SEMI- ANNUAL
REPORT
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 GrowthFund Inc.
........................................
FEBRUARY 28, 1995
[LOGO OF SMITH BARNEY MUTUAL FUNDS APPEARS HERE]
Dear Shareholder:
We are pleased to provide you with the Smith Barney Aggressive
Growth Fund Inc. Semi-Annual Report for the six months ended
February 28, 1995. The Fund enjoyed strong relative performance
in its most recent fiscal half year. The aggregate total returns
without the deduction of the applicable sales charges for Class
A, Class B, Class C and Class Z shares of the Fund were 5.03%,
4.60%, 4.60%, and 5.22%, respectively. For the same period the
Standard & Poor's Daily Price Index of 500 Common Stocks ("S&P
500") experienced a gain of 3.96% and the Value Line Composite
Index (Geometric), which we believe represents a better measure
of performance for the kinds of securities held in the Fund, ex-
perienced a decline of 2.24%. Both of these unmanaged indices
track the movement of common stock prices.
In the most recent six month period, we established initial po-
sitions in the following companies:
. Bridgeport Machines Inc., a leading manufacturer of computer
numerically controlled machine tools.
. Lehman Brothers Holdings Inc., the investment banking firm recently spun off
from American Express.
. ComputerVision Corporation, the design automation software firm where manage-
ment has recently acquired a substantial equity stake.
In the same period we added to positions in several core holdings including,
. Genzyme Corporation, on the strength of its attractive product pipeline and
strong earnings outlook.
. Wellman, Inc., where favorable pricing and demand conditions are pointing to-
wards record results for this leading plastic recycler.
. Lotus Development Corporation, on bright prospects for their rapidly growing
communications software business.
. C-COR Electronics, Inc., which is witnessing an unprecedented surge in demand
for its capital equipment for cable television operators and regional tele-
phone companies.
In the fiscal first half we realized profits from the sale of our entire posi-
tion in LIN Broadcasting Corporation and a partial position in Chiron Corpora-
tion. We sold our stake in LIN Broadcasting Corp. (which we had purchased in
1986) for $135 a share in early January. Chiron Corporation, which had become
our largest holding during the past six months, entered into a strategic part-
nership with Swiss drug giant Ciba Geigy. We tendered 38.25% of our Chiron Cor-
poration shares to Ciba for $117 a share. We have subsequently repurchased
enough Chiron Corporation stock to bring the position back up to 5% of the
Fund's assets.
Aggressive Growth Fund Inc.
1
Ever since the Federal Reserve Board began to raise short term interest rates
in February 1994, we believed that the die had been cast for a slowdown in the
US. economy from its unsustainably rapid pace. Monetary policy typically oper-
ates with a 9 month lag, therefore, it was not surprising to see evidence of an
economic slowdown beginning early in 1995. In spite of another increase in
short rates this January, long term rates have declined and now stand roughly
75 basis points below the highs reached in 1994. Moderate economic growth ac-
companied by declining long term interest rates is a favorable scenario for a
growth fund. In the Fund, we own shares in companies whose sales and earnings
depend primarily on innovation and leadership positions in emerging industries
rather than on movements in the economy.
1994 turned out to be a trying year for many heretofore "safe" investments.
Bond investors suffered one of their worst years on record, while utility
stocks, often thought of for risk averse investors, met an equally disturbing
fate. Growth stocks, in spite of the hostile interest rate environment,
outperformed fixed income vehicles and, for the most part, held their values.
Shares of companies able to grow their earnings in a consistent and rapid man-
ner were able to offset the Price/Earnings ratio contraction caused by the Fed-
eral Reserves's change in monetary policy. In spite of a plethora of negative
news events (bankruptcy of Orange County, Mexican peso devaluation and collapse
of many emerging country stock markets, six consecutive interest rate hikes by
the Fed., weakness of the US. dollar, etc.), major stock averages reached all-
time highs. While market sentiment has grown more bullish as prices have ad-
vanced, it is not yet at levels previously associated with market tops. We
think that US. growth stocks will continue to perform strongly and could in
fact become beneficiaries of the following trends:
. money flowing into domestic companies able to benefit from the decline in the
value of the US. dollar,
. investors in emerging country mutual funds returning to domestic stocks and
funds
. a moderate growth, low inflation environment tends to favor those companies
able to grow their earnings without the benefit of price increases (such as
Intel Corporation, a company which consistently brings down the price of com-
puting.)
