<PAGE>
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
SMITH BARNEY HANSBERGER
GLOBAL SMALL CAP VALUE FUND
CLASSIC INVESTOR SERIES
ANNUAL REPORT
APRIL 30, 2000
[LOGO OF HANSBERGER GLOBAL INVESTORS, INC.]
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Smith Barney Hansberger Funds
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MARKET HIGHLIGHT
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The recovery of many economies worldwide, coupled with anticipated corporate
restructurings and the continued strength of foreign investment, should, in our
view, provide investors with solid long-term capital appreciation potential.
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The Smith Barney Hansberger Global Value Fund seeks long-term capital growth by
investing primarily in the common stocks and other equity securities of U.S. and
foreign companies, including those of emerging market issuers. The Fund's
bottom-up approach to stock selection focuses primarily on identifying companies
with low share prices relative to their earnings, cash flow and/or net asset
value.
NASDAQ Symbol
-------------
Class A SGLAX
Class B SGLBX
Class L SGLCX
The Smith Barney Hansberger Global Small Cap Value Fund's primary investment
objective is long-term capital growth. The Fund seeks to achieve this objective
by investing primarily in equity securities of U.S. and foreign issuers with
relatively small market capitalizations (i.e., share price times the number of
equity securities outstanding). These are equity securities which, in the
opinion of SSB Citi Fund Management LLC, the Fund's investment manager, and
Hansberger Global Investors, Inc., the Fund's sub-investment adviser, are
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
Fund at a Glance ........................................................ 6
Smith Barney Hansberger Global Small Cap
Value Fund
Portfolio Manager Commentary ............................................ 7
Historical Performance .................................................. 9
Fund at a Glance ........................................................ 11
Schedules of Investments ................................................... 12
Statements of Assets and Liabilities ....................................... 19
Statements of Operations ................................................... 20
Statements of Changes in Net Assets ........................................ 21
Notes to Financial Statements .............................................. 23
Financial Highlights ....................................................... 29
Independent Auditors' Report ............................................... 37
Tax Information ............................................................ 38
<PAGE>
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Shareholder Letter
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[PHOTO]
HEATH B. MCLENDON
Chairman
[PHOTO]
THOMAS L. HANSBERGER,
CFA, CIC
Chairman and Chief Executive Officer
Hansberger Global Investors, Inc.
Dear Shareholder:
The investment scene is ever changing but never have we witnessed so many
factors which have greatly impacted the world's financial markets and investors'
decisions. The world's financial markets are converging and the flow of funds
into a myriad of investment choices has increased rapidly year after year,
largely contributing to the rapid growth of prosperity on a global scale.
While these remarkable events have positive implications for the creation and
growth of personal wealth, these changes do not come without risks and
challenges. For example, the seemingly limitless and in some cases justifiable
enthusiasm for new technologies and the companies that are developing them has
resulted in a historic rise in their share prices to often unsustainable
valuations.
In our opinion, the ongoing surge in trading volumes has overwhelmed the
traditional market-making systems. As a result, few market makers (one who
maintains firm bid and offer prices in a given security by standing ready to buy
or sell round lots at publicly quoted prices) are willing to commit the
necessary capital to balance order flow. As a consequence, the market has been
characterized by a dramatic increase in volatility. As a result, daily price
swings are the rule rather than the exception.
Financial markets worldwide are currently undergoing the difficult process of
correcting the overvaluation of the share prices of many technology companies.
Meanwhile, the shares of many substantial and what are deemed to be "quality"
companies have underperformed relative to the market to the disappointment of
many investors and investment professionals.
Many events shaping the world's financial markets require a sound perspective by
investors -- a balance between accepting the "new" rules without forgetting the
valuable lessons of the past while keeping a vigilant eye towards the future. We
seek to offer our shareholders the benefits of our professional expertise in
challenging market conditions.
In volatile and unpredictable markets, we think the values of active management
will become more apparent in the days ahead. Thank you for your continued
confidence in our investment approach.
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 17, 2000
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Smith Barney Hansberger Funds 1
<PAGE>
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Smith Barney Hansberger Global value Fund
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Performance Update1
For the year ended April 30, 2000 the Hansberger Global Value Fund's ("Fund")
Class A, B and L shares returned 9.75%, 8.86% and 8.77%, respectively, without
sales charges. The Fund's Class A, B and L shares returned 4.28%, 3.86% and
6.69%, respectively, with sales charges. In comparison, the Morgan Stanley
Capital International All-Country World Free Index ("MSCI Index")2 returned
13.00% for the same period.
Investment Strategy
As previously noted, the Fund seeks long-term capital growth by investing
primarily in common stocks and other equity securities of U.S. and foreign
companies, including those of emerging market issuers. Equity securities include
exchange-traded and over-the-counter common stocks and preferred shares, debt
securities convertible into equity securities and warrants and rights relating
to equity securities.
The subadviser uses a "bottom-up"3 approach to security selection, focusing
primarily on identifying individual securities that meet the Fund's value
criteria. The Fund seeks to invest in companies with low share prices relative
to their earnings, cash flow and/or net asset value.
Market and Economic Overview
The dramatic performance and valuation disparity between global growth and value
stocks over the past six months peaked in February 2000. (Value stocks are
shares of companies that are believed to be undervalued but have good
longer-term business prospects. Growth stocks are shares of companies with
historically strong and relatively predictable earnings growth rates.) Since
then, the vulnerability of what we deem to be high-priced growth stocks has
become more evident.
The volatility of the world's financial markets increased during the second
quarter of 2000 with many global telecommunications, media and technology
("TMT") large-cap growth companies posting steep declines. However, during the
past six months, a select band of global TMT stocks have performed well. The
overall performance of global stocks with the exception of these select
companies was flat during the reporting period.
The investment philosophy within the growth sector of the market, in our view,
seems to have moved from growth at a reasonable price to growth at any price. We
still believe that despite the competitive growth rates and outlook for
companies in this sector, there should be an appropriate price for these
companies' shares based on proven fundamentals. We have found that over time
companies and/or industries with sound business plans and a high potential for
future growth do not necessarily translate into competitive share prices.
Additionally many "New Economy" companies have unproven business models and
often rely on constant access to the capital markets to fund their operations.
(The New Economy represents those companies in the technology,
telecommunications and Internet sectors.) As noted author Michael Lewis recently
wrote in Bloomberg, "Stock markets are saying that the New Economy will spawn
new businesses that are not less but more profitable than the Old Economy ones
they replace." (The Old Economy represents more established, "blue-chip"
companies.) Over the long term, however, we do not believe this will be the case
for all TMT companies.
1 Please note that the Fund's holdings are subject to change and any
discussions of holdings is as of April 30, 2000. Please refer to pages 12
through 15 for a complete list and percentage breakdown of the Fund's
holdings.
2 The MSCI All-Country World Free Index represents the performance of 47
markets in both the developed and the emerging markets in Africa, Asia,
Australia, Europe, North America and South America.
3 Bottom-up investing is a search for outstanding performance of individual
stocks before considering the impact of economic trends.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
The Fund benefited from its overweighted position in emerging markets and its
holdings in Japan during the period. The Fund's holdings in Europe and
Australia/New Zealand negatively impacted its performance. The Fund's
telecommunication and health care holdings, which were purchased at significant
discounts, also positively contributed to performance. Those holdings in
consumer-oriented, industrial and materials stocks detracted from the Fund's
performance over the period, but we are confident that these holdings may
perform well in the near future.
Interestingly, the Fund's holdings have exhibited higher than average earnings
growth rates over the last three years, yet these same stocks trade at an
average 40% discount to market valuations such as price-to-earnings,
price-to-cash flow and price-to-book value ratios.4 This dichotomy was noted in
a recent Sanford Bernstein & Co. study which points out that "Old Economy"
stocks have posted superior earnings estimate revisions trends for most of the
past year, while the strong performance of "New Economy" stocks has not
coincided with improving short-term earnings expectations.
Our investment outlook and portfolio positioning has not changed significantly
since our last report. We have continued to increase the Fund's exposure in
large cap stocks and increased the Fund's holdings in Japan and in the U.S. We
continue to search for investment opportunities in Japan, focusing on the
financial services and information technology sectors that we think may benefit
from a slowly recovering economy, increased corporate investment and
redeployment of maturing savings accounts.
