate of any 
person to whom duties may be delegated hereunder; SEC fees and state blue 
sky qualification fees; charges of custodians and transfer and dividend 
disbursing agents; the Fund's and Board members' proportionate share of 
insurance premiums, professional association dues and/or assessments; 
outside auditing and legal expenses; costs of maintaining the Fund's 
existence; costs attributable to investor services, including, without 
limitation, telephone and personnel expenses; costs of preparing and 
printing prospectuses and statements of additional information for 
regulatory purposes and for distribution to existing shareholders; costs of 
shareholders' reports and meetings of the officers or Board and any 
extraordinary expenses.  In addition, the Fund will pay all distribution 
fees pursuant to a Distribution Plan adopted under Rule 12b-1 of the 
Investment Company Act of 1940, as amended (the "1940 Act").

	5.	Reimbursement to the Fund

		If in any fiscal year the aggregate expenses of the Fund 
(including fees pursuant to this Agreement and the Fund's investment 
advisory agreement (s), but excluding distribution fees, interest, taxes, 
brokerage and, if permitted by state securities commissions, extraordinary 
expenses) exceed the expense limitations of any state having jurisdiction 
over the Fund, SBA will reimburse the Fund for that excess expense to the 
extent required by state law in the same proportion as its respective fees 
bear to the combined fees for investment advice and administration.  The 
expense reimbursement obligation of SBA will be limited to the amount of 
its fees hereunder.  Such expense reimbursement, if any, will be estimated, 
reconciled and paid on a monthly basis.



	6.	Standard of Care

		SBA shall exercise its best judgment in rendering the services 
listed in paragraph 2 above, and SBA shall not be liable for any error of 
judgment or mistake of law or for any loss suffered by the Fund in 
connection with the matters to which this Agreement relates, provided that 
nothing herein shall be deemed to protect or purport to protect SBA against 
liability to the Fund or to its shareholders to which SBA would otherwise 
be subject by reason of willful misfeasance, bad faith or gross negligence 
on its part in the performance of its duties or by reason of SBA's reckless 
disregard of its obligations and duties under this Agreement.

	7.	Term of Agreement

		This Agreement shall continue automatically for successive 
annual periods, provided such continuance is specifically approved at least 
annually by the Board.

	8.	Service to Other Companies or Accounts

		The Fund understands that SBA now acts, will continue to act 
and may act in the future as administrator to one or more other investment 
companies, and the Fund has no objection to SBA so acting.  In addition, 
the Fund understands that the persons employed by SBA or its affiliates to 
assist in the performance of its duties hereunder will not devote their 
full time to such service and nothing contained herein shall be deemed to 
limit or restrict the right of SBA or its affiliates to engage in and 
devote time and attention to other businesses or to render services of 
whatever kind or nature.

	9.	Indemnification

		The Fund agrees to indemnify SBA and its officers, directors, 
employees, affiliates, controlling persons, agents (including persons to 
whom responsibilities are delegated hereunder) ("indemnitees") against any 
loss, claim, expense or cost of any kind (including reasonable attorney's 
fees) resulting or arising in connection with this Agreement or from the 
performance or failure to perform any act hereunder, provided that no such 
indemnification shall be available if the indemnitee violated the standard 
of care in paragraph 6 above.  This indemnification shall be limited by the 
1940 Act, and relevant state law.  Each indemnitee shall be entitled to 
advancement of its expenses in accordance with the requirements of the 1940 
Act and the rules, regulations and interpretations thereof as in effect 
from time to time.

	10.	Limitation of Liability

		The Fund, SBA and Boston Advisors agree that the obligations of 
the Fund under this Agreement shall not be binding upon any of the Board 
members, shareholders, nominees, officers, employees or agents, whether 
past, present or future, of the Fund individually, but are binding only 
upon the assets and property of the Fund, as provided in the Articles of 
Incorporation.  The execution and delivery of this Agreement has been duly 
authorized by the Fund, SBA and Boston Advisors, and signed by an 
authorized officer of each, acting as such.  Neither the authorization by 
the Board members of the Fund, nor the execution and delivery by the 
officer of the Fund shall be deemed to have been made by any of them 
individually or to impose any liability on any of them personally, but 
shall bind only the assets and property of the Fund as provided in the 
Articles of Incorporation.

	If the foregoing is in accordance with your understanding, kindly 
indicate your acceptance hereof by signing and returning to us the enclosed 
copy hereof.

							Very truly yours,

							Smith Barney Shearson
							Managed Municipals Fund Inc.



							By: 	/s/Heath B. McLendon
							Name:	Heath B. McLendon
							Title:	Chairman of theBoard

Accepted:

Smith, Barney Advisers, Inc.

By: 	/s/Christina Sydor
Name:	Christina Sydor
Title:	Secretary





APPENDIX A


ADMINISTRATIVE SERVICES

Fund Accounting.  Fund accounting services involve comprehensive 
accrual-based recordkeeping and management information.  They include 
maintaining a fund's books and records in accordance with the Investment 
Company Act of 1940, as amended (the "1940 Act"), net asset value 
calculation, daily dividend calculation, tax accounting and portfolio 
accounting.

