As filed with the Securities and Exchange Commission on
August 9, 1995
------------------------------------------------------------
----------------------------
Registration No. 2-74288
811-3275
U. S. 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. 41
X
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940, as amended X
Amendment No. 43 X
SMITH BARNEY INVESTMENT FUNDS 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) 723-9218
Christina T. Sydor
Secretary
SMITH BARNEY INVESTMENT FUNDS INC.
388 Greenwich Street
New York, New York 10013
(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:
X immediately upon filing pursuant to Rule 485(b)
on ------, 1995 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 December 31, 1994 will be filed on or
about February 28,
1995.
SMITH BARNEY INVESTMENT FUNDS INC.
CONTENTS OF
REGISTRATION STATEMENT
This Registration Statement contains the following pages and
documents
Front Cover
Contents Page
Cross-Reference Sheet
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
SMITH BARNEY INVESTMENT FUNDS INC.
FORM N-1A CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a) Under the Securities Act of 1933, as
amended
Part A
Item No.
Prospectus Caption
1. Cover Page
Cover Page
2. Synopsis
The Fund"s Expenses
3. Condensed Financial Highlights
Not Applicable
4. General Description of Cover Page; Prospectus Summary
Registrant
Investment Objective and
Management Policies; Additional
Information
5. Management of the Fund
Management of the Fund;
Distributor; Additional
Information; Annual Report
6. Capital Stock and Other Investment Objective and
Securities
Management Policies; Dividends,
Distributions and Taxes;
Additional Information
7. Purchase of Securities Being
Offered
Valuation of Shares; Purchase and Redemption
of Shares; Exchange Privilege;
Distributor; Additional Information
8 Redemption or Repurchase
and Redemption of Shares;
Exchange Privilege
9. Pending Legal Proceedings
Not Applicable
Part B
Item No.
Statement of
Additional Information Caption
10. Cover Page
Cover page
11. Table of Contents
Contents
12. General Information and Distributor; Additional
History
Information
13. Investment Objectives and
Investment Objective and Policies
Management Policies
14. Management of the Fund
Management of the Company;
Distributor
15. Control Persons and Principal Management of the Company
Holders of Securities
16. Investment Advisory and Other Management of the
Company;
Services
Distributor
17. Brokerage Allocation and Investment Objective and
Other Services
Management Policies; Distributor
18. Capital Stock and Other
Investment Objective and Securities
Management Policies; Purchase of
Shares; Redemption of Shares;
Taxes
19. Purchase, Redemption and
Purchase of Shares; Redemption
Pricing of Securities Being
Offered
Purchase of Shares; Redemption of
Shares; Valuation of Shares;
Distributor; Exchange Privilege
20. Tax Status
Taxes
21. Underwriters
Distributor
22. Calculation of Performance
Performance Data
Data
Performance Data
23. Financial Statements
Financial Statements
<PAGE>
<PAGE>
P R O S P E C T U S
LOGO Smith Barney Mutual Funds
Investing for your future.
Every day.
SMITH BARNEY
Special
Equities
Fund
Class Z Shares Only
AUGUST 1, 1995
PROSPECTUS BEGINS ON PAGE ONE
LOGO
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
PROSPECTUS
AUGUST , 1995
388 Greenwich Street
New York, New York 10013
(212) 723-9218
Smith Barney Special Equities Fund ("the Fund") has an investment
objective
of long-term capital appreciation by investing in a diversified,
managed port-
folio of common stocks or securities convertible into or
exchangeable for com-
mon stocks, primarily of secondary growth companies as identified
by the Fund's
investment adviser.
The Fund is one of a number of funds, each having distinct
investment objec-
tives and policies, making up Smith Barney Investment Funds Inc.
(the "Compa-
ny"). The Company is an open-end management investment company
commonly
referred to as a mutual fund.
This Prospectus sets forth concisely certain information about
the Fund and
the Company, including expenses, that prospective investors will
find helpful
in making an investment decision. Investors are encouraged to read
this Pro-
spectus carefully and to retain it for future reference. Shares of
other funds
offered by the Company are described in separate Prospectuses that
may be
obtained by calling the Company at the telephone number set forth
above or by
contacting a Smith Barney Financial Consultant.
The Class Z Shares described in this Prospectus are currently
offered exclu-
sively for sale to tax-exempt employee benefit and retirement plans
of Smith
Barney Inc. ("Smith Barney") or any of its affiliates ("Qualified
Plans").
Additional information about the Fund and the Company is
contained in a
Statement of Additional Information dated March 1, 1995, as amended
or supple-
mented from time to time, that is available upon request and
without charge by
calling or writing the Company at the telephone number or address
set forth
above or by contacting a Smith Barney Consultant. The Statement of
Additional
Information 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
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Investment Adviser and 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
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE FUND'S EXPENSES 3
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 4
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VALUATION OF SHARES 7
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DIVIDENDS, DISTRIBUTIONS AND TAXES 8
-------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES 10
-------------------------------------------------
EXCHANGE PRIVILEGE 11
-------------------------------------------------
PERFORMANCE 12
-------------------------------------------------
MANAGEMENT OF THE FUND 13
-------------------------------------------------
ADDITIONAL INFORMATION 15
-------------------------------------------------
</TABLE>
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--------------
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 such jurisdiction.
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--------------
2
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
THE FUND'S EXPENSES
The following expense table lists the costs and expenses an
investor will incur
either directly or indirectly as a shareholder of Class Z shares of
the Fund,
based on the Fund's operating expenses for its most recent fiscal
year:
<TABLE>
<CAPTION>
AS A % OF
AVERAGE NET ASSETS
-----------------------------------------------------------------
---------------
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees
0.75%
Other expenses
0.40%
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---------------
TOTAL FUND OPERATING EXPENSES..............................
1.15%
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---------------
</TABLE>
The nature of the services for which the Fund pays management
fees is
described under "Management of the Fund." Other expenses in the
above table
include fees for shareholder services, custodial fees, legal and
accounting
fees, printing costs and registration fees.
EXAMPLE
The following example is intended to assist an investor in
understanding the
various costs that an investor in the Fund will bear directly or
indirectly.
The example assumes payment by the Fund of operating expenses at
the levels set
forth in the table above. See "Purchase and Redemption of Shares"
and "Manage-
ment of the Fund."
<TABLE>
<CAPTION>
1
YEAR 3 YEARS
-----------------------------------------------------------------
-------------
<S> <C>
<C>
An investor would pay the following expenses on a $1,000
investment in Class Z shares of the Fund, assuming (1)
5.00% annual return and (2) redemption at the end of each
time period:
12 37
</TABLE>
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---------------
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.
3
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The Fund's investment objective is long-term capital
appreciation. It seeks
to achieve this objective by investing in equity securities (common
stocks or
securities which are convertible into or exchangeable for such
stocks, includ-
ing warrants) which Smith Barney Mutual Funds Management, Inc.
("SBMFM"), the
Fund's investment adviser believes to have superior appreciation
potential.
There can be no assurance that the Fund will achieve its investment
objective.
The Fund invests primarily in equity securities of secondary
growth compa-
nies, generally not within the Standard & Poor's 500 Composite
Stock Price
Index ("S&P 500"), as identified by SBMFM. These companies may not
have
reached a fully mature stage of earnings growth, since they may
still be in
the developmental stage, or may be older companies which appear to
be entering
a new stage of more rapid earnings progress due to factors such as
management
change or development of new technology, products or markets. A
significant
number of these companies may be in technology areas, including
health care
related sectors, and may have annual sales of less than $300
million. The Fund
may also choose to invest in some relatively unseasoned stocks,
i.e., securi-
ties issued by companies whose market capitalization is under $100
million.
Investing in smaller, newer issuers generally involves greater
risk than
investing in larger, more established issuers. The Fund may
purchase
restricted securities (subject to a limit on all illiquid
securities of 1.0%
of total assets), invest in money market instruments, enter into
repurchase
agreements for temporary defensive purposes, lend its portfolio
securities and
enter into short sales "against the box."
In making purchases of securities consistent with the above
policies, the
Fund will be subject to the applicable restrictions referred to
under "Invest-
ment Restrictions" in the Statement of Additional Information.