We are further encouraged by improving consumer sentiment and recently released
data showing recurring Japanese corporate profits up 46% for the year primarily
due to restructuring and cost cutting. Yet, despite the strong performance over
the past year, we also continue to see opportunities emerging in several South
East Asian countries as their economies strengthen and banking reforms take
hold. We were also encouraged by the continued strength of foreign investment
into the region.
The continued weakness of the euro has masked strong overall stock performance.
(The euro is the single currency of the European Monetary Union that was adopted
by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands,
Austria, Portugal and Finland on January 1, 1999.) The restructuring of Europe
is advancing and merger and acquisition activity is moving to a Pan European
field from a national level. If Germany adopts recently proposed tax law
changes, the largest economy in Europe may see a dramatic transformation of its
economy and industry over the next several years.
We have invested in companies that we feel may possibly benefit from any
anticipated restructuring. We also continue to think that the euro is
undervalued relative to the U.S. dollar and we expect that its value may
increase over the course of 2000.
The Fund's holdings in Eastern Europe should, in our view, continue to benefit
from the new era of stability in Russia brought on by Vladimir Putin's election
as President and the probable expansion of the European Union to include select
countries in the region.
Latin America, Mexico and Brazil have rebounded strongly over the past year as
interest rates have fallen, gross domestic product ("GDP") has strengthened, and
sovereign credit ratings have improved. We think that further restructuring of
these economies may lead to continued strength of the financial markets in these
countries. (Of course, our expectations may not be realized.)
While no guarantees can be given, we think that the Fund is well positioned for
the future. We expect that long-term investors who can tolerate the higher
volatility associated with global value investing may be ultimately rewarded for
their patience.
-----------
4 The price-to-earnings ratio is the price of a stock divided by its earnings
per share. The price-to-book ratio is the price of a stock compared to the
difference between a company's assets and liabilities.
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Smith Barney Hansberger Funds 3
<PAGE>
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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)
================================================================================
4/30/00 $12.00 $13.14 $0.03 9.75%
--------------------------------------------------------------------------------
4/30/99 12.99 12.00 0.12 (6.56)
--------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.99 0.02 14.13+
================================================================================
Total $0.17
================================================================================
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Historical Performance -- Class B Shares
--------------------------------------------------------------------------------
Net Asset Value
----------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/00 $11.97 $13.03 $0.00 8.86%
--------------------------------------------------------------------------------
4/30/99 12.96 11.97 0.04 (7.27)
--------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.96 0.02 13.87+
================================================================================
Total $0.06
================================================================================
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Historical Performance -- Class L Shares
--------------------------------------------------------------------------------
Net Asset Value
----------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/00 $11.97 $13.02 $0.00 8.77%
--------------------------------------------------------------------------------
4/30/99 12.96 11.97 0.04 (7.27)
--------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.96 0.02 13.87+
================================================================================
Total $0.06
================================================================================
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Historical Performance -- Class Y Shares
--------------------------------------------------------------------------------
Net Asset Value
----------------------
Beginning End Income Total
Year Ended of Year of Year Dividends Returns(1)
================================================================================
4/30/00 $12.03 $13.16 $0.08 10.07%
--------------------------------------------------------------------------------
4/30/99 13.00 12.03 0.15 (6.17)
--------------------------------------------------------------------------------
Inception*-- 4/30/98 12.44 13.00 0.00 4.50+
================================================================================
Total $0.23
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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4 2000 Annual Report to Shareholders
<PAGE>
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Average Annual Total Return
--------------------------------------------------------------------------------
Without Sales Charges(1)
--------------------------------------------
Class A Class B Class L Class Y
================================================================================
Year Ended 4/30/00 9.75% 8.86% 8.77% 10.07%
--------------------------------------------------------------------------------
Inception* through 4/30/00 6.88 6.07 6.03 3.28
================================================================================
With Sales Charges(2)
================================================================================
Class A Class B Class L Class Y
Year Ended 4/30/00 4.28% 3.86% 6.69% 10.07%
--------------------------------------------------------------------------------
Inception* through 4/30/00 4.59 4.89 5.56 3.28
================================================================================
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Cumulative Total Return
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Without Sales Charges(1)
================================================================================
Class A (Inception* through 4/30/00) 17.04%
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Class B (Inception* through 4/30/00) 14.94
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Class L (Inception* through 4/30/00) 14.85
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Class Y (Inception* through 4/30/00) 7.15
================================================================================
(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) 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.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 5
<PAGE>
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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+
--------------------------------------------------------------------------------
December 1997--April2000
[LINE GRAPH]
<TABLE>
<CAPTION>
Global Value Fund Global Value Fund Global Value Fund
Class A Shares Class B Shares Class L Shares MSCI All Country World Free Index
------------------------- ------------------------- ------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Dec 19\r 1997 9,500 10,000 9,900 10,000
Apr\r 1998 10842 10887 11168 11643
Oct\r 1998 8589 8531 8797 11132
Apr \r 1999 10131 10159 10449 13399
Oct 31\r 1999 10561 10565 10851 14028
Apr 30\r 2000 11119 11194 11366 15140
</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% and 1.00% for Class A and L shares, respectively. 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, 2000. The Morgan Stanley
Capital International ("MSCI") All Country World Free Market Index includes
47 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 class 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 class.
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, 2000
-------------------------------------------------------------------------------
1. NEC Corp. 2.1%
-------------------------------------------------------------------------------
2. Compagnie de Saint Gobain 1.8
-------------------------------------------------------------------------------
3. Daiwa Securities Group Inc. 1.7
-------------------------------------------------------------------------------
4. NTT DoCoMo, Inc. 1.7
-------------------------------------------------------------------------------
5. Daito Trust Construction Co., Ltd. 1.7
-------------------------------------------------------------------------------
6. British Telecommunications PLC 1.5
-------------------------------------------------------------------------------
7. Aventis SA 1.5
-------------------------------------------------------------------------------
8. NCR Corp. 1.5
-------------------------------------------------------------------------------
9. Protective Life Corp. 1.5
-------------------------------------------------------------------------------
10. Hutchison Whampoa Ltd. 1.4
-------------------------------------------------------------------------------
* As a percentage of total stocks.
Investment Allocation as of April 30, 2000**
--------------------------------------------------------------------------------
[GRAPH]
0.5% Africa
2.7% South America
23.1% North America
35.1% Asia/Pacific
5.6% Repurchase Agreement
33.0% Europe
** As a percentage of total investments.
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6 2000 Annual Report to Shareholders
<PAGE>
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Smith Barney Hansberger Global Small Cap Value Fund
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Performance Update1
For the year ended April 30, 2000, the Hansberger Global Small Cap Value Fund's
("Fund") Class A, B and L shares generated negative total returns of 16.06%,
16.73% and 16.96%, respectively, without sales charges. The Fund's Class A, B
and L shares generated negative total returns of 20.28%, 20.90% and 18.60%,
respectively, with sales charges. In comparison, the Salomon Smith Barney World
Extended Market Index2 posted a 18.87% return for the same time period. We
attribute the Fund's disappointing underperformance versus its benchmark to its
holdings in several Asian companies, which have recently been under pressure.
However, we believe that the Fund's Asia holdings may be well positioned to
offer competitive returns over the long term.
Investment Strategy
As previously noted, the Fund seeks long-term capital growth by investing
primarily in common stocks and other equity securities of U.S. and foreign
companies, including those of emerging market issuers, with relatively small
market capitalizations. These are market capitalizations of $1.4 billion or less
at the time of investment. Equity securities include exchange-traded and
over-the-counter common stocks and preferred shares, debt securities convertible
into equity securities and warrants and rights relating to equity securities.
The subadviser uses a "bottom-up"3 approach to security selection, focusing
primarily on identifying individual securities that meet the Fund's value
criteria. The Fund seeks to invest in companies with low share prices relative
to their earnings, cash flow and/or net asset value.
Market and Economic Overview
During the first half of the Fund's current fiscal year, the worldwide financial
markets continued to generally ignore global small-cap value stocks. (Value
stocks are shares of companies that are believed to be undervalued but have good
longer-term business prospects.)
