<PAGE>
[GRAPHIC]
Smith Barney Hansberger
Global Value Fund
[GRAPHIC]
Smith Barney Hansberger
Global Small Cap
Value Fund
------------------------------------------
ANNUAL REPORT
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April 30, 1999
[LOGO]
HANSBERGER
Smith Barney GLOBAL
Mutual Funds INVESTORS, INC.
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Smith Barney
Hansberger Funds
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"Our shareholders are willing to look beyond national borders. They've employed
us to look for value wherever it can be found. Our clients are willing to take
the long view, undistracted by the ups and downs of local markets."
Thomas Hansberger, CFA, CIC
Chairman and Chief Executive Officer
Hansberger Global Investors, Inc. (HGI)
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The Smith Barney Hansberger Global Value Fund seeks long-term capital growth by
investing primarily in the equity securities of U.S. and foreign companies that
are believed by the Fund's management team to be undervalued.
NASDAQ Symbol
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Class A SGLAX
Class B SGLBX
Class L SGLCX
The Smith Barney Hansberger Global Small Cap Value Fund seeks long-term capital
growth by investing primarily in the equity securities of U.S. and foreign
companies with relatively small market capitalizations that are believed by the
Fund's management team to be undervalued.
NASDAQ Symbol
-------------
Class B SCVBX
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WHAT'S INSIDE
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Shareholder Letter.............................................................1
Smith Barney Hansberger Global Value Fund
Portfolio Manager Commentary.................................................2
Historical Performance.......................................................4
Smith Barney Hansberger Global Small Cap
Value Fund
Portfolio Manager Commentary.................................................7
Historical Performance.......................................................9
Schedules of Investments......................................................12
Statements of Assets and Liabilities..........................................21
Statements of Operations......................................................22
Statements of Changes in Net Assets...........................................23
Notes to Financial Statements.................................................25
Financial Highlights..........................................................32
Independent Auditors' Report..................................................36
Tax Information...............................................................37
<PAGE>
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Shareholder Letter
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[PHOTO] [PHOTO]
HEATH B. THOMAS L.
MCLENDON HANSBERGER,
CFA, CIC
Chairman
Chairman and Chief
Executive Officer
Hansberger Global
Investors, Inc.
Dear Shareholder:
We are pleased to present the annual report for the Smith Barney Hansberger
Global Value Fund and the Smith Barney Hansberger Global Small Cap Value Fund
("Funds") for the year ended April 30, 1999. In this report, we summarize the
period's prevailing economic and market conditions and outline each Fund's
investment strategy. Detailed summaries of each Fund's performance and current
holdings can be found in the appropriate sections that follow. We hope you find
this report to be useful and informative.
A Team Approach to Uncovering Global Value
Hansberger Global Investors, Inc. ("HGI") is a leader in global investing. HGI
is made up of experienced value managers who emphasize thorough, hands-on
fundamental research. The portfolio managers follow a team approach to investing
and have access to an extensive global network supported by knowledgeable local
contacts.
The Smith Barney Hansberger Global Value Fund Team
Thomas L. Hansberger, CFA, CIC, Chairman and
Chief Executive Officer of HGI
James E. Chaney, Chief Investment Officer of HGI
John Hock, CFA, Senior Vice President of Research of HGI
Francisco Alzuru, Managing Director of HGI, Latin America
The Smith Barney Hansberger Global Small Cap Value Fund Team
Lauretta Reeves, CFA, Managing Director of Research of HGI
Vladimir Tyurenkov, Managing Director of HGI,
Eastern Europe & Russia
Charles F. Gulden, CFA, Senior Vice President of Research of HGI
Ronald Holt, Vice President of Research of HGI
Thank you for investing in the Smith Barney Hansberger Global Value Fund and the
Smith Barney Hansberger Global Small Cap Value Fund. We look forward to helping
you pursue your financial goals in the years to come.
Sincerely,
/s/ Heath B. McLendon /s/ Thomas L. Hansberger
Heath B. McLendon Thomas L. Hansberger,
Chairman CFA, CIC
Chairman and Chief
Executive Officer
Hansberger Global
Investors, Inc.
May 28, 1999
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Smith Barney Hansberger Funds 1
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Smith Barney Hansberger Global Value Fund
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Performance Update
For the year ended April 30, 1999, the Smith Barney Hansberger Global Value Fund
("Global Value Fund") Class A, Class B and Class L shares (without sales
charges) had negative returns of 6.56%, 7.27% and 7.27%, respectively. This
compares unfavorably with the 15.10% return for the Morgan Stanley Capital
International ("MSCI") All-Country Index over the same period. For the first
four months of 1999, the Global Value Fund had returns of 13.85%, 13.57% and
13.57% for the Class A, Class B and Class L shares (without sales charges),
respectively. This compares with a return of 8.40% for the MSCI All-Country
Index over the same period.
Global Markets and Portfolio Review
Trends in global equity markets during recent years have led to a great
divergence in performance, primarily favoring "momentum" stocks at the expense
of "value" stocks. In our opinion, a frenzy was created in which many investors
were willing to pay any price for certain "momentum" stocks, particularly if a
stock's name ends in ".com."
Our disciplined fundamental investment process has steered us away from such
companies in favor of much more attractively priced stocks with favorable
earnings prospects that we believe are selling at meaningful discounts to their
intrinsic values. Many of these stocks are leaders in their respective
industries, but cyclical factors have caused entire industries to fall out of
favor. Similarly, the macro uncertainties in Asia and certain emerging markets
have led to extreme share price weakness early in 1998, but share prices have
begun to recover aggressively.
Our efforts to take advantage of these opportunities have only recently begun to
be rewarded. We have continued to increase our exposure to Japan while making
limited changes in Europe. Our substantial underweight exposure in the U.S. hurt
the Fund's relative performance last year, but we believe the fundamental
condition of global equities warrants such a low weighting in favor of
opportunities outside of the U.S. Our fundamental value discipline has been
effective over the long-term and we believe that the unusual performance trends
that were evident in global equity markets during 1997 and 1998 should return to
normalcy.
Although 1998 experienced a continuation of the trend in which large-cap
"momentum" stocks led the markets in Europe and the U.S., it appears that
investors have begun to recognize that fundamentals and valuations do matter.
One of the catalysts that has caused a reversal in this trend could be the
possible bottoming of commodity prices. Commodity prices experienced a
precipitous drop between late 1996 and early 1999. This decline put excessive
pressure on commodity sensitive stocks, particularly those in the oil, base
metals, chemicals, and paper/forest product industries. We took advantage of
this excessive weakness to buy positions in what we believed were quality
companies that are global leaders in their respective industries. As oil prices
responded to OPEC production cuts and commodity prices appear to have bottomed
out, many of these stocks have staged strong recoveries.
Commodity prices have had a pronounced impact on the performance of stocks
domiciled in emerging markets as well. Many commodity-dependent developing
countries were under great duress as oil and other commodity prices collapsed.
This concern combined with additional uncertainties contributed to escalating
risk perceptions that ultimately caused weakness among emerging market stocks.
This broad-based weakness caused many large, world class, and
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2 1999 Annual Report to Shareholders
<PAGE>
low-cost operators to fall to depressed levels. Recognizing this value and
prospects for underlying earnings growth potential, we bought several stocks
throughout Asia and to a lesser extent, Eastern Europe and Latin America.
Although we have begun to see strong recoveries in most of these positions,
these stocks continue to sell at substantial discounts to their intrinsic values
and relative to their global peers.
Much of our investment activity in the United States and Europe included
investments in mid-cap stocks. On a stock-by-stock basis, we have continued to
identify what we believed were superior fundamentals and valuations in this
sector. Although large-cap stocks have been the strongest performers in recent
years, we expect the values to converge in favor of mid caps. One catalyst that
has contributed to the recent recovery in many of the fund's mid-cap holdings is
merger and acquisition activity as large-cap companies, management, and/or
financial buyers recognize the value in this segment of the marketplace.
From a geographical perspective, the Fund's portfolio is significantly
underweighted in the United States, neutral in Europe, and overweighted in Asia
versus the benchmark. The low U.S. exposure (i.e., 9.5%) is consistent with our
belief that many U.S. stocks are priced for perfection at a time when earnings
growth prospects are becoming more difficult. However, there has been great
divergence among stock performance in the U.S. and our analysts are uncovering
occasional new opportunities. The introduction of the Euro currency has been
greeted with some disappointment as the currency has weakened moderately since
its introduction.
Europe is currently attempting to address a situation in which economic
conditions in member countries are diverging while a single monetary policy must
be applied to them all. We believe that opportunities exist in Europe, but most
stocks are overvalued, particularly when compared with valuations elsewhere.
Within Europe, our emphasis has shifted from Southern Europe to Northern Europe
including the UK and Scandinavia. The Japanese exposure has increased from 2% to
11% during the last twelve months due to share price appreciation and net
purchases of new positions.
We have highlighted the key drivers that have influenced the portfolio during
the last twelve months. Our exposure to commodity-sensitive stocks, emerging
market companies, and mid-cap stocks, and our underexposure to the U.S. stock
market hurt the Fund's performance in 1998. But these same variables have
contributed to our recovery so far this calendar year. In addition to these
issues, the portfolio has substantial representation in the telecommunications,
building materials, and more selectively, in the financial services industries.
As of April 30, 1999, the Fund's portfolio was invested in 126 companies that
are domiciled in 38 countries. Each of these stocks passed our rigorous
fundamental analysis and they collectively represent some of the most
undervalued companies in the world. We recognize that recent years have been
difficult for disciplined value investors, but we believe that we are in the
early stages of a recovery in which fundamentals and valuations may be
reemerging as the primary determinants of investment performance. We appreciate
your patience and investment in the Smith Barney Hansberger Global Value Fund.