These restric-
tions and the Fund's investment objective are fundamental policies,
which
means that they may not be changed without a majority vote of
shareholders of
the Fund. Except for the objective and those restrictions
specifically identi-
fied as fundamental, all investment policies and practices
described in this
Prospectus and in the Statement of Additional Information are
non-fundamental,
so that the Board of Directors may change them without shareholder
approval.
The fundamental restrictions applicable to the Fund include a
prohibition on
(a) purchasing a security if, as a result, more than 5% of the
assets of the
Fund would be invested in the securities of the issuer (with
certain excep-
tions) or the Fund would own
4
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
more than 10% of the outstanding voting securities of the issuer,
(b) invest-
ing more than 10% of the Fund's total assets in "illiquid"
securities (which
includes repurchase agreements with more than seven days to
maturity), and
(c) investing more than 25% of the Fund's total assets in the
securities of
issuers in a particular industry (with exceptions for U.S.
government securi-
ties and certain money market instruments).
ADDITIONAL INVESTMENTS
U.S. Government Securities.U.S. government securities are
obligations of, or
are guaranteed by, the U.S. government, its agencies or
instrumentalities.
These include bills, certificates of indebtedness, and notes and
bonds issued
by the United States Treasury or by agencies or instrumentalities
of the
United States government. Some U.S. government securities, such as
United
States Treasury bills and bonds, are supported by the full faith
and credit of
the United States Treasury; others are supported by the right of
the issuer to
borrow from the United States Treasury; others, such as those of
the Federal
National Mortgage Association, are supported by the discretionary
authority of
the United States government to purchase the agency's obligations;
still oth-
ers, such as those of the Student Loan Marketing Association and
the Federal
Home Loan Mortgage Corporation ("FHLMC"), are supported only by the
credit of
the instrumentality. Mortgage participation certificates issued by
the FHLMC
generally represent ownership interests in a pool of fixed-rate
conventional
mortgages. Timely payment of principal and interest on these
certificates is
guaranteed solely by the issuer of the certificates. Other
investments will
include Government National Mortgage Association Certificates
("GNMA Certifi-
cates"), which are mortgage-backed securities representing part
ownership of a
pool of mortgage loans on which timely payment of interest and
principal is
guaranteed by the full faith and credit of the United States
government. While
the United States government guarantees the payment of principal
and interest
on GNMA Certificates, the market value of the securities is not
guaranteed and
will fluctuate.
Repurchase Agreements.The Fund may enter into repurchase
agreement transac-
tions on U.S. government securities 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.
Under the
terms of a typical repurchase agreement, the Fund would acquire an
underlying
debt obligation for a relatively short period (usually not more
than one week)
5
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
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 arrangement results in a
fixed rate of
return that is not subject to market fluctuations during the Fund's
holding
period. Under each repurchase agreement, the selling institution
will be
required to maintain the value of the securities subject to the
repurchase
agreement at not less than their repurchase price. Repurchase
agreements could
involve certain risks in the event of default or insolvency of the
other par-
ty, including possible delays or restrictions upon the Fund's
ability to dis-
pose 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
associated 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
supervision of the
Board of Directors, reviews on an ongoing basis to evaluate
potential risks,
the value of the collateral and the creditworthiness of those banks
and deal-
ers with which the Fund enters into repurchase agreements.
Loans of Portfolio Securities.The Fund may lend its portfolio
securities
provided: (a) the loan is secured continuously by collateral
consisting of
U.S. government securities, cash or cash equivalents maintained on
a daily
marked-to-market basis in an amount at least equal to the current
market value
of the securities loaned; (b) the Fund may at any time call the
loan and
obtain the return of the securities loaned; (c) the Fund will
receive any
interest or dividends paid on the loaned securities; and (d) the
aggregate
market value of securities loaned will not at any time exceed 33
1/3% of the
total assets of the Fund.
Short Sales.The Fund may sell securities short "against the box."
While a
short sale is the sale of a security the Fund does not own, it is
"against the
box" if at all times when the short position is open, the Fund owns
an equal
amount of the securities or securities convertible into, or
exchangeable with-
out further consideration for, securities of the same issue as the
securities
sold short. Short sales "against the box" are used to defer
recognition of
capital gains or losses.
American Depositary Receipts.The Fund may purchase American
Depositary
Receipts ("ADRs"), which are dollar-denominated receipts issued
generally by
domestic banks and representing the deposit with the bank of a
security of a
6
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
foreign issuer. ADRs are publicly traded on exchanges or
over-the-counter in
the United States.
Restricted Securities. The Fund may invest in restricted
securities.
Restricted securities are securities subject to legal or
contractual restric-
tions on their resale. Such restrictions might prevent the sale of
restricted
securities at a time when such a sale would otherwise be desirable.
Restricted
securities and securities for which there is no readily available
market ("il-
liquid assets") will not be acquired if such acquisition would
cause the aggre-
gate value of illiquid assets and restricted securities to exceed
10% of the
Fund's total assets.
PORTFOLIO TRANSACTIONS AND TURNOVER
SBMFM arranges for the purchase and sale of the Fund's securities
and selects
brokers and dealers (including Smith Barney) which, in its best
judgment, pro-
vide prompt and reliable execution at favorable prices and
reasonable commis-
sion rates. SBMFM may select brokers and dealers which provide it
with research
services and may cause the Fund to pay such brokers and dealers
commissions
which exceed those other brokers and dealers may have charged, if
it views the
commissions as reasonable in relation to the value of the brokerage
and/or
research services.
For reporting purposes, the Fund's portfolio turnover rate is
calculated by
dividing the lesser of purchases or sales of portfolio securities
for the fis-
cal year by the monthly average of the value of the Fund's
securities, with
money market instruments with less than one year to maturity
excluded. A 100%
portfolio turnover rate would occur, for example, if all included
securities
were replaced once during the year.
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 the Class outstanding.
Securities listed on an exchange are valued on the basis of the
last sale
prior to the time the valuation is made. If there has been no sale
since the
7
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
VALUATION OF SHARES (CONTINUED)
immediately previous valuation, then the current bid price is used.
Quotations
are taken from the exchange where the security is primarily traded.
Portfolio
securities which are primarily traded on foreign exchanges may be
valued with
the assistance of a pricing service and are generally valued at the
preceding
closing values of such securities on their respective exchange,
except that
when an occurrence subsequent to the time a foreign security is
valued is
likely to have changed such value, then the fair value of those
securities
will be determined by consideration of other factors by or under
the direction
of the Board of Directors. Over-the-counter securities are valued
on the basis
of the bid price at the close of business on each day. Unlisted
foreign secu-
rities are valued at the mean between the last available bid and
offer price
prior to the time of valuation. Any assets or liabilities initially
expressed
in terms of foreign currencies will be converted into U.S. dollar
values at
the mean between the bid and offered quotations of such currencies
against
U.S. dollars as last quoted by any recognized dealer. Securities
for which
market quotations are not readily available are valued at fair
value. Notwith-
standing the above, bonds and other fixed-income securities are
valued by
using market quotations and may be valued on the basis of prices
provided by a
pricing service approved by the Board of Directors.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund will be treated separately from the Company's other
funds in deter-
mining the amount of dividends from net investment income and
distributions of
capital gains payable to shareholders.
The Fund's policy is to distribute its investment income (that
is, its
income other than its net realized capital gains) and net realized
capital
gains, if any, once a year, normally at the end of the year in
which earned or
at the beginning of the next year.
If a shareholder does not otherwise instruct, dividends and
capital gain
distributions will be reinvested automatically in additional shares
of the
same Class at net asset value, subject to no sales charge or CDSC.
In order to
avoid the application of a 4% nondeductible excise tax on certain
undistrib-
uted amounts of ordinary income and capital gains, the Fund may
make an addi-
tional
8
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
distribution shortly before December 31 in each year of any
undistributed
ordinary income or capital gains and expects to pay any other
dividends and
distributions necessary to avoid the application of this tax.