	The designated fund accountants interact with the Fund's 
custodian, transfer agent and investment adviser daily.  As required, 
the responsibilities of each fund accountant may include:

	-Cash Reconciliation - Reconcile prior day's ending cash 
balance per custodian's records and the accounting system to the prior 
day's ending cash balance per fund accounting's cash availability 
report;

	-Cash Availability - Combine all activity affecting the 
Fund's cash account and produce a net cash amount available for 
investment;

		Formal Reconciliation's - Reconcile system generated reports 
to prior day's calculations of interest, dividends, amortization, 
accretion, distributions, capital stock and net assets;

	-Trade Processing - Upon receipt of instructions from the 
investment adviser review, record and transmit buys and sells to the 
custodian;

	-Journal Entries - Input entries to the accounting system 
reflecting shareholder activity and Fund expense accruals;

		Reconcile and Calculate N.O.A. (net other assets) - Compile 
all activity affecting asset and liability accounts other than 
investment account;

		Calculate Net Income, Mil Rate and Yield for Daily 
Distribution Funds - Calculate income on purchase and sales, calculate 
change in income due to variable rate change, combine all daily income 
less expenses to arrive at net income, calculate mil rate and yields (1 
day, 7 day and 30 day);

		Mini-Cycle (except for Money Market Funds) - Review intra 
day trial balance and reports, review trial balance N.O.A.;

		Holdings Reconciliation - Reconcile the portfolio holdings 
per the system to custodian records;

		Pricing - Determine N.A.V. for Fund using market value of 
all securities and currencies (plus N.O.A.), divided by the shares 
outstanding, and investigate securities with significant price changes 
(over 5%);

		Money Market Fund Pricing - Monitor valuation for compliance 
with Rule 2a-7;

		System Check-Back - Verify the change in market value of 
securities which saw trading activity per the system;

		Net Asset Value Reconciliation - Identify the impact of 
current day's Fund activity on a per share basis;

		Reporting of Price to NASDAQ - 5:30 P.M. is the final 
deadline for Fund prices being reported to the newspaper;

		Reporting of Price to Transfer Agent- N.A.V.s are reported 
to transfer agent upon total completion of above activities.

	In addition, fund accounting personnel: communicate corporate 
actions of portfolio holdings to portfolio managers; initiate 
notification to custodian procedures on outstanding income receivables; 
provide information to the Fund's treasurer for reports to shareholders, 
SEC, Board members, tax authorities, statistical and performance 
reporting companies and the Fund's auditors; interface with the Fund's 
auditors; prepare monthly reconciliation packages, including expense pro 
forma; prepare amortization schedules for premium and discount bonds 
based on the effective yield method; prepare vault reconciliation 
reports to indicate securities currently "out-for-transfer;" and 
calculate daily expenses based on expense ratios supplied by Fund's 
treasurer.

Financial Administration.  The financial administration services made 
available to the Fund fall within three main categories:  Financial 
Reporting; Statistical Reporting; and Publications.  The following is a 
summary of the services made available to the Fund by the Financial 
Administration Division:

		Financial Reporting

			Coordinate the preparation and review of the annual, 
semi-annual and quarterly portfolio of investments and financial 
statements included in the Fund's shareholder reports.

		Statistical Reporting

			Total return reporting;

			SEC 30-day yield reporting and 7-day yield reporting 
(for money market funds);

			Prepare dividend summary;

			Prepare quarter-end reports;

			Communicate statistical data to the financial media 
(Donoghue, Lipper, Morningstar, et al.)

		Publications

			Coordinate the printing and mailing process with 
outside printers for annual and semi-annual reports, prospectuses, 
statements of additional information, proxy statements and special 
letters or supplements;

			Provide graphics and design assistance relating to the 
creation of marketing materials and shareholder reports.

Treasury.  The following is a summary of the treasury services available 
to the Fund:

			Provide a Treasurer and Assistant Treasurer for the 
Fund;

			Determine expenses properly chargeable to the Fund;

			Authorize payment of bills for expenses of the Fund;

			Establish and monitor the rate of expense accruals;

			Prepare financial materials for review by the Fund's 
Board (e.g., Rule 2a-7, 10f-3, 17a-7 and 17e-1 reports, repurchase 
agreement dealer lists, securities transactions);

			Recommend dividends to be voted by the Fund's Board;

			Monitor mark-to-market comparisons for money market 
funds;

			Recommend valuation to be used for securities which 
are not readily saleable;

			Function as a liaison with the Fund's outside auditors 
and arrange for audits;

			Provide accounting, financial and tax support relating 
to portfolio management and any contemplated changes in the Fund's 
structure or operations;

			Prepare and file forms with the Internal Revenue 
Service

			*	Form 8613
			*	Form 1120-RIC
			*	Board Members' and Shareholders' 1099s
			*	Mailings in connection with Section 852 and 
related regulations.

Legal and Regulatory Services.  The legal and regulatory services made 
available to the Fund fall within four main areas: SEC and Public 
Disclosure Assistance; Corporate and Secretarial Services; Compliance 
Services; and Blue Sky Registration.  The following is a summary of the 
legal and regulatory services available to the Fund:

		SEC and Public Disclosure Assistance

			File annual amendments to the Fund's registration 
statements, including updating the prospectus and statement of 
additional information where applicable;

			File annual and semi-annual shareholder reports with 
the appropriate regulatory agencies;

			Prepare and file proxy statements;

			Review marketing material for SEC and NASD clearance;

			Provide legal assistance for shareholder 
communications.