Please see pages four through six for additional Fund performance information.
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Smith Barney Hansberger Funds 3
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Historical Performance -- Class A Shares
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Net Asset Value
------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/99 $12.99 $12.00 $0.12 (6.56)%
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Inception* -- 4/30/98 11.40 12.99 0.02 14.13+
================================================================================
Total $0.14
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Historical Performance -- Class B Shares
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Net Asset Value
------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/99 $12.96 $11.97 $0.04 (7.27)%
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Inception* -- 4/30/98 11.40 12.96 0.02 13.87+
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Total $0.06
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Historical Performance -- Class L Shares(2)
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Net Asset Value
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Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/99 $12.96 $11.97 $0.04 (7.27)%
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Inception* -- 4/30/98 11.40 12.96 0.02 13.87+
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Total $0.06
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Historical Performance -- Class Y Shares
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Net Asset Value
------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/99 $13.00 $12.03 $0.15 (6.17)%
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Inception* -- 4/30/98 12.44 13.00 0.00 4.50+
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Total $0.15
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It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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4 1999 Annual Report to Shareholders
<PAGE>
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Average Annual Total Returns
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Without Sales Charges(1)
--------------------------------------------
Class A Class B Class L(2) Class Y
================================================================================
Year Ended 4/30/99 (6.56)% (7.27)% (7.27)% (6.17)%
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Inception* through 4/30/99 4.84 4.08 4.08 (2.33)
================================================================================
With Sales Charges(3)
--------------------------------------------
Class A Class B Class L(2) Class Y
================================================================================
Year Ended 4/30/99 (11.21)% (11.89)% (9.10)% (6.17)%
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Inception* through 4/30/99 0.96 1.17 3.28 (2.33)
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Cumulative Total Return
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Without Sales Charges(1)
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Class A (Inception* through 4/30/99) 6.64%
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Class B (Inception* through 4/30/99) 5.59
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Class L (Inception* through 4/30/99)(2) 5.59
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Class Y (Inception* through 4/30/99) (2.65)
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(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charge of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from initial purchase.
Thereafter, this CDSC declines by 1.00% per year until no CDSC is
incurred. Class L shares also reflect the deduction of a 1.00% CDSC, which
applies if shares are redeemed within the first year of purchase.
+ Total returns are not annualized, as it may not be representative of the
total return for the year.
* The inception date for Class A, B and L shares is December 19, 1997 and
the inception date for Class Y shares is March 10, 1998.
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Smith Barney Hansberger Funds 5
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Global Value Fund at a Glance (unaudited)
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Growth of $10,000 Invested in Class A, B and L Shares of the
Global Value Fund vs. MSCI All Country World Free Index+
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December 1997--April 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
Global Value Fund Global Value Fund Global Value Fund MSCI All Country
Class A Class B Class L World Free Index
----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Dec 19 1997 9,500 9,500 9,900 10,000
Jan 1998 9,582 9,578 9,978 10,354
Apr 1998 10,842 10,887 11,287 11,643
Jul 1998 9,390 9,349 9,742 11,631
Oct 1998 8,589 8,531 8,890 11,132
Jan 1999 8,865 8,885 9,254 12,609
Apr 30 1999 10,131 10,159 10,559 13,399
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A, B and L shares
at inception on December 19, 1997, assuming deduction of the maximum
initial sales charge of 5.00% for Class A. It also assumes the deduction
of the maximum 5.00% and 1.00% CDSCs for Class B and L shares,
respectively, and the reinvestment of dividends and capital gains, if any,
at net asset value through April 30, 1999. The Morgan Stanley Capital
International ("MSCI") All Country World Free Market Index includes 46
markets, of which emerging markets represent approximately 9.5% and
excludes shares which are not readily purchased by non-local investors.
The performance of the Fund's other classes may be greater or less than
the shares' performance indicated on this chart, depending on whether
greater or lesser sales charges and fees were incurred by shareholders
investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Top Ten Holdings* As of April 30, 1999
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1. City Developments Ltd. 2.3%
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2. United Overseas Bank Ltd. 2.0
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3. Pohang Iron & Steel Co. Ltd. 1.9
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4. Hutchison Whampoa Ltd. 1.8
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5. Yamanouchi Pharmaceutical Co. Ltd. 1.7
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6. Philippines Long Distance Telephone Co. 1.5
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7. Marubeni Corp. 1.5
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8. Cable & Wireless PLC 1.5
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9. GTE Corp. 1.4
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10. Daito Trust Construction Co. Ltd. 1.3
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* As a percentage of total stocks.
Investment Allocation as of April 30, 1999**
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[PIE CHART]
Africa 0.4%
Repurchase Agreement 2.7%
Europe 41.1%
Asia/Pacific 39.5%
North America 13.2%
South America 3.1%
** As a percentage of total investments.
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6 1999 Annual Report to Shareholders
<PAGE>
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Smith Barney Hansberger Global Small Cap Value Fund
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Performance Update
For the year ended April 30, 1999, the Smith Barney Hansberger Global Small Cap
Value Fund ("Global Small Cap Value Fund") Class A, Class B and Class L shares
(without sales charge) had negative returns of 15.95%, 16.61% and 16.77%,
respectively. This compares unfavorably with the negative 3.09% return for the
Salomon Smith Barney World Extended Market Index. As of April 30, 1999, the Fund
owned securities of 81 companies in 26 countries.
Portfolio Review
United States
The U.S. remained the country in which the Fund had the largest exposure during
its fiscal year ended April 30, 1999, due mainly to two factors:
1. U.S. small-cap companies, in general, continued to trade at a significant
discount versus their larger-cap competitors in the same industries.
2. In our view, the depth and breadth of the U.S. small cap market gave the
Fund ample opportunity to diversify its exposure across industry groups.
At the commencement of its fiscal year, the Global Small Cap Value Fund held
many cyclically sensitive companies such as those providing industrial and
engineering components, chemicals and packaging materials and equipment. The
Global Small Cap Value Fund maintained little exposure to health care and high
technology companies, whose price to earnings ("P/E") multiples we viewed as too
rich versus their prospects.
As the Global Small Cap Value Fund's fiscal year progressed, however, other
investors' interest increased generally in technology and other high-growth
stocks at the expense of stocks with lower P/E multiples. As the gap in
valuations between value and growth stocks widened throughout 1998, we continued
to add to companies in "out-of-favor" sectors such as basic materials, medical
supply manufacturers, pharmaceutical distributors, specialty retailers and
apparel manufacturers. With some exceptions, the industries in which the Fund
was overweighted remained "out-of-favor" the remainder of 1998.
In the beginning of 1999, however, we have begun to see several encouraging
signs such as:
1. Stabilization in the global supply/demand of many commodities drove up
prices of raw materials and the stock prices of companies that provided
those raw materials.
2. Many investors began to rotate out of companies with high P/E to growth
ratios and into "value" stocks.
3. Many investors began looking at small- to mid-cap value companies where
the opportunity for price appreciation appeared even better.
As a result of these changes in investor sentiment, we began to see a rebound in
many of the U.S. stocks held by the Fund. We took advantage of this rebound to
trim back some issues that had grown into larger segments of the Fund's
portfolio and to sell some stocks which, due in part to market forces, did not
offer what we thought were the same favorable prospects as when originally
purchased.
Although we do not expect such a dramatic rebound in small-cap value stocks in
the U.S. to continue at this pace, our analysis indicates that many of our
holdings are still trading with "current P/E to growth rates" at significant
discounts to the "P/E to growth rates" of larger-cap and growth stocks. We
believe, therefore, that there is still room for price improvement in our U.S.
holdings. In the meantime, a continuation of the sector rotation we have seen in
the U.S. may give us an opportunity to expand our representation in other
industries.
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Smith Barney Hansberger Funds 7
<PAGE>
Europe
The Fund had significant exposure to Europe throughout its fiscal year. Our
largest country exposure within Europe was the UK. During 1998, many investors
emphasized the countries scheduled to implement the Euro at the beginning of
1999 at the expense of the UK, whose economy was under pressure from high
interest rates and a strong currency. Anticipating an eventual reduction in
rates and weakening currency, we bought several securities in the UK that were
trading at discounts to their continental competitors. Since the beginning of
the Fund's fiscal year, interest rates were cut several times in the UK, the
pound has weakened vis-a-vis the dollar and some of the Fund's holdings have
performed well. The pound continues, however, to remain strong versus the Euro,
which has weakened during the Kosovo crisis and continues to erode the
competitiveness of some UK exporters.
We believe that, over time, the UK interest rate and inflation policies will
converge with that of the Euro-11, that the pound will weaken versus the Euro,
and that the UK will adopt the Euro currency. All of these events would be
positive for the Fund's overweighted exposure in the UK.
Within Europe, we also maintained an overweight exposure in Scandinavia and
other countries outside of the Euro, whose stocks were trading at what we
believed were attractive valuations. In addition, we found value in cyclically
sensitive European companies, whose stocks were depressed due to low prices of
forest products, chemicals and metals. During 1998, industry conditions and the
prices of these stocks deteriorated further. Since the beginning of 1999, we
have seen some rebound in both commodity prices and many of our European
holdings. In our opinion, many of these stocks are still trading at a large
discount to previous highs and offer significant price appreciation potential
versus our U.S. holdings. In addition, we believe the Fund's Eastern European
holdings should benefit from the settlement of the Kosovo crisis. We expect,
that Europe should remain the region to which the Fund maintains the greatest
exposure over the medium term.
Asia
At the beginning of the Fund's fiscal year, we found opportunities extremely
compelling in Asia following the devaluation of many Asian currencies and the
subsequent financial, social and political crisis that occurred throughout Asia.
Our concerns over the viability of small-cap companies in emerging markets
during this period limited our developing Asian exposure to China, Indonesia and
Thailand.
