SMITH BARNEY INVESTMENT FUNDS INC.
On behalf of
SMITH BARNEY SPECIAL EQUITIES FUND
Supplement dated January 11, 1999 to
Prospectus dated April 30, 1998
On January 7, 1999 the Board of Directors of Smith Barney Investment Funds
Inc, on behalf of Smith Barney Special Equities Fund (the "Smith Barney
Fund"), approved a proposed reorganization pursuant to which Salomon
Brothers Small Cap Fund of the Salomon Brothers Series Funds Inc (the
"Salomon Fund") would acquire the assets of the Smith Barney Fund in
exchange for shares of the Salomon Fund and the assumption of stated
liabilities. This reorganization would permit Smith Barney Fund
shareholders to maintain an investment in a fund composed primarily of
smaller capitalized companies.
Under the terms of the proposed reorganization Smith Barney Fund
shareholders would receive shares of the Salomon Fund equal in value to
their investment in the Smith Barney Fund in accordance with the terms of
the reorganization. Smith Barney Fund shareholders would not be charged a
sales load when Salomon Fund shares are issued to them and it is
anticipated that no gain or loss for Federal income tax purposes would be
recognized by shareholders as a result of the reorganization. If the
reorganization is approved by Smith Barney Fund shareholders, those
shareholders would have all the rights and privileges accorded shareholders
within the Salomon Brothers Family of Funds such as exchangeability of fund
shares and rights of accumulation within the Salomon Brothers Family of
Funds. However, as new Salomon Fund shareholders, those shareholders would
no longer be accorded the rights and privileges of shareholders in the
Smith Barney Family of Funds such as exchangeability of fund shares and
rights of accumulation within the Smith Barney Family of Funds.
It is anticipated that as of March 8, 1999 the Smith Barney Fund will no
longer be accepting investments.
The proposed reorganization is subject to the fulfillment of certain
conditions, including approval by the shareholders of the Smith Barney
Fund. Proxy materials describing the proposed reorganization will be
mailed to Smith Barney Fund shareholders in anticipation of a meeting of
the shareholders expected to be held in May of 1999. If approved by Smith
Barney Fund shareholders at that time, the reorganization will occur as
soon after the meeting as practicable.
FD 01594
