1994
ANNUAL
REPORT
DESCRIPTION OF ART WORK ON REPORT COVER
Small box above fund name showing a personal computer, a touchtone
receiver, a DNA module, and a glass container used for measuring
scientific fluids.
Smith Barney
AGGRESSIVE
GROWTH FUND
INC.
AUGUST 31, 1994
SMITH BARNEY
AGGRESSIVE GROWTH FUND INC.
DEAR SHAREHOLDER:
We are pleased to provide you with the Annual Report, which includes the
portfolio of investments for Smith Barney Aggressive Growth Fund Inc. for
the fiscal year ended August 31, 1994. The Fund enjoyed strong relative
performance in its most recent fiscal year. The aggregate total returns
without the deduction of the applicable sales charges for Class A, Class
B, Class C and Class D shares of the Fund were 13.44%, 12.62%, 13.81% and
12.57%, respectively. This compared with a gain of 5.5% for the Standard &
Poor's Daily Price Index of 500 Common Stocks ("S&P 500") and 2.4% for the
Value Line Index, which we believe represents a better measure of perfor-
mance for the kinds of securities held in the Fund. Both of these unman-
aged indices track the movement of common stock prices. The net asset
value of Class A, Class B, Class C and Class D shares of the Fund in-
creased 13.44%, 12.62%, 13.81% and 12.57%, respectively, in the twelve-
month period ended August 31, 1994.
AN OVERVIEW OF THE MARKET AND ECONOMIC ENVIRONMENT
During the last six-months, the equity market as defined by the S&P 500,
suffered its first 10% correction in three years. The catalyst for the de-
cline, which had an even greater impact on growth stocks, was the dramatic
increase in long-term interest rates. From the low point reached in 1993,
the yield on the 30-year Treasury Bond increased to a recent level of
7.78%. Several factors contributed to this rise in interest rates: (a)
several rounds of monetary tightening by the Federal Reserve Board, (b)
fears that the strengthening economy would lead to a pickup in the rate of
inflation, (c) the liquidation of leveraged bond positions which were put
on with the expectation that interest rates would continue falling, (d)
concern over a weak U.S. dollar and its potential inflationary impact, and
(e) reaction to increases in certain commodity prices.
INVESTMENT STRATEGY
During the last six months, the Fund sold its position in McCaw Cellular
Communications which recently merged into ATT, in addition to taking par-
tial profits in Infinity Broadcasting Corporation and Cirrus Logic, Inc.
Among purchases in the same six-month period, we added to positions in
C-COR Electronics, Inc., Cablevision Systems Development Corporation, Arch
Communications Group, Inc., Telular Corporation and Univax Biologics,
Inc., while establishing an initial position in Indigo N.V.
In prior reports to you, we outlined our reasons for maintaining sizable
weightings in emerging health care stocks, including top tier biotechnol-
ogy companies and leading managed care providers. A year ago many ques-
tioned the logic of owning stocks in an industry which was being criti-
cized in Washington, D.C. as well as in the financial press. We were of
the opinion that companies able to offer innovative, cost-effective treat-
ments would succeed in any health care environment. Fortunately, this has
not gone unnoticed by health care companies, as evidenced by the consoli-
dation underway in the pharmaceutical industry as well as among managed
care providers. In May 1994, United Health Care, one of our largest hold-
ings, sold its prescription benefits management ("PBM") subsidiary to
SmithKline Beecham for $2.4 billion which after taxes generated over $10
per share of cash for the company. The shares of Value Health, one of the
few remaining independent PBMs, have risen following other takeovers in
the industry. As top line growth has become harder to achieve for many
drug companies, they have sought to augment their product lines through
strategic acquisitions. Consolidation is likely to remain an important
theme in the health care industry where companies look to leverage their
existing sales forces with new products. Several top tier biotechnology
companies possess exciting products generating significant earnings while
offering large product pipelines besides. We think they represent logical
consolidation candidates. Outright acquisitions of such young dynamic com-
panies would surprise us. We expect any possible activity to be modeled
after the highly successful Roche/Genentech deal five years ago, which al-
lowed the biotechnology company to remain autonomous, yet provided signif-
icant upside potential for shareholders.
In the face of a recovery in the market in which a portion of the early
spring decline has been retraced, there remains a healthy degree of skep-
ticism regarding a further rally in stocks. The opinion expressed in Octo-
ber of this year by investment advisors as compiled weekly by Investors
Intelligence, a New York based service, is decidedly negative with over
70% of market letter writers defined as either outright bearish or looking
for a correction. Option speculators are also pessimistic, as evidenced by
the high ratio of put options being bought to call options. Traditionally,
when these two sentiment indicators display such pessimism, it has been
indicative of a stock market with only limited downside risk. While the
aforementioned sentiment indicators are constructive, the monetary back-
drop is far from friendly following the considerable back-up in long term
interest rates. A further decline in bond prices (prompted by a rise in
interest rates) would likely keep the stock market confined to its 1994
trading range rather than move out to new highs. In addition to cash in-
flows into equity mutual funds (down in recent months, but still high by
historic standards), an increase in stock buy-back activity and large
strategic acquisitions have acted as important incremental sources of de-
mand for stock with the latter two activities showing little sign of a
slowdown.
We believe that the year-long increase in interest rates combined with the
effects of the Clinton tax hike, may act to slow the pace of the economic
expansion before reaching overheated proportions. We think that the econo-
my's momentum is strong enough though to prevent a relapse into recession
with negative ramifications for corporate profits. In the Fund, we own
companies whose sales and earnings depend more on innovation and leader-
ship positions in emerging industries rather than on movements of the
economy. A moderation in the growth rate of the economy, therefore should
not have a deleterious effect on the earnings of most companies in the
Fund. In fact, the relative earnings momentum of companies in the Fund
compared to companies in the S&P 500 would accelerate in a slowing econ-
omy. Under such a scenario, growth stocks may receive an increased weight-
ing in an institutional equity portfolio, which would have positive impli-
cations for the Fund.
In mid-November of this year, the way Smith Barney mutual funds are listed
in the newspaper will change to reflect our consolidated mutual fund fam-
ily. Before the consolidation, the various Classes of Smith Barney and
Smith Barney Shearson mutual funds were listed in the press under separate
headings. Now, all funds will appear under the heading "Smith Barney."
Your Smith Barney Financial Consultant will be able to help you locate
funds in your newspaper.
The past twelve months were a difficult investment environment, but we be-
lieve we have been successful in meeting our stated investment goals. Dur-
ing the next six months we will endeavor to do the same and look forward
to reporting to you in the Fund's Semi-Annual Report.