During the reporting period, the Fund's main Asian exposure was in the developed
markets of New Zealand and Hong Kong, whose stock markets also were depressed
due to weakness in the region and in Japan, whose market had been declining for
some time and where valuations looked attractive. Throughout most of 1998, we
saw a deterioration in many stock prices in Asia. During this period, we
consolidated our exposure, moving out of positions that we believed had less
favorable outlooks and into companies that had become, in our view, better
values.
Since the beginning of 1999, we have seen a considerable rebound in many of the
Asian stocks held in the Fund's portfolio returning to or exceeding levels at
which the Fund originally made purchases. Some positions, especially those that
are export- or commodity-oriented in New Zealand, China and Hong Kong began to
reach our sell targets or have become significant weightings in the portfolio.
We have started to trim some of those stocks and have deployed some of the sale
proceeds into other Hong Kong, Australian and Japanese issues. We are now
reassessing select companies in Thailand, Malaysia and Indonesia whose stock
prices are lagging.
Please see pages nine through eleven for additional performance information.
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8 1999 Annual Report to Shareholders
<PAGE>
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Historical Performance -- Class A Shares
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Net Asset Value
------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
================================================================================
4/30/99 $12.37 $10.19 $0.16 $0.03 (15.95)%
- --------------------------------------------------------------------------------
Inception* -- 4/30/98 11.40 12.37 0.01 0.00 8.64+
================================================================================
Total $0.17 $0.03
================================================================================
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Historical Performance -- Class B Shares
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
================================================================================
4/30/99 $12.34 $10.16 $0.09 $0.03 (16.61)%
- --------------------------------------------------------------------------------
Inception* -- 4/30/98 11.40 12.34 0.01 0.00 8.38+
================================================================================
Total $0.10 $0.03
================================================================================
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Historical Performance -- Class L Shares(2)
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Net Asset Value
------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
================================================================================
4/30/99 $12.34 $10.14 $0.09 $0.03 (16.77)%
- --------------------------------------------------------------------------------
Inception* -- 4/30/98 11.40 12.34 0.01 0.00 8.38+
================================================================================
Total $0.10 $0.03
================================================================================
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Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
================================================================================
4/30/99 $12.37 $10.22 $0.19 $0.03 (15.49)%
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Inception* -- 4/30/98 11.74 12.37 0.00 0.00 5.37+
================================================================================
Total $0.19 $0.03
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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Smith Barney Hansberger Funds 9
<PAGE>
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Average Annual Total Returns
- --------------------------------------------------------------------------------
Without Sales Charges(1)
---------------------------------------------
Class A Class B Class L(2) Class Y
================================================================================
Year Ended 4/30/99 (15.95)% (16.61)% (16.77)% (15.49)%
- --------------------------------------------------------------------------------
Inception* through 4/30/99 (6.45) (7.16) (7.29) (10.08)
================================================================================
With Sales Charges(3)
---------------------------------------------
Class A Class B Class L(2) Class Y
================================================================================
Year Ended 4/30/99 (20.14)% (20.72)% (18.38)% (15.49)%
- --------------------------------------------------------------------------------
Inception* through 4/30/99 (9.91) (9.86) (8.00) (10.08)
================================================================================
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Cumulative Total Return
- --------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 4/30/99) (8.68)%
- --------------------------------------------------------------------------------
Class B (Inception* through 4/30/99) (9.62)
- --------------------------------------------------------------------------------
Class L (Inception* through 4/30/99)(2) (9.80)
- --------------------------------------------------------------------------------
Class Y (Inception* through 4/30/99) (11.41)
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charge of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from initial purchase.
Thereafter, this CDSC declines by 1.00% per year until no CDSC is
incurred. Class L shares also reflect the deduction of a 1.00% CDSC, which
applies if shares are redeemed within the first year of purchase.
+ Total returns are not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, B and L shares is December 19, 1997 and the
inception date for Class Y shares is March 10, 1998.
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10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Global Small Cap Value Fund at a Glance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A, B and L Shares of the
Global Small Cap Value Fund vs. Salomon Smith Barney World Extended Market
Index+
- --------------------------------------------------------------------------------
December 1997--April 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
Small Cap Value Fund Small Cap Value Fund Small Cap Value Fund SSB World Extended
Class A Class B Class L Market Index
-------------------- -------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Dec 19 1997 9,500 9,500 9,900 10,000
Jan 1998 9,069 9,061 9,443 10,313
Apr 1998 10,321 10,338 10,738 11,659
Jul 1998 9,044 9,003 9,382 10,850
Oct 1998 7,734 7,685 8,008 9,933
Jan 1999 8,011 8,032 8,362 10,808
Apr 30 1999 8,675 8,682 9,020 11,299
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A, B and L shares
at inception on December 19, 1997, assuming deduction of the maximum
initial sales charges of 5.00% for Class A. It also assumes the deduction
of the maximum 5.00% and 1.00% CDSCs for Class B and L shares,
respectively, and the reinvestment of dividends and capital gains, if any,
at net asset value through April 30, 1999. The Salomon Smith Barney World
Extended Market Index is a component of the Broad Market Index ("BMI")
which defines the small-capitalization stock universe or remaining 20% of
the capital of each country within the index. The BMI universe spans 22
countries and includes listed shares of countries with a total available
market capitalization of at least the local equivalent of $100 million on
the last business day of May each year. The performance of the Fund's
other classes may be greater or less than the shares' performance
indicated on this chart, depending on whether greater or lesser sales
charges and fees were incurred by shareholders investing in the other
classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Top Ten Holdings* As of April 30, 1999
- --------------------------------------------------------------------------------
1. Giordano International Ltd. 2.3%
- --------------------------------------------------------------------------------
2. Elkem ASA 2.1
- --------------------------------------------------------------------------------
3. Penn Treaty American Corp. 2.1
- --------------------------------------------------------------------------------
4. Air New Zealand Ltd. 2.1
- --------------------------------------------------------------------------------
5. Somerfield PLC 2.0
- --------------------------------------------------------------------------------
6. Henry Walker Group Ltd. 2.0
- --------------------------------------------------------------------------------
7. Kyudenko Corp. 1.9
- --------------------------------------------------------------------------------
8. PETCO Animal Supplies 1.9
- --------------------------------------------------------------------------------
9. Fischer & Paykel Industries Ltd. 1.9
- --------------------------------------------------------------------------------
10. Koninklijke Emballage Industrie Van Leer NV 1.9
- --------------------------------------------------------------------------------
* As a percentage of total stocks.
Investment Allocation as of April 30, 1999**
[PIE CHART]
Asia/Pacific 25.4%
South America 1.5%
Repurchase Agreement 3.9%
Europe 45.7%
North America 23.5%
** As a percentage of total investments.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
STOCK -- 97.3%
Argentina -- 0.9%
50,000 YPF Sociedad Anonima ADR, Class D Shares(a) $ 2,100,000
- -----------------------------------------------------------------------------------------
Australia -- 2.9%
252,807 Broken Hill Proprietary Co. Ltd. 2,862,605
108,425 National Australia Bank Ltd. 2,114,243
265,569 Orica Ltd. 1,548,265
- -----------------------------------------------------------------------------------------
6,525,113
- -----------------------------------------------------------------------------------------
Austria -- 2.2%
11,000 Bank Austria AG 683,267
34,200 Boehler-Uddeholm AG 2,013,255
23,800 VA Technologie AG 2,266,235
- -----------------------------------------------------------------------------------------
4,962,757
- -----------------------------------------------------------------------------------------
Brazil -- 1.6%
110,000 Companhia Vale do Rio Doce ADR 2,115,168
15,700 Telecomunicacoes Brasileiras SA Telebras ADR 1,431,644
- -----------------------------------------------------------------------------------------
3,546,812
- -----------------------------------------------------------------------------------------
Canada -- 2.4%
77,000 Alcan Aluminium Ltd. 2,444,750
127,000 Moore Corp. Ltd. 1,270,000
296,136 Nexfor Inc. 1,514,942
- -----------------------------------------------------------------------------------------
5,229,692
- -----------------------------------------------------------------------------------------
Chile -- 0.4%
35,000 Cia de Telecomunicaciones de Chile SA-ADR 925,313
- -----------------------------------------------------------------------------------------
China -- 0.8%
130,000 Huaneng Power International, Inc. ADR 1,746,875
- -----------------------------------------------------------------------------------------
