As filed with the Securities and Exchange Commission
on November 12, 1998
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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
[ ] Pre-Effective Amendment No.
[X] Post-Effective Amendment No. 52
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940,
Amendment No. 54
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)
(800)-451-2010
(Registrant's Telephone Number, including Area Code:)
Christina T. Sydor
388 Greenwich Street, New York, New York 10013(22nd
Floor)
(Name and Address of Agent For Service)
Continuous
(Approximate Date of Proposed Public Offering)
It is proposed that this filing will become effective:
XXX immediately upon filing pursuant to Paragraph (b) of Rule 485
On November 12, 1998 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
On (date) pursuant to paragraph (a)(1) of Rule 485
75 days after filing pursuant to paragraph (a)(2) of Rule 485
On (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
This post-effective amendment designates a new
effective date for a previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Common
Stock
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 485(a) Under the Securities Act of
1933, as amended
Part A
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Prospectus Summary
3. Condensed Financial Highlights Financial
Highlights Information
4. General Description
of Registrant Cover Page;
Prospectus Summary
Investment
Objective and
Management
Policies;
Additional
Information
5. Management of the Fund Management of the
Fund and the Company;
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 of
Shares;
Exchange
Privilege;
Redemption of
Shares;
Minimum Account
Size;
Distributor;
Additional
Information
8. Redemption
or Purchase of Shares; Redemption of
Shares;
Exchange Privilege
9. Pending Legal Proceedings Not Applicable
Part B
Item No. and Caption Statement of
Additional Information Caption
10 Cover Page Cover page
11. Table of Contents Contents
12. General Information
and History Distributor; Additional
Information
13. Investment Objectives
and Policies Investment
Objectives
Management and
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 Services Management of the
Company;
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;
Pricing of Securities Being Redemption of
Shares
Offered Valuation of
Shares;
Distributor;
Exchange Privilege
20. Tax Status Taxes
21. Underwriters see Prospectus
"Purchase of Shares"
22. Calculations of Performance Performance Data
23. Financial Statements Financial
Statements
SMITH BARNEY INVESTMENT FUNDS
PART A
PROSPECTUS
SMITH BARNEY
Government
Securities
Fund
Class Z
Shares Only
NOVEMBER
12, 1998
Prospectus begins on
page one
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
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Prospectus November
12, 1998
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Smith Barney Government Securities Fund -- Class Z Shares
388 Greenwich Street
New York, New York 10013
(800) 451-2010
Smith Barney Government Securities Fund (the "Fund") has an
investment
objective of high current return through investments that are issued or
guaranteed by the United States government, its agencies or
instrumentalities
("U.S. government securities"). It may write covered call options and
secured
put options and purchase put options on U.S. government securities. For
hedging
purposes, the Fund may purchase and sell interest rate futures
contracts and put
and call options thereon.
The Fund is one of a number of funds, each having distinct
investment
objectives and policies, making up Smith Barney Investment Funds Inc.
(the
"Company"). 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
Prospectus 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 Salomon Smith Barney Financial Consultant.
The Class Z Shares described in this Prospectus are currently
offered
exclusively for sale to tax-exempt employee benefit and retirement
plans of
Salomon Smith Barney Inc. ("Salomon 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 (the "SAI") dated April 30, 1998,
as amended
or supplemented 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 Salomon Smith Barney Financial
Consultant. The
SAI has been filed with the Securities and Exchange Commission (the
"SEC") and
is incorporated by reference into this Prospectus in its entirety.
CFBDS, Inc.
Distributor
Mutual Management Corp.
Investment Adviser and Administrator
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY
IS A CRIMINAL OFFENSE.
1
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Table of Contents
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The Fund's Expenses
3
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Investment Objective and Management Policies
4
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Valuation of Shares
12
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Dividends, Distributions and Taxes
13
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Purchase, Exchange and Redemption of Shares
14
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Performance
15
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Management of the Company and the Fund
16
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Additional Information
17
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=======================================================================
=========
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 an offer or solicitation in such jurisdiction.
=======================================================================
=========
2
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The Fund's Expenses
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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 estimated operating expenses.
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Annual Fund Operating Expenses*
(as a percentage of average net assets)
Management fees
0.55%
Other expenses
0.12
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TOTAL FUND OPERATING EXPENSES
0.67%
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=========
* Annual Fund Operating Expenses have been estimated based on expenses
the Fund
expects to incur during its fiscal year ending December 31. 1998.
The nature of the services for which the Fund pays management
fees is
described under "Management of the Company and 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, Exchange and Redemption of
Shares" and
"Management of the Company and the Fund."
<TABLE>
<CAPTION>
Smith Barney Government Securities Fund 1 Year 3
Years 5 Years 10 Years
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========================
<S> <C> <C>
<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: $7 $21
$37 $83
=======================================================================
=====================
</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
representation of past or future expenses and actual expenses may be
greater or
less than those shown.
3
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Investment Objective and Management Policies
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INVESTMENT OBJECTIVE
The investment objective of the Fund is high current return. The
Fund's
investment objective may not be changed without the "vote of a majority
of the
outstanding voting securities" as defined in the Investment Company Act
of 1940,
as amended (the "1940 Act"). There can be no assurance that the Fund
will
achieve its investment objective.
The Fund seeks to achieve its investment objective by investing
primarily
in 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 United States government securities, such as 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 others, 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 of the Fund will include
Government
National Mortgage Association Certificates ("GNMA Certificates") 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. The Fund may write covered call options and secured put
options and
purchase put options on U.S. government securities. The Fund also
purchases and
sells interest rate futures contracts, and purchases and sells put and
call
options on futures contracts, as a means of hedging against changes in
interest
rates. The Fund may also invest in real estate investment trusts and
purchase
the securities of companies with less than three years of continuous
operation.