2
We have always viewed our mission as one of providing rewarding long term in-
vestment results for our shareholders. We are quite pleased to report that
based on data supplied by Lipper Analytical Services, out of the 644 mutual
funds in existence for the 10 years ended December 31, 1994, Smith Barney Ag-
gressive Growth Fund was ranked 47th. Put another way, the Fund was in the top
decile of funds in the recently completed 10 year period. We hope to build on
that record over the next 10 years.
/s/ Heath B. McLendon /s/ Richard A. Freeman
Heath B. McLendon Richard A. Freeman
Chairman of the Board Vice President and
and Investment Officer
Investment Officer
April 4, 1995
3
Smith Barney
Aggressive Growth Fund Inc.
Portfolio Highlights (unaudited) February 28, 1995
(CHART TO COME)
Industry Breakdown
Pie chart depicting the allocation of the Aggressive Growth Fund's investment
securities held at February 28, 1995 by industry classification. The pie is
broken in pieces representing industries in the following percentages:
<TABLE>
<CAPTION>
Industry Percentage
<S> <C>
Convertible Preferred Stock and
Net Other Assets and Liabilities 6.5%
Other Common Stocks 4.8%
Environmental 4.5%
Computer Software 8.1%
Computer Hardware 3.5%
Pharmaceuticals 7.0%
Diversified Technology 10.9%
Managed Healthcare Providers 11.0%
Semiconductor 9.0%
Wireless Communications 6.8%
Broadcasting/Cable 11.6%
Biotechnology 16.3%
</TABLE>
4
Smith Barney
Aggressive Growth Fund Inc.
Portfolio of Investments (unaudited) February 28, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- -----------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 93.5%
Biotechnology -- 16.3%
90,000 Alkermes, Inc.+ $ 261,563
206,107 Chiron Corporation+ 12,521,000
180,000 Cor Therapeutics, Inc.+ 2,430,000
320,000 Genentech, Inc.+ 16,080,000
275,000 Genzyme Corporation+ 10,656,250
27,000 Genzyme Corporation Tissue Repair+ 108,000
300,000 Univax Biologics, Inc.+ 2,025,000
- -----------------------------------------------------------------------------
44,081,813
- -----------------------------------------------------------------------------
Broadcasting/Cable -- 11.6%
100,000 Cablevision Systems Development Corporation, Class A+ 5,600,000
100,000 Comcast Corporation, Class A 1,600,000
293,750 Comcast Corporation, Class A, Special 4,626,562
410,000 Infinity Broadcasting Corporation, Class A+ 14,452,500
25,000 LIN Television Corporation+ 737,500
200,000 Tele-Communications, Inc., Class A+ 4,550,000
- -----------------------------------------------------------------------------
31,566,562
- -----------------------------------------------------------------------------
Managed Healthcare Providers -- 11.0%
270,000 United Healthcare Corporation 11,610,000
205,000 U.S. HealthCare, Inc. 8,815,000
250,000 Value Health, Inc.+ 9,312,500
- -----------------------------------------------------------------------------
29,737,500
- -----------------------------------------------------------------------------
Diversified Technology -- 10.9%
450,000 C-COR Electronics, Inc.+ 12,037,500
151,000 Drexler Technology Corporation+ 830,500
400,000 Excel Technology, Inc.+ 1,575,000
135,000 Indigo N.V.+ 3,999,375
5,000 Ortel Corporation+ 120,000
210,000 Tyco International Ltd. 10,946,250
- -----------------------------------------------------------------------------
29,508,625
- -----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
5
Smith Barney
Aggressive Growth Fund Inc.