Sincerely,
Heath B. McLendon Richard A. Freeman
Heath B. McLendon Richard A. Freeman
Chairman of the Board Vice President and
and Investment Officer Investment Officer
October 17, 1994
HISTORICAL PERFORMANCE -- CLASS A SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Net Asset Value
Year Ended Capital Gains Dividends
Total
August 31 Beginning Ending Paid Paid
Return*
<S> <C> <C> <C> <C>
<C>
1985 $10.62 $11.45 $0.05 $0.08
9.22%
1986 $11.45 $16.43 -- --
43.49%
1987 $16.43 $21.63 $0.84 --
39.36%
1988 $21.63 $13.68 $2.47 --
(24.40)%
1989 $13.68 $19.25 $0.43 --
44.97%
1990 $19.25 $16.16 $2.03 $0.02
(6.38)%
1991 $16.16 $20.12 $0.94 --
31.97%
1992 $20.12 $18.94 $0.76 --
(2.42)%
1993 $18.94 $23.59 -- --
24.55%
1994 $23.59 $26.76 -- --
13.44%
Total $7.52 $0.10
Cumulative Total Return -- (10/24/83 through 8/31/94)
279.91%
<FN>
* Figures assume reinvestment of all dividends and capital gains distri-
butions at net asset value and do not assume deduction of the front-end
sales charge (maximum 5%).
</TABLE>
THE FUND'S POLICY IS TO DISTRIBUTE DIVIDENDS
AND CAPITAL GAINS, IF ANY, ANNUALLY.
AVERAGE ANNUAL TOTAL RETURN** -- CLASS A SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Without Sales Charge With Sales
Charge***
<S> <C> <C>
Year Ended 8/31/94 13.44% 7.77%
Five Years Ended 8/31/94 11.24% 10.11%
Inception 10/24/83 through 8/31/94 13.09% 12.55%
<FN>
** All average annual total return figures shown reflect reinvestment
of dividends and capital gains at net asset value.
*** Average annual total return figures assume the deduction of the max-
imum 5% sales charge.
</TABLE>
NOTE: On November 6, 1992, existing shares of the Fund were desig-
nated Class A shares. Class A shares are subject to a maximum 5%
front-end sales charge and a service fee of 0.25% of the value of
the average daily net assets attributable to that Class. The Fund's
annual rates of return would have been lower had service fees been
in effect prior to November 6, 1992.
GROWTH OF $10,000 INVESTED IN CLASS A SHARES OF
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.+
VS. VALUE LINE COMPOSITE INDEX
October 24, 1983 -- August 31, 1994
DESCRIPTION OF MOUNTAIN CHART IN
SHEARSON COVERS (CLASS A)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Ag-
gressive Growth Fund's Class A shares on October 24, 1983 through August
31, 1994 as compared with the growth of a $10,000 investment in the Value
Line Composite Index. The plot points used to draw the line graph were as
follows:
<TABLE>
<CAPTION>
GROWTH OF
$10,000
GROWTH OF $10,000 INVESTMENT
IN THE
MONTH INVESTED IN CLASS A VALUE
LINE
ENDED SHARES OF THE FUND COMPOSITE
INDEX
<S> <C> <C>
10/24/83 $10,000 --
10/83 $ 9,947 $10,000
11/83 $10,430 $10,451
12/83 $10,035 $10,225
03/84 $ 8,623 $ 9,573
06/84 $ 8,684 $ 9,018
09/84 $ 8,851 $ 9,522
12/84 $ 8,806 $ 9,108
03/85 $10,068 $ 9,927
06/85 $10,415 $10,160
09/85 $ 9,464 $ 9,632
12/85 $11,224 $10,913
03/86 $13,516 $12,308
06/86 $15,329 $12,331
09/86 $13,112 $11,067
12/86 $14,111 $11,265
03/87 $19,040 $13,348
06/87 $18,551 $13,544
09/87 $19,934 $13,995
12/87 $14,878 $ 9,995
03/88 $16,227 $11,265
06/88 $17,296 $11,728
09/88 $15,991 $11,483
12/88 $16,278 $11,343
03/89 $18,317 $11,989
06/89 $10,402 $12,680
09/89 $23,032 $13,325
12/89 $23,013 $12,281
03/90 $22,754 $11,717
06/90 $25,468 $11,658
09/90 $18,981 $ 8,777
12/90 $21,639 $ 8,991
03/91 $26,748 $11,138
06/91 $24,940 $11,048
09/91 $28,528 $11,203
12/91 $30,793 $11,539
03/92 $29,813 $11,974
06/92 $27,130 $11,337
09/92 $26,988 $11,285
12/92 $31,418 $12,216
03/93 $29,231 $12,768
06/93 $31,304 $12,653
09/93 $35,819 $13,080
12/93 $38,048 $13,486
03/94 $36,159 $13,008
06/94 $33,760 $12,612
08/94 $37,991 $13,494
</TABLE>
+ Illustration of $10,000 invested in Class A shares on October 24, 1983
assuming reinvestment of dividends and capital gains at net asset value
through August 31, 1994.
VALUE LINE COMPOSITE INDEX -- The Value Line Composite Index (Geomet-
ric), composed of approximately 1,700 stocks, is a geometric average of
the daily price percentage change in each stock covering both large and
small capitalized companies.
Index information is available at month-end only; therefore, the closest
month-end to inception date of the Class has been used.
NOTE: All figures cited here and on the following pages represent past
performance of Class A shares and do not guarantee future results.
HISTORICAL PERFORMANCE -- CLASS B SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Net Asset Value
Year Ended Capital Gains Dividends
Total
August 31 Beginning Ending Paid Paid
Return*
<S> <C> <C> <C> <C>
<C>
11/6/92-8/31/93 $20.52 $23.46 -- --
14.33%
1994 $23.46 $26.42 -- --
12.62%
Total $0.00 $0.00
Cumulative Total Return -- (11/6/92 through 8/31/94)
28.75%
<FN>
* Figures assume reinvestment of all dividends and capital gains distri-
butions at net asset value and do not assume deduction of the contin-
gent deferred sales charge ("CDSC").
</TABLE>
AVERAGE ANNUAL TOTAL RETURN** -- CLASS B SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Without CDSC With
CDSC***
<S> <C> <C>
Year Ended 8/31/94 12.62%
7.62%
Inception 11/6/92 through 8/31/94 14.92%
12.94%
<FN>
** All average annual total return figures shown reflect reinvestment
of dividends and capital gains at net asset value.
*** Average annual total return figures assume the deduction of the max-
imum applicable CDSC which is described in the prospectus.
</TABLE>
NOTE: On November 6, 1992, the Fund began offering Class B shares.
Class B shares are subject to a 5% CDSC and service and distribution
fees of 0.25% and 0.75%, respectively, of the value of the average
daily net assets attributable to that Class.