Although the historic performance of the technology sector during the last two
months of 1999 slowed somewhat by the end of the first quarter of 2000, the
market continued to favor large-cap value stocks over their small-cap
counterparts. We think that some investor concerns centered on rising U.S.
interest rates and the future direction of interest rates worldwide. The decline
of the tech-laden NASDAQ Composite Index4 reflects these concerns and the fear
that valuations that have been assigned to many companies by investors may be
without fundamental merit.
The Fund began its fiscal year invested in 87 companies in 30 countries.
Although we have kept the Fund's geographic exposure broad, with investments in
31 countries as of April 30, 2000, we have concentrated the number of the Fund's
holdings to 63. The depressed valuations in small-cap value stocks have provided
us with the opportunity to focus on a more select list of what we deem to be
higher-quality companies.
With the economic recovery underway in Asia, we took advantage of depressed
stock prices in the region by raising the Fund's exposure from 18% to 45%. As a
result, the Fund's emerging market exposure moved from 10% to 25% over the past
six months. We established new country positions in South Korea, Malaysia,
Slovakia and Mexico. The decision to raise the emerging market and Asian
allocations forced us
1 Please note that the Fund's holdings are subject to change and any
discussion of holdings is as of April 30, 2000. Please refer to pages 16
through 18 for a complete list and percentage breakdown of the Fund's
holdings.
2 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.
3 Bottom-up investing is a search for outstanding performance of individual
stocks before considering the impact of economic trends.
4 The NASDAQ Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 7
<PAGE>
to scale back the Fund's European holdings. The Fund benefited from a currency
perspective as the Euro depreciated over 14% during the period.
With a lower number of stocks in the portfolio, the Fund's sector allocation has
also become more focused. We made the most significant changes within the Fund's
portfolio in the technology and telecommunications industries. During the
period, the Fund's weighting in the technology and telecommunications sectors
increased to 23% from 14%. We also reduced the Fund's exposure in the utilities,
transportation specialty retailing, beverages and miscellaneous materials and
commodities sectors to increase the Fund's holdings in what we believe are
high-quality technology and telecommunications companies.
We are confident that the worldwide markets' shift from a growth to value
orientation may benefit the Fund's performance over time. (Of course, no
guarantees can be given that this will occur.) In our opinion, although the
market currently favors large-cap value stocks over small-cap value stocks, the
recent decline in the share price of high-growth companies may be substantial
enough to create increased interest in small-cap value stocks. We will continue
to invest in what we think are quality companies that have declined in reaction
to the sell-off in technology stocks. In terms of geography, we feel that
despite rising U.S. interest rates, economic conditions in Asia should continue
to improve and may support higher stock prices over time. (Please note that our
expectations may not be realized.)
Thank you for your continued support and interest in the Smith Barney Hansberger
Global Value Small Cap Fund.
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8 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance -- Class A Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
4/30/00 $10.19 $8.51 $0.05 $0.00 $0.00 (16.06)%
-------------------------------------------------------------------------------------------------------------
4/30/99 12.37 10.19 0.16 0.03 0.00 (15.95)
-------------------------------------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.37 0.01 0.00 0.00 8.64+
=============================================================================================================
Total $0.22 $0.03 $0.00
=============================================================================================================
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Historical Performance -- Class B Shares
-------------------------------------------------------------------------------------------------------------
Net Asset Value
----------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
4/30/00 $10.16 $8.46 $0.00 $0.00 $0.00 (16.73)%
-------------------------------------------------------------------------------------------------------------
4/30/99 12.34 10.16 0.09 0.03 0.00 (16.61)
-------------------------------------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.34 0.01 0.00 0.00 8.38+
=============================================================================================================
Total $0.10 $0.03 $0.00
=============================================================================================================
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Historical Performance -- Class L Shares
-------------------------------------------------------------------------------------------------------------
Net Asset Value
---------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
4/30/00 $10.14 $8.42 $0.00 $0.00 $0.00 (16.96)%
-------------------------------------------------------------------------------------------------------------
4/30/99 12.34 10.14 0.09 0.03 0.00 (16.77)
-------------------------------------------------------------------------------------------------------------
Inception*-- 4/30/98 11.40 12.34 0.01 0.00 0.00 8.38+
=============================================================================================================
Total $0.10 $0.03 $0.00
=============================================================================================================
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
-------------------------------------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
<S> <C> <C> <C> <C> <C> <C>
=============================================================================================================
4/30/00 $10.22 $8.51 $0.08 $0.00 $0.00 (16.05)%
-------------------------------------------------------------------------------------------------------------
4/30/99 12.37 10.22 0.19 0.03 0.00 (15.49)
-------------------------------------------------------------------------------------------------------------
Inception*-- 4/30/98 11.74 12.37 0.00 0.00 0.00 5.37+
=============================================================================================================
Total $0.27 $0.03 $0.00
=============================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 9
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Return
--------------------------------------------------------------------------------
Without Sales Charges(1)
----------------------------------------------
Class A Class B Class L Class Y
================================================================================
Year Ended 4/30/00 (16.06)% (16.73)% (16.96)% (16.05)%
--------------------------------------------------------------------------------
Inception* through 4/30/00 (10.64) (11.33) (11.51) (12.91)
================================================================================
With Sales Charges(2)
----------------------------------------------
Class A Class B Class L Class Y
================================================================================
Year Ended 4/30/00 (20.28)% (20.90)% (18.60)% (16.05)%
--------------------------------------------------------------------------------
Inception* through 4/30/00 (12.55) (12.45) (11.90) (12.91)
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Return
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 4/30/00) (23.35)%
--------------------------------------------------------------------------------
Class B (Inception* through 4/30/00) (24.74)
--------------------------------------------------------------------------------
Class L (Inception* through 4/30/00) (25.10)
--------------------------------------------------------------------------------
Class Y (Inception* through 4/30/00) (25.63)
================================================================================
(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) 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.
--------------------------------------------------------------------------------
10 2000 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 2000
[LINE GRAPH]
<TABLE>
<CAPTION>
Small Cap Value Class A Small Cap Value Class B Small Cap Value Class L SSB World EMI Index
----------------------- ----------------------- ----------------------- --------------------
<S> <C> <C> <C> <C>
Dec 19\r 1997 9,500 10,000 9,900 10,000
Apr\r 1998 10,321 10,338 10,625 11,659
Oct\r 1998 7,734 7,685 7,924 9,933
Apr \r 1999 8,675 8,682 8,926 11,299
Oct 31\r 1999 7,943 7,912 8,143 11,668
Apr 30\r 2000 7282 7303 7412 13431
</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% and 1.00% for Class A and L shares, respectively. 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, 2000. 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
class 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 class.
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, 2000
--------------------------------------------------------------------------------
1. Shanghai Petrochemical Co., Ltd. 3.6%
--------------------------------------------------------------------------------
2. Wing Hang Bank Ltd. 2.8
--------------------------------------------------------------------------------
3. Irkutskenergo ADR 2.6
--------------------------------------------------------------------------------
4. Nihon Unisys, Ltd. 2.5
--------------------------------------------------------------------------------
5. Clipsal Industries Holdings 2.4
--------------------------------------------------------------------------------
6. PT Ramayana Lestari Sentosa Tbk 2.4
--------------------------------------------------------------------------------
7. Daito Trust Construction Co., Ltd. 2.4
--------------------------------------------------------------------------------
8. Partner Communications Company Ltd. ADR 2.4
--------------------------------------------------------------------------------
9. NCR Corp. 2.3
--------------------------------------------------------------------------------
10. United Engineers Berhad 2.3
--------------------------------------------------------------------------------
* As a percentage of total investments.