		Corporate and Secretarial Services

			Provide a Secretary and an Assistant Secretary for the 
Fund; 

			Maintain general corporate calendar;

			Prepare agenda and background materials for Fund board 
meetings, make presentations where appropriate, prepare minutes and 
follow-up matters raised at Board meetings;

			Organize, attend and keep minutes of shareholder 
meetings;

			Maintain Articles of Incorporation and By-Laws of the 
Fund.

		Legal Consultation and Business Planning

			Provide general legal advice on matters relating to 
portfolio management, Fund operations and any potential changes in the 
Fund's investment policies, operations or structure;

			Maintain continuing awareness of significant emerging 
regulatory and legislative developments which may affect the Fund, 
update the Fund's Board and the investment adviser on those developments 
and provide related planning assistance where requested or appropriate;

			Develop or assist in developing guidelines and 
procedures to improve overall compliance by the Fund and its various 
agents;

			Manage Fund litigation matters and assume full 
responsibility for the handling of routine Fund examinations and 
investigations by regulatory agencies.

		Compliance Services

		The Compliance Department is responsible for preparing 
compliance manuals, conducting seminars for fund accounting and advisory 
personnel and performing on-going testing of the Fund's portfolio to 
assist the Fund's investment adviser in complying with prospectus 
guidelines and limitations, 1940 Act requirements and Internal Revenue 
Code requirements.  The Department may also act as liaison to the SEC 
during its routine examinations of the Fund.

		State Regulation

		The State Regulation Department operates in a fully 
automated environment using blue sky registration software developed by 
Price Waterhouse.  In addition to being responsible for the initial and 
on-going registration of shares in each state, the Department acts as 
liaison between the Fund and state regulators, and monitors and reports 
on shares sold and remaining registered shares available for sale.







shared\domestic\clients\shearson\funds\smmu\admn2.




A-5



shared\domestic\clients\shearson\funds\smmu\admn2.







SMITH BARNEY SHEARSON MANAGED MUNICIPALS FUND INC.

SUB-ADMINISTRATION AGREEMENT

									April 20, 1994


The Boston Company Advisors, Inc.
One Exchange Place
Boston, MA 02109

Dear Sirs:

		Smith Barney Shearson Managed Municpals Fund Inc. (the "Fund"), 
a corporation organized under the laws of the State of Maryland and Smith, 
Barney Advisers, Inc. ("SBA") confirm their agreement with The Boston 
Company Advisors, Inc. ("Boston Advisors") as follows:

		1.	Investment Description; Appointment

		The Fund desires to employ its capital by investing and 
reinvesting in investments of the kind and in accordance with the 
limitations specified in its Articles of Incorporation dated September 8, 
1980 as amended from time to time (the "Articles of Incorporation"), in its 
Prospectus and Statement of Additional Information as from time to time in 
effect, and in such manner and to such extent as may from time to time be 
approved by the Board of Directors of the Fund (the "Board").  Copies of 
the Fund's Prospectus, Statement of Additional Information and Articles of 
Incorporation have been or will be submitted to you.  The Fund employs SBA 
as its administrator, and the Fund and SBA desire to employ and hereby 
appoint Boston Advisors as the Fund's sub-administrator.  Boston Advisors 
accepts this appointment and agrees to furnish the services to the Fund, 
for the compensation set forth below, under the general supervision of SBA.

		2.	Services as Sub-Administrator

		Subject to the supervision and direction of the Board and SBA, 
Boston Advisors will: (a) assist in supervising all aspects of the Fund's 
operations except those performed by the Fund's investment adviser under 
the Fund's investment advisory agreement; (b) supply the Fund with office 
facilities (which may be in Boston Advisor's own offices), statistical and 
research data, data processing services, clerical, accounting and 
bookkeeping services, including, but not limited to, the calculation of (i) 
the net asset value of shares of the Fund, (ii) applicable contingent 
deferred sales charges and similar fees and changes and (iii) distribution 
fees, internal auditing and legal services, internal executive and 
administrative services, and stationery and office supplies; and (c) 
prepare reports to shareholders of the Fund, tax returns and reports to and 
filings with the Securities and Exchange Commission (the "SEC") and state 
blue sky authorities.





		3.	Compensation

		In consideration of services rendered pursuant to this 
Agreement, SBA will pay Boston Advisors on the first business day of each 
month a fee for the previous month calculated in accordance with the terms 
set forth in Appendix B, and  as agreed to from time to time by the Fund, 
SBA and Boston Advisors.  Upon any termination of this Agreement before the 
end of any month, the fee for such part of a month shall be prorated 
according to the proportion which such period bears to the full monthly 
period and shall be payable upon the date of termination of this Agreement.  
For the purpose of determining fees payable to Boston Advisors, the value 
of the Fund's net assets shall be computed at the times and in the manner 
specified in the Fund's Prospectus and Statement of Additional Information 
as from time to time in effect.

		4.	Expenses

		Boston Advisors will bear all expenses in connection with the 
performance of its services under this Agreement.  The Fund will bear 
certain other expenses to be incurred in its operation, including: taxes, 
interest, brokerage fees and commissions, if any; fees of the Board members 
of the Fund who are not officers, directors or employees of Smith Barney 
Shearson Inc., Boston Advisors of their affiliates; SEC fees and state blue 
sky qualification fees; charges of custodians and transfer and dividend 
disbursing agents; the Fund's and its Board members' proportionate share of 
insurance premiums, professional association dues and/or assessments; 
outside auditing and legal expenses; costs of maintaining the Fund's 
existence; costs attributable to investor services, including, without 
limitation, telephone and personnel expenses; costs of preparing and 
printing prospectuses and statements of additional information for 
regulatory purposes and for distribution to existing shareholders; costs of 
shareholders' reports and meetings of the officers or Board and any 
extraordinary expenses.  In addition, the Fund will pay all distribution 
fees pursuant to a Distribution Plan adopted under Rule 12b-1 of the 
Investment Company Act of 1940, as amended (the "1940 Act").  