The Fund may invest up to 5% of its net assets in U.S. government
securities for which the principal repayment at maturity, while paid in
U.S.
dollars, is determined by reference to the exchange rate between the
U.S. dollar
and the currency of one or more foreign countries ("Exchange Rate-
Related
Securities"). The interest payable on these securities is denominated
in U.S.
dollars, is not subject to foreign currency risk and, in most cases, is
paid at
rates higher than most
4
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Investment Objective and Management Policies (continued)
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other U.S. government securities in recognition of the foreign currency
risk
component of Exchange Rate-Related Securities.
The Fund may borrow money (up to 25% of its total assets) to
increase its
investments, thereby leveraging its portfolio and exaggerating the
effect on net
asset value of any increase or decrease in the market value of the
Fund's
securities. See "Leverage through Borrowing." The Fund may enter into
repurchase
agreements, reverse repurchase agreements and firm commitment
agreements and
"short sales against the box" and may lend its portfolio securities.
The total
of the Fund's direct borrowing and borrowings in connection with
entering into
reverse repurchase agreements will not exceed 33 1/3% of the Fund's
total
assets. Except when in a temporary defensive investment position, the
Fund
intends to maintain at least 65% of its assets invested in U.S.
government
securities (including futures contracts and options thereon and options
relating
to U.S. government securities).
The Fund's distributions may consist of interest income from U.S.
government securities, premiums from expired put and call options
written by the
Fund, net gains from closing purchase and sale transactions in options,
futures
contracts or related options, and net gains from sales of portfolio
securities
pursuant to options or otherwise. The investments of the Fund involve
certain
special risks set forth in the description of those techniques in this
Prospectus and in the SAI.
The value of securities in which the Fund invests (and therefore
the
Fund's net asset value per share) generally will vary inversely with
changes in
interest rates and also will fluctuate in response to other factors.
In making purchases of securities consistent with the above
policies, the
Fund will be subject to the applicable restrictions referred to under
"Investment Restrictions" in the SAI.
ADDITIONAL INVESTMENTS
Repurchase Agreements. The Fund may enter into repurchase
agreement
transactions 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),
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. The value of the underlying securities will be at least equal
at all
times to the total amount of the repurchase obligation, including
interest. The
Fund bears a risk of loss in the event
5
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Investment Objective and Management Policies (continued)
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that the other party to a repurchase agreement defaults on its
obligations and
the Fund is delayed or prevented from exercising its rights to dispose
of the
collateral securities, including the risk of a possible decline in the
value of
the underlying securities during the period while 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.
Mutual Management Corp. ("MMC" or the "Adviser"), acting under the
supervision
of the Board of Directors, reviews on an ongoing basis the
creditworthiness and
the value of the collateral of those banks and dealers with which the
Fund
enters into repurchase agreements to evaluate potential risks.
Reverse Repurchase Agreements. A reverse repurchase agreement
involves the
sale of a money market instrument by the Fund and its agreement to
repurchase
the instrument at a specified time and price. The Fund will maintain a
segregated account consisting of U.S. government securities or cash or
cash
equivalents to cover its obligations under reverse repurchase
agreements with
broker-dealers (but not banks). The Fund will invest the proceeds in
other money
market instruments or repurchase agreements maturing not later than the
expiration of the reverse repurchase agreement. Under the 1940 Act,
reverse
repurchase agreements may be considered borrowings by the seller;
accordingly,
the Fund will limit its investments in reverse repurchase agreements
and other
borrowings to no more than 33 1/3% of its total assets.
Zero Coupon Securities. The Fund may also invest in zero coupon
bonds. A
zero coupon bond pays no interest in cash to its holder during its
life,
although interest is accrued during that period. Its value to an
investor
consists of the difference between its face value at the time of
maturity and
the price for which it was acquired, which is generally an amount
significantly
less than its face value (sometimes referred to as a "deep discount"
price).
Because such securities usually trade at a deep discount, they will be
subject
to greater fluctuations of market value in response to changing
interest rates
than debt obligations of comparable maturities which make periodic
distributions
of interest. On the other hand, because there are no periodic interest
payments
to be reinvested prior to maturity, zero coupon securities eliminate
reinvestment risk and lock in a rate of return to maturity.
Dollar Roll Transactions. The fund may enter into "dollar rolls,"
in which
the Fund sells fixed income securities and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity)
securities on
a specified future date. During this "roll" period, the Fund would
forego
principal and interest paid on such securities. The Fund would be
compensated by
the difference between the current sales price and the forward price
for the
future purchase, as well as by the interest earned on the cash proceeds
of the
initial sale. Since the Fund will receive interest on the securities in
which it
invests the transaction proceeds, such transactions may involve
leverage.
However, since the proceeds will be invested
6
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Investment Objective and Management Policies (continued)
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only in U.S. Treasury obligations and since the Fund will enter into
dollar roll
transactions only with dealers of sufficient creditworthiness in the
judgement
of the Fund's investment adviser, such transactions do not present the
risks to
the Fund that are associated with other types of leverage. Dollar roll
transactions are considered borrowings by the Fund and will be subject
to the
Fund's overall borrowing limitation.
Firm Commitment Agreements and When-Issued Purchases. Firm
commitment
agreements and when-issued purchases call for the purchase of
securities at an
agreed-upon price on a specified future date, and would be used, for
example,
when a decline in the yield of securities of a given issuer is
anticipated. The
Fund as purchaser assumes the risk of any decline in value of the
security
beginning on the date of the agreement or purchase. The Fund will not
use such
transactions for leveraging purposes, and accordingly will segregate
U.S.
government securities, cash or cash equivalents in an amount sufficient
to meet
its purchase obligations under the agreement.
Loans of Portfolio Securities. Consistent with applicable
regulatory
requirements, the Fund is authorized to lend securities it holds to
brokers,
dealers and other financial organizations 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. The risks in lending portfolio securities, as with other
extensions
of secured credit, consists of possible delays in receiving additional
collateral or in the recovery of the securities or possible loss of
rights in
the collateral should the borrower fail financially. Loans will be made
to firms
deemed by MMC to be in good standing and will not be made unless, in
the
judgement of MMC, the consideration to be earned from such loans would
justify
the risk.