TAXES
The Fund will be treated as a separate taxpayer with the result
that, for
Federal tax purposes, the amount of investment income and capital
gains earned
will be determined on a fund-by-fund basis, rather than on a
Company-wide
basis. The Fund has qualified and intends to continue to qualify as
a "regu-
lated investment company" under the Code. In any taxable year in
which the
Fund so qualifies and distributes at least 90% of its investment
company tax-
able income (which includes, among other items, dividends, interest
and the
excess of any net short-term capital gains over net long-term
capital losses),
the Fund (but not its shareholders) generally will be relieved of
Federal
income tax on the investment company taxable income and net
realized capital
gains (the excess of net long-term capital gains over net
short-term capital
losses), if any, distributed to shareholders. In order to qualify
as a regu-
lated investment company, the Fund will be required to meet various
Code
requirements.
Distributions of any investment company taxable income are
taxable to share-
holders as ordinary income. Distributions of any net capital gains
designated
by the Fund as capital gains dividends are taxable to shareholders
as long-
term capital gains regardless of the length of time a shareholder
may have
held shares of the Fund.
Dividends (including capital gains dividends) declared by the
Fund in
October, November or December of any calendar year to shareholders
of record
on a date in such a month will be deemed to have been received by
shareholders
on December 31 of that calendar year, provided that the dividend is
actually
paid by the Fund during January of the following calendar year.
Upon the disposition of shares of the Fund (whether by
redemption, sale or
exchange), a shareholder generally will realize a taxable gain or
loss. Such
gain or loss generally will be a capital gain or loss if the shares
are capi-
tal assets in the shareholder's hands, and generally will be
long-term or
short-term depending upon the shareholder's holding period for the
shares. Any
loss realized by a shareholder on disposition of Fund shares held
by the
shareholder for six months or less will be treated a long-term
capital loss to
the extent of any
9
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
distributions of capital gains dividends received by the
shareholder with
respect to such shares.
Shareholders will be notified annually about the amounts of
dividends and
distributions, including the amounts (if any) for that year which
have been
designated as capital gains dividends. Dividends and distributions
and gains
realized upon a disposition of Fund shares may also be subject to
state, local
or foreign taxes depending on each shareholder's particular
situation. Divi-
dends consisting of interest from U.S. government securities may be
exempt
from all state and local income taxes. Shareholders should consult
their plan
documents tax advisors and/or for specific information on the tax
consequences
of participating in a Qualified Plan.
PURCHASE AND REDEMPTION OF SHARES
Purchases of the Fund's Class Z shares must be made in accordance
with the
terms of a Qualified Plan. Purchases are effected at the net asset
value next
determined after a purchase order is received by Smith Barney (the
"trade
date"). Payment is due to Smith Barney on the third business day
(the "settle-
ment date") after the trade date. Investors who make payment prior
to the set-
tlement date may designate a temporary investment (such as a money
market fund
of the Smith Barney Mutual Funds) for such payment until settlement
date. The
Fund reserves the right to reject any purchase order and to suspend
the offer-
ing of shares for a period of time. There are no minimum investment
require-
ments for Class Z shares; however, the Fund reserves the right to
vary this
policy at any time.
Purchase orders received by Smith Barney prior to the close of
regular trad-
ing on the NYSE, currently 4:00 p.m., New York time, on any day
that the Fund
calculates its net asset value, are priced according to the net
asset value
determined on that day. See "Valuation of Shares." Certificates for
Fund
shares are issued upon request to the Fund's transfer agent.
Shareholders may redeem their shares on any day on which the Fund
calculates
its net asset value. See "Valuation of Shares." Redemption requests
received
in proper form prior to the close of regular trading on the NYSE
are priced at
the net asset value per share determined on that day. Redemption
requests
received after the close of regular trading on the NYSE are priced
at the net
asset value as next determined. Shareholders acquiring Class Z
shares through
a Qualified Plan should consult the terms of their respective plans
for
redemption provisions.
10
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
EXCHANGE PRIVILEGE
Holders of Class Z shares in the Fund may exchange their shares
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 shares may be
made at any
time without payment of any exchange fee.
Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc.
Smith Barney Diversified Strategic Income Fund
Smith Barney Funds, Inc. -- Income and Growth Portfolio
Smith Barney Funds, Inc. -- Income Return Account Portfolio
Smith Barney Funds, Inc. -- U.S. Government Securities Portfolio
Smith Barney High Income Fund
Smith Barney Money Funds, Inc. -- Cash Portfolio
Smith Barney Money Funds, Inc. -- Government Portfolio
Smith Barney Utilities Fund
Smith Barney World Funds, Inc. -- International Equity Portfolio
Smith Barney Managed Growth Fund
The exchange of shares of one fund for shares of another fund is
generally
treated for Federal income tax purposes as a sale of the shares
given in
exchange by the shareholder. Therefore, an exchanging shareholder
may realize a
taxable gain or loss in connection with the exchange. Shareholders
should con-
sult their plan prospectus and/or other governing documents
regarding
exchanges. Generally, exchanges within such a plan are not treated
as a taxable
event.
Shareholders exercising the exchange privilege with any of the
other funds of
the Smith Barney Mutual Funds should review the prospectus of that
fund care-
fully prior to making an exchange request.
Although the exchange privilege is an important benefit,
excessive exchange
transactions can be detrimental to the Fund's performance and its
shareholders.
SBMFM may determine that a pattern of frequent exchanges is
excessive and con-
trary to the best interests of the Fund's other shareholders. In
this event,
11
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
EXCHANGE PRIVILEGE (CONTINUED)
SBMFM will notify Smith Barney, and Smith Barney may, at its
discretion,
decide to limit additional purchases and/or exchanges by the
shareholder. Upon
such a determination, Smith Barney will provide notice in writing
or by tele-
phone 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
listed above,
which position the shareholder would be expected to maintain for a
significant
period of time. All relevant factors will be considered in
determining what
constitutes an abusive pattern of exchanges. The Fund reserves the
right to
modify or discontinue exchange privileges upon 60 days' prior
notice to share-
holders.
PERFORMANCE
TOTAL RETURN
From time to time, the Fund may include its total return, average
annual
total return and current dividend return for Class Z shares in
advertisements
and/or other types of sales literature. 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
Class Z shares by annualizing the most recent monthly distribution
and divid-
ing by the net asset value or the maximum public offering price
(including
sales charge) on the last day of the period for which current
dividend return
is presented. The current dividend return may vary from time to
time depending
on market conditions, the composition of its investment portfolio
and operat-
ing expenses. These factors and possible differences in the methods
used in
calculating current dividend
12
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
PERFORMANCE (CONTINUED)
return should be considered when comparing Class Z shares' 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 per-
formance of mutual funds or other industry publications. The Fund
will include
performance data for Class Z shares in any advertisement or
information includ-
ing performance data of the Fund.
MANAGEMENT OF THE COMPANY AND THE FUND
BOARD OF DIRECTORS
Overall responsibility for management and supervision of the
Company rests
with the Company's Board of Directors. The Directors approve all
significant
agreements between the Company and the companies that furnish
services to the
Fund and the Company, including agreements with its 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 advis-
er, administrator and sub-administrator. The Statement of
Additional Informa-
tion contains background information regarding each Director and
executive
officer of the Company.
INVESTMENT ADVISER--SBMFM
SBMFM, located at 388 Greenwich Street, New York, New York 10013,
serves as
the Fund's investment adviser pursuant to a transfer of the
investment advisory
agreement effective November 7, 1994, from its affiliate Mutual
Management
Corp. (Mutual Management Corp. and SBMFM are both wholly owned
subsidiaries of
Holdings.) Investment advisory services continue to be provided to
the Fund by
the same portfolio managers who had provided services under the
agreement with
Mutual Management Corp. SBMFM (through predecessor entities) has
been in the
investment counseling business since 1934 and is a registered
investment advis-
er. SBMFM renders investment advice to investment companies that
had aggregate
assets under management as of January 31, 1995, in excess of $51.9
billion.
13
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
MANAGEMENT OF THE COMPANY AND THE FUND (CONTINUED)
Subject to the supervision and direction of the Company's Board
of Direc-
tors, SBMFM 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
professional portfo-
lio managers and securities analysts who provide research services
to the
Fund. For investment advisory services rendered, the Fund pays
SBMFM a monthly
fee at the annual rate of 0.55% of the value of its average daily
net assets.
PORTFOLIO MANAGEMENT
George V. Novello, a Managing Director of SBMFM, has served as
Investment
Officer of the Fund since September 1990 and manages the day-to-day
operations
of the Fund, including making all investment decisions.