GROWTH OF $10,000 INVESTED IN CLASS B SHARES OF
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.+
VS. VALUE LINE COMPOSITE INDEX
November 6, 1992 -- August 31, 1994
DESCRIPTION OF MOUNTAIN CHART IN
SHEARSON COVERS (CLASS B)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Ag-
gressive Growth Fund's Class B shares on November 6, 1992 through August
31, 1994 as compared with the growth of a $10,000 investment in the Value
Line Composite Index. The plot points used to draw the line graph were as
follows:
<TABLE>
<CAPTION>
GROWTH OF
$10,000
GROWTH OF $10,000 INVESTMENT
IN THE
MONTH INVESTED IN CLASS B VALUE
LINE
ENDED SHARES OF THE FUND COMPOSITE
INDEX
<S> <C> <C>
11/6/92 $10,000 --
11/92 $10,712 $10,410
12/92 $10,780 $10,664
3/93 $10,010 $11,146
6/93 $10,697 $11,045
9/93 $12,222 $11,418
12/93 $12,958 $11,773
3/94 $12,290 $11,355
6/94 $11,452 $11,009
8/94 $12,875 $11,779
</TABLE>
+ Illustration of $10,000 invested in Class B shares on November 6, 1992
assuming deduction of the maximum CDSC at the time of redemption and
reinvestment of dividends and capital gains at net asset value through
August 31, 1994.
++ Value does not assume deduction of applicable CDSC.
+++ Value assumes deduction of applicable CDSC (assuming redemption on Au-
gust 31, 1994).
VALUE LINE COMPOSITE INDEX -- The Value Line Composite Index (Geomet-
ric), composed of approximately 1,700 stocks, is a geometric average
of the daily price percentage change in each stock covering both large
and small capitalized companies.
Index information is available at month-end only; therefore, the clos-
est month-end to inception date of the Class has been used.
NOTE: All figures cited here and on the following pages represent
past performance of Class B shares and do not guarantee future re-
sults.
HISTORICAL PERFORMANCE -- CLASS C SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Net Asset Value
Year Ended Capital Gains Dividends
Total
August 31 Beginning Ending Paid Paid
Return*
<S> <C> <C> <C> <C>
<C>
11/6/92-8/31/93 $20.52 $23.67 -- --
15.35%
1994 $23.67 $26.94 -- --
13.81%
Total $0.00 $0.00
Cumulative Total Return -- (11/6/92 through 8/31/94)
31.29%
<FN>
* Figures assume reinvestment of all dividends and capital gains distri-
butions at net asset value.
</TABLE>
AVERAGE ANNUAL TOTAL RETURN** -- CLASS C SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Actual
<S> <C>
Year Ended 8/31/94
13.81%
Inception 11/6/92 through 8/31/94
16.17%
</TABLE>
** All average annual total return figures shown reflect reinvestment
of dividends and capital gains at net asset value.
NOTE: On November 6, 1992, the Fund began offering Class C shares.
Class C shares are not subject to a sales charge or a service fee
and are available only to tax-exempt employees and retirement plans
and certain UITs of Smith Barney and its affiliates.
GROWTH OF $10,000 INVESTED IN CLASS C SHARES OF
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.+
VS. VALUE LINE COMPOSITE INDEX
November 6, 1992 -- August 31, 1994
DESCRIPTION OF MOUNTAIN CHART IN
SHEARSON COVERS (CLASS C)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Ag-
gressive Growth Fund's Class C shares on November 6, 1992 through August
31, 1994 as compared with the growth of a $10,000 investment in the Value
Line Composite Index. The plot points used to draw the line graph were as
follows:
<TABLE>
<CAPTION>
GROWTH OF
$10,000
GROWTH OF $10,000 INVESTMENT
IN THE
MONTH INVESTED IN CLASS C VALUE
LINE
ENDED SHARES OF THE FUND COMPOSITE
INDEX
<S> <C> <C>
11/6/92 $10,000 --
11/92 $10,712 $10,410
12/92 $10,789 $10,664
3/93 $10,044 $11,146
6/93 $10,760 $11,045
9/93 $12,329 $11,418
12/93 $13,109 $11,773
3/94 $12,471 $11,355
6/94 $11,657 $11,009
8/94 $13,129 $11,779
</TABLE>
+ Illustration of $10,000 invested in Class C shares on November 6, 1992
assuming reinvestment of dividends and capital gains at net asset value
through August 31, 1994.
VALUE LINE COMPOSITE INDEX -- The Value Line Composite Index (Geomet-
ric), composed of approximately 1,700 stocks, is a geometric average of
the daily price percentage change in each stock covering both large and
small capitalized companies.
Index information is available at month-end only; therefore, the clos-
est month-end to inception date of the Class has been used.
NOTE: All figures cited here and on the following pages represent past
performance of Class C shares and do not guarantee future results.
HISTORICAL PERFORMANCE -- CLASS D SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Net Asset Value
Year Ended Capital Gains Dividends
Total
August 31 Beginning Ending Paid Paid
Return*
<S> <C> <C> <C> <C>
<C>
5/13/93-8/31/93 $21.14 $23.47 -- --
11.02%
1994 $23.47 $26.42 -- --
12.57%
Total $0.00 $0.00
Cumulative Total Return -- (5/13/93 through 8/31/94)
24.98%
<FN>
* Figures assume reinvestment of all dividends and capital gains distri-
butions at net asset value.
</TABLE>
AVERAGE ANNUAL TOTAL RETURN** -- CLASS D SHARES (UNAUDITED)
<TABLE>
<CAPTION>
Actual
<S> <C>
Year Ended 8/31/94
12.57%
Inception 5/13/93 through 8/31/94
18.69%
</TABLE>
** All average annual total return figures shown reflect reinvestment
of dividends and capital gains at net asset value.
NOTE: The Fund began offering Class D shares on May 13, 1993. Class
D shares are subject to service and distribution fees of 0.25% and
0.75%, respectively, of the value of the average daily net assets
attributable to that Class.
GROWTH OF $10,000 INVESTED IN CLASS D SHARES OF
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.+
VS. VALUE LINE COMPOSITE INDEX
May 13, 1993 -- August 31, 1994
DESCRIPTION OF MOUNTAIN CHART IN
SHEARSON COVERS (CLASS D)
A line graph depicting the total growth (including reinvestment of divi-
dends and capital gains) of a hypothetical investment of $10,000 in Ag-
gressive Growth Fund's Class D shares on May 13, 1993, through August 31,
1994 as compared with the growth of a $10,000 investment in the Value Line
Composite Index. The plot points used to draw the line graph were as fol-
lows:
<TABLE>
<CAPTION>
GROWTH OF
$10,000
GROWTH OF $10,000 INVESTMENT
IN THE
MONTH INVESTED IN CLASS C VALUE
LINE
ENDED SHARES OF THE FUND COMPOSITE
INDEX
<S> <C> <C>
5/12/93 $10,000 $10,000
5/93 $10,350 $10,390
6/93 $10,383 $10,237
9/93 $11,864 $10,583
12/93 $12,578 $10,912
3/94 $11,930 $10,525
6/94 $11,116 $10,204
8/94 $12,498 $10,918
</TABLE>
+ Illustration of $10,000 invested in Class D shares on May 13, 1993 as-
suming reinvestment of dividends and capital gains at net asset value
through August 31, 1994.