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 without
further consideration for, securities of the same issue as the
securities sold
short.
Options Activities. The Fund may write (i.e., sell) call options
("calls")
if the calls are "covered" throughout the life of the option. A call is
"covered" if the Fund owns the optioned securities, if the Fund
maintains in a
segregated account with the Company's custodian cash, cash equivalents
or U.S.
government securities with a value sufficient to meet its obligations
under the
call, or if the Fund owns an offsetting call option. When the Fund
writes a
call, it receives a premium and gives the purchaser the right to buy
the
underlying security at any time during the call
7
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Investment Objective and Management Policies (continued)
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period (usually not more than nine months in the case of common stock
or fifteen
months in the case of U.S. government securities) at a fixed exercise
price
regardless of market price changes during the call period. If the call
is
exercised, the Fund foregoes any gain from an increase in the market
price of
the underlying security over the exercise price. The Fund may purchase
call
options on securities. However, the Fund may only purchase a call on
securities
to effect a "closing purchase transaction," which is the purchase of a
call
covering the same underlying security and having the same exercise
price and
expiration date as a call previously written by the Fund on which it
wishes to
terminate its obligation.
The Fund also may write and purchase put options ("puts"). When
the Fund
writes a put, it receives a premium and gives the purchaser of the put
the right
to sell the underlying security to the Fund at the exercise price at
any time
during the option period. When the Fund purchases a put, it pays a
premium in
return for the right to sell the underlying security at the exercise
price at
any time during the option period. If any put is not exercised or sold,
it will
become worthless on its expiration date. The Fund will not purchase
puts on
securities if more than 10% of its net assets would be invested in
premiums on
puts.
The Fund may write puts on securities only if they are "secured."
A put is
"secured" if the Fund maintains cash, cash equivalents or U.S.
government
securities with a value equal to the exercise price in a segregated
account or
holds a put on the same underlying security at an equal or greater
exercise
price. The aggregate value of the obligations underlying puts written
by the
Fund will not exceed 50% of its net assets. The Fund also writes
"straddles,"
which are combinations of secured puts and covered calls on the same
underlying
security.
The Fund will realize a gain (or loss) on a closing purchase
transaction
with respect to a call or put previously written by the Fund if the
premium,
plus commission costs, paid to purchase the call or put is less (or
greater)
than the premium, less commission costs, received on the sale of the
call or
put. A gain also will be realized if a call or put which the Fund has
written
lapses unexercised, because the Fund would retain the premium. See
"Dividends,
Distributions and Taxes."
There can be no assurance that a liquid secondary market will
exist at a
given time for any particular option. In this regard, it is difficult
to predict
to what extent liquid markets will develop or continue. See below for a
discussion of the purchase by the Fund of options on futures contracts.
See the
Statement of Additional Information for further discussion of risks
involved in
options trading, and particular risks applicable to options trading on
U.S.
government securities, including risks involved in options trading on
GNMA
Certificates.
Swap Agreements. As one way of managing its exposure to different
types of
investments, the Fund may enter into interest rate swaps, currency
swaps, and
other
8
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Investment Objective and Management Policies (continued)
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types of swap agreements such as caps, collars, and floors. In a
typical
interest rate swap, one party agrees to make regular payments equal to
a
floating interest rate times a "notional principal amount," in return
for
payments equal to a fixed rate times the same amount for a specified
period of
time. If a swap agreement provides for payments in different
currencies, the
parties might agree to exchange the notional principal amount as well.
Swaps may
also depend on other prices or rates, such as the value of an index or
mortgage
prepayment rates.
Swap agreements are sophisticated hedging instruments that
typically
involve a small investment of cash relative to the magnitude of risks
assumed.
As a result, swaps can be highly volatile and may have a considerable
impact on
the Fund's performance. Swap agreements are subject to risks related to
the
counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. The Fund may also suffer
losses if
it is unable to terminate outstanding swap agreements or reduce its
exposure
through offsetting transactions.
Interest Rate Futures Contracts. The Fund may purchase and sell
interest
rate futures contracts ("futures contracts") as a hedge against changes
in
interest rates. A futures contract is an agreement between two parties
to buy
and sell a security for a set price on a future date. Futures contracts
are
traded on designated "contracts markets" which, through their clearing
corporations, guarantee performance of the contracts. Currently, there
are
futures contracts based on securities such as long-term Treasury bonds,
Treasury
notes, GNMA Certificates and three-month Treasury bills.
Generally, if market interest rates increase, the value of
outstanding
debt securities declines (and vice versa). Entering into a futures
contract for
the sale of securities has an effect similar to the actual sale of
securities,
although the sale of the futures contract might be accomplished more
easily and
quickly. For example, if the Fund holds long-term U.S. government
securities and
MMC anticipates a rise in long-term interest rates, it could, in lieu
of
disposing of its portfolio securities, enter into futures contracts for
the sale
of similar long-term securities. If interest rates increased and the
value of
the Fund's securities declined, the value of the Fund's futures
contracts would
increase, thereby protecting the Fund by preventing the net asset value
from
declining as much as it otherwise would have. Similarly, entering into
futures
contracts for the purchase of securities has an effect similar to
actual
purchase of the underlying securities, but permits the continued
holding of
securities other than the underlying securities. For example, if MMC
expects
long-term interest rates to decline, the Fund might enter into futures
contracts
for the purchase of long-term securities, so that it could gain rapid
market
exposure that may offset anticipated increases in the cost of
securities it
intends to purchase, while continuing to hold higher-yielding short-
term
securities or waiting for the long-term market to stabilize.
9
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Investment Objective and Management Policies (continued)
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The Fund also may purchase and sell listed put and call options
on futures
contracts. An option on a futures contract gives the purchaser the
right, in
return for the premium paid, to assume a position in a futures contract
(a long
position if the option is a call and a short position if the option is
a put),
at a specified exercise price at any time during the option period.