Management's discussion and analysis and additional performance
information
regarding the Fund during the fiscal year ended December 31, 1994
is included
in the Fund's Annual Report dated December 31, 1994. A copy of the
Annual
Report may be obtained upon request without charge from a Smith
Barney Finan-
cial Consultant or by writing or calling the Fund at the address or
phone num-
ber listed on page one of this Prospectus.
ADMINISTRATOR
SBMFM also serves as the Fund's administrator and oversees all
aspects of
the Fund's administration. For administration services rendered to
the Fund,
the Fund pays SBMFM a fee at the annual rate of 0.20% of the value
of the
Fund's average daily net assets.
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
management, investment advisory, administrative and/or
sub-administrative
services to investment companies that had aggregate assets under
management as
of January 31, 1995, in excess of $69.7 billion.
14
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
ADDITIONAL INFORMATION
The Company was organized as a Maryland corporation pursuant to
Articles of
Incorporation dated September 29, 1981, as amended from time to
time. The Fund
offers shares of common stock currently classified into five
Classes, A, B, C,
Y, and Z with a par value of $.001 per share. Each Class of shares
has the
same rights, privileges and preferences, except with respect to:
(a) the des-
ignation 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 ongo-
ing basis, will consider whether any such conflict exists and, if
so, take
appropriate action.
Boston Safe Deposit and Trust Company, an indirect wholly owned
subsidiary
of Mellon, is located at One Boston Place, Boston, Massachusetts
02108, and
serves as custodian of the Company's investments.
TSSG is located at Exchange Place, Boston, Massachusetts 02109,
and serves
as the Company's transfer agent.
The Company does not hold annual shareholder meetings. There
normally will
be no meeting 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 pur-
pose upon written request of shareholders holding at least 10% of
the
Company's outstanding shares and the Company will assist
shareholders in call-
ing 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 Company will be voted on a
Company-
wide basis on all matters except matters affecting only the
interests of one
Fund or one Class of shares.
The Fund sends 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 period covered. In an effort to reduce the
Fund's
printing and mailing costs, the Company plans to consolidate the
mailing of
its semi-annual and annual reports by household. This consolidation
means that
a
15
<PAGE>
Smith Barney
Special Equities Fund--Class Z Shares
ADDITIONAL INFORMATION (CONTINUED)
household having multiple accounts with the identical address of
record will
receive a single copy of each report. In addition, the Company also
plans to
consolidate the mailing of its Prospectuses so that a shareholder
having mul-
tiple accounts (i.e., individual, IRA and/or Self-Employed
Retirement Plan
accounts) will receive a single Prospectus annually. Shareholders
who do not
want this consolidation to apply to their accounts should contact
their Smith
Barney Financial Consultants or TSSG.
16
<PAGE>
SmithBarney
A member of TravelersGroup LOGO
SMITH BARNEY
SPECIAL
EQUITIES
FUND
388 Greenwich Street
New York, New York 10013
FD XXXX XX
<PAGE>
P R O S P E C T U S
SMITH BARNEY
Managed
Growth
Fund
Class
Z Shares Only
AUGUST 1, 1995
PROSPECTUS
BEGINS ON PAGE ONE
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Everyday.
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
PROSPECTUS
AUGUST , 1995
388 Greenwich Street
New York, New York 10013
(212) 723-9218
The primary investment objective of the Smith Barney Managed
Growth Fund (the
"Fund") will be long term growth of capital.
The Fund is one of a number of funds, each having distinct
investment objec-
tives and policies, making up the Smith Barney Investment Funds
Inc. (the
"Company"). The Fund is an open-end, management investment company
commonly
referred to as a mutual fund.
This Prospectus sets forth concisely certain information about the
Company
and the Fund, including expenses, that prospective investors will
find helpful
in making an investment decision. Investors are encouraged to read
this Pro-
spectus carefully and retain it for future reference.
The Class Z shares described in this Prospectus are currently
offered exclu-
sively for sale to tax-exempt employee benefit and retirement plans
of Smith
Barney Inc. ("Smith Barney") or any of its affiliates ("Qualified
Plans").
Additional information about the Fund is contained in a Statement
of Addi-
tional Information dated May 1, 1995, as amended or supplemented
from time to
time, that is available upon request and without charge by calling
or writing
the Fund at the telephone number or address set forth above or by
contacting a
Smith Barney Financial Consultant. The Statement of Additional
Information 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
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Investment Adviser and 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
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE FUND'S EXPENSES 3
-------------------------------------------------
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 4
-------------------------------------------------
VALUATION OF SHARES 9
-------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES 10
-------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES 12
-------------------------------------------------
EXCHANGE PRIVILEGE 12
-------------------------------------------------
PERFORMANCE 14
-------------------------------------------------
MANAGEMENT OF THE FUND 14
-------------------------------------------------
ADDITIONAL INFORMATION 16
-------------------------------------------------
</TABLE>
-----------------------------------------------------------------
--------------
No person has been authorized to give any information or to make
any
representations 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 distributor. This Prospectus does not constitute an offer by
the Fund
or the distributor 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 offer or solicitation in such jurisdiction.
-----------------------------------------------------------------
--------------
2
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
THE FUND'S EXPENSES
The following expense table lists the costs and expenses an
investor will incur
either directly or indirectly as a shareholder of Class Z shares of
the Fund,
based on the Fund's operating expenses for its most recent fiscal
year:
<TABLE>
<CAPTION>
AS A % OF
AVERAGE NET ASSETS
-----------------------------------------------------------------
---------------
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees
0.85%
Other expenses
0.12%
-----------------------------------------------------------------
---------------
TOTAL FUND OPERATING EXPENSES..............................
0.97%
-----------------------------------------------------------------
---------------
</TABLE>
The nature of the services for which the Fund pays management
fees is
described under "Management of the Fund." "Other expenses" in the
above table
include fees for shareholder services, custodial fees, legal and
accounting
fees, printing costs and registration fees.
EXAMPLE
The following example is intended to assist an investor in
understanding the
various costs that an investor in the Fund will bear directly or
indirectly.
The example assumes payment by the Fund of operating expenses at
the levels set
forth in the table above. See "Purchase and Redemption of Shares"
and "Manage-
ment of the Fund."
<TABLE>
<CAPTION>
1
YEAR 3 YEARS
-----------------------------------------------------------------
-------------
<S> <C>
<C>
An investor would pay the following expenses on a $1,000
investment in Class Z shares of the Fund, assuming (1) a 5.00%
annual return and (2) redemption at the end of each time
period:
$10 $31
</TABLE>
-----------------------------------------------------------------
---------------
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.
3
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The investment objective of the Fund is long term growth of
capital. There
can be no assurance that the investment objective of the Fund will
be
achieved. The Fund's investment objective may be changed only by
the "vote of
a majority of the outstanding voting securities" as defined in the
Investment
Company Act of 1940, as amended (the "1940 Act").
The Fund attempts to achieve its objective by investing primarily
in common
stock and securities, including debt securities which are
convertible into
common stock and which are currently price depressed, undervalued
or out of
favor. Such securities might typically be valued at the low end of
their 52
week trading range. Although under normal circumstances the Fund's
portfolio
will primarily consist of these securities, the Fund may also
invest in pre-
ferred stocks and warrants when the Manager perceives an
opportunity for capi-
tal growth from such securities. The Fund may, from time to time
enter into
futures contracts, write call options and purchase put options
(which are
sometimes referred to as "derivatives"). A derivative is a
financial instru-
ment whose performance is derived, at least in part, from the
performance of
an underlying asset. The Fund will not invest more than 10% of its
assets in
derivatives. The Fund may also invest in repurchase agreements,
lend its port-
folio securities and invest in real estate investment trusts and
foreign secu-
rities. Additionally, the Fund may, subject to the limitations set
forth in
the 1940 Act, invest in the securities of other investment
companies.
The Manager's investment decisions with respect to the Fund's
portfolio are
based upon analysis and research, taking into account, among other
factors,
the relationship of book value to market value of the securities,
cash flow,
the multiple of earnings, private market value and the ratio of
market capi-
talization to sales. These factors are not applied formulaically,
as the Man-
ager examines each security separately.