Portfolio of Investments (unaudited) (continued) February 28, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (continued)
Semiconductor -- 9.0%
130,000 Cirrus Logic, Inc.+ $ 4,371,250
305,000 GenRad, Inc.+ 1,791,875
230,000 Intel Corporation 18,342,500
- -----------------------------------------------------------
24,505,625
- -----------------------------------------------------------
Computer Software -- 8.1%
450,000 ComputerVision Corporation+ 2,531,250
275,000 Lotus Development Corporation+ 11,481,250
255,000 Oracle Systems Corporation+ 8,032,500
- -----------------------------------------------------------
22,045,000
- -----------------------------------------------------------
Pharmaceuticals -- 7.0%
300,000 Forest Laboratories, Inc., Class A+ 15,225,000
250,000 Gensia Pharmaceuticals, Inc.+ 843,750
300,000 IDEC Pharmaceuticals Corporation+ 1,125,000
100,000 Vertex Pharmaceuticals, Inc.+ 1,625,000
- -----------------------------------------------------------
18,818,750
- -----------------------------------------------------------
Wireless Communications -- 6.8%
300,000 Arch Communications Group, Inc.+ 5,662,500
335,000 California Microwave, Inc.+ 9,798,750
300,000 Telular Corporation+ 3,037,500
- -----------------------------------------------------------
18,498,750
- -----------------------------------------------------------
Environmental -- 4.5%
85,000 Image Industries Inc. 1,349,375
400,000 Wellman, Inc. 10,800,000
- -----------------------------------------------------------
12,149,375
- -----------------------------------------------------------
Computer Hardware -- 3.5%
176,000 NetFRAME Systems, Inc.+ 1,166,000
556,143 Quantum Corporation+ 8,203,109
- -----------------------------------------------------------
9,369,109
- -----------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
6
Smith Barney
Aggressive Growth Fund Inc.
Portfolio of Investments (unaudited) (continued) February 28, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- ---------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (continued)
Investment Banking Services -- 2.3%
350,000 Lehman Brothers Holdings Inc. $ 6,343,750
- ---------------------------------------------------------------
Drug Delivery/Testing -- 1.6%
499,500 Advanced Polymer Systems, Inc.+ 2,559,938
170,000 Cygnus Therapeutic Systems+ 1,402,500
90,000 Cytotherapeutics, Inc.+ 500,625
- ---------------------------------------------------------------
4,463,063
- ---------------------------------------------------------------
Machinery -- 0.9%
170,000 Bridgeport Machines Inc.+ 2,252,500
- ---------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $138,053,962) 253,340,422
- ---------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 3.7% (Cost
$2,721,625)
200,000 Cellular Communications, Inc.+ 10,150,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $140,775,587*) 97.2% 263,490,422
OTHER ASSETS AND LIABILITIES (Net) 2.8 7,471,923
- -----------------------------------------------------------
NET ASSETS 100.0% $270,962,345
</TABLE>
- --------------------------------------------------------------------------------
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
See Notes to Financial Statements.
7
Smith Barney
Aggressive Growth Fund Inc.
Statement of Assets and Liabilities (unaudited) February 28, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $140,775,587)(Note 1)
See accompanying schedule $263,490,422
Receivable for Fund shares sold 7,585,014
Receivable for investment securities sold 1,514,125
Dividends receivable 52,200
- ---------------------------------------------------------------------
Total Assets 272,641,761
- ---------------------------------------------------------------------
LIABILITIES:
Payable for investment securities purchased $1,195,991
Investment advisory fee payable (Note 2) 123,656
Notes payable (Note 7) 100,000
Payable for Fund shares redeemed 55,715
Service fees payable (Note 3) 46,927
Administration fee payable (Note 2) 41,219
Distribution fee payable (Note 3) 32,441
Transfer agent fees payable (Note 2) 31,223
Due to custodian 24,973
Custodian fees payable (Note 2) 9,000
Accrued expenses and other payables 18,271
- ---------------------------------------------------------------------
Total Liabilities 1,679,416
- ---------------------------------------------------------------------
NET ASSETS $270,962,345
- ---------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
Smith Barney
Aggressive Growth Fund Inc.