		5.	Reimbursement of the Fund

		If in any fiscal year the aggregate expenses of the Fund 
(including fees pursuant to this Agreement and the Fund's investment 
advisory agreement(s) and administration agreement, but excluding 
distribution fees, interest, taxes, brokerage and, if permitted by state 
securities commissions, extraordinary expenses) exceed the expense 
limitations of any state having jurisdiction over the Fund, Boston Advisory 
will reimburse the Fund for that excess expense to the extent required by 
state law in the same proportion as its respective fees bear to the 
combined fees for investment advice and administration.  The expense 
reimbursement obligation of Boston Advisors will be limited to the amount 
of its fees hereunder.  Such expense reimbursement, if any, will be 
estimated, reconciled and paid on  a monthly basis.

		6.	Standard of Care

		Boston Advisors shall exercise its best judgment in rendering 
the services listed in paragraph 2 above.  Boston Advisors shall not be 
liable for any error of judgment or mistake of law or for any loss suffered 
by the Fund in connection with the matters to which this Agreement 


relates, provided that nothing herein shall be deemed to protect or purport 
to protect Boston Advisors against liability to the Fund or to its 
shareholders to which Boston Advisors would otherwise be subject by reason 
of willful misfeasance, bad faith or gross negligence on its part in the 
performance of its duties or by reason of Boston Advisor's reckless 
disregard of its obligations and duties under this Agreement.

		7.	Term of Agreement

		This agreement shall continue automatically for successive 
annual periods, provided that it may be terminated by 90 days' written 
notice to the other parties by any of the Fund, SBA or Boston Advisors.  
This Agreement shall extend to and shall be binding upon the parties 
hereto, and their respective successors and assigns, provided, however, 
that this agreement may not be assigned, transferred or amended without the 
written consent of all the parties hereto.

		8.	Service to Other Companies or Accounts

		The Fund understands that Boston Advisors now acts, will 
continue to act and may act in the future as administrator to one or more 
other investment companies, and the Fund has no objection to Boston 
Advisors so acting.  In addition, the Fund understands that the persons 
employed by Boston Advisors to assist in the performance of its duties 
hereunder may or may not devote their full time to such service and nothing 
contained herein shall be deemed to limit or restrict the right of Boston 
Advisors or its affiliates to engage in and devote time and attention to 
other businesses or to render services of whatever kind of nature.

		9.	Indemnification

		SBA agrees to indemnify Boston Advisors and its officers, 
directors, employees, affiliates, controlling persons and agents 
("indemnitees") to the extent that indemnification is available from the 
Fund, and Boston Advisors agrees to indemnify SBA and its indemnitees, 
against any loss, claim, expenses or cost of any kind (including reasonable 
attorney's fees) resulting or arising in connection with this Agreement or 
from the performance or failure to perform any act hereunder, provided that 
not such indemnification shall be available if the indemnitee violated the 
standard of care in paragraph 6 above.  This indemnification shall be 
limited by the 1940 Act, and relevant state law.  Each indemnitee shall be 
entitled to advancement of its expenses in accordance with the requirements 
of the 1940 Act and the rules, regulations and interpretations thereof as 
in effect from time to time.

		10.	Limitations of Liability

		The Fund, SBA and Boston Advisors agree that the obligations of 
the Fund under this Agreement shall not be binding upon any of the Board 
members, shareholders, nominees, officers, employees or agents, whether 
past, present or future, of the Fund individually, but are binding only 
upon the assets and property of the Fund, as provided in the Articles of 
Incorporation and Bylaws.  




The execution and delivery of this Agreement has been duly authorized by 
the Fund, SBA and Boston Advisors, and signed by an authorized officer of 
each, acting as such.  Neither the authorization by the Board Members of 
the Fund, nor the execution and delivery by the officer of the Fund shall 
be deemed to have been made by any of them individually or to impose any 
liability on any of them personally, but shall bind only the assets and 
property of the Fund as provided in the Articles of Incorporation and 
Bylaws.

		If the foregoing is in accordance with your understanding, 
kindly indicate your acceptance hereof by signing and returning to us the 
enclosed copy hereof.

					Very truly yours,

					Smith Barney Shearson
					Managed Municipals Fund Inc.

					By:	/s/Heath B. McLendon
					Name:	Heath B. McLendon
					Title:	Chairman of the Board

					Smith, Barney Advisers, Inc.

					By:	/s/Christina Sydor
					Name:	Christina Sydor
					Title:	Secretary
Accepted:
The Boston Company Advisors, Inc.

By:	________________________
Name:	



Appendix A

ADMINISTRATIVE SERVICES

Fund Accounting.  Fund accounting services involve comprehensive 
accrual-based recordkeeping and management information.  They include 
maintaining a fund's books and records in accordance with the Investment 
Company Act of 1940, as amended (the "1940 Act" ), net asset value 
calculation, daily dividend calculation, tax accounting and portfolio 
accounting.