Although the Fund's assets will be invested primarily in equity
securities,
government securities money market instruments may be held and
repurchase
agreements may be entered into for temporary defensive purposes and
so that
the Fund may receive a return on its otherwise uninvested cash.
When the Man-
ager invests in such securities, investment income will increase
and may con-
stitute a larger portion of the return on the Fund.
4
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
RISK FACTORS AND OTHER SPECIAL CONSIDERATIONS
Warrants; Convertible Securities. A warrant is a security that
gives the
holder the right, but not the obligation, to subscribe for newly
created secu-
rities of the issuer or a related company at a fixed price either
at a certain
date or during a set period. A convertible security is a security
that may be
converted either at a stated price or rate within a specified
period of time
into a specified number of shares of common stock. In investing in
convertible
securities, the Fund seeks the opportunity, through the conversion
feature, to
participate in the capital appreciation of the common stock into
which the
securities are convertible.
Covered Option Writing. The Fund may write covered call options
with respect
to its portfolio securities. The Fund realizes a fee (referred to
as a "premi-
um") for granting the rights evidenced by the options. A call
option embodies
the right of its purchaser to compel the writer of the option to
sell to the
option holder an underlying security at a specified price at any
time during
the option period. Thus, the purchaser of a call option written by
the Fund
has the right to purchase from the Fund the underlying security
owned by the
Fund at the agreed-upon price for a specified time period.
Upon the exercise of a call option written by the Fund, the Fund
may suffer
a loss equal to the excess of the security's market value at the
time of the
option exercise over the Fund's cost of the security, less the
premium
received for writing the option.
The Fund will write only covered options with respect to its
portfolio secu-
rities. Accordingly, whenever the Fund writes a call option on its
securities,
it will continue to own or have the present right to acquire the
underlying
security for as long as it remains obligated as the writer of the
option. To
support its obligation to purchase the underlying security if a
call option is
exercised, the Fund will either (a) deposit with its custodian in
a segregated
account, cash, government securities or other high grade debt
obligations hav-
ing a value at least equal to the exercise price of the underlying
securities
or (b) continue to own an equivalent number of puts of the same
"series" (that
is, puts on the same underlying security) with exercise prices
greater than
those that it has written (or, if the exercise prices of the puts
that it
holds are less than the exercise prices of those that it has
written, it will
deposit the difference with its custodian in a segregated account).
5
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
The Fund may engage in a closing purchase transaction to realize
a profit,
to prevent an underlying security from being called or to unfreeze
an under-
lying security (thereby permitting its sale or the writing of a new
option on
the security prior to the outstanding option's expiration). To
effect a clos-
ing purchase transaction, the Fund would purchase, prior to the
holder's exer-
cise of an option that the Fund has written, an option of the same
series as
that on which the Fund desires to terminate its obligation. The
obligation of
the Fund under an option that it has written would be terminated by
a closing
purchase transaction, but the Fund would not be deemed to own an
option as a
result of the transaction. There can be no assurances that the Fund
will be
able to effect closing purchase transactions at a time when it
wishes to do
so. To facilitate closing purchase transactions, however, the Fund
ordinarily
will write options only if a secondary market for the options
exists on domes-
tic securities exchanges or in the over-the-counter market.
Options on Broad-Based Domestic Stock Indexes. The Fund may write
call
options and purchase put options on broad-based domestic stock
indexes and
enter into closing transactions with respect to such options.
Options on stock
indexes are similar to options on securities except that, rather
than having
the right to take or make delivery of stock at the specified
exercise price,
an option on a stock index gives the holder the right to receive,
upon exer-
cise of the option, an amount of cash if the closing level of the
stock index
upon which the option is based is "in the money"; i.e. the closing
level of
the index is higher than the exercise price of the option. This
amount of cash
is equal to the difference between the closing level of the index
and the
exercise price of the option, expressed in dollars times a
specified multiple.
The writer of the option is obligated, in return for the premium
received, to
make delivery of this amount. Unlike stock options, all settlements
are in
cash, and gain or loss depends on price movements in the stock
market gener-
ally rather than price movements in the individual stocks.
The effectiveness of purchasing and writing puts and calls on
stock index
options depends to a large extent on the ability of the Manager to
predict the
price movement of the stock index selected. Therefore, whether the
Fund real-
izes a gain or loss from the purchase of options on an index
depends upon
movements in the level of stock prices in the stock market
generally. Addi-
tionally, because exercises of index options are settled in cash,
a call
writer such as the Fund cannot determine the amount of the
settlement obliga-
tions in advance and
6
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
it cannot provide in advance for, or cover, its potential
settlement obliga-
tions by acquiring and holding the underlying securities. When the
Fund has
written the call, there is also a risk that the market may decline
between the
time the Fund has a call exercised against it, at a price which is
fixed as of
the closing level of the index on the date of exercise, and the
time the Fund
is able to exercise the closing transaction with respect to the
long call
position it holds.
Futures Contracts and Options on Futures Contracts.A futures
contract pro-
vides for the future sale by one party and the purchase by the
other party of
a certain amount of a specified security at a specified price,
date, time and
place. The Fund may enter into futures contracts to sell securities
when the
Manager believes that the value of the Fund's securities will
decrease. An
option on a futures contract, as contrasted with the direct
investment in a
futures contract, gives the purchaser the right, in return for the
premium
paid, to assume a position in a futures contract at a specified
exercise price
at any time prior to the expiration date of the option. A call
option gives
the purchaser of the option the right to enter into a futures
contract to buy
and obliges the writer to enter into a futures contract to sell the
underlying
securities. A put option gives a purchaser the right to sell and
obliges the
writer to buy the underlying contract. The Fund may enter into
futures con-
tracts to purchase securities when the Manager anticipates
purchasing the
underlying securities and believes that prices will rise before the
purchases
will be made. When the Fund enters into a futures contract to
purchase an
underlying security, an amount of cash, government securities or
other high
grade debt securities, equal to the market value of the contract,
will be
deposited in a segregated account with the Fund's custodian to
collateralize
the position, thereby insuring that the use of the contract is
unleveraged.
The Fund will not enter into futures contracts for speculation and
will only
enter into futures contracts that are traded on a U.S. exchange or
board of
trade.
Lending Securities.The Fund is authorized to lend securities it
holds to
brokers, dealers and other financial organizations. These loans, if
and when
made, may not exceed 33 1/3% of the Fund's assets taken at value.
The Fund's
loans of securities will be collateralized by cash, letters of
credit or gov-
ernment securities that are maintained at all times in a segregated
account
with the Fund's custodian in an amount at least equal to the
current market
value of the loaned securities. By lending its portfolio
securities, the Fund
will seek to generate income by continuing to receive interest on
the loaned
securities, by investing the cash
7
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
collateral in short-term instruments or by obtaining yield in the
form of
interest paid by the borrower when government securities are used
as collater-
al. The risks in lending portfolio securities, as with other
extensions of
secured credit, consist of possible delays in receiving additional
collateral
or in the recovery of the securities or possible loss of rights in
the collat-
eral should the borrower fail financially. Loans will be made to
firms deemed
by the Manager to be of good standing and will not be made unless,
in the
judgment of the Manager, the consideration to be earned from such
loans would
justify the risk.
Foreign Securities.The Fund may invest up to 10% of its net
assets in secu-
rities of foreign issuers. Investing in foreign securities involves
certain
risks, including those resulting from fluctuations in currency
exchange rates,
revaluation of currencies, future political or economic
developments and the
possible imposition of restrictions or prohibitions on the
repatriation of
foreign currencies or other foreign governmental laws or
restrictions, reduced
availability of public information concerning issuers, and,
typically, the
lack of uniform accounting, auditing and financial reporting
standards or
other regulatory practices and requirements comparable to those
applicable to
domestic companies. Moreover, securities of many foreign companies
may be less
liquid and their prices more volatile than those of securities of
comparable
domestic companies. In addition, with respect to certain foreign
countries,
the possibility exists of expropriation, confiscatory taxation and
limitations
on the use or removal of funds or other assets of the Fund,
including the
withholding of dividends.