When an
option on a futures contract is exercised, delivery of the futures
position is
accompanied by cash representing the difference between the current
market price
of the futures contract and the exercise price of the option. The Fund
may
purchase put options on interest rate futures contracts in lieu of, and
for the
same purpose as, the sale of a futures contract. It also may purchase
such put
options in order to hedge a long position in the underlying futures
contract in
the same manner as it purchases "protective puts" on securities. The
purchase of
call options on interest rate futures contracts is intended to serve
the same
purpose as the actual purchase of the futures contract, and the Fund
will set
aside cash or cash equivalents sufficient to purchase the amount of
portfolio
securities represented by the underlying futures contracts. See
"Options
Activities" and "Dividends, Distributions and Taxes."
The Fund may not purchase futures contracts or related options
if,
immediately thereafter, more than 30% of the Fund's total assets would
be so
invested. In purchasing and selling futures contracts and related
options, the
Fund will comply with rules and interpretations of the Commodity
Futures Trading
Commission ("CFTC"), under which the Company is excluded from
regulation as a
"commodity pool." CFTC regulations permit use of commodity futures and
options
for bona fide hedging purposes without limitation on the amount of
assets
committed to margin and option premiums.
The Fund will not engage in transactions involving futures
contracts or
related options for speculation but only as a hedge against changes in
the
market values of debt securities held, or intended to be purchased, by
the Fund
and where the transactions are appropriate to reduction of the Fund's
risks. The
Fund's futures transactions will be entered into for traditional
hedging
purposes -- that is, futures contracts will be sold (or related put
options
purchased) to protect against a decline in the price of securities that
the Fund
owns, or futures contracts (or related call options) will be purchased
to
protect the Fund against an increase in the price of securities it is
committed
to purchase.
There is no assurance that the Fund will be able to close out its
futures
positions at any time, in which case it would be required to maintain
the margin
deposits on the contract. There can be no assurance that hedging
transactions
will be successful, as there may be an imperfect correlation (or no
correlation)
between movements in the prices of the futures contracts and of the
debt
securities being hedged, or price distortions due to market conditions
in the
futures markets. Where futures contracts are purchased to hedge against
an
increase in the price of long-term securities, but the long-term market
declines
and the Fund does not invest in long-term securities,
10
<PAGE>
- -----------------------------------------------------------------------
- ---------
Investment Objective and Management Policies (continued)
- -----------------------------------------------------------------------
- ---------
the Fund would realize a loss on the futures contracts, which would not
be
offset by a reduction in the price of securities purchased. Where
futures
contracts are sold to hedge against a decline in the price of the
Fund's
long-term securities but the long-term market advances, the Fund would
lose part
or all of the benefit of the advance due to offsetting losses in its
futures
positions.
Foreign Currency Risks. The Fund has the ability to invest up to
5% of its
net assets in U.S. government securities where the principal repayment
amount
may be increased or decreased due to fluctuations of foreign currency
exchange
rates.
Leverage through Borrowing. The Fund may borrow up to 25% of the
value of
its net assets on an unsecured basis from banks to increase its
holdings of
portfolio securities or to acquire securities to be placed in a
segregated
account with the custodian for various purposes (e.g. to secure puts
written by
the Fund). The Fund is required to maintain continuous asset coverage
of 300%
with respect to such borrowings, and to sell (within three days)
sufficient
portfolio holdings to restore such coverage, if it should decline to
less than
300% due to market fluctuations or otherwise, even if it is
disadvantageous from
an investment standpoint. Leveraging will exaggerate the effect of any
increase
or decrease in the value of portfolio securities on the Fund's net
asset value,
and money borrowed will be subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average
balances) which
may or may not exceed the interest and option premiums received from
the
securities purchased with borrowed funds.
American Depositary Receipts. The Fund may purchase foreign
securities and
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 foreign issuer. ADRs are publicly traded on exchanges
or
over-the-counter in the United States.
Year 2000. The investment management services provided to the
Fund by MMC
and the services provided to shareholders by Salomon Smith Barney
depend on the
smooth functioning of their computer systems. Many
computer software systems in use today cannot recognize the year 2000,
but
revert to 1900 or some other date, due to the manner in which dates
were encoded
and calculated. That failure could have a negative impact on the Fund's
operations, including the handling of securities trades, pricing and
account
services. MMC and Salomon Smith Barney have advised the Fund that they
have
been
reviewing all of their computer systems and actively working on
necessary
changes to their systems to prepare for the year 2000 and expect that
their
systems will be compliant before that date. In addition, MMC has been
advised by
the Fund's custodian, transfer agent and accounting service agent that
they are
also in the process of modifying their systems with the same goal.
There can,
however, be no assurance that MMC, Salomon Smith Barney or any other
service provider
will be successful, or that interaction with other non-complying
computer
systems will not impair Fund services at that time.
11
<PAGE>
- -----------------------------------------------------------------------
- ---------
Investment Objective and Management Policies (continued)
- -----------------------------------------------------------------------
- ---------
In addition, the ability of issuers to make timely payments of
interest
and principal or to continue their operations or services may be
impaired by the
inadequate preparation of their computer systems for the year 2000.
This may
adversely affect the market values of securities of specific issuers or
of
securities generally if the inadequacy of preparation is perceived as
widespread
or as affecting trading markets.
PORTFOLIO TRANSACTIONS AND TURNOVER
MMC arranges for the purchase and sale of the Fund's securities
and
selects brokers and dealers (including Salomon Smith Barney) which, in
its best
judgment, provide prompt and reliable execution at favorable prices and
reasonable commission rates. MMC 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.
The Fund may experience high portfolio turnover as a result of
its
investment strategies. Short-term gains realized from portfolio
transactions are
taxable to shareholders as ordinary income. While the Fund does not
intend to
engage in short-term trading, it will not consider portfolio turnover
rate a
limiting factor in making investment decisions consistent with its
respective
objectives and policies.