Croatia -- 1.1%
154,800 Pliva DD GDR(a)+ 2,453,580
- -----------------------------------------------------------------------------------------
Czech Republic -- 0.5%
165,000 Komercni Banka AS GDR(a) 680,625
220,000 The Czech Power Co. (Czeske Energeticke Zavody) Class A Shares(a) 310,722
- -----------------------------------------------------------------------------------------
991,347
- -----------------------------------------------------------------------------------------
Denmark -- 0.7%
16,000 The Codan Group (Forsikringsselskabet Codan) 1,591,155
- -----------------------------------------------------------------------------------------
Finland -- 1.1%
118,500 Kemira Oyj 771,044
195,000 Metsa-Serla Oyj, Class B Shares 1,671,110
- -----------------------------------------------------------------------------------------
2,442,154
- -----------------------------------------------------------------------------------------
France -- 3.6%
3,034 Bail Investissement 402,209
9,500 Compagnie de Saint Gobain 1,633,287
3,200 Eridania Beghin-Say SA 444,529
17,916 Lafarge SA 1,743,871
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
France -- 3.6% (continued)
30,000 Rhone-Poulenc SA, Class A Shares(a) $ 1,428,299
29,100 Scor SA 1,453,184
2,205 Societe Eurafrance SA 1,110,455
- -----------------------------------------------------------------------------------------
8,215,834
- -----------------------------------------------------------------------------------------
Germany -- 3.4%
40,400 BASF AG 1,765,293
51,000 Bilfinger & Berger Bau AG 1,278,804
32,000 Hoechst AG 1,465,964
97,500 Pfleiderer AG 1,371,960
32,000 Veba AG 1,752,047
- -----------------------------------------------------------------------------------------
7,634,068
- -----------------------------------------------------------------------------------------
Hong Kong -- 4.5%
42,800 HSBC Holdings PLC 1,590,401
426,000 Hutchison Whampoa Ltd. 3,820,012
400,000 Smartone Telecommunications Holdings Ltd. 1,385,717
2,800,000 Swire Pacific Ltd., Class B Shares 2,384,362
4,078,000 Techtronic Industries Co. Ltd. 778,716
- -----------------------------------------------------------------------------------------
9,959,208
- -----------------------------------------------------------------------------------------
Hungary -- 0.4%
44,000 EGIS Rt.(a) 892,608
- -----------------------------------------------------------------------------------------
India -- 1.2%
240,000 Gujarat Ambuja Cements Ltd. GDR+ 1,800,000
234,400 Tata Engineering & Locomotive Co. Ltd. GDR(a)+ 768,832
- -----------------------------------------------------------------------------------------
2,568,832
- -----------------------------------------------------------------------------------------
Italy -- 0.6%
750,000 Azienda Mediterranea Gas e Acqua S.p.A. 715,102
850,000 Montedison S.p.A. di RNC 642,999
- -----------------------------------------------------------------------------------------
1,358,101
- -----------------------------------------------------------------------------------------
Japan -- 11.4%
225,000 Amway Japan Ltd. 2,280,819
125,000 Daiichi Pharmaceutical Co. Ltd. 2,031,584
244,000 Daito Trust Construction Co. Ltd. 2,869,987
200,000 Daiwa Securities Group Inc. 1,223,139
650,000 Dowa Fire & Marina Insurance Ltd. 2,450,467
55,000 Kirin Beverage Corp. 1,020,609
317,000 Kyudenko Corp. 1,928,053
1,395,000 Marubeni Corp. 3,225,569
560,000 Nippon Fire & Marine Insurance Co. Ltd. 1,867,214
23 NTT Mobile Communication Network, Inc. 1,348,804
75,000 Tokyo Electric Power 1,602,228
115,000 Yamanouchi Pharmaceutical Co. Ltd. 3,641,771
- -----------------------------------------------------------------------------------------
25,490,244
- -----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
Malaysia -- 1.3%
680,000 Malayan Banking Berhad $ 1,692,918
2,030,000 Technology Resources Industries Berhad 1,100,841
- -----------------------------------------------------------------------------------------
2,793,759
- -----------------------------------------------------------------------------------------
Mexico -- 1.3%
263,900 Cemex SA de CV CPO 1,228,106
11,000 Telefonos de Mexico SA ADR, Class L Shares(a) 833,250
191,000 Transportacion Maritima Mexicana SA de CV ADR, Class A Shares(a) 919,188
- ----------------------------------------------------------------------------------------
2,980,544
- -----------------------------------------------------------------------------------------
Netherlands -- 3.8%
33,000 ING Groep NV 2,035,485
108,701 Koninklijke Ahrend Groep NV 2,116,103
82,800 Koninklijke Emballage Industrie Van Leer NV 1,449,819
67,500 Koninklijke KPN NV 2,820,891
- -----------------------------------------------------------------------------------------
8,422,298
- -----------------------------------------------------------------------------------------
New Zealand -- 3.5%
1,000,000 Carter Holt Harvey Ltd. 1,466,153
525,000 Fernz Corp. Ltd. 1,762,740
310,000 Fisher & Paykel Industries Ltd. 1,136,268
770,000 Fletcher Challenge Building 1,275,441
920,000 Fletcher Challenge Energy(a) 2,203,482
- -----------------------------------------------------------------------------------------
7,844,084
- -----------------------------------------------------------------------------------------
Norway -- 4.4%
37,800 Norsk Hydro ASA 1,696,667
100,600 Odfjell ASA, Class A Shares 1,208,001
160,000 Petroleum Geo-Services ASA(a) 2,702,113
172,000 Saga Petroleum ASA 1,910,743
116,100 Sparebanken NOR 2,221,653
- -----------------------------------------------------------------------------------------
9,739,177
- -----------------------------------------------------------------------------------------
Peru -- 0.2%
204,000 Banco Wiese ADR(a) 408,000
- -----------------------------------------------------------------------------------------
Philippines -- 2.1%
150,600 Metropolitan Bank & Trust Co. 1,505,010
101,000 Philippines Long Distance Telephone Co. 3,267,061
- -----------------------------------------------------------------------------------------
4,772,071
- -----------------------------------------------------------------------------------------
Poland -- 0.8%
300,000 Telekomunikacja Polska SA GDR(a)+ 1,867,500
- -----------------------------------------------------------------------------------------
Russia -- 1.6%
60,200 Lukoil Holding ADR 2,232,216
300,000 Rostelecom ADR 1,293,750
- -----------------------------------------------------------------------------------------
3,525,966
- -----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
Singapore -- 5.7%
90,000 Asia Pulp & Paper Co. Ltd. ADR(a) $ 945,000
750,000 City Developments Ltd. 5,004,429
588,911 Jardine Matheson Holdings Ltd. 2,508,761
550,000 United Overseas Bank Ltd. 4,254,502
- -----------------------------------------------------------------------------------------
12,712,692
- -----------------------------------------------------------------------------------------
Slovakia -- 0.3%
122,200 Slovakofarma AS GDR(a)+ 369,655
143,000 Vychodoslovenske Zeleziarne AS 522,433
- -----------------------------------------------------------------------------------------
892,088
- -----------------------------------------------------------------------------------------
Slovenia -- 0.6%
97,000 SKB Banka GDR+ 1,280,400
- -----------------------------------------------------------------------------------------
South Africa -- 0.4%
290,000 Standard Bank Investment Corp. Ltd. 878,860
- -----------------------------------------------------------------------------------------
South Korea -- 4.2%
162,000 Pohang Iron & Steel Co. Ltd. ADR 4,171,500
47,002 Samsung Electonics GDR+ 2,086,899
3,000 Samsung Fire & Marine Insurance 1,388,305
7,420 SK Telecom Co. Ltd. 785,814
63,000 SK Telecom Co. Ltd. ADR 874,125
- -----------------------------------------------------------------------------------------
9,306,643
- -----------------------------------------------------------------------------------------
Spain -- 1.1%
98,000 Iberdrola SA 1,373,812
66,300 Repsol SA 1,080,239
- -----------------------------------------------------------------------------------------
2,454,051
- -----------------------------------------------------------------------------------------
Sweden -- 2.2%
61,000 AssiDoman AB 1,261,919
73,500 BT Industries AB 1,236,506
140,400 SKF AB, Class B Shares 2,420,402
- -----------------------------------------------------------------------------------------
4,918,827
- -----------------------------------------------------------------------------------------
Switzerland -- 2.1%
1,020 ABB AG, Bearer Shares(a) 1,490,640
1,000 Holderbank Financiere Glarus AG, Bearer Shares 1,207,882
6,000 UBS AG 2,041,379
- -----------------------------------------------------------------------------------------
4,739,901
- -----------------------------------------------------------------------------------------
Thailand -- 1.9%
580,000 Bangkok Bank Public Co. Ltd. 1,734,609
910,000 Thai Farmers Bank Public Co. Ltd. 2,525,394
- -----------------------------------------------------------------------------------------
4,260,003
- -----------------------------------------------------------------------------------------
United Kingdom -- 8.9%
1,115,244 The BICC Group 1,885,435
125,000 British Airways PLC 984,676
115,000 British Telecommunications PLC 1,931,233
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
United Kingdom -- 8.9% (continued)
226,846 Cable & Wireless PLC $ 3,221,456
250,000 Enterprise Oil PLC 1,806,329
100,000 National Power PLC 803,037
40,000 National Westminster Bank PLC 964,127
270,000 Nycomed Amersham PLC 2,205,151
156,000 Orange PLC 2,117,408
288,593 Rolls-Royce PLC 1,339,392
148,776 Standard Chartered PLC 2,687,684
- -----------------------------------------------------------------------------------------
19,945,928
- -----------------------------------------------------------------------------------------
United States -- 11.2%
62,300 American Standard Cos., Inc.(a) 2,850,225
109,800 Archer-Daniels-Midland Co.(a) 1,647,000
35,000 Fluor Corp.(a) 1,168,125
76,000 Georgia Pacific Timber Co. 1,957,000
47,000 GTE Corp. 3,146,062
76,000 IBP Inc. 1,539,000
100,000 Nabors Industries, Inc.(a) 2,056,250
20,500 Pharmacia & Upjohn, Inc. 1,148,000
20,000 Phelps Dodge Corp. 1,265,000
50,000 Protective Life Corp. 1,959,375
45,500 Raychem Corp. 1,202,906
120,000 Republic Services Inc.(a) 2,467,500
40,000 Schlumberger Ltd. ADR 2,555,000
- -----------------------------------------------------------------------------------------
24,961,443
- -----------------------------------------------------------------------------------------
TOTAL STOCK
(Cost -- $198,656,198) 217,337,928
=========================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=========================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 2.7%
$6,000,000 CIBC Wood Gundy Securities, Inc., 4.700% due 5/3/99;
Proceeds at maturity -- $6,002,350; (Fully collateralized by
U.S. Treasury Notes, 5.625% due 12/31/99;
Market value -- $6,120,627) (Cost -- $6,000,000 6,000,000
=========================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $204,656,198*) $223,337,928
=========================================================================================
</TABLE>
(a) Non-income producing security.