Investment Allocation as of April 30, 2000*
--------------------------------------------------------------------------------
[GRAPH]
1.4% South America
26.7% North America
27.1% Europe
44.8% Asia/Pacific
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
SHARES SECURITY VALUE
================================================================================
STOCK -- 94.4%
Australia -- 3.3%
252,807 Broken Hill Proprietary Co., Ltd. $ 2,720,131
113,498 National Australia Bank Ltd. 1,553,660
1,100,000 North Ltd. 1,890,244
465,569 Orica Ltd. 1,839,131
--------------------------------------------------------------------------------
8,003,166
--------------------------------------------------------------------------------
Austria -- 1.7%
45,200 Boehler-Uddeholm AG 1,765,442
39,800 VA Technologie AG 2,374,950
--------------------------------------------------------------------------------
4,140,392
--------------------------------------------------------------------------------
Brazil -- 2.2%
62,000 Companhia Vale do Rio Doce ADR 1,535,870
85,300 Embratel Participacoes SA 1,919,250
15,700 Telecomunicacoes Brasileiras SA Telebras ADR 1,855,544
--------------------------------------------------------------------------------
5,310,664
--------------------------------------------------------------------------------
Canada -- 1.0%
77,000 Alcan Aluminium Ltd. 2,521,750
--------------------------------------------------------------------------------
Chile -- 0.5%
70,000 Cia de Telecomunicaciones de Chile SA ADR 1,295,000
--------------------------------------------------------------------------------
China -- 0.2%
49,500 Huaneng Power International, Inc. GDR (a) 457,875
--------------------------------------------------------------------------------
Croatia -- 0.8%
154,800 Pliva DD GDR (a)(b) 1,935,000
--------------------------------------------------------------------------------
Czech Republic -- 0.7%
230,000 Komercni Banka AS ADR (a) 1,742,250
--------------------------------------------------------------------------------
France -- 6.0%
64,006 Aventis SA 3,528,896
30,500 Compagnie de Saint Gobain 4,171,990
17,916 Lafarge SA 1,487,381
40,000 Schlumberger Ltd. 3,062,500
53,100 Scor 2,316,922
--------------------------------------------------------------------------------
14,567,689
--------------------------------------------------------------------------------
Germany -- 1.9%
40,400 BASF AG 1,769,039
17,700 Infineon Technologies AG (a) 1,206,529
32,000 Veba AG 1,560,151
--------------------------------------------------------------------------------
4,535,719
--------------------------------------------------------------------------------
Hong Kong -- 3.9%
130,781 HSBC Holdings PLC 1,460,734
226,000 Hutchison Whampoa Ltd. 3,293,149
802,936 SmartOne Telecommunications Holdings Ltd. 2,515,231
2,800,000 Swire Pacific Ltd., Class B Shares 2,084,938
--------------------------------------------------------------------------------
9,354,052
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
SHARES SECURITY VALUE
================================================================================
Hungary -- 0.6%
34,000 EGIS Rt. $ 1,494,795
--------------------------------------------------------------------------------
Ireland -- 1.9%
600,000 Eircom PLC 2,113,311
60,000 Elan Corp. PLC ADR (a) 2,572,500
--------------------------------------------------------------------------------
4,685,811
--------------------------------------------------------------------------------
Japan -- 18.9%
540,000 Asahi Chemical Industry Co., Ltd. 3,107,842
271,000 Dai-Ichi Kangyo Bank, Ltd. 2,246,736
156,000 Daiichi Pharmaceutical Co., Ltd. 2,681,915
244,000 Daito Trust Construction Co., Ltd. 3,838,075
253,000 Daiwa Securities Group Inc. 3,862,595
144,000 Dowa Fire & Marina Insurance Ltd. 358,418
90,000 Fujitsu Ltd. 2,548,230
250,000 Hitachi Ltd. 2,984,039
1,035,000 Marubeni Corp. 2,997,502
175,000 NEC Corp. 4,760,583
115 NTT DoCoMo, Inc. 3,841,314
76,000 Nihon Unisys, Ltd. 1,765,071
840,000 Nippon Fire & Marine Insurance Co., Ltd. 2,292,852
400,000 Nishimatsu Construction Co., Ltd. 1,276,891
395,000 Sumitomo Trust & Banking Co., Ltd. 2,887,347
350,000 Tokai Bank, Ltd. 1,820,032
695,000 Toyo Trust & Banking Co., Ltd. 2,540,134
--------------------------------------------------------------------------------
45,809,576
--------------------------------------------------------------------------------
Malaysia -- 2.7%
600,000 Malayan Banking Berhad 2,494,737
152,000 Malaysian Pacific Industries Berhad 1,700,000
1,850,000 Technology Resources Industries Berhad 2,366,053
--------------------------------------------------------------------------------
6,560,790
--------------------------------------------------------------------------------
Mexico -- 1.0%
3,298 Cemex SA ADR Warrants (a) 9,070
52,780 Cemex SA de CV CPO 1,154,562
22,000 Telefonos de Mexico SA ADR, Class L Shares 1,293,875
--------------------------------------------------------------------------------
2,457,507
--------------------------------------------------------------------------------
Netherlands -- 2.1%
33,379 ING Groep NV 1,825,711
32,500 Koninklijke KPN NV 3,283,083
--------------------------------------------------------------------------------
5,108,794
--------------------------------------------------------------------------------
Norway -- 2.4%
37,800 Norsk Hydro ASA 1,383,648
88,900 Odfjell ASA, Class A Shares 1,291,718
203,200 Petroleum Geo-Services ASA (a) 3,179,613
--------------------------------------------------------------------------------
5,854,979
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 13
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
SHARES SECURITY VALUE
================================================================================
Philippines -- 0.8%
101,000 Philippine Long Distance Telephone Co. $ 1,810,343
--------------------------------------------------------------------------------
Poland -- 1.0%
300,000 Telekomunikacja Polska SA GDR (b) 2,302,500
--------------------------------------------------------------------------------
Russia -- 2.1%
45,200 Lukoil Holding ADR 2,724,656
120,000 Rostelecom ADR 2,332,500
--------------------------------------------------------------------------------
5,057,156
--------------------------------------------------------------------------------
Singapore -- 1.8%
430,000 City Developments Ltd. 1,951,684
356,928 United Overseas Bank Ltd. 2,487,522
--------------------------------------------------------------------------------
4,439,206
--------------------------------------------------------------------------------
Slovakia -- 0.1%
122,200 Slovakofarma a.s. GDR (a)(b) 290,225
--------------------------------------------------------------------------------
South Africa -- 0.5%
310,000 Standard Bank Investment Corp. Ltd. 1,143,152
--------------------------------------------------------------------------------
South Korea -- 2.1%
35,000 Korea Telecom Corp. ADR (a) 1,207,500
12,848 Samsung Electronics GDR (b) 2,071,740
59,410 SK Telecom Co., Ltd. ADR 1,904,833
--------------------------------------------------------------------------------
5,184,073
--------------------------------------------------------------------------------
Spain -- 0.5%
98,000 Iberdrola SA 1,260,131
--------------------------------------------------------------------------------
Sweden -- 1.5%
79,300 AssiDoman AB 1,310,890
100,000 Atlas Copco AB, Class B Shares 2,289,735
--------------------------------------------------------------------------------
3,600,625
--------------------------------------------------------------------------------
Switzerland -- 2.4%
16,534 ABB Ltd. 1,859,534
7,000 Swisscom AG 2,473,700
6,000 UBS AG 1,473,409
--------------------------------------------------------------------------------
5,806,643
--------------------------------------------------------------------------------
Thailand -- 1.4%
930,000 Bangkok Bank Public Co., Ltd. 1,575,030
1,820,000 Thai Farmers Bank Public Co., Ltd. (a) 1,911,514
--------------------------------------------------------------------------------
3,486,544
--------------------------------------------------------------------------------
United Kingdom -- 7.3%
380,767 British Airways PLC 2,000,478
197,443 British Telecommunications PLC 3,543,754
116,846 Cable & Wireless PLC 1,947,250
270,000 Nycomed Amersham PLC 2,059,666
470,000 Old Mutual PLC 1,066,410
542,626 Rolls Royce PLC 2,073,927
282,948 Royal & Sun Alliance Insurance Group PLC 1,597,244
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL VALUE FUND
SHARES SECURITY VALUE
================================================================================
United Kingdom -- 7.3% (continued)
148,776 Standard Chartered PLC $ 2,018,414
245,000 Unilever PLC 1,472,162
--------------------------------------------------------------------------------
17,779,305
--------------------------------------------------------------------------------
United States -- 21.1%
57,500 American Home Products Corp. 3,230,781
62,300 American Standard Cos., Inc. (a) 2,554,300
48,000 AT&T Corp. 2,241,000
9,300 B.F. Goodrich Co. 296,438
60,000 Bristol-Myers Squibb Co. 3,146,250
213,000 CK Witco Corp. (a) 2,502,750
155,000 Ciber Inc. (a) 2,799,687
65,000 Deere & Co. 2,624,375
46,000 FedEx Corp. (a) 1,733,625
35,000 Fluor Corp. 1,174,687
47,000 GTE Corp. 3,184,250
18,000 Johnson & Johnson 1,485,000
92,500 Lafarge Corp. 2,335,625
118,500 McKesson HBOC, Inc. 1,999,688
87,000 NCR Corp. (a) 3,360,375
20,000 Phelps Dodge Corp. 925,000
140,000 Protective Life Corp. 3,333,750
195,000 Republic Services Inc. (a) 2,669,063
37,000 U. S. West, Inc. 2,633,938
20,100 VoiceStream Wireless Corp. (a) 1,989,900
100,000 Xerox Corp. 2,643,750
52,000 XL Capital, Ltd. (c) 2,476,500
--------------------------------------------------------------------------------
51,340,732
--------------------------------------------------------------------------------
TOTAL STOCK
(Cost -- $204,621,642) 229,336,444
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 5.6%
$13,638,000 CIBC Wood Gundy Securities Inc., 5.600% due
5/1/00; Proceeds at maturity -- $13,644,364;
(Fully collateralized by U.S. Treasury Notes,
4.625% to 8.500% due 11/15/00 to 11/30/00;
Market value -- $13,912,053)
(Cost -- $13,638,000) 13,638,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $218,259,642*) $242,974,444
================================================================================
(a) Non-income producing security.