The Fund may invest in securities commonly known as American
Depository
Receipts ("ADR's") of foreign issuers which have certain risks,
including
trading for a lower price, having less liquidity than their
underlying securi-
ties and risks relating to the issuing bank or trust company. ADR's
can be
sponsored by the issuing bank or trust company or unsponsored.
Holders of
unsponsored ADR's have a greater risk that receipt of corporate
information
will be untimely and incomplete and costs may be higher.
Restricted and Illiquid Securities.The Fund may invest in
securities which
are not readily marketable as well as restricted securities not
registered
under the Securities Act of 1933, OTC options and securities that
are other-
wise considered illiquid as a result of market or other factors.
Although it
may invest up to 15% of its assets in such securities, the Fund
does not cur-
rently anticipate investing more than 5% on its assets in
restricted or illiq-
uid securities. The
8
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
Fund may invest in securities eligible for resale under Rule 144A
of the Secu-
rities Act ("Rule 144A securities"). The Board of Directors of the
Fund may
determine that specific Rule 144A securities held by the Fund may
be deemed
liquid. Nevertheless, due to changing market or other factors, Rule
144A secu-
rities may be subject to a greater possibility of becoming illiquid
than regis-
tered securities.
PORTFOLIO TRANSACTIONS AND TURNOVER
The Manager arranges for the purchase and sale of the Fund's
securities and
selects brokers and dealers (including Smith Barney), which in its
best judg-
ment provide prompt and reliable execution at favorable prices and
reasonable
commission rates. The Manager may select brokers and dealers which
provide it
with research services and may cause the Fund to pay such brokers
and dealers
commissions which exceed those other brokers and dealers may have
charged, if
it views the commissions as reasonable in relation to the value of
the broker-
age and/or research services.
It is anticipated that the annual portfolio turnover rate of the
Fund normally
will be less than 100%. The Fund's portfolio turnover rate is
calculated by
dividing the lesser of purchases or sales of portfolio securities
for the fis-
cal year by the monthly average of the value of the Fund's
securities, with
money market instruments with less than one year to maturity
excluded. A 100%
portfolio turnover rate would occur, for example, if all included
securities
were replaced once during the year.
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 the 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. Secu-
rities listed on an exchange are valued on the basis of the last
sale prior to
the time the valuation is made. If there has been no sale since the
immediately
previous
9
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
VALUATION OF SHARES (CONTINUED)
valuation, then the current bid price is used. Quotations are taken
from the
exchange where the security is primarily traded. Portfolio
securities which
are primarily traded on foreign exchanges may be valued with the
assistance of
a pricing service and are generally valued at the preceding closing
values of
such securities on their respective exchange, except that when an
occurrence
subsequent to the time a foreign security is valued is likely to
have changed
such value, then the fair value of those securities will be
determined by con-
sideration of other factors by or under the direction of the Board
of Direc-
tors. Over-the-counter securities are valued on the basis of the
bid price at
the close of business on each day. Unlisted foreign securities are
valued at
the mean between the last available bid and offer price prior to
the time of
valuation. Any assets or liabilities initially expressed in terms
of foreign
currencies will be converted into U.S. dollar values at the mean
between the
bid and offered quotations of such currencies against U.S. dollars
as last
quoted by any recognized dealer. Securities for which market
quotations are
not readily available are valued at fair value. Notwithstanding the
above,
bonds and other fixed-income securities are valued by using market
quotations
and may be valued on the basis of prices provided by a pricing
service
approved by the Board of Directors.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund's policy is to distribute its investment income (that is,
its income
other than its net realized capital gains) and net realized capital
gains, if
any, once a year, normally at the end of the year in which earned
or at the
beginning of the next year.
If a shareholder does not otherwise instruct, dividends and
capital gain dis-
tributions will be reinvested automatically in additional shares of
the same
Class at net asset value, subject to no sales charge or CDSC. In
order to
avoid the application of a 4.00% non-deductible excise tax on
certain undis-
tributed amounts of ordinary income and capital gains, the Fund may
make an
additional distribution shortly before December 31 in each year of
any undis-
tributed ordinary income or capital gains and expects to pay any
other divi-
dends and distributions necessary to avoid the application of this
tax.
10
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
TAXES
The Fund has qualified and intends to continue to qualify as a
"regulated
investment company" under the Code. To qualify, the Fund must first
meet cer-
tain requirements, including the distribution of at least 90% of
its invest-
ment company taxable income (which includes, among other items,
dividends,
interest and the excess of any net short-term capital gains over
net long-term
capital losses).
Distributions of any investment company taxable income are taxable
to share-
holders as ordinary income. Distributions of any net capital gains
designated
by the Fund as capital gains dividends are taxable to shareholders
as long-
term capital gains regardless of the length of time a shareholder
may have
held shares of the Fund.
Dividends (including capital gain dividends) declared by the Fund
in October,
November or December of any calendar year to shareholders of record
on a date
in such a month will be deemed to have been received by
shareholders on Decem-
ber 31 of that calendar year, provided that the dividend is
actually paid by
the Fund during January of the following calendar year.
Upon the disposition of shares of the Fund (whether by redemption,
sale or
exchange), a shareholder generally will realize a taxable gain or
loss. Such
gain or loss generally will be a capital gain or loss if the shares
are capi-
tal assets in the shareholder's hands, and generally will be
long-term or
short-term depending upon the shareholder's holding period for the
shares. Any
loss realized by a shareholder on disposition of Fund shares held
by the
shareholder for six months or less will be treated as long-term
capital loss
to the extent of any distributions of capital gains dividends
received by the
shareholder with respect to such shares.
Shareholders will be notified annually about the amounts of
dividends and
distributions, including the amounts (if any) for that year which
have been
designated as capital gain dividends. Dividends and distributions
and gains
realized upon a disposition of Fund shares may also be subject to
state, local
or foreign taxes depending on each shareholder's particular
situation. Divi-
dends consisting of interest from U.S. government securities may be
exempt
from all state and local income taxes. Shareholders should consult
their plan
documents and/or tax advisors for specific information on the tax
consequences
of participating in a Qualified Plan.
11
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
PURCHASE AND REDEMPTION OF SHARES
Purchasers of the Fund's Class Z shares must be made in
accordance with the
terms of a Qualified Plan. Purchases are effected at the net asset
value next
determined after a purchase order is received by Smith Barney (the
"trade
date"). Payment is due to Smith Barney on the third business day
(the "settle-
ment date") after the trade date. Investors who make payment prior
to the set-
tlement date may designate a temporary investment (such as a money
market fund
of the Smith Barney Mutual Funds) for such payment until settlement
date. The
Fund reserves the right to reject any purchase order and to suspend
the offer-
ing of shares for period of time. There are no minimum investment
requirements
for Class Z shares; however, the Fund reserves the right to vary
this policy at
any time.
Purchase orders received by Smith Barney prior to the close of
regular trad-
ing on the NYSE, currently 4:00 p.m., New York time, on any day
that the Fund
calculates its net asset value, are priced according to the net
asset value
determined on that day. See "Valuation of Shares." Certificates for
Fund shares
are issued upon request to the Fund's transfer agent.
Shareholders may redeem their shares on any day on which the Fund
calculates
its net asset value. See "Valuation of Shares." Redemption requests
received in
proper form prior to the close of regular trading on the NYSE are
priced at the
net asset value per share determined on that day. Redemption
requests received
after the close of regular trading on the NYSE are priced at the
net asset
value as next determined. Shareholders acquiring Class Z shares
through a Qual-
ified Plan should consult the terms of their respective plans for
redemption
provisions.
EXCHANGE PRIVILEGE
Holders of Class Z shares in the Fund may exchange their shares
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 shares may be
made at any
time without payment of any exchange fee.
Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc.
Smith Barney Diversified Strategic Income Fund
12
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
EXCHANGE PRIVILEGE (CONTINUED)
Smith Barney Funds, Inc. -- Income and Growth Portfolio
Smith Barney Funds, Inc. -- Income Return Account Portfolio
Smith Barney Funds, Inc. -- U.S. Government Securities Portfolio
Smith Barney High Income Fund
Smith Barney Money Funds, Inc. -- Cash Portfolio
Smith Barney Money Funds, Inc. -- Government Portfolio
Smith Barney Utilities Fund
Smith Barney Special Equities Fund
Smith Barney World Funds, Inc. -- International Equity Portfolio
The exchange of shares of one fund for shares of another fund is
generally
treated for Federal income tax purposes as a sale of the shares
given in
exchange by the shareholder. Therefore, an exchanging shareholder
may realize
a taxable gain or loss in connection with the exchange.