For reporting purposes, the Fund's portfolio turnover rate is
calculated
by dividing the lesser of purchases or sales of portfolio securities
for the
fiscal 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 net asset value of Class Z shares is determined as of the
close of
regular trading on the New York Stock Exchange ("NYSE") on each day
that the
NYSE is open, by dividing the value of the Fund's net assets
attributable to
Class Z shares by the total number of Class Z shares outstanding. The
per share
net asset value of the Class Z shares may be higher than those of other
Classes
because of the lower expenses attributable to Class Z shares.
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
immediately previous valuation, then the current bid price is used.
Quotations
are taken from the exchange where the security is primarily traded.
United
States over-the-counter securities are valued on the basis of the bid
price at
the close of business on each
12
<PAGE>
- -----------------------------------------------------------------------
- ---------
Valuation of Shares (continued)
- -----------------------------------------------------------------------
- ---------
day. Securities for which market quotations are not readily available
are valued
at fair value as determined in good faith by or under the direction of
the Board
of Directors. 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.
When the Fund writes a put or call option, it records the premium
received
as an asset and equivalent liability, and thereafter adjusts the
liability to
the market value of the option determined in accordance with the
preceding
paragraph. The premium paid for an option purchased by the Fund is
recorded as
an asset and subsequently adjusted to market value.
- -----------------------------------------------------------------------
- ---------
Dividends, Distributions and Taxes
- -----------------------------------------------------------------------
- ---------
DIVIDENDS AND DISTRIBUTIONS
The Fund's policy is to declare and pay monthly dividends from
its net
investment income. Dividends from net realized capital gains, if any,
will be
distributed annually. The Fund may also pay additional dividends
shortly before
December 31 from certain amounts of undistributed ordinary income and
capital
gains realized, in order to avoid a Federal excise tax liability.
Unless a
shareholder is eligible for qualified distributions, and has instructed
that
dividends and capital gain distributions be paid in cash and credited
to their
account, any dividend or capital gain distribution paid will
automatically
reinvest in additional shares of Class Z at net asset value, with no
additional
sales charge or CDSC.
TAXES
The following is a summary of the material federal tax
considerations
affecting the Fund and Fund shareholders. Qualified plan participants
should
consult their plan document or tax advisors about the tax consequences
of
participating in a Qualified Plan. Please refer to the SAI for further
discussion. In addition to the considerations described below and in
the SAI,
there may be other federal, state, local, and/or foreign tax
applications to
consider.
The Fund will be treated as a separate taxpayer with the result
that, for
Federal income tax purposes, the qualification of the Fund as a
regulated
investment company under subchapter M of the Internal Revenue Code (the
"Code")
will be determined without regard to the qualification of the other
funds of the
Company. The Fund has qualified and intends to continue to qualify each
year
as a
regulated investment company. In each taxable year that the Fund so
qualifies
and meets certain distribution requirements, the Fund will not be
subject to
Federal income tax on its net investment income and net capital gains
that it
distributes to its shareholders. The Fund expects to distribute all of
such
income and gains each year.
13
<PAGE>
- -----------------------------------------------------------------------
- ---------
Dividends, Distributions and Taxes (continued)
- -----------------------------------------------------------------------
- ---------
Provided that a Qualified Plan has not borrowed to finance its
investment
in the Fund, it will not be taxable on the receipt of dividends and
distributions from the Fund.
Dividends and interest received by the Fund from investing in
foreign
securities may give rise to withholding and other taxes imposed by
foreign
countries. Tax conventions between certain countries and the United
States may
reduce or eliminate such taxes. The Fund's foreign tax payments will
reduce the
amount of its dividends and distributions.
The Fund is required to withhold ("backup withholding") 31% of
all taxable
dividends, capital gain distributions, and the proceeds of any
redemption,
regardless of whether gain or loss is realized upon the redemption, for
shareholders who do not provide the Fund with a correct taxpayer
identification
number (social security or employer identification number). Withholding
from
taxable dividends and capital gain distributions also is required for
shareholders who otherwise are subject to backup withholding. Any tax
withheld
as a result of backup withholding does not constitute an additional
tax, and may
be claimed as a credit on the shareholders' federal income tax return.
- -----------------------------------------------------------------------
- ---------
Purchase, Exchange and Redemption of Shares
- -----------------------------------------------------------------------
- ---------
Purchase 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 Salomon Smith Barney
(the
"trade date"). Payment is due to Salomon Smith Barney on the third
business day
(the "settlement date") after the trade date. Investors who make
payment prior
to the settlement 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 offering of shares for a 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 the Fund or Salomon Smith Barney
prior to the
close of regular trading on the NYSE, currently 4:00 p.m., Eastern
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."
Qualified Plans may redeem their shares on any day 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 deter-
14
<PAGE>
- -----------------------------------------------------------------------
- ---------
Purchase, Exchange and Redemption of Shares (continued)
- -----------------------------------------------------------------------
- ---------
mined. Shareholders acquiring Class Z shares through a Qualified Plan
should
consult the terms of their respective plans for redemption provisions.
Holders of Class Z shares should consult their Qualified Plans
for
information about available exchange options.
- -----------------------------------------------------------------------
- ---------
Performance
- -----------------------------------------------------------------------
- ---------
YIELD
From time to time, the Fund advertises the 30 day "yield" of its
Class Z
shares. The Fund's yield refers to the income generated by an
investment in
those shares over the 30 day period identified in the advertisement and
is
computed by dividing the net investment income per share earned by the
Class
during the period by the maximum public offering price per share on the
last day
of the period. This income is "annualized" by assuming the amount of
income is
generated each month over a one year period and is compounded semi-
annually. The
annualized income is then shown as a percentage of the net asset value.
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 gains 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 its Class Z
shares by
annualizing the most recent monthly distribution and dividing by the
net asset
value or the maximum public offering price (including sales charge) on
the last
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 the investment portfolio and operating expenses. These
factors
and possible differences in the methods used in calculating current
dividend
return should be considered when comparing Class Z shares' current
return to
yields published for other investment companies and other invest-
15
<PAGE>
- -----------------------------------------------------------------------
- ---------
Performance (continued)
- -----------------------------------------------------------------------
- ---------
ment vehicles. The Fund may also include comparative performance
information in
advertising or marketing its shares. Such performance information may
include
data from Lipper Analytical Services, Inc. or similar independent
services that
monitor the performance of mutual funds, or other industry
publications.