VALUE LINE COMPOSITE INDEX -- The Value Line Composite Index (Geomet-
ric), composed of approximately 1,700 stocks, is a geometric average of
the daily price percentage change in each stock covering both large and
small capitalized companies.
Index information is available at month-end only; therefore, the clos-
est month-end to inception date of the Class has been used.
NOTE: All figures cited here and on the following pages represent past
performance of Class D shares and do not guarantee future results.
PORTFOLIO HIGHLIGHTS (UNAUDITED) AUGUST 31, 1994
NDUSTRY BREAKDOWN
DESCRIPTION OF PIE CHARTS IN SHAREHOLDER REPORT
Pie chart depicting the allocation of the Aggressive Growth Fund's invest-
ment securities held at August 31, 1994 by industry classification. The
pie is broken in pieces representing industries in the following percent-
ages:
<TABLE>
<CAPTION>
INDUSTRY
PERCENTAGE
<S>
<C>
WIRELESS COMMUNICATIONS
8.6%
BROADCASTING CABLE
11.5%
BIOTECHNOLOGY
17.5%
CONVERTIBLE PREFERRED STOCK
4.2%
COMMERCIAL PAPER, AND NET OTHER ASSETS AND LIABILITIES
3.2%
OTHER COMMON STOCKS AND UNITS
6.0%
COMPUTER SOFTWARE
6.8%
COMPUTER HARDWARE
4.4%
PHARMACEUTICALS
7.4%
DIVERSIFIED TECHNOLOGY
8.2%
MANAGED HEALTH CARE PROVIDERS
13.8%
SEMICONDUCTOR
8.4%
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
Percentage of
Company Net
Assets
<S> <C>
GENENTECH, INC. 6.4%
CHIRON CORPORATION 6.4
INTEL CORPORATION 5.9
UNITED HEALTHCARE INC. 5.5
FOREST LABS, INC. CLASS A 5.5
INFINITY BROADCASTING CORPORATION CLASS A 5.1
VALUE HEALTH, INC. 4.8
LOTUS DEVELOPMENT CORPORATION 4.0
WELLMAN INC. 4.0
TYCO LABORATORIES INC. 3.6
</TABLE>
PORTFOLIO OF INVESTMENTS AUGUST 31, 1994
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE
1)
<S> <C> <C>
COMMON STOCKS -- 92.6%
BIOTECHNOLOGY -- 17.5%
115,000 Alkermes, Inc.+ $
431,250
235,000 Chiron Corporation+
16,391,250
180,000 Cor Therapeutics, Inc.+
2,655,000
320,000 Genentech, Inc.+
16,440,000
200,000 Genzyme Corporation+
6,800,000
185,500 Glycomed, Inc.+
579,688
260,000 Univax Biologics, Inc. +
1,495,000
44,792,188
MANAGED HEALTHCARE PROVIDERS -- 13.8%
270,000 United Healthcare Corporation
14,107,500
205,000 U.S. Healthcare, Inc.
8,866,250
250,000 Value Health, Inc.+
12,312,500
35,286,250
BROADCASTING/CABLE -- 11.5%
100,000 Cablevision Systems Development Corpo-
ration, Class A+
5,750,000
100,000 Comcast Corporation, Class A
1,600,000
293,750 Comcast Corporation, Class A, Special
4,700,000
410,000 Infinity Broadcasting Corporation,
Class A+
12,915,000
200,000 Tele-Communications, Inc., Class A+
4,512,500
29,477,500
WIRELESS COMMUNICATIONS -- 8.6%
270,000 Arch Communications Group, Inc.+
5,062,500
335,000 California Microwave, Inc.+
7,956,250
250,000 Telular Corporation+
2,265,625
50,000 LIN Broadcasting Corporation+
6,700,000
21,984,375
SEMICONDUCTOR -- 8.4%
150,000 Cirrus Logic, Inc.+
4,143,750
400,000 GenRad, Inc.+
2,100,000
230,000 Intel Corporation
15,122,500
21,366,250
DIVERSIFIED TECHNOLOGY -- 8.2%
215,000 C-COR Electronics, Inc.+ $
7,310,000
151,000 Drexler Technology Corporation +
698,375
376,000 Excel Technology, Inc.+
2,256,000
80,000 Indigo N.V.
1,410,000
210,000 Tyco Laboratories, Inc.
9,240,000
20,914,375
PHARMACEUTICALS -- 7.4%
300,000 Forest Laboratories, Inc., Class A+
14,100,000
250,000 Gensia Pharmaceuticals, Inc.+
2,812,500
240,000 IDEC Pharmaceuticals Corporation+
660,000
100,000 Vertex Pharmaceuticals, Inc.+
1,437,500
19,010,000
COMPUTER SOFTWARE -- 6.8%
250,000 Lotus Development Corporation+
10,218,750
170,000 Oracle Systems Corporation+
7,256,875
17,475,625
COMPUTER HARDWARE -- 4.4%
246,000 NetFRAME Systems, Inc.+
2,337,000
556,143 Quantum Corporation+
8,689,734
11,026,734
ENVIRONMENTAL -- 4.0%
320,000 Wellman, Inc.