Shareholders should
consult their plan prospectus and/or other governing documents
regarding
exchanges. Generally, exchanges within such a plan are not treated
as a tax-
able event.
Shareholders exercising the exchange privilege with any of the
other funds
of the Smith Barney Mutual Funds should review the prospectus of
that fund
carefully prior to making an exchange. Smith Barney reserves the
right to
reject any exchange request.
Although the exchange privilege is an important benefit,
excessive exchange
transactions can be detrimental to the Fund's performance and its
sharehold-
ers. Smith Barney Mutual Fund Management Fund, Inc., the Fund's
Investment
adviser ("SBMFM") may determine that a pattern of frequent
exchanges is exces-
sive and contrary to the best interests of the Fund's other
shareholders. In
this event, the SBMFM will notify Smith Barney, and Smith Barney
may, at its
discretion, decide to limit additional purchases and/or exchanges
by the
shareholder. Upon such a determination, Smith Barney will provide
notice in
writing or by telephone to the shareholder at least 15 days prior
to sus-
pending 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 listed above, which position the shareholder would be
expected to
maintain for a significant period of time. All relevant factors
will be con-
sidered in determining what constitutes an abusive pattern of
exchanges. The
Fund reserves the right to modify or discontinue exchange
privileges upon 60
days' prior notice to shareholders.
13
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
PERFORMANCE
From time to time the Fund may include its total return, average
annual
total return and current dividend return for Class Z shares in
advertisements
and/or other types of sales literature. 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
Class Z shares by annualizing the most recent monthly distribution
and divid-
ing by the net asset value or the maximum public offering price
(including
sales charge) on the last day of the period for which current
dividend return
is presented. The current dividend 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 calcu-
lating current dividend return should be considered when comparing
Class Z
shares 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 informa-
tion may include data from Lipper Analytical Services, Inc. and
other finan-
cial publications. The Fund will include performance data for Class
Z 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
Company rests
with the Company's Board of Directors. The Directors approve all
significant
agreements between the Company and the companies that furnish
services to the
Fund and the Company, including agreements with its distributor,
investment
adviser, custodian and transfer agent. The day-to-day operations of
14
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
MANAGEMENT OF THE FUND (CONTINUED)
the Fund are delegated to the Fund's investment manager. The
Statement of
Additional Information contains background information regarding
each Director
of the Fund and executive officer of the Company.
MANAGER
The Manager, located at 388 Greenwich Street, New York, New York
10013,
serves as the Fund's investment adviser and manages the day-to-day
operations
of the Fund pursuant to a management agreement entered into by the
Company, on
behalf of the Fund. The Manager (through its predecessors) has been
in the
investment counseling business since 1934 and is a registered
investment advis-
er. The Manager renders investment advice to investment companies
that had
aggregate assets under management as of December 31, 1994, in
excess of $50
billion.
Subject to the supervision and direction of the Company's Board
of Directors,
the Manager 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
professional portfo-
lio managers and securities analysts who provide research services
to the Fund.
For investment advisory services rendered, the Fund pays the
Manager a monthly
fee at the annual rate of 0.85% of the value of its average daily
net assets.
Although this fee is higher than that paid by most investment
companies, the
Fund's management has determined that it is comparable to the fee
charged by
other investment advisers of investment companies that have similar
investment
objectives and policies.
PORTFOLIO MANAGEMENT
Doug Johnson, a Director of the Mutual Fund Division of Smith
Barney, will
manage the day to day operations of the Fund's investment
portfolio. Prior to
joining Smith Barney, Mr. Johnson was a portfolio manager with
Safeco Asset
Management, where he co-managed the Safeco Equity Fund since 1984.
Management's discussion and analysis, and additional performance
information
regarding the Fund during the fiscal year ending December 31, 1995
will be
included in the Annual Report dated December 31, 1995. A copy of
the Annual
Report may be obtained upon request and without charge from a Smith
Barney
Financial Consultant or by writing or calling the Fund at the
address or phone
number listed on page one of this Prospectus.
15
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
ADDITIONAL INFORMATION
The Company was organized as a Maryland corporation pursuant to
Articles of
Incorporation dated September 29, 1981, as amended from time to
time. The Fund
offers shares of common stock currently classified into five
Classes, A, B, C,
Y and Z, with a par value of $.001 per share. Each Class represents
an identi-
cal 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
designation 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 pur-
suant to the Plan; (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 consider whether any such
conflicts
exists and, if so, take appropriate action.
PNC Bank, National Association, located at 17th and Chestnut
Streets, Phila-
delphia, Pennsylvania 19103 serves as custodian of the Fund's
investments.
TSSG is located at Exchange Place, Boston, Massachusetts 02109,
and serves
as the Company's transfer agent.
The Company does not hold annual shareholder meetings. There
normally will
be no meeting 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 pur-
pose upon written request of shareholders holding at least 10% of
the
Company's outstanding shares and the Company will assist
shareholders in call-
ing 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 Company will be voted on a
Company-
wide basis on all matters except matters affecting only the
interests of one
Fund or one Class of shares.
The Fund sends its shareholders a semi-annual report and an
audited annual
report, each of which includes a list 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 Company plans to consolidate the
mailing of
its
16
<PAGE>
Smith Barney
Managed Growth Fund--Class Z Shares
ADDITIONAL INFORMATION (CONTINUED)
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. In addition, the Company also
plans to
consolidate the mailing of its Prospectuses so that a shareholder
having mul-
tiple accounts (i.e., individual, IRA and/or Self-Employed
Retirement Plan
accounts) will receive a single Prospectus annually. Shareholders
who do not
want this consolidation to apply to their accounts should contact
their Smith
Barney Financial Consultant or TSSG.
17
<PAGE>
SMITH BARNEY
------------
A member of Travelers
Group [LOGO]
SMITH BARNEY
MANAGED
GROWTH
FUND
388
Greenwich Street
New York,
New York 10013
8/95
SMITH BARNEY INVESTMENT FUNDS INC.
388 Greenwich Street
New York, New York 10013
STATEMENT OF ADDITIONAL INFORMATION
PART B
The Statement of Additional Information dated May 1, 1995,
filed with the Post-Effective Amendment No. 38 to the
Fund']s Registration Statement on Form N-1A, is
incorporated in its entirety by reference.
SMITH BARNEY INVESTMENT FUNDS 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 (Special Equities Fund) Annual Report for
the fiscal year ended December 31, 1994, and the Report of
Independent Accountants dated February 10, 1995 is
incorporated by reference to the Rule 30(b)2-1 filed on
February 27, 1995 as Accession #0000053798-95-000098
Included in Part C:
Consent of Auditors
(b) Exhibits
All references are to the Registrant's registration
statement on Form N-1A (the "Registration Statement"]) as
filed with the SEC on October 2, 1981 (File Nos. 2-74288 and
811-3275).
(1) Articles of Restatement dated September 17, 1993 to
Registrant's Articles of Incorporation dated September
28, 1981, Articles of Amendment dated October 14, 1994,
Articles Supplementary, Articles of Amendment dated October
14, 1994, Articles Supplementary, Articles of Amendments and
Certificates of Correction dated November 7, 1994, are
incorporated by referene to Post-Effective Amendment No. 37
to the Registration Statement filed on November 7, 1994
("Post Effective Amendment No. 37").
(2) Registrant's By-Laws, as amended on September 30,
1992 are incorporated by reference to Post-Effective
Amendment No. 30 to the Registration Statement filed on
April 30, 1993.
(3) Not Applicable.
(4) Registrant's form of stock certificate for Class A,
Class B and Class D are incorporated by reference to Post-
Effective Amendment No. 27 to the Registration Statement
filed on October 23, 1992.
(5) (a) Investment Advisory Agreement dated July 30, 1993,
between the Registrant on behalf of Smith Barney Investment
Grade Bond Fund, Smith Barney Government Securities Fund and
Smith Barney Special Equities Fund and Green Street Advisors
is incorporated by reference to the Registration Statement
filed on Form N-14 on September 2, 1993, File No. 33-50153.