	The designated fund accountants interact with the Fund's 
custodian, transfer agent and investment adviser daily.  As required, 
the responsibilities of each fund accountant may include:

	-	Cash Reconciliation - Reconcile prior day's ending cash 
balance per custodian's records and the accounting system to the prior 
day's ending cash balance per fund accounting's cash availability 
report;

	-	Cash Availability - Combine all activity affecting the 
Fund's cash account and produce a net cash amount available for 
investment;

	-	Formal Reconciliation - Reconcile system generated reports 
to prior day's calculations of interest, dividends, amortization, 
accretion, distributions, capital stock and net assets;

	-	Trade Processing - Upon receipt of instructions from the 
investment adviser review, record and transmit buys and sells to the 
custodian;

	-	Journal Entries - Input entries to the accounting system 
reflecting shareholder activity and Fund expense accruals;

	-	Reconcile and Calculate N.O.A. (net other assets) - Compile 
all activity affecting asset and liability accounts other than 
investment account;

	-	Calculate Net Income, Mil Rate and Yield for Daily 
Distribution
		Funds - Calculate income on purchases and sales, calculate 
change in income due to variable rate change; combine all daily income 
less expenses to arrive at net income; calculate mil rate and yields (1 
day, 7 day and 30 day);

	-	Mini-Cycle (except for Money Market Funds) - Review intra 
day trial balance and reports, review trial balance N.O.A.;

	-	Holdings Reconciliation - Reconcile the portfolio holdings 
per the system to custodian reports;

	-	Pricing - Determine N.A.V. for the Fund using market value 
of all securities and currencies (plus N.O.A.), divided by the shares 
outstanding, and investigate securities with significant price changes 
(over 5%);

	-	Money Market Fund Pricing - Monitor valuation for compliance 
with Rule 2a-7;

	-	System Check-Back - Verify the change in market value of 
securities which saw trading activity per the system;

	-	Net Asset Value Reconciliation - Identify the impact of 
current day's Fund activity on a per share basis;

	-	Reporting of Price to NASDAQ - 5:30 P.M. is the final 
deadline for Fund prices being reported to the newspaper;

	-	Reporting of Price to Transfer Agent - N.A.V.s are reported 
to transfer agent upon total completion of above activities.

	In addition, fund accounting personnel: communicate corporate 
actions of portfolio holdings to portfolio mangers; initiate 
notification to custodian procedures on outstanding income receivables; 
provide information to the Fund's treasurer for reports to shareholders, 
SEC, Board, tax authorities, statistical and performance reporting 
companies and the Fund's auditors; interface with Fund's auditors; 
prepare monthly reconciliation packages, including expense pro forma; 
prepare amortization schedules for premium and discount bonds based on 
the effective  yield method; prepare vault reconciliation reports to 
indicate securities currently "out-for-transfer;" and calculate daily 
expenses based on expense ratios supplied by Fund's treasurer.

Financial Administration.  The financial administration services made 
available to the Fund fall within three main categories:  Financial 
Reporting; Statistical Reporting; and Publications.  The following is a 
summary of the services made available to the Fund by the Financial 
Administration Division:

	Financial Reporting

	-	Coordinate the preparation and review of the annual, semi-
annual and quarterly portfolio of investments and financial statements 
included in the Fund's shareholder reports.

	Statistical Reporting

	-	Total return reporting;

	-	SEC 30-day yield reporting and 7-day yield reporting (for 
money market funds);

	-	Prepare dividend summary;

	-	Prepare quarter-end reports;

	-	Communicate statistical data to the financial media 
(Donoghue, Lipper, Morningstar, et al.).

	Publications

	-	Coordinate the printing and mailing process with outside 
printers for annual and semi-annual reports, prospectuses, statements of 
additional information, proxy statements and special letters or 
supplements;

Treasury.  The following is a summary of the treasury services available 
to the Fund:

	-	Provide an Assistant Treasurer for the Fund;

	-	Authorize payment of bills for expenses of the Fund;

	-	Establish and monitor the rate of expense accruals;

	-	Prepare financial materials for review by the Fund's Board 
(e.g., Rule 2a-7, 10f-3 17a-7 and 17e-1 reports, repurchase agreement 
dealer lists, securities transactions);

	-	Monitor mark-to-market comparisons for money market funds;

	-	Recommend valuations to be used for securities which are not 
readily saleable;

	-	Function as a liaison with the Fund's outside auditors and 
arrange for audits;

	-	Provide accounting, financial and tax support relating to 
portfolio management and any contemplated changes in the fund's 
structure or operations;

	-	Prepare and file forms with the Internal Revenue Service

		*	Form 8613
		*	Form 1120-RIC
		*	Board Members' and Shareholders' 1099s
		*	Mailings in connection with Section 852 and related 
regulations.

Legal and Regulatory Services.  The legal and regulatory services made 
available to the Fund fall within four main areas: SEC and Public 
Disclosure Assistance; Corporate and Secretarial Services; Compliance 
Services; and Blue Sky Registration.  The following is a summary of the 
legal and regulatory services available to the Fund:

	SEC and Public Disclosure Assistance

	-	File annual amendments to the Fund's registration 
statements, including updating the prospectus and statement of 
additional information where applicable;

	-	File annual and semi-annual shareholder reports with the 
appropriate regulatory agencies;

	-	Prepare and file proxy statements;

	-	Provide legal assistance for shareholder communications.