- -----------------------------------------------------------------------
- ---------
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
Company and the Fund, including agreements with the Fund's distributor,
investment adviser, administrator, custodian and transfer agent. The
day-to-day
operations of the Fund are delegated to the Fund's investment adviser
and
administrator. The SAI contains background information regarding each
Director
and executive officer of the Company.
INVESTMENT ADVISER -- MMC
The Adviser is a registered investment adviser whose principal
executive
offices are located at 388 Greenwich Street, New York, New York 10013,
and
serves as the Fund's investment adviser. The Adviser is a wholly-owned
subsidiary of Salomon Smith Barney Holdings Inc. ("Holdings"). Holdings
is a
wholly-owned subsidiary of Citigroup Inc. ("Citigroup"). Citigroup
businesses
produce a broad range of financial services -- asset management,
banking and
consumer finance, credit and charge cards, insurance, investments,
investment
banking and trading -- and use diverse channels to make them available
to
consumer and corporate customers around the world. Among these
businesses are
Citibank, Commercial Credit, Primerica Financial Services, Salomon
Smith Barney,
SSBC Asset Management, Travelers Life & Annuity, and Travelers Property
Casualty. The Adviser has been in the investment counseling business
(through
its predecessors) since 1968 and renders investment advice to a wide
variety of
individual, institutional and investment company clients that had
aggregate
assets under management as of September 30, 1998 in excess of $108
billion.
Subject to the supervision and direction of the Company's Board
of
Directors, MMC 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
portfolio
managers and securities analysts who provide research services to the
Fund. For
investment advisory services rendered, the Fund pays MMC a fee at the
following
annual rates of average daily net assets: 0.35% up to $2 billion, 0.30%
of the
next $2 billion,
16
<PAGE>
- -----------------------------------------------------------------------
- ---------
Management of the Company and the Fund (continued)
- -----------------------------------------------------------------------
- ---------
0.25% of the next $2 billion, 0.20% of the next $2 billion and 0.15% of
net
assets thereafter. For the fiscal year ended December 31, 1997, MMC was
paid
investment advisory fees equal to 0.35% of the value of the Fund's
average daily
net assets.
PORTFOLIO MANAGEMENT
James E. Conroy, Managing Director of Salomon Smith Barney, has
served as
Vice President and Investment Officer of the Fund since the Fund's
commencement
of operations (March 20, 1984) 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, 1997 is
included in the Fund's Annual Report dated December 31, 1997. A copy of
the
Annual Report may be obtained upon request without charge from a
Salomon Smith
Barney Financial Consultant or by writing or calling the Fund at the
address or
phone number listed on page one of this Prospectus.
ADMINISTRATOR -- MMC
MMC also serves as the Fund's administrator and oversees all
aspects of
the Fund's administration. For administration services rendered, the
Fund pays
MMC a fee at the annual rate of 0.20% of the value of the Fund's
average daily
net assets.
On October 8, 1998, Travelers Group Inc. ("Travelers") and
Citicorp
consummated their merger, creating a new entity called Citigroup. By
approving
the merger, the Federal Reserve Board approved Travelers, as the
surviving
entity, becoming a bank holding company subject to regulation under the
Bank
Holding Company Act of 1956, the requirements of the Glass-Steagall Act
and
certain other laws and regulations. MMC does not believe that its
compliance
with the applicable law will have a material adverse effect on its
ability to
continue to provide the Fund with the same level of investment advisory
services
that it currently receives.
DISTRIBUTOR
CFBDS, Inc. is located at 21 Milk Street, Boston, MA 02109-5408
and serves
as the Fund's distributor.
- -----------------------------------------------------------------------
- ---------
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,
L, 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
designation of each Class;
17
<PAGE>
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- ---------
Additional Information (continued)
- -----------------------------------------------------------------------
- ---------
(b) the effect of the respective sales charges for each Class; (c) the
distribution and/or service fees borne by each Class; (d) the expenses
allocable
exclusively to each Class; (e) voting rights on matters exclusively
affecting a
single Class; (f) the exchange privilege of each Class; and (g) the
conversion
feature of the Class B shares. The Board of Directors does not
anticipate that
there will be any conflicts among the interests of the holders of the
different
Classes. The Directors, on an ongoing basis, will consider whether any
such
conflict exists and, if so, take appropriate action.
PNC Bank, located at 17th and Chestnut Streets, Philadelphia PA
19103,
serves as custodian of the Company's investments.
First Data, located at Exchange Place, Boston, Massachusetts
02109, 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
purpose
upon written request of shareholders holding at least 10% of the
Company's
outstanding shares and the Company will assist shareholders in calling
such a
meeting as required by the 1940 Act. When matters are submitted for
shareholder
vote, shareholders of each Class will have one vote for each full share
owned
and a proportionate fractional vote for any fractional share held of
that Class.
Generally, shares of the 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, 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
household
having multiple accounts with the identical address of record will
receive a
single copy of each report. Shareholders who do not want this
consolidation to
apply to their account should contact their Salomon Smith Barney
Financial
Consultants or First Data.
18
<PAGE>
SALOMON
SMITH BARNEY
---
- ---------
A Member of Citigroup
[LOGO]
Smith Barney
Government
Securities
Fund
388
Greenwich Street
New York, New
York 10013
FD
0234 11/98
PART B
The Statement of Additional Information for Class A, Class B, Class L
and Class Y shares of the Smith Barney Government Securities Fund is
incorporated by reference to Part B of Post-Effective Amendment No.48
to the Fund's Registration Statement filed on April 30, 1998 (accession
No. 91155-98-296).