Statement of Assets and Liabilities (unaudited) (continued)
February 28, 1995
<TABLE>
<S> <C>
NET ASSETS consist of:
Accumulated net investment loss $ (4,543,399)
Accumulated net realized gain on investments sold 10,490,043
Unrealized appreciation of investments 122,714,835
Par value 99,965
Paid-in capital in excess of par value 142,200,901
- ---------------------------------------------------------------------
Total Net Assets $270,962,345
- ---------------------------------------------------------------------
NET ASSET VALUE:
CLASS A SHARES:
NET ASSET VALUE and redemption price per share
($188,551,316 / 6,935,430 shares of common stock
outstanding) $27.19
- ---------------------------------------------------------------------
Maximum offering price per share ($27.19 / 0.95)
(based on sales charge of 5.00% of the offering price
on
February 28, 1995) $28.62
- ---------------------------------------------------------------------
CLASS B SHARES:
NET ASSET VALUE and offering price per share+
($56,078,909 / 2,098,566 shares of common stock
outstanding) $26.72
- ---------------------------------------------------------------------
CLASS C SHARES:
NET ASSET VALUE and offering price per share+
($2,487,434 / 93,084 shares of common stock
outstanding) $26.72
- ---------------------------------------------------------------------
CLASS Z SHARES:
NET ASSET VALUE, offering and redemption price per
share
($23,844,686 / 869,403 shares of common stock
outstanding) $27.43
- ---------------------------------------------------------------------
</TABLE>
+ Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
See Notes to Financial Statements.
9
Smith Barney
Aggressive Growth Fund Inc.
Statement of Operations (unaudited)
For the six months ended February 28, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 240,258
Dividends 223,600
- -------------------------------------------------------------------------------
Total Investment Income 463,858
- -------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee (Note 2) $750,726
Service fees (Note 3) 283,842
Administration fee (Note 2) 250,242
Transfer agent fees (Notes 2 and 4) 197,193
Distribution fee (Note 3) 193,122
Custodian fees (Note 2) 29,321
Directors' fees and expenses (Note 2) 24,400
Legal and audit fees 23,417
Other 80,877
Interest expense (Note 7) 11,877
- -------------------------------------------------------------------------------
Total Expenses 1,845,017
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,381,159)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
(Notes 1 and 5):
Net realized gain on investments sold during the period 5,269,912
Net unrealized appreciation of investments during the
period 8,438,948
- -------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 13,708,860
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,327,701
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
10
Smith Barney
Aggressive Growth Fund Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Year
2/28/95 Ended
(Unaudited) 8/31/94
<S> <C> <C>
Net investment loss $ (1,381,159) $ (3,162,240)
Net realized gain on investments sold during the
period 5,269,912 14,492,212
Net unrealized appreciation of investments during
the period 8,438,948 26,593,555
- ------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 12,327,701 37,923,527
Distributions to shareholders from net realized
gain on investments:
Class A (5,743,305) --
Class B (1,793,108) --
Class C (formerly Class D shares) (24,861) --
Class Z (formerly Class C shares) (742,482) --
Net increase/(decrease) in net assets from Fund
share
transactions (Note 6):
Class A 4,567,877 1,315,120
Class B 5,855,659 28,399,638
Class C (formerly Class D shares) 2,068,228 335,105
Class Z (formerly Class C shares) (1,045,957) (34,713,767)
- ------------------------------------------------------------------------------
Net increase in net assets 15,469,752 33,259,623
NET ASSETS:
Beginning of period 255,492,593 222,232,970
- ------------------------------------------------------------------------------
End of period (including accumulated net
investment loss of $4,543,399 and $3,162,240,
respectively) $270,962,345 $255,492,593
- ------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
11
Smith Barney
Aggressive Growth Fund Inc.
Financial Highlights
For a Class A share outstanding throughout each period.
<TABLE>
<CAPTION>
Six Months Year Year
Ended Ended Ended
2/28/95 8/31/94 8/31/93+
(unaudited)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 26.76 $ 23.59 $ 18.94
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) (0.12) (0.32) (0.21)
Net realized and unrealized
gain/(loss) on investments 1.41 3.49 4.86
- -------------------------------------------------------------------------------
Total from investment operations 1.29 3.17 4.65
- -------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- --
Distributions from net realized
capital gains (0.86) -- --
- -------------------------------------------------------------------------------
Total distributions (0.86) -- --
- -------------------------------------------------------------------------------
Net Asset Value, end of period $ 27.19 $ 26.76 $ 23.59
- -------------------------------------------------------------------------------
Total return++ 5.03% 13.44% 24.55%
- -------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $188,551 $180,917 $150,471
Ratio of operating expenses to
average net assets 1.34%+++** 1.42%+++ 1.34%
Ratio of net investment income/(loss)
to average net assets (0.98)%** (1.23)% (1.01)%
Portfolio turnover rate 11% 11% 13%
- -------------------------------------------------------------------------------
</TABLE>
* On November 6, 1992 the Fund commenced selling Class B and Class Z (for-
merly Class C) shares. Those shares in existence prior to November 6,1992
were designated as Class A shares. On May 13, 1993 the Fund commenced sell-
ing Class C (formerly Class D) shares.