10,160,000
DRUG DELIVERY/TESTING -- 2.0%
499,500 Advanced Polymer Systems, Inc.+
2,997,000
170,000 Cygnus Therapeutic Systems+
1,338,750
70,000 Cytotherapeutics, Inc.+
568,750
400,000 TSI Corporation +
237,520
5,142,020
TOTAL COMMON STOCKS (Cost $130,287,805)
236,635,317
CONVERTIBLE PREFERRED STOCK -- 4.2% (Cost $2,721,625)
200,000 Cellular Communications, Inc.+
10,650,000
<CAPTION>
FACE
VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER -- 1.3% (Cost $3,424,000)
$3,424,000 General Electric, 4.750% due 9/1/94 $
3,424,000
TOTAL INVESTMENTS (Cost $136,433,430*) 98.1%
250,709,317
OTHER ASSETS AND LIABILITIES (NET) 1.9
4,783,276
NET ASSETS 100.0%
$255,492,593
<FN>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1994
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $136,433,430) (Note 1)
See accompanying schedule
$250,709,317
Cash
145
Receivable for investment securities sold
2,772,411
Receivable for Fund shares sold
2,692,247
Dividends and interest receivable
35,782
Due from Advisor
56,890
TOTAL ASSETS
256,266,792
LIABILITIES:
Payable for Fund shares redeemed $411,473
Investment advisory fee payable (Note 2) 122,811
Service fee payable (Note 3) 46,488
Payable for investment securities purchased 43,750
Administration fee payable (Note 2) 40,937
Distribution fee payable (Note 3) 30,372
Transfer agent fees payable (Note 2) 27,521
Custodian fees payable (Note 2) 10,400
Accrued expenses and other payables 40,447
TOTAL LIABILITIES
774,199
NET ASSETS
$255,492,593
NET ASSETS CONSIST OF:
Accumulated net investment loss $
(3,162,240)
Accumulated net realized gain on investments sold
13,523,887
Unrealized appreciation of investments
114,275,887
Par value
95,659
Paid-in capital in excess of par value
130,759,400
TOTAL NET ASSETS
$255,492,593
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES (continued) AUGUST 31, 1994
<TABLE>
<S>
<C>
NET ASSET VALUE:
CLASS A SHARES:
Net Asset Value and redemption price per share
($180,917,275 / 6,761,035 shares of common stock outstanding)
$26.76
Maximum offering price per share ($26.76 / 0.95) (based on
sales charge of 5% of the offering price on August 31, 1994)
$28.17
CLASS B SHARES:
Net Asset Value and offering price per share+
($49,740,559 / 1,882,602 shares of common stock outstanding)
$26.42
CLASS C SHARES:
Net Asset Value, offering and redemption price per share
($24,467,433 / 908,359 shares of common stock outstanding)
$26.94
CLASS D SHARES:
Net Asset Value offering and redemption price per share
($367,326 / 13,901 shares of common stock outstanding)
$26.42
<FN>
+ Redemption price per share is equal to Net Asset Value less any applica-
ble contingent deferred sales charge.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1994
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME:
Dividends
$ 351,630
Interest
125,957
TOTAL INVESTMENT INCOME
477,587
EXPENSES:
Investment advisory fee (Note 2) $1,494,432
Service fee (Note 3) 516,749
Administration fee (Note 2) 498,144
Transfer agent fees (Notes 2 and 4) 339,893
Distribution fee (Note 3) 242,673
Legal and audit fees 110,849
Custodian fees (Note 2) 49,747
Directors' fees and expenses (Note 2) 45,370
Interest expense (Note 7) 25,591
Other 316,379
TOTAL EXPENSES
3,639,827
NET INVESTMENT LOSS
(3,162,240)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain on investments sold during the year
14,492,212
Net unrealized appreciation of investments during the year
26,593,555
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
41,085,767
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$37,923,527
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR
YEAR
ENDED
ENDED
8/31/94
8/31/93
<S> <C>
<C>
Net investment loss $ (3,162,240)
$ (2,038,685)
Net realized gain on investments sold during the year 14,492,212
1,895,930
Net unrealized appreciation on investments during the year 26,593,555
44,190,147
Net increase in net assets resulting from operations 37,923,527
44,047,392
Net increase/(decrease) in net assets from Fund share
transactions (Note 6):
Class A 1,315,120
(68,499,166)
Class B 28,399,638
16,824,989
Class C (34,713,767)
48,377,699
Class D 335,105
22,852
Net increase in net assets 33,259,623
40,773,766
NET ASSETS:
Beginning of year 222,232,970
181,459,204
End of year (including accumulated net investment loss of
$3,162,240 at August 31, 1994) $255,492,593
$222,232,970
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
YEAR
YEAR YEAR
ENDED
ENDED ENDED
8/31/94
8/31/93+ 8/31/92*+
<S> <C> <C>
<C>
Net Asset Value, beginning of year $ 23.59 $
18.94 $ 20.12
Income from investment operations:
Net investment income/(loss) (0.32)
(0.21) (0.07)
Net realized and unrealized gain/(loss) on
investments 3.49
4.86 (0.35)
Total from investment operations 3.17
4.65 (0.42)
Less distributions:
Distributions from net investment income --
- -- --
Distributions from net realized gains --
- -- (0.76)
Total distributions --
- -- (0.76)
Net Asset Value, end of year $ 26.76 $
23.59 $ 18.94
Total return++ 13.44%
24.55% (2.42)%
Ratios/supplemental data:
Net assets, end of year (in 000's) $180,917
$150,471 $181,459
Ratio of operating expenses to average net
assets 1.42%+++
1.34% 1.05%
Ratio of net investment income/(loss) to av-
erage net assets (1.23)%
(1.01)% (0.31)%
Portfolio turnover rate 11%
13% 3%
<FN>
* On November 6, 1992 the Fund commenced selling Class B and C shares.
Shares issued prior to November 6,1992 were designated as Class A
shares. On May 13, 1993 the Fund commenced selling Class D shares.
+ Per share amounts have been calculated using the monthly average
method, which more appropriately presents the per share data for these
periods, since use of the undistributed method does not accord with
results of operations for all Classes of shares.
++ Total return represents aggregate total return for each period indi-
cated and does not reflect any applicable sales charge.
+++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 1.43% for the year ended
August 31, 1994.
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR
YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
ENDED
8/31/91+ 8/31/90+ 8/31/89+ 8/31/88 8/31/87 8/31/86
8/31/85
<S> <C> <C> <C> <C> <C> <C>
$ 16.16 $ 19.25 $ 13.68 $ 21.63 $ 16.43 $ 11.45 $
10.62
(0.05) (0.02) 0.02 (0.12) (0.11) (0.09)
(0.04)
4.95 (1.02) 5.98 (5.36) 6.15 5.07
1.00
4.90 (1.04) 6.00 (5.48) 6.04 4.98
0.96
-- (0.02) -- -- -- --
(0.08)
(0.94) (2.03) (0.43) (2.47) (0.84) --
(0.05)
(0.94) (2.05) (0.43) (2.47) (0.84) --
(0.13)
$ 20.12 $ 16.16 $ 19.25 $ 13.68 $ 21.63 $ 16.43 $
11.45
31.97% (6.38)% 44.97% (24.40)% 39.36% 43.49%
9.22%
$144,587 $86,169 $94,228 $81,287 $143,572 $115,212
$100,140
1.17% 1.13% 1.25% 1.10% 1.10% 1.20%
1.20%
(0.24)% (0.11)% 0.15% (0.60)% (0.60%) (0.60%)
(0.30%)
23% 14% 8% 10% 25% 24%
33%
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR
PERIOD
ENDED
ENDED
8/31/94
8/31/93*+
<S> <C> <C>
Net Asset Value, beginning of period $ 23.46 $
20.52
Income from investment operations:
Net investment loss (0.29)
(0.30)
Net realized and unrealized gain on investments 3.25
3.24
Total from investment operations 2.96
2.94
Net Asset Value, end of period $ 26.42 $
23.46
Total return++ 12.62%
14.33%
Ratios/supplemental data:
Net assets, end of period (in 000's) $49,741
$18,139
Ratio of operating expenses to average net assets 2.22%+++
2.18%**
Ratio of net investment loss to average net assets (2.04)%
(1.86)%**
Portfolio turnover rate 11%
13%
<FN>
* The Fund commenced selling Class B shares on November 6, 1992.