	Corporate and Secretarial Services

	-	Provide an Assistant Secretary for the Fund;

	-	Maintain general corporate calendar;

	-	Prepare agenda and background materials for Fund board 
meetings, make presentations where appropriate, prepare minutes and 
follow-up matters raised at Board meetings;

	-	Organize, attend and keep minutes of shareholder meetings;

	-	Maintain Articles of Incorporation and By-Laws of the Fund.

	Legal Consultation and Business Planning

	-	Provide general legal advice on matters relating to 
portfolio management, Fund operations and any potential changes in the 
Fund's investment policies, operations or structure;

	-	Maintain continuing awareness of significant emerging 
regulatory and legislative developments which may affect the Fund, 
update the Fund's Board and the investment adviser on those developments 
and provide related planning assistance where requested or appropriate;

	-	Develop or assist in developing guidelines and procedures to 
improve overall compliance by the Fund and its various agents;

	-	Manage Fund litigation matters and assume full 
responsibility for the handling of routine fund examinations and 
investigations by regulatory agencies.

	Compliance Services

	The Compliance Department is responsible for preparing compliance 
manuals, conducting seminars for fund accounting and advisory personnel 
and performing on-going testing of the Fund's portfolio to assist the 
Fund's investment adviser in complying with prospectus guidelines and 
limitations, 1940 Act requirements and Internal Revenue Code 
requirements.  The Department may also act as liaison to the SEC during 
its routine examinations of the Fund.



	State Regulation

	The State Regulation Department operates in a fully automated 
environment using blue sky registration software development by Price 
Waterhouse.  In addition to being responsible for the initial and on-
going registration of shares in each state, the Department acts as 
liaison between the Fund and state regulators, and monitors and reports 
on shares sold and remaining registered shares available for sale.



Schedule B



Fee





shared domestic clients shearson funds smmu subadm



A-4




shared\domestic\clients\shearson\funds/smmu/subadm





shared\domestic\clients\shearson\agr.doc




EXHIBIT 11A 
 
 
 
 
 
                  CONSENT OF INDEPENDENT ACCOUNTANTS 
 
 
 
 
To the Board of Directors of 
Smith Barney Shearson Managed Municipals Fund, Inc.: 
 
          We hereby consent to the following with respect to Post-Effective 
Amendment 
No. 26 to the Registration Statement on Form N-1A (File No. 2-69308) under 
the Securities 
Act of 1933, as amended, of Smith Barney Shearson Managed Municipals Fund, 
Inc.: 
 
 
          1.   The incorporation by reference of our report dated April 8, 
1994 
               accompanying the Annual Report for the fiscal year ended 
February 28, 
               1994 of Smith Barney Shearson Managed Municipals Fund, Inc., 
in the 
               Statement of Additional Information. 
 
          2.   The reference to our firm under the heading "Financial 
Highlights" in the 
               Prospectus. 
 
          3.   The reference to our firm under the heading "Counsel and 
Auditors" in 
               the Statement of Additional Information. 
 
 
 
 
 
 
                                                                               
COOPERS & LYBRAND 
 
 
Boston, Massachusetts 
April 26, 1994 
 




AMENDED SERVICES AND DISTRIBUTION PLAN
SMITH BARNEY MANAGED MUNICIPALS FUND INC.

	This Services and Distribution Plan (the "Plan") is adopted in 
accordance with rule 12b-1 (the "Rule") under the Investment Company Act of 
1940, as amended (the "1940 Act"), by Smith Barney Managed Municipals Fund 
Inc., a corporation organized under the laws of the State of Maryland (the 
"Fund"), subject to the following terms and conditions:

Section 1.  Annual Fee

	(a) Class A Service Fee.  The Fund will pay to the distributor of its 
shares, Smith Barney Inc., a corporation organized under the laws of the 
State of Delaware ("Distributor"), a service fee under the Plan at the 
annual rate of .15% of the average daily net assets of the Fund 
attributable to the Class A shares (the "Class A Service Fee").

	(b) Service Fee for Class B shares.  The Fund will pay to the 
Distributor a service fee under the Plan at the annual rate of .15% of the 
average daily net assets of the Fund attributable to the Class B shares 
(the "Class B Service Fee").

	(c) Service Fee for Class C shares.  The Fund will pay to the 
Distributor a service fee under the Plan at the annual rate of .15% of the 
average daily net assets of the Fund attributable to the Class C shares 
(the "Class C Service Fee," and collectively with the Class A Service Fee 
and the Class B Service Fee, the "Service Fees").

	(d) Distribution Fee for Class B shares.  In addition to the Class B 
Service Fee, the Fund will pay the Distributor a distribution fee under the 
Plan at the annual rate of .50% of the average daily net assets of the fund 
attributable to the Class B Distribution Fee, the "Distribution Fees").

	(e) Distribution Fee for Class C shares.  In addition to the Class C 
Service Fee, the Fund will pay the Distributor a distribution fee under the 
Plan at the annual rate of .55% of the average daily net assets of the Fund 
attributable to the Class C shares (the "Class C Distribution Fee," and 
collectively with the Class B Distribution Fee, the "Distribution Fees").

	(f) Payment of Fees.  The Service Fees and Distribution Fees will be 
calculated daily and paid monthly by the Fund with respect to the foregoing 
classes of the fund's shares (each a "Class" and together the "Classes") at 
the annual rates indicated above.