** Annualized.
+ Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for these
periods, since use of the undistributed net investment income method does
not accord with results of operations for all classes of shares.
++ Total return represents aggregate total return for each period indicated
and does not reflect any applicable sales charge.
+++ The operating expense ratio excludes interest expense. The operating ex-
pense ratio including interest expense for the six months ended February
28, 1995 and the year ended August 31, 1994 was 1.35% and 1.43%, respec-
tively.
See Notes to Financial Statements.
12
Smith Barney
Aggressive Growth Fund Inc.
<TABLE>
<CAPTION>
Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended
8/31/92*+ 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> <C>
$ 20.12 $ 16.16 $ 19.25 $ 13.68 $ 21.63 $ 16.43 $ 11.45 $ 10.62
- -------------------------------------------------------------------------------------------
(0.07) (0.05) (0.02) 0.02 (0.12) (0.11) (0.09) (0.04)
(0.35) 4.95 (1.02) 5.98 (5.36) 6.15 5.07 1.00
- -------------------------------------------------------------------------------------------
(0.42) 4.90 (1.04) 6.00 (5.48) 6.04 4.98 0.96
- -------------------------------------------------------------------------------------------
-- -- (0.02) -- -- -- -- (0.08)
(0.76) (0.94) (2.03) (0.43) (2.47) (0.84) -- (0.05)
- -------------------------------------------------------------------------------------------
(0.76) (0.94) (2.05) (0.43) (2.47) (0.84) -- (0.13)
- -------------------------------------------------------------------------------------------
$ 18.94 $ 20.12 $ 16.16 $ 19.25 $ 13.68 $ 21.63 $ 16.43 $ 11.45
- -------------------------------------------------------------------------------------------
(2.42)% 31.97% (6.38)% 44.97% (24.40)% 39.36% 43.49% 9.22%
- -------------------------------------------------------------------------------------------
$181,459 $144,587 $86,169 $94,228 $81,287 $143,572 $115,212 $100,140
1.05% 1.17% 1.13% 1.25% 1.10% 1.10% 1.20% 1.20%
(0.31)% (0.24)% (0.11)% 0.15% (0.60)% (0.60)% (0.60)% (0.30)%
3% 23% 14% 8% 10% 25% 24% 33%
- -------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
13
Smith Barney
Aggressive Growth Fund Inc.
Financial Highlights
For a Class B share outstanding throughout each period.
<TABLE>
<CAPTION>
Six Months Year Period
Ended Ended Ended
2/28/95 8/31/94 8/31/93*+
(unaudited)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 26.42 $ 23.46 $ 20.52
- ------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.17) (0.29) (0.30)
Net realized and unrealized gain on
investments 1.33 3.25 3.24
- ------------------------------------------------------------------------------
Total from investment operations 1.16 2.96 2.94
- ------------------------------------------------------------------------------
Less distributions:
Distributions from net realized
capital gains (0.86) -- --
- ------------------------------------------------------------------------------
Total distributions (0.86) -- --
- ------------------------------------------------------------------------------
Net Asset Value, end of period $ 26.72 $ 26.42 $ 23.46
- ------------------------------------------------------------------------------
Total return++ 4.60% 12.62% 14.33%
- ------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $56,079 $49,741 $18,139
Ratio of operating expenses to
average net assets 2.14%+++** 2.22%+++ 2.18%**
Ratio of net investment loss to
average net assets (1.78)%** (2.04)% (1.86)%**
Portfolio turnover rate 11% 11% 13%
- ------------------------------------------------------------------------------
</TABLE>
* The Fund commenced selling Class B shares on November 6, 1992.