+ Security is exempt under Rule 144A of the Securities Act of 1933. This
security may be sold in transactions that are exempt from registration,
normally to qualified institutional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
STOCK -- 96.1%
Australia -- 2.9%
258,000 Henry Walker Group Ltd. $ 321,484
47,700 Mayne Nickless Ltd. 166,297
- -----------------------------------------------------------------------------------------
487,781
- -----------------------------------------------------------------------------------------
Austria -- 2.4%
4,400 Boehler-Uddeholm AG 259,015
2,800 Schoeller-Bleckman Oilfield Equipment AG 152,563
- -----------------------------------------------------------------------------------------
411,578
- -----------------------------------------------------------------------------------------
Canada -- 2.3%
22,800 Moore Corp. Ltd. 228,000
32,851 Nexfor Inc. 168,055
- -----------------------------------------------------------------------------------------
396,055
- -----------------------------------------------------------------------------------------
Czech Republic -- 0.3%
14,000 Komercni Banka AS GDR(a) 57,750
- -----------------------------------------------------------------------------------------
Denmark -- 0.8%
1,300 Forsikringsselskabet Codan (The Codan Group) 129,281
- -----------------------------------------------------------------------------------------
Finland -- 3.4%
27,000 Kemira Oyj 175,680
23,000 Metsa-Serla Oyj, Class B Shares 197,105
47,200 Tamro Oyj 197,253
- -----------------------------------------------------------------------------------------
570,038
- -----------------------------------------------------------------------------------------
France -- 2.9%
2,000 Bail Investissement 265,134
2,200 Financiere Marc de La Charrieu SA 224,380
- -----------------------------------------------------------------------------------------
489,514
- -----------------------------------------------------------------------------------------
Germany -- 4.4%
2,760 Fuchs Petrolub AG Oel & Chemie, Preferred Shares 200,025
15,920 Hans Einhell AG 148,221
13,300 Lindner Holding KGaA 253,285
6,800 Moebel Walther AG 138,851
- -----------------------------------------------------------------------------------------
740,382
- -----------------------------------------------------------------------------------------
Hong Kong -- 7.0%
559,753 CDL Hotels International Ltd. 231,108
800,000 Giordano International Ltd. 371,588
1,300,000 Shanghai Petrochemical Co. Ltd. 243,210
320,000 South China Morning Post Holdings Ltd. 193,019
51,500 Wing Hang Bank Ltd. 157,480
- -----------------------------------------------------------------------------------------
1,196,405
- -----------------------------------------------------------------------------------------
Hungary -- 1.4%
4,000 BorsodChem Rt. 93,656
7,300 EGIS Rt.(a) 148,091
- -----------------------------------------------------------------------------------------
241,747
- -----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
Italy -- 2.4%
300,000 Azienda Mediterranea Gas e Acqua S.p.A $ 286,040
44,900 Sogefi S.p.A 123,558
- -----------------------------------------------------------------------------------------
409,598
- -----------------------------------------------------------------------------------------
Japan -- 7.2%
56,000 Ataka Construction & Engineering Co., Ltd. 272,106
25,000 Daito Trust Construction Co., Ltd. 294,056
10,000 Kirin Beverage Corp. 185,565
33,000 Koito Manufacturing Co., Ltd. 153,713
52,000 Kyudenko Corp. 316,273
- -----------------------------------------------------------------------------------------
1,221,713
- -----------------------------------------------------------------------------------------
Netherlands -- 5.2%
3,700 Eriks Holdings NV 199,644
15,100 European Vinyls Corp. International NV 148,574
12,343 Koninklijke Ahrend NV 240,283
17,000 Koninklijke Emballage Industrie Van Leer NV 297,668
- -----------------------------------------------------------------------------------------
886,169
- -----------------------------------------------------------------------------------------
New Zealand -- 6.7%
160,300 Air New Zealand Ltd., Class B Shares 336,389
49,000 Fernz Corp., Ltd. 164,522
83,000 Fisher & Paykel Industries Ltd. 304,226
348,248 Fletcher Challenge Forests 187,084
68,800 Tranz Rail Holdings Ltd. 148,226
- -----------------------------------------------------------------------------------------
1,140,447
- -----------------------------------------------------------------------------------------
Norway -- 3.5%
19,300 Elkem ASA 344,532
13,080 Sparebanken NOR 250,294
- -----------------------------------------------------------------------------------------
594,826
- -----------------------------------------------------------------------------------------
Peru -- 1.5%
33,400 Banco Wiese ADR(a) 66,800
12,600 Southern Peru Copper Corp. 179,550
- -----------------------------------------------------------------------------------------
246,350
- -----------------------------------------------------------------------------------------
Russia -- 0.3%
17,000 Irkutskenergo ADR 44,625
24,000 Nizhegorodsvyazinform ADR 12,720
- -----------------------------------------------------------------------------------------
57,345
- -----------------------------------------------------------------------------------------
Singapore -- 1.3%
200,000 Clipsal Industries Holdings 230,000
- -----------------------------------------------------------------------------------------
Slovakia -- 0.5%
1,400 Slovakofarma AS 58,076
7,800 Vychodoslovenske Zeleziarne AS 28,496
- -----------------------------------------------------------------------------------------
86,572
- -----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=========================================================================================
<S> <C> <C>
Slovenia -- 0.8%
9,800 SKB Banka GDR+ $ 129,360
- -----------------------------------------------------------------------------------------
Spain -- 3.1%
3,200 Banco Pastor SA 168,873
7,000 Catalana Occidente SA 158,118
7,000 Construcciones y Auxiliare de Ferrocarriles SA 192,555
- -----------------------------------------------------------------------------------------
519,546
- -----------------------------------------------------------------------------------------
Sweden -- 5.3%
16,600 BT Industries AB 279,265
12,600 Esselte AB, Class B Shares 196,992
15,750 Getinge Industrier AB, Class B Shares 245,303
44,740 Lifco AB, Class B Shares(a) 186,172
- -----------------------------------------------------------------------------------------
907,732
- -----------------------------------------------------------------------------------------
Switzerland -- 1.5%
600 Forbo Holding AG 250,246
- -----------------------------------------------------------------------------------------
Thailand -- 0.3%
111,800 Precious Shipping Public Co., Ltd. 48,196
- -----------------------------------------------------------------------------------------
United Kingdom -- 7.5%
143,187 BICC Group PLC 242,072
79,000 David S. Smith Holdings PLC 169,173
45,000 Dorling Kindersley Holdings PLC 257,575
18,400 Morgan Crucible Co. PLC 83,544
480,000 Sherwood Group PLC 189,347
58,333 Somerfield PLC 324,501
- -----------------------------------------------------------------------------------------
1,266,212
- -----------------------------------------------------------------------------------------
United States -- 21.2%
4,000 Alpharma, Inc., Class A Shares 118,000
5,700 Aviation Sales Co.(a) 228,000
22,800 Chiquita Brands International, Inc.(a) 228,000
8,400 The Geon Co. 257,250
9,900 Hibbett Sporting Goods, Inc.(a) 270,393
30,700 Hoenig Group, Inc.(a) 283,975
8,400 Invacare Corp. 194,250
16,000 Owens & Minor, Inc. 158,000
15,700 Paxar Corp.(a) 140,318
12,000 Penn Treaty American Corp.(a) 336,750
24,000 PETCO Animal Supplies, Inc.(a) 315,000
8,300 Roper Industries, Inc. 236,550
4,400 Tarrant Apparel Group(a) 207,350
4,000 Tecumseh Products Co., Class A Shares 244,500
15,000 Titanium Metals Corp. 110,625
22,600 Wolverine World Wide, Inc. 271,231
- -----------------------------------------------------------------------------------------
3,600,192
- -----------------------------------------------------------------------------------------
TOTAL STOCK
(Cost -- $17,930,078) 16,315,035
=========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=========================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 3.9%
$670,000 CIBC Wood Gundy Securities, Inc., 4.700% due 5/3/99;
Proceeds at maturity -- $670,262; (Fully collateralized by
U.S. Treasury Notes, 5.625% due 12/31/99;
Market value -- $686,100) (Cost -- $670,000) $ 670,000
=========================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $18,600,078*) $ 16,985,035
=========================================================================================
</TABLE>
(a) Non-income producing security.