** Annualized.
+ Per share amounts have been calculated using the monthly average
method, which more appropriately presents the per share data for this
period, since use of the undistributed method does not accord with re-
sults of operations for all Classes of shares.
++ Total return represents aggregate total return for each period indi-
cated and does not reflect any
applicable sales charge.
+++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 2.23% for the year ended
August 31, 1994.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR
PERIOD
ENDED
ENDED
8/31/94
8/31/93*+
<S> <C> <C>
Net Asset Value, beginning of period $ 23.67 $
20.52
Income from investment operations:
Net investment loss (0.31)
(0.12)
Net realized and unrealized gain on investments 3.58
3.27
Total from investment operations 3.27
3.15
Net Asset Value, end of period $ 26.94 $
23.67
Total return++ 13.81%
15.35%
Ratios/supplemental data:
Net assets, end of period (in 000's) $24,467
$53,599
Ratio of operating expenses to average net assets 1.01%+++
0.99%**
Ratio of net investment loss to average net assets (0.83)%
(0.67)%**
Portfolio turnover rate 11%
13%
<FN>
* The Fund commenced selling Class C shares on November 6, 1992.
** Annualized.
+ Per share amounts have been calculated using the monthly average
method, which more appropriately presents the per share data for this
period, since use of the undistributed method does not accord with re-
sults of operations for all Classes of shares.
++ Total return represents aggregate total return for each period indi-
cated.
+++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 1.02% for the year ended
August 31, 1994.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
FOR A CLASS D SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR
PERIOD
ENDED
ENDED
8/31/94
8/31/93*+
<S> <C> <C>
Net Asset Value, beginning of period $23.47
$21.14
Income from investment operations:
Net investment loss (0.17)
(0.13)
Net realized and unrealized gain on investments 3.12
2.46
Total from investment operations 2.95
2.33
Net Asset Value, end of period $26.42
$23.47
Total return++ 12.57%
11.02%
Ratios/supplemental data:
Net assets, end of period (in 000's) $ 367 $
24
Ratio of operating expenses to average net assets 2.08%+++
2.11%**
Ratio of net investment loss to average net assets (1.90)%
(1.76)%**
Portfolio turnover rate 11%
13%
<FN>
* The Fund commenced selling Class D shares on May 13, 1993.
** Annualized.
+ Per share amounts have been calculated using the monthly average
method, which more appropriately presents the per share data for this
period, since use of the undistributed method does not accord with re-
sults of operations for all Classes of shares.
++ Total return represents aggregate total return for each period indi-
cated.
+++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 2.09% for the year ended
August 31, 1994.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Aggressive Growth Fund Inc. (the "Fund"), formerly known as
Smith Barney Shearson Aggressive Growth Fund Inc., was incorporated under
the laws of the State of Maryland on May 12, 1983. The Fund is registered
as a diversified, open-end management investment company with the Securi-
ties and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"). As of November 6, 1992, the Fund offered three
classes of shares: Class A, Class B and Class C. On January 29, 1993 the
Fund offered a fourth class of shares, Class D shares, to investors eligi-
ble to participate in the Smith Barney 401(k) Program. The Fund began
selling Class D shares on May 13, 1993. Class A and Class B shares are of-
fered to the general public. Class A shares are sold with a front-end
sales charge. Class B shares may be subject to a contingent deferred sales
charge ("CDSC") upon redemption. Class B shares will convert automatically
to Class A shares approximately eight years after the date of purchase.
Class C shares are offered exclusively to tax-exempt employee benefit and
retirement plans of Smith Barney Inc. ("Smith Barney") and its affiliates
and unit investment trusts sponsored by Smith Barney. Class C and Class D
shares are offered without a front-end sales load or CDSC. All Classes of
shares have identical rights and privileges except with respect to the ef-
fect of the respective sales charges of each Class, if any, the distribu-
tion and/or service fees borne by each Class, expenses allocable exclu-
sively to each Class, voting rights on matters affecting a single Class,
the exchange privilege of each Class and the conversion feature of Class B
shares. The following is a summary of significant accounting policies con-
sistently followed by the Fund in the preparation of its financial state-
ments.
Portfolio valuation: Listed securities traded on a national securities
exchange are valued at the last reported sales price; securities traded in
the over-the-counter market and listed securities for which no sale was
reported are valued at the bid price or, in the absence of a recent bid
price, at the bid equivalent as obtained from one or more of the major
market makers in the securities. Investments in securities for which mar-
ket quotations are not available are valued at fair value as determined in
good faith by the Board of Directors. Short-term investments that mature
in 60 days or less are valued at amortized cost.
Repurchase agreements: The Fund engages in repurchase agreement transac-
tions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of
the seller to repurchase, and the Fund to resell, the obligation at an
agreed- upon price and time, thereby determining the yield during the
Fund's holding period. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Fund's holding pe-
riod. The value of the collateral is at least equal at all times to the
total amount of the repurchase obligations including interest. In the
event of counterparty default, the Fund has the right to use the collat-
eral to offset losses incurred. There is potential loss to the Fund in the
event the Fund is delayed or prevented from exercising its rights to dis-
pose of the collateral securities, including the risk of a possible de-
cline in the value of the underlying securities during the period while
the Fund seeks to assert its rights. The Fund's investment adviser, admin-
istrator or sub-administrator acting under the supervision of the Board of
Directors, reviews the value of the collateral and the creditworthiness of
those banks and dealers with which the Fund enters into repurchase agree-
ments to evaluate potential risks.
Securities transactions and investment income: Securities transactions
are recorded as of the trade date. Dividend income is recorded on the ex-
dividend date. Interest income is recorded on an accrual basis. Realized
gains and losses from securities transactions are recorded on the identi-
fied cost basis. Investment income and realized and unrealized gains and
losses are allocated based upon the relative net assets of each Class of
shares.
Dividends and distributions to shareholders: Distributions from net in-
vestment income, if any, are determined on a Class level and will be de-
clared and paid at least annually. Distributions from net realized capital
gains, if any, after utilization of capital loss carryforwards, are deter-
mined on a Fund level and will be distributed at least annually. Addi-
tional distributions may be made at the discretion of the Board of Direc-
tors in order to avoid the application of a 4% nondeductible excise tax on
certain amounts of undistributed ordinary income and capital gains. Income
distributions and capital gain distributions on a Fund level are deter-
mined in accordance with income tax regulations which may differ from gen-
erally accepted accounting principles. These differences are primarily due
to differing treatments of income and gains on various investment securi-
ties held by the Fund, timing differences and differing characterization
of distributions made by the Fund as a whole.