(b) 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.
(c) Security segregated for open forward foreign currency contracts.
* Aggregate cost for Federal income tax purposes is substantially the same
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 15
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
SHARES SECURITY VALUE
================================================================================
STOCK -- 100.0%
Australia -- 0.9%
47,700 Mayne Nickless Ltd. $ 96,024
--------------------------------------------------------------------------------
Austria -- 4.0%
4,400 Boehler-Uddeholm AG 171,857
2,000 Mayr-Melnhof Karton AG 94,556
22,400 Schoeller-Bleckman Oilfield Equipment AG 175,554
--------------------------------------------------------------------------------
441,967
--------------------------------------------------------------------------------
Czech Republic -- 1.0%
14,000 Komercni Banka a.s. GDR (a) 106,050
--------------------------------------------------------------------------------
Denmark -- 0.8%
4,900 Sophus Berendsen A/S, Class B Shares 88,639
--------------------------------------------------------------------------------
Germany -- 4.8%
9,300 Fag Kugelfischer Georg Schaefer AG 75,852
8,600 Jenoptik AG 246,872
6,800 Lindner Holding KGaA 216,890
--------------------------------------------------------------------------------
539,614
--------------------------------------------------------------------------------
Hong Kong -- 10.6%
3,000,000 Shanghai Petrochemical Co., Ltd. 404,406
74,000 SmarTone Telecommunications Holdings Ltd. 231,808
220,000 South China Morning Post Holdings Ltd. 233,014
125,500 Wing Hang Bank Ltd. 307,741
--------------------------------------------------------------------------------
1,176,969
--------------------------------------------------------------------------------
Hungary -- 1.7%
2,500 BorsodChem Rt. 92,693
2,300 EGIS Rt. 101,119
--------------------------------------------------------------------------------
193,812
--------------------------------------------------------------------------------
Indonesia -- 2.4%
532,000 PT Ramayana Lestari Sentosa Tbk 270,195
--------------------------------------------------------------------------------
Israel -- 2.4%
25,000 Partner Communications Company Ltd. ADR (a) 267,189
--------------------------------------------------------------------------------
Japan-- 10.7%
44,000 Ataka Construction & Engineering Co., Ltd. 104,223
17,000 Daito Trust Construction Co., Ltd. 267,407
60,000 Dowa Fire & Marina Insurance Ltd. 149,340
28,000 Higo Bank, Ltd. 101,040
36,000 JGC Corp. 92,270
43,000 Koito Manufacturing Co., Ltd. 201,722
12,000 Nihon Unisys, Ltd. 278,696
--------------------------------------------------------------------------------
1,194,698
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
================================================================================
SHARES SECURITY VALUE
Malaysia -- 4.5%
191,000 Technology Resources Industries Berhad $244,278
100,000 United Engineers Berhad (a) 257,895
--------------------------------------------------------------------------------
502,173
--------------------------------------------------------------------------------
Mexico -- 1.7%
12,000 Nuevo Grupo Iusacell ADR (a) 191,250
--------------------------------------------------------------------------------
Netherlands -- 2.9%
8,100 European Vinyls Corp. International NV (a) 95,960
2,300 Lernout & Hauspie Speech Products NV (a) 222,526
--------------------------------------------------------------------------------
318,486
--------------------------------------------------------------------------------
New Zealand -- 2.6%
110,300 Air New Zealand Ltd., Class B Shares 134,605
53,000 Fisher & Paykel Industries Ltd. 157,188
--------------------------------------------------------------------------------
291,793
--------------------------------------------------------------------------------
Norway -- 3.3%
9,300 Elkem ASA 147,602
31,600 Merkantildata ASA (a) 217,213
--------------------------------------------------------------------------------
364,815
--------------------------------------------------------------------------------
Peru -- 1.4%
12,600 Southern Peru Copper Corp. 158,287
--------------------------------------------------------------------------------
Philippines -- 1.8%
200,000 Jollibee Foods Corp. Warrants (a) 52,077
8,000 Philippine Long Distance Telephone Co. 143,393
--------------------------------------------------------------------------------
195,470
--------------------------------------------------------------------------------
Russia -- 2.6%
59,000 Irkutskenergo ADR 295,000
--------------------------------------------------------------------------------
Singapore -- 2.4%
200,000 Clipsal Industries Holdings 271,822
--------------------------------------------------------------------------------
Slovakia -- 0.5%
1,400 Slovakofarma AS (b) 55,528
--------------------------------------------------------------------------------
South Korea -- 3.0%
11,000 Hyundai Electronics Industries Co. (a) 174,453
15,000 Koomin Bank 162,199
--------------------------------------------------------------------------------
336,652
--------------------------------------------------------------------------------
Spain -- 2.8%
3,200 Banco Pastor SA 129,477
6,000 Mapfre Vida SA 176,884
--------------------------------------------------------------------------------
306,361
--------------------------------------------------------------------------------
Sweden -- 2.0%
15,750 Getinge Industrier AB, Class B Shares 146,013
12,000 Trelleborg AB 80,419
--------------------------------------------------------------------------------
226,432
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 17
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (continued) April 30, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HANSBERGER GLOBAL SMALL CAP VALUE FUND
================================================================================
SHARES SECURITY VALUE
Thailand -- 3.5%
20,000 Advanced Info Service Public Co. Ltd. (a) $ 234,212
93,000 Bangkok Bank Public Co. Ltd. (a) 157,503
--------------------------------------------------------------------------------
391,715
--------------------------------------------------------------------------------
United Kingdom -- 0.7%
18,400 Morgan Crucible Co. PLC 73,564
--------------------------------------------------------------------------------
United States-- 25.0%
6,000 Agco Corp. 71,250
5,900 Alpharma, Inc., Class A Shares 227,889
10,000 CK Witco Corp. 117,500
13,000 Ciber Inc. (a) 234,813
8,400 The Geon Co. 183,750
20,700 Hoenig Group, Inc. (a) 186,300
8,400 Invacare Corp. 224,700
69,000 Iomega Corp. (a) 245,813
6,700 NCR Corp. (a) 258,789
16,000 Owens & Minor, Inc. 192,000
8,800 Tarrant Apparel Group (a) 79,200
10,500 Unisys Corp. (a) 243,470
2,300 Voicestream Wireless Corp. (a) 227,701
8,100 Watsco Inc. 104,287
15,600 Wolverine World Wide, Inc. 187,200
--------------------------------------------------------------------------------
2,784,662
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $12,191,799*) $11,139,167
================================================================================
(a) Non-income producing security.