Section 2.  Expenses Covered by the Plan

	With respect to expenses incurred by each Class its respective 
Service Fees and/or Distribution Fees may be used for; (a) costs of 
printing and distributing the Fund's prospectus, statement of additional 
information and reports to prospective investors in the Fund; (b) costs 
involved in preparing, printing and distributing sales literature 
pertaining o the Fund; (c) an allocation of overhead and other branch 
office distribution-related expenses of the Distributor; (d) payments made 
to, and expenses of Smith Barney Financial Consultants and other persons 
who provide support services in connection with the distribution of the 
Fund's shares, including but not limited to, office space and equipment, 
telephone


facilities, answering routine inquires regarding the Fund, processing 
shareholder transactions and providing any other shareholder services not 
otherwise provided by the Fund's Transfer agent; and (e) accruals for 
interest on the amount of the foregoing expenses that exceed the 
Distribution Fee and, in the case of Class B shares, the contingent 
deferred sales charge received by the Distributor; provided, however, that 
the Distribution Fees may be used by the Distributor only to cover expenses 
primarily intended to result in the sale of the Fund's Class B and C 
shares, including without limitation, payments to Distributor's financial 
consultants ant the time of the sale of Class B and C shares.  In addition, 
Service Fees are intended to be used by the Distributor primarily to pay 
its financial consultants for servicing shareholder accounts, including a 
continuing fee to each such financial consultant, which fee shall begin to 
accrue immediately after the sale of such shares.

Section 3.  Approval of Shareholders

	The Plan will not take effect, and no fees will be payable in 
accordance with Section 1 of the Plan, with respect to a Class until the 
Plan has been approved by a vote of a least a majority of the outstanding 
voting securities of the Class.  The Plan will be deemed to have been 
approved with respect to a class so longer as a majority of the outstanding 
voting securities of the Class votes for the approval of the Plan, 
notwithstanding that: (a) the Plan has not been approved by a major of the 
outstanding voting securities of any other Class, or (b) the Plan has not 
been approved by a majority of the outstanding voting securities of the 
Fund.

Section 4.  Approval of Directors

	Neither the Plan nor any related agreements will take effect until 
approved by a majority of both (a) the full Board of Directors of the Fund 
and (b) those Directors who are not interested persons of the Fund and who 
have not direct or indirect financial interest in the operation of the Plan 
or in any agreements related to it (the "Qualified Directors"), cast in 
person at a meeting called for the purpose of voting on the Plan and the 
related agreements.

Section 5.  Continuance of the Plan

	The Plan will continue in effect with respect to each Class until 
November 7, 1995, and thereafter for successive twelve-month periods with 
respect to each Class; provided, however, that such continuance is 
specifically approved at least annually by the Directors of the Fund and by 
a majority of the Qualified Directors.

Section 6.  Termination

	The Plan may be terminated at any time with respect to a Class (i) by 
the Fund without the payment of any penalty, by the vote of a majority of 
the outstanding voting securities of such Class or (ii) by a vote of the 
Qualified Directors.  The Plan may remain in effect with respect to a 
particular Class even if the Plan has been terminated in accordance with 
this Section 6 with respect to any other Class.

Section 7.  Amendments

	The Plan may to be amended with respect to any Class so as to 
increase materially the amounts of the Fees described in Section 1 above, 
unless the amendment is approved by a vote of the holders of at least a 
majority of the outstanding voting securities of that class.  No material 
amendment to the Plan may be made unless approved by the Fund's Board of 
Directors in the manner described in Section 4 above.



Section 8.  Selection of Certain Directors

	While the Plan is in effect, the selection and nomination of the 
Fund's Directors who are not interested persons of the Fund will be 
committed to the discretion of the Directors then in office who are not 
interested persons of the Fund.

Section 9.  Written Reports

	In each year during which the Plan remains in effect, a person 
authorized to direct the disposition of monies paid or payable by the Fund 
pursuant to the Plan or any related agreement will prepare and furnish to 
the Fund's Board of Directors and the Board will review, at least 
quarterly, written reports complying with the requirements of the Rule, 
which sets out the amounts expended under the Plan and the purposes for 
which those expenditures were made.

Section 10.  Preservation of Materials

	The Fund will preserve copies of the Plan, any agreement relating to 
the Plan and any report made pursuant to Section 9 above, for a period of 
not less than six years (the first two years in an easily accessible place) 
from the date of the Plan, agreement or report.

Section 11.  Meanings of Certain Terms

	As used in the Plan, the terms "interested person" and "majority of 
the outstanding voting securities" will be deemed to have the same meaning 
that those terms have under the 1940 Act by the Securities and Exchange 
Commission.



	IN WITNESS WHEREOF, the Fund execute the Plan as of November 7, 1994.

						SMITH BARNEY 
						MANAGED MUNICIPALS FUND INC.