+ Security is exempt under Rule 144A of the Securities Act of 1933. This
security may be sold in transactions that are exempt from registration,
normally to qualified institutional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Smith Barney Hansberger
Hansberger Global Small
Global Value Cap Value
Fund Fund
===========================================================================================================================
<S> <C> <C>
ASSETS:
Investments, at cost $ 204,656,198 $ 18,600,078
Foreign currency, at cost 792,666 --
===========================================================================================================================
Investments, at value $ 223,337,928 $ 16,985,035
Foreign currency, at value 799,501 --
Cash 258,700 5,090
Receivable for securities sold 2,084,518 254,806
Dividends and interest receivable 557,312 65,861
Receivable for Fund shares sold 66,034 9,163
Receivable for open forward foreign currency contracts (Note 4) 5,367 --
Receivable from manager -- 87,036
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 227,109,360 17,406,991
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 8,073,995 --
Management fees payable 200,750 14,844
Payable for Fund shares purchased 54,921 1,350
Payable for open forward foreign currency contracts (Note 4) 30,725 203
Distribution fees payable 19,925 4,586
Accrued expenses 139,619 45,536
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 8,519,935 66,519
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Assets $ 218,589,425 $ 17,340,472
===========================================================================================================================
NET ASSETS:
Par value of capital shares $ 18,197 $ 1,704
Capital paid in excess of par value 219,330,872 20,527,149
Undistributed net investment income 402,571 28,962
Accumulated net realized loss from security
transactions and foreign currencies (19,809,349) (1,601,595)
Net unrealized appreciation (depreciation)
of investments and foreign currencies 18,647,134 (1,615,748)
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Assets $ 218,589,425 $ 17,340,472
===========================================================================================================================
Shares Outstanding:
Class A 1,414,715 531,238
----------------------------------------------------------------------------------------------------------------------
Class B 2,784,416 770,018
----------------------------------------------------------------------------------------------------------------------
Class L 729,190 160,346
----------------------------------------------------------------------------------------------------------------------
Class Y 13,268,683 242,863
----------------------------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 12.00 $ 10.19
----------------------------------------------------------------------------------------------------------------------
Class B * $ 11.97 $ 10.16
----------------------------------------------------------------------------------------------------------------------
Class L ** $ 11.97 $ 10.14
----------------------------------------------------------------------------------------------------------------------
Class Y (and redemption price) $ 12.03 $ 10.22
----------------------------------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $ 12.63 $ 10.73
----------------------------------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $ 12.09 $ 10.24
===========================================================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if
shares are redeemed within one year from initial purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Smith Barney Hansberger
Hansberger Global Small
Global Value Cap Value
Fund Fund
===========================================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 659,876 $ 74,545
Dividends 4,420,390 592,266
Less: Foreign withholding tax (457,481) (72,193)
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Income 4,622,785 594,618
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,754,476 208,760
Distribution fees (Note 2) 508,113 130,442
Custody 114,864 14,905
Registration fees 112,275 79,325
Shareholder and system servicing fees 82,474 42,689
Shareholder communications 40,708 20,011
Audit and legal 38,116 27,177
Directors' fees 22,320 14,089
Other 13,386 9,090
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 2,686,732 546,488
Less: Management fee waiver (Note 2) -- (80,863)
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses 2,686,732 465,625
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 1,936,053 128,993
- ---------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES (NOTES
3 AND 4):
Realized Loss From:
Security transactions (excluding short-term securities) (19,216,579) (1,508,282)
Foreign currency transactions (236,704) (48,786)
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Loss (19,453,283) (1,557,068)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation)
of Investments and Foreign Currencies:
Beginning of year 8,375,536 1,565,615
End of year 18,647,134 (1,615,748)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) 10,271,598 (3,181,363)
- ---------------------------------------------------------------------------------------------------------------------------
Net Loss on Investments and Foreign Currencies (9,181,685) (4,738,431)
- ---------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Operations $ (7,245,632) $ (4,609,438)
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets For the Years Ended April 30,
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Hansberger Global Value Fund 1999 1998
===========================================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,936,053 $ 202,933
Net realized gain (loss) (19,453,283) 200,904
Increase in net unrealized appreciation 10,271,598 8,375,536
- ---------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (7,245,632) 8,779,373
- ---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,249,826) (85,869)
Net realized gains -- --
- ---------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (2,249,826) (85,869)
- ---------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 117,051,480 132,967,684
Net asset value of shares issued for reinvestment of dividends 363,706 83,205
Cost of shares reacquired (29,808,698) (1,265,998)
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 87,606,488 131,784,891
- ---------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets 78,111,030 140,478,395
NET ASSETS:
Beginning of year 140,478,395 --
- ---------------------------------------------------------------------------------------------------------------------------
End of year* $ 218,589,425 $ 140,478,395
===========================================================================================================================
* Includes undistributed net investment income of: $ 402,571 $ 510,503
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued) For the Years Ended April 30,
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Hansberger Small Cap Value Fund 1999 1998
===========================================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 128,993 $ 59,952
Net realized gain (loss) (1,557,068) 110,277
Increase in net unrealized appreciation (depreciation) (3,181,363) 1,565,615
- ---------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (4,609,438) 1,735,844
- ---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (235,940) (20,614)
Net realized gains (71,247) --
- ---------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (307,187) (20,614)
- ---------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 6,255,298 22,450,956
Net asset value of shares issued for reinvestment of dividends 261,166 20,354
Cost of shares reacquired (8,077,569) (368,338)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Fund Share Transactions (1,561,105) 22,102,972
- ---------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (6,477,730) 23,818,202
NET ASSETS:
Beginning of year 23,818,202 --
- ---------------------------------------------------------------------------------------------------------------------------
End of year* $ 17,340,472 $ 23,818,202
===========================================================================================================================
* Includes undistributed net investment income of: $ 28,962 $ 143,223
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Hansberger Global Value Fund and Smith Barney Hansberger Global
Small Cap Value Fund ("Portfolios") are separate investment portfolios of the
Smith Barney Investment Funds Inc. ("Fund"). The Fund, a Maryland corporation,
is registered under the Investment Company Act of 1940, as amended, as an
open-end, diversified management investment company. The Fund consists of these
Portfolios and six other separate investment portfolios: Concert Peachtree
Growth Fund, Smith Barney Investment Grade Bond Fund, Smith Barney Special
Equities Fund, Smith Barney Contrarian Fund, Smith Barney Small Cap Value Fund
and Smith Barney Government Securities Fund. The financial statements and
financial highlights for the other portfolios are presented in separate annual
reports.
The significant accounting policies consistently followed by the Portfolios are:
(a) security transactions are accounted for on trade date; (b) securities traded
on national securities markets are valued at the closing prices on the primary
exchange on which they are traded; securities listed or traded on certain
foreign exchanges or other markets whose operations are similar to the U.S.
over-the-counter market (including securities listed on exchanges where the
primary market is believed to be over-the-counter) and securities for which no
sales price was reported on that date are valued at the mean between the bid and
ask prices. Securities which are listed or traded on more than one exchange or
market are valued at the quotations on the exchange or market determined to be
the primary market for such securities; (c) securities for which market
quotations are not available will be valued in good faith at fair value by or
under the direction of the Board of Directors; (d) securities maturing within 60
days are valued at cost plus accreted discount, or minus amortized premium,
which approximates value; (e) gains or losses on the sale of securities are
calculated by using the specific identification method; (f) interest income,
adjusted for amortization of premium and accretion of discount, is recorded on
an accrual basis; (g) dividend income is recorded on the ex-dividend date;
foreign dividend income is recorded on the ex-dividend date or as soon as
practical after the Portfolios determine the existence of a dividend declaration
after exercising reasonable due diligence; (h) direct expenses are charged to
each Portfolio and class; management fees and general expenses are allocated on
the basis of relative net assets by class; (i) dividends and distributions to
shareholders are recorded on the ex-dividend date; (j) the accounting records of
each Portfolio are maintained in U.S. dollars. All assets and liabilities
denominated in foreign currencies are translated into U.S. dollars on the date
of valuation. Purchases and sales of securities, and income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income or expense amounts
recorded and collected or paid are adjusted when reported by the custodian; (k)
the character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At April 30, 1999, reclassifications were made to the capital
accounts of the Portfolios to reflect permanent book/tax differences and income
and gains available for distributions under tax income regulations. Net
investment income, net realized gains and net assets were not affected by these
adjustments; (l) each Portfolio intends to comply with the applicable provisions
of the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies and to make distributions of taxable income sufficient to
relieve each Portfolio from substantially all Federal income and excise taxes;
and (m) estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
In addition, the Portfolios may enter into forward exchange contracts in order
to hedge against foreign currency risk. These contracts are marked-to-market
daily by recognizing the difference between the contract exchange rate and the
current market rate as an unrealized gain or loss. Realized gains or losses are
recognized when contracts are settled.
2. Management Agreement and Other Transactions
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment
manager of the Fund. The Smith Barney Hansberger Global Value Fund ("Global
Value") and Smith Barney Hansberger Global Small Cap Value Fund ("Global Small
Cap") pay SSBC a management fee calculated at the annual rate of 0.95% and
1.05%, respectively, of the average daily net assets of each Portfolio. These
fees are calculated daily and paid monthly. For the year ended April 30, 1999,
SSBC waived a portion of its management fee for Global Small Cap in the amount
of $80,863.
SSBC has entered into a sub-advisory agreement with Hansberger Global Investors,
Inc. ("Hansberger"). Pursuant to the sub-advisory agreement, Hansberger is
responsible for the day-to-day portfolio operations and investment decisions of
the Portfolios. SSBC pays Hansberger a fee of 0.50% and 0.60% of the average
daily net assets of Global Value and Global Small Cap, respectively, for the
services Hansberger provides as sub-investment adviser. These fees are
calculated daily and paid monthly.
On October 8, 1998, CFBDS, Inc. became the Fund's distributor. Prior to that
date Salomon Smith Barney Inc. ("SSB"), was the Fund's distributor. SSB, as well
as certain other broker-dealers, continues to sell Fund shares to the public as
a member of the selling group.
SSB, another subsidiary of SSBH, acts as the primary broker for its portfolio
agency transactions. For the year ended April 30, 1999, SSB received brokerage
commissions of $37,890.
On June 12, 1998, the Fund's existing Class C shares were renamed Class L
shares. Effective June 15, 1998, Class L shares are being sold at net asset
value plus a maximum initial sales charge of 1.00%. Class L shares also have a
1.00% contingent deferred sales charge ("CDSC"), which applies if redemption
occurs within the first year of purchase.
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs within one year from initial purchase.
Thereafter this CDSC declines by 1.00% per year until no CDSC is incurred. Class
L shares have a 1.00% CDSC, which applies if redemption occurs within the first
year of purchase.
There is also a CDSC of 1.00% on Class A shares, which applies if redemption
occurs within the first year of purchase. This CDSC only applies to those
purchases of Class A shares, which, when combined with current holdings of Class
A shares, equal or exceed $500,000 in the aggregate. These purchases do not
incur an initial sales charge.