(b) 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.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities April 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Smith Barney Hansberger
Hansberger Global Small
Global Value Cap Value
Fund Fund
========================================================================================================
<S> <C> <C>
ASSETS:
Investments -- Cost $218,259,642 $12,191,799
Foreign currency -- Cost 82 --
========================================================================================================
Investments -- Value $242,974,444 $11,139,167
Foreign currency -- Value 83 --
Cash -- 41,806
Receivable for securities sold 3,389,955 --
Dividends and interest receivable 839,458 38,299
Receivable for Fund shares sold 621,698 2,077
Receivable from manager -- 26,266
Receivable for open forward foreign currency contracts (Note 4) 17,118 --
--------------------------------------------------------------------------------------------------------
Total Assets 247,842,756 11,247,615
--------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,369,335 --
Receivable for Fund shares sold 885,658 11,959
Payable to bank 871,535 --
Management fees payable 223,207 7,389
Distribution fees payable 11,881 1,679
Payable for open forward foreign currency contracts (Note 4) 10,122 --
Accrued expenses 100,360 58,730
--------------------------------------------------------------------------------------------------------
Total Liabilities 3,472,098 79,757
--------------------------------------------------------------------------------------------------------
Total Net Assets $244,370,658 $11,167,858
========================================================================================================
NET ASSETS:
Par value of capital shares $ 18,603 $ 1,316
Capital paid in excess of par value 224,393,422 16,826,130
Undistributed (overdistributed) net investment income 389,238 (24,655)
Accumulated net realized loss from
security transactions and foreign currencies (5,118,384) (4,581,294)
Net unrealized appreciation (depreciation)
of investments and foreign currencies 24,687,779 (1,053,639)
--------------------------------------------------------------------------------------------------------
Total Net Assets $244,370,658 $11,167,858
========================================================================================================
Shares Outstanding:
Class A 1,396,181 332,275
-----------------------------------------------------------------------------------------------------
Class B 2,458,277 462,603
-----------------------------------------------------------------------------------------------------
Class L 682,200 107,493
-----------------------------------------------------------------------------------------------------
Class Y 14,066,322 413,531
-----------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $13.14 $8.51
-----------------------------------------------------------------------------------------------------
Class B * $13.03 $8.46
-----------------------------------------------------------------------------------------------------
Class L ** $13.02 $8.42
-----------------------------------------------------------------------------------------------------
Class Y (and redemption price) $13.16 $8.51
-----------------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $13.83 $8.96
-----------------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $13.15 $8.51
========================================================================================================
</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 19
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Years Ended April 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Smith Barney Hansberger
Hansberger Global Small
Global Value Cap Value
Fund Fund
==================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 4,325,356 $ 378,052
Interest 518,883 38,941
Less: Foreign withholding tax (415,936) (39,424)
--------------------------------------------------------------------------------------------------
Total Investment Income 4,428,303 377,569
--------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,235,627 153,718
Distribution fees (Note 2) 476,176 85,947
Custody 110,160 19,669
Registration fees 81,172 80,639
Shareholder and system servicing fees 75,190 22,828
Audit and legal 36,876 30,822
Shareholder communications 18,977 15,830
Directors' fees 16,180 10,121
Other 15,442 11,462
--------------------------------------------------------------------------------------------------
Total Expenses 3,065,800 431,036
Less: Management fee waiver (Note 2) -- (32,619)
--------------------------------------------------------------------------------------------------
Net Expenses 3,065,800 398,417
--------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 1,362,503 (20,848)
--------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTES 3 AND 4):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) 15,245,594 (2,916,105)
Foreign currency transactions (730,809) (97,525)
--------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) 14,514,785 (3,013,630)
--------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation)
of Investments and Foreign Currencies:
Beginning of year 18,647,134 (1,615,748)
End of year 24,687,779 (1,053,639)
--------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) 6,040,645 562,109
--------------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments and Foreign Currencies 20,555,430 (2,451,521)
--------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations $ 21,917,933 $ (2,472,369)
==================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 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 2000 1999
=========================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,362,503 $ 1,936,053
Net realized gain (loss) 14,514,785 (19,453,283)
Increase in net unrealized appreciation 6,040,645 10,271,598
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 21,917,933 (7,245,632)
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,199,656) (2,249,826)
---------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (1,199,656) (2,249,826)
---------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 59,522,830 117,051,480
Net asset value of shares issued for reinvestment of dividends 40,655 363,706
Cost of shares reacquired (54,500,529) (29,808,698)
---------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 5,062,956 87,606,488
---------------------------------------------------------------------------------------------------------
Increase in Net Assets 25,781,233 78,111,030
NET ASSETS:
Beginning of year 218,589,425 140,478,395
---------------------------------------------------------------------------------------------------------
End of year* $ 244,370,658 $ 218,589,425
=========================================================================================================
* Includes undistributed net investment income of: $ 389,238 $ 402,571
=========================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 21
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (comntinued) For the Years Ended April, 30
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Hansberger Small Cap Value Fund 2000 1999
==========================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (20,848) $ 128,993
Net realized loss (3,013,630) (1,557,068)
(Increase) decrease in net unrealized depreciation 562,109 (3,181,363)
----------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Operations (2,472,369) (4,609,438)
----------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (42,420) (235,940)
Net realized gains -- (71,247)
Capital (603) --
----------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (43,023) (307,187)
----------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 2,326,627 6,255,298
Net asset value of shares issued for reinvestment of dividends 18,976 261,166
Cost of shares reacquired (6,002,825) (8,077,569)
----------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (3,657,222) (1,561,105)
----------------------------------------------------------------------------------------------------------
Decrease in Net Assets (6,172,614) (6,477,730)
NET ASSETS:
Beginning of year 17,340,472 23,818,202
----------------------------------------------------------------------------------------------------------
End of year* $ 11,167,858 $ 17,340,472
==========================================================================================================
* Includes undistributed (overdistributed) net investment income of: $ (24,655) $ 28,962
==========================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22 2000 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 seven other separate investment portfolios: Concert Peachtree
Growth Fund, Smith Barney Investment Grade Bond Fund, Smith Barney Premier
Selections Large Cap Fund, Smith Barney Small Cap Growth 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 shareholder 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, 2000, 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. Accordingly,
for Smith Barney Hansberger Global Small Cap Value Fund, a portion of net
investment loss amounting to $44,185 was reclassified to paid-in-capital. 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
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 23
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
markets and any other parameters used in determining these estimates could
cause actual results to differ.
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
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which in turn is a subsidiary of Citigroup Inc.
("Citigroup"), 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 Value") 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, 2000, SSBC waived a portion of its
management fee for Global Small Cap in the amount of $32,619.
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.
Effective October 1999, Citi Fiduciary Trust Company ("CFTC"), formerly known as
Smith Barney Private Trust Company, another subsidiary of Citigroup, became the
Fund's transfer agent and PFPC Global Fund Services ("PFPC") became the
sub-transfer agent. CFTC receives account fees and asset-based fees that vary
according to the account size and type of account. PFPC is responsible for
shareholder recordkeeping and financial processing for all shareholder accounts
and is paid by CFTC. During the period October 1, 1999 through April 30, 2000,
the Portfolios paid transfer agent fees of $41,576 to CFTC.
CFBDS, Inc. ("CFBDS") acts as the Fund's distributor. Salomon Smith Barney Inc.
("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, 2000, SSB received brokerage
commissions of $51,855.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. 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, 2000, CDSC's received by CFBDS were approximately:
CDSCs
--------------------------
Portfolio Class B Class L
=============================================================================
Global Value $144,000 $ 1,000
-----------------------------------------------------------------------------
Global Small Cap Value 50,000 --
=============================================================================
For the year ended April 30, 2000, sales charges received by SSB and CFBDS were
approximately:
Sales Charges
---------------------------
Portfolio Class A Class L
=============================================================================
Global Value $ 27,000 $ 12,000
-----------------------------------------------------------------------------
Global Small Cap Value 3,000 2,000
=============================================================================
--------------------------------------------------------------------------------
24 2000 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, 2000, total Distribution Plan fees incurred
by the Portfolios were:
Portfolio Class A Class B Class L
============================================================================
Global Value $ 41,479 $344,384 $ 90,313
----------------------------------------------------------------------------
Global Small Cap Value 10,598 62,122 13,227
============================================================================
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended April 30, 2000, 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 $113,067,318 $122,347,468
----------------------------------------------------------------------------
Global Small Cap Value 8,205,715 11,027,889
============================================================================
At April 30, 2000, 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 $ 44,751,921 $(20,037,119) $ 24,714,802
----------------------------------------------------------------------------
Global Small Cap Value 755,426 (1,808,058) (1,052,632)
============================================================================
4. Forward Foreign Currency Contracts
At April 30, 2000, Global 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:
Unrealized
Local Market Settlement Gain
Foreign Currency Currency Value Date (Loss)
================================================================================
Global Value:
To Sell:
Czech Republic Koruna 4,723,488 $ 117,984 5/2/00 $ 3,982
Czech Republic Koruna 10,581,113 264,356 5/3/00 4,466
Czech Republic Koruna 9,083,898 226,950 5/4/00 3,811
Czech Republic Koruna 4,442,424 111,022 5/5/00 239
Japanese Yen 15,062,252 139,443 5/1/00 1,921
Japanese Yen 19,494,142 180,504 5/2/00 2,534
Japanese Yen 7,023,356 65,032 5/2/00 165
--------------------------------------------------------------------------------
17,118
--------------------------------------------------------------------------------
To Buy:
Swedish Krona 9,564,558 1,068,608 5/2/00 (10,122)
--------------------------------------------------------------------------------
Net Unrealized Gain on Forward
Foreign Currency Contracts $ 6,996
================================================================================
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 25
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, 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.