PART C
Item 24. Financial Statements and Exhibits
a) Financial Statements:
Included in Part A:
Included in Part B:
The Registrant's Semi-Annual Reports for series whose fiscal period ended
June 30, 1998 are incorporated by reference to the Definitive 30b2-1
filed on September 25, 1998 as Accession #0000091155-98-573.
The Registrant's Annual Reports for series whose fiscal year ended
December 31, 1997 and the Report of Independent Auditors dated February
10, 1998 are incorporated by reference to the Definitive 30b2-1 filed on
March 10, 1998 as Accession #0000091155-98-157.
The Registrant's Annual Reports for series whose fiscal year ended April
30, 1998 and the Report of Independent Auditors dated June 12,1998 are
incorporated by reference to the Definitive 30b2-1 filed on July 9,1998
as Accession #0000091155-98-444.
(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 reference to Post-Effective Amendment No. 37 to the
Registration Statement filed on November 7, 1994.
Articles of Amendment dated October 23, 1997 are
incorporated by reference to Post-Effective Amendment
No. 46 dated October 23, 1997("Post-Effective
Amendment No.46"). Articles of Amendment dated
February 27, 1998 are incorporated by reference
to Post-Effective Amendment No. 48 dated April 29, 1998.
Articles of Amendment dated June 1, 1998 are incorporated
by reference to Post-Effective Amendment No. 49.
(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 Smith
Barney Hansberger Global Value Fund ("Global Value
Fund") and Smith Barney Hansberger Global Value Small
Cap Fund ("Small Cap Fund") is incorporated by
reference to Post Effective Amendment 46.
(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 Greenwich 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 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.
(c) Investment Management Agreements on behalf of
Global Value Fund and Global Small Cap Fund between
Registrant and Smith Barney Mutual Funds Management
Inc. is incorporated by reference to Post-Effective
Amendment No. 46.
(d) Sub-Advisory Agreement on behalf of Global
Value Fund and Global Small Cap Fund between MMC and
Hansberger Global Investors Inc. is
incorporated by reference to Post-Effective
Amendment No. 46.
(e)Investment Management Agreements on behalf of
Smith Barney Small Cap Growth Fund and Smith Barney
Small Cap Value Fund between Registrant and
Mutual Management Corp. is incorporated by reference
To Post-Effective Amendment No. 49.
(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) 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.
(c) Form of Distribution Agreement between the
Registrant and CFBDS, Inc. is incorporated by reference
To Post-Effective Amendment No. 49.
(7) Not Applicable.
8 (a) Custodian Agreement with PNC Bank, National
Association is incorporated by reference to Post -
Effective Amendment No. 44 filed on April 29, 1997.
(b) Custodian Agreement with Chase Manhattan Bank
is incorporated by reference to Post-Effective
Amendment No. 46.
9 (a) Transfer Agency and Registrar Agreement dated
August 5, 1993 with First Data Investor Services
Group, Inc. (formerly The Shareholder Services Group,
Inc.) is incorporated by reference to Post-Effective
Amendment No. 31 as filed on December 22, 1993 (Post-
Effective Amendment No. 31").
(b)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. 40 filed on
June 27, 1995.
(10) Opinion of Robert A. Vegliante, Deputy General
Counsel of Smith Barney Mutual Funds Management Inc.
filed with the Registrant's rule 24-f2 Notice
(Accession No. 000091155-97-000104) is incorporated by
reference.
(11) To be filed by amendment.
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) (a) Amended Services and Distribution Plans
pursuant to Rule 12b-1 between the Registrant on behalf
of Smith Barney Investment 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.
(c) Form of Services and Distribution Plans
pursuant to Rule 12b-1 between the Registrant on
behalf of the Global Value Fund and Small Cap Fund is
incorporated by reference to Post-Effective Amendment
No. 46.
(d) Form of Amended and Restated Shareholder Services and
Distribution Plan pursuant to Rule 12b-1 between
the Registrant on behalf of each of its series
is incorporated by reference to Post-Effective Amendment
No. 49.
(16) Performance Data is incorporated by reference to
Post-Effective Amendment No. 22 as filed on May 1,
1989.
(17) Filed herein.
(18) Form of Plan pursuant to Rule 18f-3 is incorporated by
reference to Post-Effective Amendment No.50 to
Registration Statement.
Item 25 Persons Controlled by or Under Common Control
with Registrant
None.
Item 26. Title of Class Number of Record Holders
As of November 9, 1998
Smith Barney
Investment Grade Bond Fund
Class A 12,778
Class B 12,583
Class C 844
Class Y 3
Smith Barney
Government Securities Fund
Class A 20,254
Class B 5,584
Class C 228
Class Y 10
Smith Barney
Contrarian Fund
Class A 11,433
Class B 29,109
Class C 3,094
Class Y 5
Class Z 1
Smith Barney
Special Equities Fund
Class A 17,530
Class B 24,063
Class C 1,657
Class Y 5
Class Z 1
Concert
Peachtree Growth Fund
Class A 118
Class B 241
Class C 33
Class Y 6
Smith Barney Hansberger Global Small Cap
Value Fund
Class A 632
Class B 1,489
Class C 412
Class Y 2
Smith Barney Hansberger Global Value Fund
Class A 1,996
Class B 4,621
Class C 1,244
Class Y 8
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 -Mutual Management Corp.("MMC")
formerly Smith Barney Mutual Funds Management Inc.
MMC was incorporated in December 1968 under the laws
of the State of Delaware. MMC is a wholly owned
subsidiary of Salomon Smith Barney Holdings Inc.
("Holdings")(formerly known as Smith Barney Holdings
Inc.), which in turn is a wholly owned subsidiary of
Citigroup Inc. MMC 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 MMC together with
information as to any other business, profession,
vocation or employment of a substantial nature engaged
in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and
D of FORM ADV filed by MMC pursuant to the Advisers
Act (SEC File No. 801-8314).