For the year ended April 30, 1999, CDSC's paid to SSB and CFBDS were
approximately:
CDSC's
------------------------------
Portfolio Class A Class B Class L
================================================================================
Global Value $21,000 $170,000 $7,000
- --------------------------------------------------------------------------------
Global Small Cap Value 5,000 44,000 4,000
================================================================================
For the year ended April 30, 1999, sales charges received by SSB and CFBDS were
approximately:
Sales Charges
-------------------
Portfolio Class A Class L
================================================================================
Global Value $52,000 $16,000
- --------------------------------------------------------------------------------
Global Small Cap Value 18,000 2,000
================================================================================
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Pursuant to a Distribution Plan, the Portfolios pay a service fee with respect
to Class A, B and L shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class' shares. The Portfolios also pay a
distribution fee with respect to Class B and L shares calculated at the annual
rate of 0.75% of the average daily net assets for each respective Portfolio and
class. For the year ended April 30, 1999, total Distribution Plan fees incurred
by the Portfolios were:
Portfolio Class A Class B Class L
================================================================================
Global Value $51,299 $362,453 $94,361
- --------------------------------------------------------------------------------
Global Small Cap Value 18,295 91,799 20,348
================================================================================
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
Portfolio Purchases Sales
================================================================================
Global Value $178,853,814 $45,382,427
- --------------------------------------------------------------------------------
Global Small Cap Value 5,015,325 6,829,247
================================================================================
At April 30, 1999, aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
Net Unrealized
Appreciation
Portfolio Appreciation Depreciation (Depreciation)
================================================================================
Global Value $ 38,589,561 $(19,907,831) $ 18,681,730
- --------------------------------------------------------------------------------
Global Small Cap Value 1,767,182 (3,382,225) (1,615,043)
================================================================================
4. Forward Foreign Currency Contracts
At April 30, 1999, Global Value and Global Small Cap Value had open forward
foreign contracts as described below. The Portfolio bears the market risk that
arises from changes in foreign currency exchange rates. The unrealized gain
(loss) on the contracts reflected in the accompanying financial statements were
as follows:
Global Value: Local Market Settlement Unrealized
Foreign Currency Currency Value Date Loss
================================================================================
To Sell:
European Currency Unit 173,353 $ 183,444 5/3/99 $ (106)
- --------------------------------------------------------------------------------
European Currency Unit 88,168 93,307 5/4/99 (1,453)
- --------------------------------------------------------------------------------
European Currency Unit 25,226 26,739 5/28/99 (302)
- --------------------------------------------------------------------------------
New Zealand Dollar 115,597 64,690 5/3/99 (2,471)
- --------------------------------------------------------------------------------
New Zealand Dollar 1,654,616 925,960 5/4/99 (8,972)
================================================================================
(13,304)
================================================================================
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 27
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Value: Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
===================================================================================================
<S> <C> <C> <C> <C>
To Buy:
Japanese Yen 135,840,000 $1,137,307 5/7/99 $ (4,396)
- ---------------------------------------------------------------------------------------------------
Japanese Yen 246,231,480 2,061,550 5/7/99 (7,970)
- ---------------------------------------------------------------------------------------------------
New Zealand Dollar 764,827 428,010 5/3/99 5,367
- ---------------------------------------------------------------------------------------------------
South African Rand 2,795,076 457,399 5/4/99 (5,055)
===================================================================================================
(12,054)
===================================================================================================
Net Unrealized Loss on
Forward Foreign Currency Contracts $(25,358)
===================================================================================================
<CAPTION>
Global Small Cap: Local Market Settlement Unrealized
Foreign Currency Currency Value Date Loss
===================================================================================================
<S> <C> <C> <C> <C>
To Sell:
European Currency Unit 9,870 $10,445 5/3/99 $(203)
===================================================================================================
Net Unrealized Loss on
Forward Foreign Currency Contracts $(203)
===================================================================================================
</TABLE>
5. Option Contracts
Premiums paid when put or call options are purchased by the Portfolios represent
investments, which are marked-to-market daily. When a purchased option expires,
the Portfolio will realize a loss in the amount of the premium paid. When the
Portfolio enters into a closing sales transaction, the Portfolio will realize a
gain or loss depending on whether the proceeds from the closing sales
transaction are greater or less than the premium paid for the option. When the
Portfolio exercises a put option, it will realize a gain or loss from the sale
of the underlying security and the proceeds from such sale will be decreased by
the amount of the premium originally paid. When the Portfolio exercises a call
option, the cost of the security that the Portfolio purchases upon exercise will
be increased by the premium originally paid.
At April 30, 1999, the Portfolios had no open purchased call or put options.
When a Portfolio writes a covered call or put option, an amount equal to the
premium received by the Portfolio is recorded as a liability, the value of which
is marked-to-market daily. When a written option expires, the Portfolio realizes
a gain equal to the amount of the premium received. When the Portfolio enters
into a closing purchase transaction, the Portfolio realizes a gain or loss
depending upon whether the cost of the closing transaction is greater or less
than the premium originally received without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
eliminated. When a written call option is exercised the cost of the security
sold will be decreased by the premium originally received. When a written put
option is exercised, the amount of the premium originally received will reduce
the cost of the security that the Portfolio purchased upon exercise. When
written index options are exercised, settlement is made in cash.
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolio enters into options for hedging purposes. The risk in
writing a covered call option is that the Portfolio gives up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a covered put option is that the Portfolio
is exposed to the risk of loss if the market price of the underlying security
declines.
During the year ended April 30, 1999, the Portfolios did not write any covered
call or put options.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking-to-market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are made or received and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolio records a realized gain or
loss equal to the difference between the proceeds from (or cost of) the closing
transactions and the Portfolio's basis in the contract. The Portfolio enters
into such contracts to hedge a portion of its portfolio. The Portfolio bears the
market risk that arises from changes in the value of the financial instruments
and securities indices (futures contracts).
At April 30, 1999, the Portfolios had no open futures contracts.
7. Concentration of Risk
The Portfolios' investments in foreign securities may involve risks not present
in domestic investments. Since securities may be denominated in a foreign
currency and may require settlement in foreign currencies and pay interest or
dividends in foreign currencies, changes in the relationship of these foreign
currencies to the U.S. dollar can significantly affect the value of the
investments and earnings of each of the Portfolios. Foreign investments may also
subject the Portfolios to foreign government exchange restrictions,
expropriation, taxation or other political, social or economic developments, all
of which could affect the market and/or credit risk of the investments.
In addition to the risks described above, risks may arise from forward foreign
currency contracts with respect to the potential inability of counterparties to
meet the terms of their contracts.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 29
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
8. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Portfolios maintain exposure for the risk of any losses
in the investment of amounts received as collateral.
At April 30, 1999, the Portfolios had no securities on loan.
9. Capital Loss Carryforward
At April 30, 1999, the Smith Barney Hansberger Global Value Fund and the Smith
Barney Hansberger Global Small Cap Value Fund had, for Federal income tax
purposes, approximately $2,964,000 and $721,000 of unused capital loss
carryforwards available to offset future capital gains through April 30, 2007,
respectively. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
10. Capital Shares
At April 30, 1999, the Fund had ten billion shares of capital stock authorized
with a par value of $0.001 per share. The Portfolios have the ability to issue
multiple classes of shares. Each share of a class represents an identical legal
interest in a Portfolio and has the same rights, except that each class bears
certain expenses specifically related to the distribution of its shares.
Effective June 12, 1998, the Fund adopted the renaming of existing Class C
shares as Class L shares.
At April 30, 1999, total paid-in capital amounted to the following for each
Portfolio:
Portfolio Class A Class B Class L Class Y
================================================================================
Global Value $17,418,794 $33,998,332 $8,843,178 $159,088,765
- --------------------------------------------------------------------------------
Global Small Cap 6,757,973 9,284,493 2,007,763 2,478,624
================================================================================
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Period Ended*
April 30, 1999 April 30, 1998
---------------------------- ---------------------------
Shares Amount Shares Amount
================================================================================================
<S> <C> <C> <C> <C>
Smith Barney Hansberger
Global Value Fund
Class A
Shares sold 402,580 $ 4,389,138 2,136,344 $ 24,725,211
Shares issued on reinvestment 18,913 199,342 2,413 27,893
Shares reacquired (1,121,531) (11,613,734) (24,004) (295,535)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (700,038) $ (7,025,254) 2,114,753 $ 24,457,569
================================================================================================
Class B
Shares sold 594,636 $ 6,808,290 3,558,428 $ 41,419,420
Shares issued on reinvestment 12,210 128,697 3,969 45,877
Shares reacquired (1,335,698) (13,782,855) (49,129) (599,114)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (728,852) $ (6,845,868) 3,513,268 $ 40,866,183
================================================================================================
Class L
Shares sold 249,974 $ 2,836,977 882,791 $ 10,292,554
Shares issued on reinvestment 3,384 35,667 816 9,435
Shares reacquired (377,684) (3,955,109) (30,091) (371,349)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (124,326) $ (1,082,465) 853,516 $ 9,930,640
================================================================================================
Class Y**
Shares sold 8,968,472 $ 103,017,075 4,338,907 $ 56,530,499
Shares issued on reinvestment -- -- -- --
Shares reacquired (38,696) (457,000) -- --
- ------------------------------------------------------------------------------------------------
Net Increase 8,929,776 $ 102,560,075 4,338,907 $ 56,530,499
================================================================================================
Smith Barney Hansberger
Global Small Cap Value Fund
Class A
Shares sold 189,385 $ 2,052,051 755,715 $ 8,670,260
Shares issued on reinvestment 13,333 127,740 658 7,518
Shares reacquired (422,929) (4,037,611) (4,924) (57,082)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (220,211) $ (1,857,820) 751,449 $ 8,620,696
================================================================================================
Class B
Shares sold 135,286 $ 1,459,543 955,601 $ 10,919,021
Shares issued on reinvestment 11,442 109,529 938 10,711
Shares reacquired (317,427) (3,030,257) (15,822) (177,383)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (170,699) $ (1,461,185) 940,717 $ 10,752,349
================================================================================================
Class L
Shares sold 45,393 $ 497,054 229,248 $ 2,629,681
Shares issued on reinvestment 2,496 23,897 186 2,125
Shares reacquired (104,956) (1,009,701) (12,021) (133,873)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (57,067) $ (488,750) 217,413 $ 2,497,933
================================================================================================
Class Y**
Shares sold 223,982 $ 2,246,650 18,881 $ 231,994
Shares issued on reinvestment -- -- -- --
Shares reacquired -- -- -- --
- ------------------------------------------------------------------------------------------------
Net Increase 223,982 $ 2,246,650 18,881 $ 231,994
================================================================================================
</TABLE>
* For the period from December 19, 1997 (inception date) to April 30, 1998.