						By:/s/Heath B. McLendon
						      Heath B. McLendon
						      Chairman of the Board


g\shared\domestic\clients\shearson\funds\smmu\12b1pln2.doc09:15 AM



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<ARTICLE>  6 
<SERIES> 
               <NUMBER> 0 
               <NAME> SBS MANAGED MUNICIPALS FUND CLASS A 
        
<S>                                        <C> 
<PERIOD-TYPE>                              12-MOS 
<FISCAL-YEAR-END>                          FEB-28-1994 
<PERIOD-END>                               FEB-28-1994 
<INVESTMENTS-AT-COST>                                      2,160,968,245 
<INVESTMENTS-AT-VALUE>                                     2,248,098,792 
<RECEIVABLES>                                                749,650,630 
<ASSETS-OTHER>                                                         0 
<OTHER-ITEMS-ASSETS>                                                   0 
<TOTAL-ASSETS>                                             2,997,749,422 
<PAYABLE-FOR-SECURITIES>                                     166,445,211 
<SENIOR-LONG-TERM-DEBT>                                                0 
<OTHER-ITEMS-LIABILITIES>                                    634,487,253 
<TOTAL-LIABILITIES>                                          800,932,464 
<SENIOR-EQUITY>                                                        0 
<PAID-IN-CAPITAL-COMMON>                                   2,069,750,483 
<SHARES-COMMON-STOCK>                                        114,538,900 
<SHARES-COMMON-PRIOR>                                        107,421,909 
<ACCUMULATED-NII-CURRENT>                                              0 
<OVERDISTRIBUTION-NII>                                        (1,133,368) 
<ACCUMULATED-NET-GAINS>                                       27,222,452 
<OVERDISTRIBUTION-GAINS>                                               0 
<ACCUM-APPREC-OR-DEPREC>                                     100,977,391 
<NET-ASSETS>                                               2,196,816,958 
<DIVIDEND-INCOME>                                                      0 
<INTEREST-INCOME>                                            125,281,710 
<OTHER-INCOME>                                                         0 
<EXPENSES-NET>                                                15,836,287 
<NET-INVESTMENT-INCOME>                                      109,445,423 
<REALIZED-GAINS-CURRENT>                                      89,982,781 
<APPREC-INCREASE-CURRENT>                                    (57,513,854) 
<NET-CHANGE-FROM-OPS>                                        141,914,350 
<EQUALIZATION>                                                         0 
<DISTRIBUTIONS-OF-INCOME>                                     97,102,875 
<DISTRIBUTIONS-OF-GAINS>                                      97,964,382 
<DISTRIBUTIONS-OTHER>                                                   0 
<NUMBER-OF-SHARES-SOLD>                                       13,780,448 
<NUMBER-OF-SHARES-REDEEMED>                                   14,139,151 
<SHARES-REINVESTED>                                            7,475,694 
<NET-CHANGE-IN-ASSETS>                                       340,301,934 
<ACCUMULATED-NII-PRIOR>                                                0 
<ACCUMULATED-GAINS-PRIOR>                                     38,221,263 
<OVERDISTRIB-NII-PRIOR>                                       (4,175,923) 
<OVERDIST-NET-GAINS-PRIOR>                                             0 
<GROSS-ADVISORY-FEES>                                          6,502,360 
<INTEREST-EXPENSE>                                                     0 
<GROSS-EXPENSE>                                               15,836,287 
<AVERAGE-NET-ASSETS>                                       2,035,296,965 
<PER-SHARE-NAV-BEGIN>                                              16.71 
<PER-SHARE-NII>                                                     0.90 
<PER-SHARE-GAIN-APPREC>                                             0.30 
<PER-SHARE-DIVIDEND>                                                0.88 
<PER-SHARE-DISTRIBUTIONS>                                           0.90 
<RETURNS-OF-CAPITAL>                                                0.00 
<PER-SHARE-NAV-END>                                                16.13 
<EXPENSE-RATIO>                                                     0.72 
<AVG-DEBT-OUTSTANDING>                                                 0 
<AVG-DEBT-PER-SHARE>                                                   0 
 
 





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               <NUMBER> 0  
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<S>                                        <C>  
<PERIOD-TYPE>                              12-MOS  
<FISCAL-YEAR-END>                          FEB-28-1994  
<PERIOD-END>                               FEB-28-1994  
<INVESTMENTS-AT-COST>                                      2,160,968,245  
<INVESTMENTS-AT-VALUE>                                     2,248,098,792  
<RECEIVABLES>                                                749,650,630  
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<OTHER-ITEMS-ASSETS>                                                   0  
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<PAYABLE-FOR-SECURITIES>                                     166,445,211  
<SENIOR-LONG-TERM-DEBT>                                                0  
<OTHER-ITEMS-LIABILITIES>                                    634,487,253  
<TOTAL-LIABILITIES>                                          800,932,464  
<SENIOR-EQUITY>                                                        0  
<PAID-IN-CAPITAL-COMMON>                                   2,069,750,483  
<SHARES-COMMON-STOCK>                                         21,680,115  
<SHARES-COMMON-PRIOR>                                          3,671,521  
<ACCUMULATED-NII-CURRENT>                                              0  
<OVERDISTRIBUTION-NII>                                        
(1,133,368)  
<ACCUMULATED-NET-GAINS>                                       27,222,452  
<OVERDISTRIBUTION-GAINS>                                               
0  
<ACCUM-APPREC-OR-DEPREC>                                     100,977,391  
<NET-ASSETS>                                               2,196,816,958  
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0  
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<PER-SHARE-NAV-BEGIN>                                              16.71  
<PER-SHARE-NII>                                                     0.81  
<PER-SHARE-GAIN-APPREC>                                             0.31  
<PER-SHARE-DIVIDEND>                                                0.80  
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<RETURNS-OF-CAPITAL>                                                0.00  
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<EXPENSE-RATIO>                                                     0.72  
<AVG-DEBT-OUTSTANDING>                                                 0  
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