Federal income taxes: It is the Fund's policy to comply with the require-
ments of the Internal Revenue Code of 1986, as amended, applicable to reg-
ulated investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax pro-
vision is required.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE
AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Smith Barney Asset Management, a division of Smith, Bar-
ney Advisers, Inc. ("SBA"), which is a wholly owned subsidiary of Smith
Barney Holdings Inc. ("Holdings"). Holdings is a wholly owned subsidiary
of The Travelers Inc. Under the Advisory Agreement, the Fund pays a
monthly fee at the annual rate of 0.60% of the value of its average daily
net assets.
Prior to April 21, 1994, the Fund was party to an administration agreement
(the "Administration Agreement") with The Boston Company Advisors, Inc.
("Boston Advisors"), an indirect wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). Under the Administration Agreement, the Fund paid
a monthly fee at the annual rate of .20% of the value of its average daily
net assets.
As of the close of business on April 21, 1994, SBA succeeded Boston
Advisors as the Fund's administrator. The new administration agreement
contains substantially the same terms and conditions, including the level
of fees, as the predecessor agreement.
As of the close of business on April 21, 1994, the Fund and SBA entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with Boston Advisors. Under the Sub-Administration Agreement, SBA pays
Boston Advisors a portion of its fee at a rate agreed upon from time to
time between SBA and Boston Advisors.
For the year ended August 31, 1994, the Fund incurred total brokerage com-
missions of $34,996, of which $3,800 was paid to Smith Barney.
For the year ended August 31, 1994, Smith Barney received from investors
$255,719 representing commissions (sales charges) on sales of Class A
shares.
A CDSC is generally payable by a shareholder in connection with the re-
demption of Class B shares within five years (eight years in the case of
purchases by certain 401(k) plans) after the date of purchase. In circum-
stances in which the CDSC is imposed, the amount of the charge ranges be-
tween 5% and 1% of net asset value depending on the number of years since
the date of purchase (except in the case of purchases by certain 401(k)
plans in which case a 3% CDSC is imposed for the eight year period after
the date of the purchase). For the year ended August 31, 1994, Smith Bar-
ney received $101,447 from shareholders in CDSCs on the redemption of
Class B shares.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Fund for serving as a Director or of-
ficer of the Fund. The Fund pays each Director who is not an officer, di-
rector or employee of Smith Barney or any of its affiliates $3,000 per
annum plus $500 per meeting attended and reimburses each such Director for
travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of Mellon, serves as the Fund's custodian. The Shareholder Services Group,
Inc., a subsidiary of First Data Corporation, serves as the Fund's trans-
fer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a dis-
tribution agreement with the Fund and sells shares of the Fund through
Smith Barney or its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a services
and distribution plan (the "Plan"). Under this Plan, the Fund compensates
Smith Barney for servicing shareholder accounts for Class A, Class B and
Class D shareholders, and covers expenses incurred in distributing Class B
and Class D shares. Smith Barney is paid an annual service fee with re-
spect to Class A, Class B and Class D shares of the Fund at the rate of
0.25% of the value of the average daily net assets of each respective
Class of shares. Smith Barney is also paid an annual distribution fee with
respect to Class B and Class D shares at the rate of 0.75% of the value of
the average daily net assets of each respective Class of shares. For the
year ended August 31, 1994, the Fund incurred a service fee of $435,857,
$80,526 and $366 for Class A, Class B and Class D shares, respectively.
For the year ended August 31, 1994, the Fund incurred distribution fees of
$241,578 and $1,095 for Class B and Class D shares.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operation of any
Class of shares are prorated among the Classes based upon the relative net
assets of each Class. Operating expenses directly attributable to a Class
of shares are charged to that Class' operations. In addition to the above
service and distribution fees, Class specific operating expense include
transfer agent fees. For the year ended August 31, 1994, transfer agent
fees for Class A, Class B, Class C and Class D shares were $270,751,
$68,908, $131 and $103, respectively.
5. SECURITIES TRANSACTIONS
Costs of purchases and proceeds from sales of securities, excluding short-
term investments and long-term U.S. government securities, for the year
ended August 31, 1994, were $27,820,759 and $52,103,016, respectively.
At August 31, 1994, aggregate gross unrealized appreciation for all secu-
rities in which there was an excess of value over tax cost was
$130,825,100, and aggregate gross unrealized depreciation for all securi-
ties in which there was an excess of tax cost over value was $16,549,213.
6. COMMON STOCK
At August 31, 1994, the Fund had authorized 100 million shares of $.01 par
value common stock divided into four Classes: Class A, Class B, Class C,
and Class D.
Changes in common stock outstanding were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR
ENDED
8/31/94
8/31/93
CLASS A SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C>
<C>
Sold 3,336,796 $ 75,925,637 3,043,908 $
63,507,753
Issued in exchange for
shares of Smith Barney
Shearson 1990's Fund (Note
8) 997,919 26,604,524 --
- --
Redeemed (3,951,101) (101,215,041) (6,245,040)
(132,006,919)
Net increase/(decrease) 383,614 $ 1,315,120 (3,201,132) $
(68,499,166)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD
ENDED
8/31/94 8/31/93*
CLASS B SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C> <C>
Sold 3,421,611 $ 87,244,483 1,450,574 $
31,569,205
Issued in exchange for
shares of Smith Barney
Shearson 1990's Fund (Note
8) 18,212 482,442 --
- --
Redeemed (2,330,261) (59,327,287) (677,534)
(14,744,216)
Net increase 1,109,562 $ 28,399,638 773,040 $
16,824,989
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD
ENDED
8/31/94 8/31/93*
CLASS C SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C> <C>
Sold 281,446 $ 7,536,528 2,588,331
$55,409,780
Redeemed (1,637,144) (42,250,295) (324,274)
(7,032,081)
Net increase/(decrease) (1,355,698) $(34,713,767) 2,264,057
$48,377,699
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD
ENDED
8/31/94 8/31/93*
CLASS D SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C>
<C>
Sold 13,833 $358,452 1,042 $
22,852
Redeemed (974) (23,347) --
- --
Net increase 12,859 $335,105 1,042 $
22,852
<FN>
* The Fund commenced selling Class B and Class C shares on November 6,
1992. Any shares outstanding prior to November 6, 1992 were designated
Class A shares. The Fund commenced selling Class D shares on May 13,
1993.