(b) Investment Advisory Agreement dated April 8,
1994, between the Registrant on behalf of Smith Barney
European Fund and Smith Barney Advisers, Inc. is
incorporated by reference to Post-Effective Amendment No. 35
to the Registration Statement filed on June 23, 1994.
(c) Investment Advisory Agreements on behalf of Smith
Barney Growth Opportunity Fund and Smith Barney Managed
Growth Fund is incorporated by reference to Post-Effective
Amendment No. 40 filed on June 27, 1995.
(6) (a) Distribution Agreement dated July 30, 1993, between
the Registrant and Smith Barney Shearson Inc. is
incorporated by reference to the registration statement
filed on Form N-14 on September 2, 1993. File 33-50153.
(b) Supplement to the Distribution Agreement between
the Registrant and Smith Barney Inc. on behalf of Smith
Barney Growth Opportunity Fund and Smith Managed Growth Fund
will be filed by amendment.
(c) Form of Distribution Agreement between the
Registrant and PFS Distributors on behalf of Smith Barney
Investment Funds Inc. is incorporated by reference to Post-
Effective Amendment No. 40 filed on June 27, 1995.
(7) Not Applicable.
(8)(a) Custodian Agreement with Boston Safe Deposit and
Trust Company is incorporated by reference to Post-Effective
Amendment No.20 as filed on September 6, 1988.
(b) Custodian Agreement with PNC Bank, National
Associates will be filed by amendment.
(9)(a) Administration Agreement dated May 5, 1994, between
the Registrant, SBA and The Boston Boston Company Advisors,
Inc. is incorporated by reference to Post-Effective
Amendment No. 37.
(c) Transfer Agency and Registrar Agreement dated
August 5, 1993 with The Shareholder Services Group, Inc.
("TSSG") is incorporated by reference to Post-Effective
Amendment No. 31 as filed on December 22, 1993 (Post-
Effective Amendment No. 31).
(d) Supplement to the Transfer Agency and Registrar
Agreement between the Registrant and TSSG on behalf of Smith
Barney Growth Opportunity Fund and Smith Barney Managed
Growth Fund will be filed by amendment.
(e) Sub-Transfer Agency Agreement between the
Registrant and PFS Shareholders Services on behalf of Smith
Barney Investment Funds Inc. is incorporated by reference to
Post-Effective Amendment No. 4o filed on June 27, 1995.
(10) Not applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14)(a) Amended Services and Distribution Plans pursuant to
Rule 12b-1 between the Registrant on behalf of Smith Barney
Invest Grade Bond Fund, Smith Barney Government Securities
Fund, Smith Barney Special Equities Fund and Smith Barney
European Fund and Smith Barney, Inc. ("Smith Barney") are
incorporated by reference to Post-Effective Amendment No.
37.
(b) Form of Services and Distribution Plans pursuant
to Rule 12b-1 between the Registrant
on behalf of Smith Barney Growth Opportunity Fund and Smith
Barney Managed Growth Fund is incorporated by reference to
Post-Effective Amendment No. 40 filed on June 27, 1995.
(15) Performance Date is incorporated by reference to Post-
Effective Amendment No. 22 as filed on May 1, 1989.
(16) Powers of Attorney are incorporated by reference to
Post-Effective Amendment No. 31.
Item 25 Persons Controlled by or Under Common Control with
Registrant
None.
Item 26. Number of Holders of Securities
(2) (1)
Number of Record Holders as of May 31, 1995 Title of Class
Common Stock par value Class A Class B Class
C
$.001 per share
Special Equities
Fund 18,073 15,095 165
Investment Grade
Bond Fund 16,134 16,080 99
Government Securities
Fund 32,891 12,046 48
Item 27. Indemnification
The response to this item is incorporated by reference
to Pre-Effective Amendment No. 1 to the registration
statement filed on Form N-14
on October 8, 1993 (File No. 33-50153).
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")
SBMFM was incorporated in December 1968 under the laws of
the State
of
Delaware. SBMFM is a wholly owned subsidiary of Smith
Barney
Holdings Inc.
("Holdings") (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 sustantial 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 Travelers Group 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 files by MMC on behalf of
Greenwich Street
Advisors pursuant to the Advisers (SEC File No. 801-14437).
Prior to the close of business on July 30, 1993 (the
"closing"), Shearson
Lehman Advisors, a member of the Assets 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 files by Shearson Lehman
Brothers
on behalf
of Shearson Lehman Advisors prior to July 30, 1993. (SEC
FILE NO.
801-
3701)
6/--/95
Item 29. Principal Underwriters
Smith Barney Inc. ("Smith Barney") currently acts as a
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 Aggressive
Growth Fund
Inc., Smith Barney Appreciation Fund Inc., Smith Barney
Principal
Return Fund, Smith Barney Managed Governments
Fund Inc., 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., 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 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 Holdings
Inc.), which in turn is a wholly owned subsidiary of The
Travelers Inc. (formerly know as Primerica Corporation)
("Travelers"]). On June 1, 1994, Smith Barney changed its
name from Smith Barney Shearson 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).
PFS Distributors ("PFS"]) currently acts as distributor for
Common Sense Growth; Common Sense Growth/Income; Common
Sense Government; Common Sense Money Market; Common Sense
Municipal Bond; CSII Aggressive Opportunity - A CSII
Aggressive
Opportunity - B; CSII Growth - A; CSII Growth - B; CSII
Growth/Income - A;
CSII Growth/Income - B CSII Government - A; CSII Government
- B; CSII
Emerging Growth - A; CSII Emerging Growth - B; CSII
International Equity - A;
and CSII International Equity - B.
On May 8, 1995, PFS changed its name from Common Sense
Distributors to PFS Distributors, its current name. The
information required by this Item 29 with respect to each
director, officer and partner of PFS is incorporated by
reference to Schedule A of FORM BD, filed by PFS pursuant to
the Securities Exchange Act of 1934 (SEC File No. 8-37352).
Item 30. Location of Accounts and Records
(1) Smith Barney Investment Funds Inc.
388 Greenwich Street
New York, NY 10013
(2) Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, NY 10013
(3) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, PA 19103
(4) Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02108
(5) The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The Registrant hereby undertakes to furnish to each
person to whom a prospectus of any series of the Registrant
is delivered a copy of the Registrant's latest annual
report, upon request and without charge.
485(b) Certification
The Registrant hereby certifies that it meets all
requirements for effectiveness pursuant to Rule 485 (b)
under the Securities Act of 1933, as amended.
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 INVESTMENT FUNDS., 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 the 9th day of August, 1995.
SMITH BARNEY INVESTMENT FUNDS INC.
By: /s/ Heath B McLendon*
Chief Executive Officer
WITNESS our hands on the date set forth below.
Pursuant to the requirements of the Securities Act of
1933, as amended, this Post-Effective Amendment to the
Registration Statement has been signed below by the
following persons in the capacities and on the dates
indicated.
Signature Title
/s/ Heath B. McLendon* Chairman of the Board
8/9 /95
Heath B. McLendon (Chief Executive Officer)
/s/ Lewis E. Daidone* Senior Vice President and
8/ 9 /95
Lewis E. Daidone Treasurer (Chief
Financial and Accounting
Officer
/s/ Paul R. Ades* Director
8/ 9 /95
Paul R. Ades
/s/ Herbert Barg* Director
8/9/95
Herbert Barg
/s/ Alger B. Chapman* Director
8/ 9/95
Alger B. Chapman
/s/ Dwight B. Crane* Director
8/9 /95
Dwight B. Crane
/s/ Frank Hubbard* Director
8/9/95
Frank Hubbard
/s/ Allan R. Johnson* Director
8/9/95
Allan R. Johnson
/s/ Ken Miller* Director
8/9 /95
Ken Miller
/s/ John F. White* Director
8/9/95
John F. White
* Signed by Lee D. Augsburger, their duly authorized
attorney-in-fact, pursuant to power of attorney
dated November 3, 1994.
/s/ Lee D. Augsburger
Lee D. Augsburger
EXHIBITS
Exhibit No. Description of Exhibits
1 Cover Letter to SEC
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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