** For the period ended April 30, 1998, Class Y had an inception date of
March 10, 1998.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 31
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30:
<TABLE>
<CAPTION>
Class A Class B
Smith Barney Hansberger ------------------------------ ------------------------------
Global Value Fund 1999(1) 1998(2) 1999(1) 1998(2)
==========================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.99 $ 11.40 $ 12.96 $ 11.40
- ----------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.37 0.05 0.29 0.02
Net realized and unrealized gain (loss) (1.24) 1.56 (1.24) 1.56
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.87) 1.61 (0.95) 1.58
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.12) (0.02) (0.04) (0.02)
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.12) (0.02) (0.04) (0.02)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 12.00 $ 12.99 $ 11.97 $ 12.96
- ----------------------------------------------------------------------------------------------------------
Total Return (6.56)% 14.13%++ (7.27)% 13.87%++
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 16,974 $ 27,478 $ 33,316 $ 45,526
- ----------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 1.55% 1.71%+ 2.30% 2.48%+
Net investment income 3.42 1.25+ 2.66 0.52+
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 28% 1% 28% 1%
==========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the period from December 19, 1997 (inception date) to April 30, 1998.
(3) The Manager waived part of its fees for the period ended April 30, 1998.
If such fees were not waived, the per share effect on net investment
income and the expense ratios would have been as follows:
Net Investment Income Expense Ratios
Per Share Decreases Without Fee Waivers+
------------------- --------------------
Class A $0.01 2.09%
Class B 0.01 2.87
++ Total returns are not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30:
<TABLE>
<CAPTION>
Class L(1) Class Y
Smith Barney Hansberger ----------------------------- ------------------------------
Global Value Fund 1999(2) 1998(3) 1999(2) 1998(4)
==========================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.96 $ 11.40 $ 13.00 $ 12.44
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.29 0.02 0.40 0.00*
Net realized and unrealized gain (loss) (1.24) 1.56 (1.22) 0.56
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.95) 1.58 (0.82) 0.56
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.04) (0.02) (0.15) --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.04) (0.02) (0.15) --
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.97 $ 12.96 $ 12.03 $ 13.00
- ----------------------------------------------------------------------------------------------------------
Total Return (7.27)% 13.87%++ (6.17)% 4.50%++
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 8,725 $ 11,060 $159,574 $ 56,414
- ----------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(5) 2.30% 2.49%+ 1.10% 1.47%+
Net investment income 2.67 0.42+ 3.73 1.83+
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 28% 1% 28% 1%
==========================================================================================================
</TABLE>
(1) On June 12, 1998, Class C shares were renamed Class L shares.
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from December 19, 1997 (inception date) to April 30, 1998.
(4) For the period from March 10, 1998 (inception date) to April 30, 1998.
(5) The Manager waived part of its fees for the periods ended April 30, 1998.
If such fees were not waived, the per share effect on net investment
income and the expense ratios would have been as follows:
Net Investment Income Expense Ratios
Per Share Decreases Without Fee Waivers+
------------------- --------------------
Class L $0.01 2.88%
Class Y 0.00* 1.85
* Amount represents less than $0.01 per share.
++ Total returns are not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 33
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30:
<TABLE>
<CAPTION>
Class A Class B
Smith Barney Hansberger ------------------------------- ------------------------------
Global Small Cap Value Fund 1999(1) 1998(2) 1999(1) 1998(2)
==========================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.37 $ 11.40 $ 12.34 $ 11.40
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.11 0.05 0.03 0.02
Net realized and unrealized gain (loss) (2.10) 0.93 (2.09) 0.93
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (1.99) 0.93 (2.06) 0.95
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.16) (0.01) (0.09) (0.01)
Net realized gains (0.03) -- (0.03) --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.01) (0.12) (0.01)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 10.19 $ 12.37 $ 10.16 $ 12.34
- ----------------------------------------------------------------------------------------------------------
Total Return (15.95)% 8.64%++ (16.61)% 8.38%++
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 5,414 $ 9,296 $ 7,819 $ 11,606
- ----------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 1.92% 1.95%+ 2.74% 2.68%+
Net investment income 1.06 1.28+ 0.27 0.58+
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 27% 2% 27% 2%
==========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the period from December 19, 1997 (inception date) to April 30, 1998.
(3) The Manager waived all of its fees for the period ended April 30, 1998 and
a portion of its fees for the year ended April 30, 1999. In addition, the
Manager reimbursed the Portfolio for $17,302 in expenses for the period
ended April 30, 1998. If such fees were not waived and expenses not
reimbursed, the per share effect on net investment income and the expense
ratios would have been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- -------------------
1999 1998(2) 1999 1998(2)
---- ---- ---- ----
Class A $0.04 $0.05 2.33% 3.25%+
Class B 0.04 0.04 3.14 3.96+
++ Total returns are not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
34 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30:
<TABLE>
<CAPTION>
Class L(1) Class Y
------------------------------ ------------------------------
Smith Barney Hansberger
Global Small Cap Value Fund 1999(2) 1998(3) 1999(2) 1998(4)
==========================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.34 $ 11.40 $ 12.37 $ 11.74
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.02 0.02 0.16 0.00*
Net realized and unrealized gain (loss) (2.10) 0.93 (2.09) 0.63
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (2.08) 0.95 (1.93) 0.63
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.09) (0.01) (0.19) --
Net realized gains (0.03) -- (0.03) --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.12) (0.01) (0.22) --
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 10.14 $ 12.34 $ 10.22 $ 12.37
- ----------------------------------------------------------------------------------------------------------
Total Return (16.77)% 8.38%++ (15.49)% 5.37%++
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 1,626 $ 2,682 $ 2,481 $ 234
- ----------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(5) 2.83% 2.71%+ 1.23% 1.73%+
Net investment income 0.19 0.58+ 1.71 2.42+
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 27% 2% 27% 2%
==========================================================================================================
</TABLE>
(1) On June 12, 1998, Class C shares were renamed Class L shares.
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from December 19, 1997 (inception date) to April 30, 1998.
(4) For the period from March 10, 1998 (inception date) to April 30, 1998.
(5) The Manager waived part of its fees for the period ended April 30, 1998,
and a portion of its fees for the year ended April 30, 1999. In addition,
the Manager reimbursed the Portfolio for $17,302 in expenses for the
period ended April 30, 1998. If such fees were not waived, and expenses
not reimbursed, the per share effect on net investment income and the
expense ratios would have been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- -------------------
1999 1998 1999 1998+
---- ---- ---- ----
Class L $0.04 $0.04(3) 3.24% 4.02%(3)
Class Y 0.04 0.00*(4) 1.64 3.05(4)
* Amount represents less than $0.01 per share.
++ Total returns are not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 35
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Smith Barney Investment Funds Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Smith Barney Hansberger Global Value Fund
and Smith Barney Hansberger Global Small Cap Value Fund of Smith Barney
Investment Funds Inc. as of April 30, 1999, the related statements of operations
for the year then ended, and the statements of changes in net assets and
financial highlights for the year ended April 30, 1999 and for the period from
December 19, 1997 (commencement of operations) to April 30, 1998. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1999, by correspondence with the custodian. As to securities purchased or
sold but not yet received or delivered, we performed other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
Smith Barney Hansberger Global Value Fund and Smith Barney Hansberger Global
Small Cap Value Fund of Smith Barney Investment Funds Inc. as of April 30, 1999,
the results of their operations for the year then ended, and the changes in
their net assets and financial highlights for the year ended April 30, 1999 and
the period ended April 30,1998, in conformity with generally accepted accounting
principles.
KPMG LLP
New York, New York
June 14, 1999
- --------------------------------------------------------------------------------
36 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
April 30, 1999:
o Corporate dividend received deductions of:
Global Value Fund 16.60%
Global Small Cap Value Fund 10.14%
o The total foreign sourced income received by Global Value Fund and
Global Small Cap Value Fund, respectively, are $0.10774 per share
(or a total amount of $1,960,583) and $0.10017 per share (or a total
amount of $170,739). The total amounts of foreign taxes paid, again
respectively, are $0.02514 per share (or a total amount of $457,481)
and $0.04236 per share (or a total amount of $72,193).
- --------------------------------------------------------------------------------
Smith Barney Hansberger Funds 37
<PAGE>
Smith Barney
Hansberger Funds
Directors
Paul R. Ades
Herbert Barg
Dwight B. Crane
Frank Hubbard
Heath B. McLendon, Chairman
Jerome Miller
Ken Miller
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Manager
SSBC Fund Management Inc.
Sub-Investment Adviser
Hansberger Global Investors, Inc.
Distributor
CFBDS, Inc.
Custodian
The Chase Manhattan Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is for the information of shareholders of Smith Barney Investment
Funds Inc. -- Smith Barney Hansberger Global Value and Smith Barney Hansberger
Global Small Cap Value Funds. It is not authorized for distribution to
prospective investors unless accompanied by a current Prospectus for the Fund,
which contains information concerning the Fund's investment policies and
expenses as well as other pertinent information.
SALOMONSMITHBARNEY
- ---------------------------
A member of citigroup[LOGO]
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Investment Funds Inc.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD01490 6/99