</TABLE>
7. LINE OF CREDIT
The Fund and several affiliated entities participate in a $50 million line
of credit provided by Continental Bank N.A. under an Amended and Restated
Line of Credit Agreement (the "Agreement") dated April 30, 1992 and re-
newed effective May 31, 1994, primarily for temporary or emergency pur-
poses, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. Under this Agreement, the
Fund may borrow up to the lesser of $25 million or 20% of its net assets.
Interest is payable either at the bank's Money Market Rate or the London
Interbank Offered Rate (LIBOR) plus .375% on an annualized basis. Under
the terms of the Agreement, as amended, the Fund and the other affiliated
entities are charged an aggregate commitment fee of $100,000 which is al-
located equally among each of the participants. The Agreement requires,
among other provisions, each participating fund to maintain a ratio of net
assets (not including funds borrowed pursuant to the Agreement) to aggre-
gate amount of indebtedness pursuant to the Agreement of no less than 5 to
1. During the year ended August 31, 1994, the Fund had an average out-
standing daily balance of $456,712 with interest rates ranging from
3.3125% to 4.8750%. Interest expense for the year ended August 31, 1994,
totalled $25,591. At August 31, 1994, the Fund had no outstanding borrow-
ings under this Agreement.
8. REORGANIZATION
On October 15, 1993, the Fund (the "Acquiring Fund") acquired the
assets and certain liabilities of Smith Barney Shearson 1990's Fund (the
"Acquired Fund"), in a tax-free exchange for shares of the Acquiring Fund,
pursuant to a plan of reorganization approved by the Acquired Fund's
shareholders on October 12, 1993. Total shares issued by the Acquiring
Fund, the total net assets of the Acquired Fund and the Acquiring Fund are
as follows:
<TABLE>
<CAPTION>
SHARES TOTAL NET
TOTAL NET
ISSUED BY ASSETS OF
ASSETS OF
ACQUIRING ACQUIRED ACQUIRING ACQUIRED
ACQUIRING
FUND FUND FUND FUND*
FUND
<S> <C> <C> <C>
<C>
The Fund Smith Barney Shearson 1990s Fund 1,016,131 $27,086,966
$247,422,920
</TABLE>
The total net assets of the Acquired Fund before acquisition included un-
realized appreciation of $9,088,361. The total net assets of the Acquiring
Fund immediately after the acquisition were $274,509,886.
9. LENDING OF PORTFOLIO SECURITIES
The Fund has the ability to lend its securities to brokers, dealers and
other financial organizations. Loans of securities by the Fund are collat-
eralized by cash, letters of credit or U.S. government securities that are
maintained at all times in an amount at least equal to the current market
value of the loaned securities. At August 31, 1994, the Fund had no secu-
rities on loan.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.:
We have audited the accompanying statement of assets and liabilities of
Smith Barney Aggressive Growth Fund Inc., formerly known as Smith Barney
Shearson Aggressive Growth Fund Inc., including the schedule of portfolio
investments, as of August 31, 1994, and the related statement of opera-
tions for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial high-
lights for each of the ten years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and fi-
nancial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclo-
sures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1994 by correspondance with the custo-
dian and brokers. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evalu-
ating 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 position
of Smith Barney Aggressive Growth Fund Inc., formerly known as Smith Bar-
ney Shearson Aggressive Growth Fund Inc., as of August 31, 1994, the re-
sults of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the finan-
cial highlights for each of the ten years in the period then ended in con-
formity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
October 7, 1994
TAX INFORMATION (unaudited)
FISCAL YEAR ENDED AUGUST 31, 1994
The following information represents fiscal year end disclosures of vari-
ous tax benefits passed through to shareholders at calendar year end.
Of the distributions made by the Fund, 100% represents the amount of each
distribution which will qualify for the dividends received deduction
available to corporate shareholders.
The above figures may differ from those cited elsewhere in this report due
to differences in the calculations of income and capital gains for Securi-
ties and Exchange Commission (book) purposes and Internal Revenue Service
(tax) purposes.
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
Smith Barney Asset Management
388 Greenwich Street
New York, New York 10013
ADMINISTRATOR
Smith, Barney Advisers, Inc.
388 Greenwich Street
New York, New York 10013
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services
Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit
and Trust Company
One Boston Place
Boston, Massachusetts 02108
GLOSSARY OF COMMONLY USED MUTUAL FUND TERMS
CAPITAL GAIN (OR LOSS) This is the increase (or decrease) in the market
value (price) of a security in your portfolio. If a stock or bond appreci-
ates in price, there is a capital gain; if it depreciates, there is a cap-
ital loss. A capital gain or loss is "realized" upon the sale of a
security; if net capital gains exceed net capital losses, there may be a
capital gain distribution to shareholders.
CONTINGENT DEFERRED SALES CHARGE (CDSC) One kind of back-end load, a CDSC
may be imposed if shares are redeemed during the first few years of owner-
ship. The CDSC may be expressed as a percentage of either the original
purchase price or the redemption proceeds. Most CDSCs decline over time,
and some will not be charged if shares are redeemed after a certain period
of time.
DIVIDEND This is income generated by securities in a portfolio and dis-
tributed after expenses to shareholders.
FRONT-END SALES CHARGE This is the sales charge applied to an investment
at the time of initial purchase.
NET ASSET VALUE (NAV) Net asset value is the total market of all securi-
ties held by a fund, minus any liabilities, divided by the number of
shares outstanding. It is the value of a single share of a mutual fund on
a given day. The total value of your investment would be the NAV multi-
plied by the number of shares you own.
TOTAL RETURN Total return measures a fund's performance, taking into ac-
count the combination of dividends paid and the gain or loss in the value
of the securities held in the portfolio. It may be expressed on an average
annual basis or cumulative basis (total change over a given period). In
addition, total return may be expressed with or without the effects of
sales charges or the reinvestment of dividends and capital gains.
Whenever a fund reports any type of performance, it must also report the
average annual total return according to the standardized calculation de-
veloped by the SEC. The SEC average annual total return calculation in-
cludes the effects of all fees and sales charges and assumes the reinvest-
ment of all dividends and capital gains.
AGGRESSIVE
GROWTH
FUND INC.
DIRECTORS
Paul R. Ades
Herbert Barg
Alger B. Chapman
Dwight B. Crane
Frank Hubbard
Allan R. Johnson
Heath B. McLendon
Ken Miller
John F. White
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
Richard P. Roelofs
Executive Vice President
Richard A. Freeman
Vice President and
Investment Officer
Lewis E. Daidone
Treasurer
Christina T. Sydor
Secretary
Recycled
Recyclable
This report is submitted for
the general information of the
shareholders of Smith Barney
Aggressive Growth Fund Inc. It is
not authorized for distribution to
prospective investors unless
accompanied or preceded by an
effective Prospectus for the Fund,
which contains information
concerning the Fund's investment
policies, fees and expenses as well
as other pertinent information.
SMITH BARNEY
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 9, 188, 189, 214
FD0433 J4