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, 2000, 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, 2000, 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
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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.
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, 2000, the Portfolios had no securities on loan.
9. Capital Loss Carryforward
At April 30, 2000, the Global Value Fund and the Global Small Cap Value had, for
Federal income tax purposes, approximately $5,113,800 and $1,311,500 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. The amount and date of expiration of the carryforward losses for
each Portfolio is indicated below:
Portfolio 4/30/07 4/30/08 Total
===============================================================================
Global Value $ 2,964,000 $ 2,149,800 $ 5,113,800
-------------------------------------------------------------------------------
Global Small Cap Value 721,300 590,200 1,311,500
===============================================================================
10. Capital Shares
At April 30, 2000, 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.
At April 30, 2000, total paid-in capital amounted to the following for each
Portfolio:
Portfolio Class A Class B Class L Class Y
===============================================================================
Global Value $ 17,016,078 $ 29,686,494 $ 8,249,716 $169,459,737
-------------------------------------------------------------------------------
Global Small Cap Value 4,838,980 6,403,633 1,511,487 4,073,346
===============================================================================
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 27
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
April 30, 2000 April 30, 1999
-------------------------------- -------------------------------
Shares Amount Shares Amount
============================================================================================================
<S> <C> <C> <C> <C>
Smith Barney Hansberger
Global Value Fund
Class A
Shares sold 3,100,354 $ 40,917,265 402,580 $ 4,389,138
Shares issued on reinvestment 2,972 40,655 18,913 199,342
Shares reacquired (3,121,860) (41,360,636) (1,121,531) (11,613,734)
------------------------------------------------------------------------------------------------------------
Net Decrease (18,534) $ (402,716) (700,038) $ (7,025,254)
============================================================================================================
Class B
Shares sold 286,562 $ 3,619,345 594,636 $ 6,808,290
Shares issued on reinvestment -- -- 12,210 128,697
Shares reacquired (612,701) (7,931,183) (1,335,698) (13,782,855)
------------------------------------------------------------------------------------------------------------
Net Decrease (326,139) $ (4,311,838) (728,852) $ (6,845,868)
============================================================================================================
Class L*
Shares sold 117,436 $ 1,491,901 249,974 $ 2,836,977
Shares issued on reinvestment -- -- 3,384 35,667
Shares reacquired (164,426) (2,085,363) (377,684) (3,955,109)
------------------------------------------------------------------------------------------------------------
Net Decrease (46,990) $ (593,462) (124,326) $ (1,082,465)
============================================================================================================
Class Y
Shares sold 1,028,834 $ 13,494,319 8,968,472 $ 103,017,075
Shares reacquired (231,195) (3,123,347) (38,696) (457,000)
------------------------------------------------------------------------------------------------------------
Net Increase 797,639 $ 10,370,972 8,929,776 $ 102,560,075
============================================================================================================
Smith Barney Hansberger
Global Small Cap Value Fund
Class A
Shares sold 15,650 $ 152,220 189,385 $ 2,052,051
Shares issued on reinvestment 1,997 18,976 13,333 127,740
Shares reacquired (216,610) (2,077,400) (422,929) (4,037,611)
------------------------------------------------------------------------------------------------------------
Net Decrease (198,963) $ (1,906,204) (220,211) $ (1,857,820)
============================================================================================================
Class B
Shares sold 29,549 $ 288,373 135,286 $ 1,459,543
Shares issued on reinvestment -- -- 11,442 109,529
Shares reacquired (336,964) (3,150,490) (317,427) (3,030,257)
------------------------------------------------------------------------------------------------------------
Net Decrease (307,415) $ (2,862,117) (170,699) $ (1,461,185)
============================================================================================================
Class L*
Shares sold 29,803 $ 282,650 45,393 $ 497,054
Shares issued on reinvestment -- -- 2,496 23,897
Shares reacquired (82,656) (774,935) (104,956) (1,009,701)
------------------------------------------------------------------------------------------------------------
Net Decrease (52,853) $ (492,285) (57,067) $ (488,750)
============================================================================================================
Class Y
Shares sold 170,668 $ 1,603,384 223,982 $ 2,246,650
------------------------------------------------------------------------------------------------------------
Net Increase 170,668 $ 1,603,384 223,982 $ 2,246,650
============================================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L Shares.
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Smith Barney Hansberger Class A
--------------------------------
Global Value Fund 2000(1) 1999(1) 1998(2)
================================================================================
Net Asset Value, Beginning of Year $ 12.00 $ 12.99 $ 11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.06 0.37 0.05
Net realized and unrealized gain (loss) 1.11 (1.24) 1.56
--------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.17 (0.87) 1.61
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) (0.12) (0.02)
--------------------------------------------------------------------------------
Total Distributions (0.03) (0.12) (0.02)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $ 13.14 $ 12.00 $ 12.99
--------------------------------------------------------------------------------
Total Return 9.75% (6.56)% 14.13%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $18,339 $16,974 $27,478
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 1.42% 1.55% 1.71%+
Net investment income 0.48 3.42 1.25+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 50% 28% 1%
================================================================================
(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 ratio would have been as follows:
Net Investment Income Expense Ratio
Per Share Decrease Without Fee Waiver
-------------------- -------------------
1998 $0.01 2.09%+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 29
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Smith Barney Hansberger Class B
--------------------------------
Global Value Fund 2000(1) 1999(1) 1998(2)
================================================================================
Net Asset Value, Beginning of Year $11.97 $12.96 $11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3) (0.04) 0.29 0.02
Net realized and unrealized gain (loss) 1.10 (1.24) 1.56
--------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.06 (0.95) 1.58
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.04) (0.02)
--------------------------------------------------------------------------------
Total Distributions -- (0.04) (0.02)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $13.03 $11.97 $12.96
--------------------------------------------------------------------------------
Total Return 8.86% (7.27)% 13.87%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $32,024 $33,316 $45,526
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 2.19% 2.30% 2.48%+
Net investment income (loss) (0.32) 2.66 0.52+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 50% 28% 1%
================================================================================
(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 ratio would have been as follows:
Net Investment Income Expense Ratio
Per Share Decrease Without Fee Waiver
--------------------- -----------------
1998 $0.01 2.87%+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Class L
Smith Barney Hansberger ---------------------------------
Global Value Fund 2000(1) 1999(1)(2) 1998(3)
================================================================================
Net Asset Value, Beginning of Year $11.97 $12.96 $11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(4) (0.04) 0.29 0.02
Net realized and unrealized gain (loss) 1.09 (1.24) 1.56
--------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.05 (0.95) 1.58
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.04) (0.02)
--------------------------------------------------------------------------------
Total Distributions -- (0.04) (0.02)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $13.02 $11.97 $12.96
--------------------------------------------------------------------------------
Total Return 8.77% (7.27)% 13.87%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $8,886 $8,725 $11,060
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(4) 2.21% 2.30% 2.49%+
Net investment income (loss) (0.34) 2.67 0.42+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 50% 28% 1%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) For the period from December 19, 1997 (inception date) to April 30, 1998.