Item 29. Principal Underwriters
(a) CFBDS, Inc. the Registrant's Distributor, is also
the distributor for
CitiFundsSM International Growth & Income Portfolio,
CitiFundsSM International Equity Portfolio, CitiFundsSM Large Cap
Growth
Portfolio, CitiFundsSM Intermediate Income Portfolio,
CitiFundsSM Short-Term U.S. Government Income Portfolio,
CitiFundsSM Emerging Asian Markets Equity Portfolio,
CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash Reserves,
CitiFundsSM Premium U.S. Treasury Reserves,
CitiFundsSM Premium Liquid Reserves, CitiFundsSM Institutional U.S.
Treasury Reserves, CitiFundsSM Institutional Liquid Reserves,
SM Institutional Cash Reserves, CitiFundsSM Tax Free Reserves,
CitiFundsSM Institutional Tax Free Reserves,
CitiFundsSM California Tax Free Reserves,
CitiFundsSM Connecticut Tax Free Reserves,
CitiFundsSM New York Tax Free Reserves, CitiFundsSM Balanced Portfolio,
CitiFundsSM Small Cap Value Portfolio, CitiFundsSM Growth & Income
Portfolio,
CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM National
Tax Free Income Portfolio, CitiFundsSM New York Tax Free Income
Portfolio,
CitiSelect VIP Folio 200, Citiselect VIP Folio 300,
CitiSelect (VIP Folio 400, CitiSelect (VIP Folio 500,
CitiFundsSM Small Cap Growth VIP Portfolio, CitiSelect (Folio 200,
CitiSelect (Folio 300, CitiSelect (Folio 400, and CitiSelect (Folio
500.
CFBDS is also the placement agent for Large Cap Value Portfolio,
International Portfolio, Foreign Bond Portfolio,
Intermediate Income Portfolio, Short-Term Portfolio,
Growth & Income Portfolio, Large Cap Growth Portfolio,
Small Cap Growth Portfolio, International Equity Portfolio,
Balanced Portfolio, Government Income Portfolio, Emerging
Asian Markets Equity Portfolio, Tax Free Reserves Portfolio,
Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio.
CFBDS, Inc. is also the distributor for the following
Smith Barney Mutual Fund registrants:
Consulting Group Capital Markets Funds
Global Horizons Investment Series (Cayman Islands)
Greenwich Street Series Fund
Puerto Rico Daily Liquidity Fund Inc.
Smith Barney Adjustable Rate Government Income Fund
Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc.
Smith Barney Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund Inc.
Smith Barney Concert Allocation Series Inc.
Smith Barney Equity Funds
Smith Barney Fundamental Value Fund Inc.
Smith Barney Funds, Inc.
Smith Barney Income Funds
Smith Barney Institutional Cash Management Fund, Inc.
Smith Barney Investment Trust
Smith Barney Managed Governments Fund Inc.
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Money Funds, Inc.
Smith Barney Muni Funds
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Natural Resources Fund Inc.
Smith Barney New Jersey Municipals Fund Inc.
Smith Barney Oregon Municipals Fund Inc.
Smith Barney Principal Return Fund
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Telecommunications Trust
Smith Barney Variable Account Funds
Smith Barney World Funds, Inc.
Smith Barney Worldwide Special Fund N.V. (Netherlands
Antilles)
Travelers Series Fund Inc.
The USA High Yield Fund N.V.(Netherlands Antilles)
Worldwide Securities Limited (Bermuda).
Zenix Income Fund Inc.
And various series of unit investment trusts.
CFBDS, Inc. is also the distributor for the following
Salomon Brothers funds;
Salomon Brothers Opportunity Fund Inc.
Salomon Brothers Investors Fund Inc.
Salomon Brothers Capital Fund Inc.
Salomon Brothers Series Funds Inc.
Salomon Brothers Institutional Series Funds Inc.
Salomon Brothers Variable Series Funds Inc.
The information required by this Item 29 with respect
to each director, officer and partner of CFBDS, Inc.
is incorporated by reference to Schedule A of Form BD
filed by CFBDS, Inc. pursuant to the Securities
Exchange Act of 1934 (SEC File No. 8-32417).
Item 30. Location of Accounts and Records
(1) Smith Barney Investment Funds Inc.
388 Greenwich Street
New York, New York 10013
(2) Mutual Management Corp.
388 Greenwich Street
New York, New York 10013
(3) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, PA
(4) The Chase Manhattan Bank
Chase Metrotech Center
Brooklyn, New York 11245
(5) First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(6) CFBDS Inc.
21 Milk Street, 5th floor
Boston, Massachusetts 02109
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not applicable
(b) Not applicable
(c) 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.
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 INC., has duly caused this Amendment
to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized,
all in the City of New York, State of New York on the
12th day of November, 1998.
SMITH BARNEY INVESTMENT FUNDS INC.
By: /s/ Heath B. McLendon*
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 Date
/s/ Heath B. McLendon Chairman of the Board 11/12/98
Heath B. McLendon (Chief Executive Officer)
/s/ Lewis E. Daidone Senior Vice President
Lewis E. Daidone and Treasurer 11/12/98
(Chief Financial
and Accounting Officer)
/s/ Paul R. Ades * Director 11/12/98
Paul R. Ades
/s/ Herbert Barg* Director 11/12/98
Herbert Barg
/s/ Dwight B. Crane* Director 11/12/98
Dwight B. Crane
/s/ Frank Hubbard* Director 11/12/98
Frank Hubbard
/s/ Jerome Miller** Director 11/12/98
Jerome Miller
/s/ Ken Miller* Director 11/12/98
Ken Miller
*Signed by Heath B. McLendon, their duly authorized
attorney-in-fact, pursuant
to power of attorney dated November 3, 1994.
**Signed by Heath B. McLendon, their duly authorized
attorney-in-fact, pursuant
to power of attorney dated April 15, 1998.
/s/ Heath B. McLendon
Heath B. McLendon
EXHIBITS
Exhibit No. Description of Exhibit
(17) Financial Data Schedule
Cover page
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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.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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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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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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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.
<TABLE> <S> <C>
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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.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> SMITH BARNEY INVESTMENT FUNDS INC.
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