(4) 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 ratio would have been as follows:
Net Investment Income Expense Ratio
Per Share Decrease Without Fee Waiver
--------------------- -------------------
1998 $0.01 2.88%+
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 31
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Class Y
Smith Barney Hansberger --------------------------------
Global Value Fund 2000(1) 1999(1) 1998(2)
================================================================================
Net Asset Value, Beginning of Year $12.03 $13.00 $12.44
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.11 0.40 0.00*
Net realized and unrealized gain (loss) 1.10 (1.22) 0.56
--------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.21 (0.82) 0.56
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.08) (0.15) --
--------------------------------------------------------------------------------
Total Distributions (0.08) (0.15) --
--------------------------------------------------------------------------------
Net Asset Value, End of Year $13.16 $12.03 $13.00
--------------------------------------------------------------------------------
Total Return 10.07% (6.17)% 4.50%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $185,122 $159,574 $56,414
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 1.06% 1.10% 1.47%+
Net investment income 0.81 3.73 1.83+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 50% 28% 1%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the period from March 10, 1998 (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 ratio would have been as follows:
Net Investment Income Expense Ratio
Per Share Decrease Without Fee Waiver
--------------------- -------------------
1998 $0.00* 1.85%+
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Smith Barney Hansberger Class A
--------------------------------
Global Small Cap Value Fund 2000(1) 1999(1) 1998(2)
==============================================================================
Net Asset Value, Beginning of Year $10.19 $12.37 $11.40
------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.02 0.11 0.05
Net realized and unrealized gain (loss) (1.65) (2.10) 0.93
------------------------------------------------------------------------------
Total Income (Loss) From Operations (1.63) (1.99) 0.93
------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.05) (0.16) (0.01)
Net realized gains -- (0.03) --
Capital (0.00)* -- --
------------------------------------------------------------------------------
Total Distributions (0.05) (0.19) (0.01)
------------------------------------------------------------------------------
Net Asset Value, End of Year $8.51 $10.19 $12.37
------------------------------------------------------------------------------
Total Return (16.06)% (15.95)% 8.64%++
------------------------------------------------------------------------------
Net Assets, End of Year (000s) $2,827 $5,414 $9,296
------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 2.41% 1.92% 1.95%+
Net investment income 0.22 1.06 1.28+
------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 27% 2%
==============================================================================
(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 or a portion of its fees for the two years ended
April 30, 2000 and the period ended April 30, 1998. 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
------------------------ -----------------------
2000 1999 1998(2) 2000 1999 1998(2)
---- ---- ---- ---- ---- ----
Class A $0.02 $0.04 $0.05 2.64% 2.33% 3.25%+
* Amount represents less than $0.01 per share.
++ Total return is 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, except where noted:
Smith Barney Hansberger Class B
----------------------------------
Global Small Cap Value Fund 2000(1) 1999(1) 1998(2)
================================================================================
Net Asset Value, Beginning of Year $10.16 $12.34 $11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3) (0.06) 0.03 0.02
Net realized and unrealized gain (loss) (1.64) (2.09) 0.93
--------------------------------------------------------------------------------
Total Income (Loss) From Operations (1.70) (2.06) 0.95
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.09) (0.01)
Net realized gains -- (0.03) --
Capital (0.00)* -- --
--------------------------------------------------------------------------------
Total Distributions (0.00)* (0.12) (0.01)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $8.46 $10.16 $12.34
--------------------------------------------------------------------------------
Total Return (16.73)% (16.61)% 8.38%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $3,915 $7,819 $11,606
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 3.21% 2.74% 2.68%+
Net investment income (loss) (0.61) 0.27 0.58+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 27% 2%
================================================================================
(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 or a portion of its fees for the two years ended
April 30, 2000 and the period ended April 30, 1998. 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
------------------------ -----------------------
2000 1999 1998(2) 2000 1999 1998(2)
---- ---- ---- ---- ---- ----
Class B $0.02 $0.04 $0.04 3.43% 3.14% 3.96%+
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
34 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Smith Barney Hansberger Class L
---------------------------------
Global Small Cap Value Fund 2000(1) 1999(1)(2) 1998(3)
================================================================================
Net Asset Value, Beginning of Year $10.14 $12.34 $11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(4) (0.08) 0.02 0.02
Net realized and unrealized gain (loss) (1.64) (2.10) 0.93
--------------------------------------------------------------------------------
Total Income (Loss) From Operations (1.72) (2.08) 0.95
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.09) (0.01)
Net realized gains -- (0.03) --
Capital (0.00)* -- --
--------------------------------------------------------------------------------
Total Distributions (0.00)* (0.12) (0.01)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $8.42 $10.14 $12.34
--------------------------------------------------------------------------------
Total Return (16.96)% (16.77)% 8.38%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $906 $1,626 $2,682
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(4) 3.45% 2.83% 2.71%+
Net investment income (loss) (0.85) 0.19 0.58+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 27% 2%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) For the period from December 19, 1997 (inception date) to April 30, 1998.
(4) The Manager waived all or a portion of its fees for the two years ended
April 30, 2000 and the period ended April 30, 1998. 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
-------------------------- -----------------------
2000 1999 1998(3) 2000 1999 1998(3)
---- ---- ---- ---- ---- ----
Class L $0.02 $0.04 $0.04 3.67% 3.24% 4.02%+
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 35
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended April 30, except where noted:
Smith Barney Hansberger Class Y
----------------------------------
Global Small Cap Value Fund 2000(1) 1999(1) 1998(2)
================================================================================
Net Asset Value, Beginning of Year $10.22 $12.37 $11.74
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.06 0.16 0.00*
Net realized and unrealized gain (loss) (1.69) (2.09) 0.63
--------------------------------------------------------------------------------
Total Income (Loss) From Operations (1.63) (1.93) 0.63
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.08) (0.19) --
Net realized gains -- (0.03) --
Capital (0.00)* -- --
--------------------------------------------------------------------------------
Total Distributions (0.08) (0.22) --
--------------------------------------------------------------------------------
Net Asset Value, End of Year $8.51 $10.22 $12.37
--------------------------------------------------------------------------------
Total Return (16.05)% (15.49)% 5.37%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $3,520 $2,481 $234
--------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses(3) 1.88% 1.23% 1.73%+
Net investment income 0.65 1.71 2.42+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 27% 2%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the period from March 10, 1998 (inception date) to April 30,
1998.
(3) The Manager waived all or a portion of its fees for the two years ended
April 30, 2000 and the period ended April 30, 1998. 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
------------------------- ------------------------
2000 1999 1998(2) 2000 1999 1998(2)
---- ---- ---- ---- ---- ----
Class Y $0.02 $0.04 $0.00* 2.10% 1.64% 3.05%+
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
36 2000 Annual Report to Shareholders
<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, 2000, the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two year period then ended and the financial highlights for each of
the years in the two year period then ended 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, 2000,
the results of their operations for the year then ended, the changes in their
net assets for each of the years in the two year period then ended and the
financial highlights for each of the years in the two year period then ended,
and for the period from December 19, 1997 (commencement of operations) to April
30, 1998, in conformity with accounting principles generally accepted in the
United States of America.
KPMG LLP
New York, New
York June 12, 2000
--------------------------------------------------------------------------------
Smith Barney Hansberger Funds 37
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
April 30, 2000:
. Corporate dividend received deductions of:
Global Value Fund 13.62%
Global Small Cap Value Fund 18.37%
. The total foreign sourced income received by Global Value Fund
and Global Small Cap Value Fund, respectively, are $0.0819 per
share (or a total amount of $1,523,186) and $0.01272 per share
(or a total amount of $16,735). The total amounts of foreign
taxes paid, again respectively, are $0.0223 per share (or a total
amount of $415,517) and $0.02996 per share (or a total amount of
$39,424).
--------------------------------------------------------------------------------
38 2000 Annual Report to Shareholders
<PAGE>
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<PAGE>
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<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
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Manager
SSB Citi Fund Management LLC
Sub-Investment Adviser
Hansberger Global Investors, Inc.
Distributor
CFBDS, Inc.
Custodian
The Chase Manhattan Bank, N.A.
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of the shareholders of
Smith Barney Investment Funds Inc.--Smith Barney Hansberger Global Value and
Smith Barney Hansberger Global Small Cap Value Funds, but it may also be used as
sales literature when proceeded or accompanied by the current Prospectus, which
gives details about charges, expenses, investment objectives and operating
policies of the Fund. If used as sales material after July 31, 2000, this report
must be accompanied by performance information for the most recently completed
calendar quarter.
[LOGO OF SALOMON SMITH BARNEY]
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/mutualfunds
FD01490 6/00