** Annualized.
+ Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for this
period, since use of the undistributed net investment income method does
not accord with results of operations for all classes of shares.
++ Total return represents aggregate total return for each period indicated
and does not reflect any applicable sales charge.
+++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense for the six months ended February
28, 1995 and the year ended August 31, 1994 was 2.15% and 2.23%,
respectively.
See Notes to Financial Statements.
14
Smith Barney
Aggressive Growth Fund Inc.
Financial Highlights
For a Class C share outstanding throughout each period.
<TABLE>
<CAPTION>
Six Months Year Period
Ended Ended Ended
2/28/95 8/31/94 8/31/93*+
(unaudited)
<S> <C> <C> <C>
Net Asset Value, beginning of period $26.42 $23.47 $ 21.14
- ------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.10) (0.17) (0.13)
Net realized and unrealized gain on
investments 1.26 3.12 2.46
- ------------------------------------------------------------------------------
Total from investment operations 1.16 2.95 2.33
- ------------------------------------------------------------------------------
Less distributions:
Distributions from net realized
capital gains (0.86) -- --
- ------------------------------------------------------------------------------
Total distributions (0.86) -- --
- ------------------------------------------------------------------------------
Net Asset Value, end of period $26.72 $26.42 $ 23.47
- ------------------------------------------------------------------------------
Total return++ 4.60% 12.57% 11.02%
- ------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $2,487 $ 367 $ 24
Ratio of operating expenses to
average net assets 2.05%+++** 2.08%+++ 2.11%**
Ratio of net investment loss to
average net assets (1.68)%** (1.90)% (1.76)%**
Portfolio turnover rate 11% 11% 13%
- ------------------------------------------------------------------------------
</TABLE>
* The Fund commenced selling Class C (formerly Class D) shares on May 13,
1993.
** Annualized.
+ Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for this
period, since use of the undistributed net investment income method does not
accord with results of operations for all classes of shares.
++ Total return represents aggregate total return for each period indicated
and does not reflect any applicable sales charge.
+++ The operating expense ratio excludes interest expense. The operating ex-
pense ratio including interest expense for the six months ended February
28, 1995 and the year ended August 31, 1994 was 2.05% and 2.09%, respec-
tively.
See Notes to Financial Statements.
15
Smith Barney
Aggressive Growth Fund Inc.
Financial Highlights
For a Class Z share outstanding throughout each period.
<TABLE>
<CAPTION>
Six Months Year Period
Ended Ended Ended
2/28/95 8/31/94 8/31/93*+
(unaudited)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 26.94 $ 23.67 $ 20.52
- ------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.09) (0.31) (0.12)
Net realized and unrealized gain on
investments 1.44 3.58 3.27
- ------------------------------------------------------------------------------
Total from investment operations 1.35 3.27 3.15
- ------------------------------------------------------------------------------
Less distributions:
Distributions from net realized
capital gains (0.86) -- --
- ------------------------------------------------------------------------------
Total distributions (0.86) -- --
- ------------------------------------------------------------------------------
Net Asset Value, end of period $ 27.43 $ 26.94 $ 23.67
- ------------------------------------------------------------------------------
Total return++ 5.22% 13.81% 15.35%
- ------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $23,845 $24,467 $53,599
Ratio of operating expenses to
average net assets 0.93%**+++ 1.01%+++ 0.99%**
Ratio of net investment loss to
average net assets (0.57)%** (0.83)% (0.67)%**
Portfolio turnover rate 11% 11% 13%
- ------------------------------------------------------------------------------
</TABLE>
* The Fund commenced selling Class Z (formerly Class C) shares on November 6,
1992.
** Annualized.
+ Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for this
period, since use of the undistributed net investment income method does
not accord with results of operations for all classes of shares.
++ Total return represents aggregate total return for each period indicated.
+++ The operating expense ratio excludes interest expense. The operating ex-
pense ratio including interest expense for the six months ended February
28, 1995 and the year ended August 31, 1994 was 0.94% and 1.02%, respec-
tively.
See Notes to Financial Statements.
16
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
Smith Barney Aggressive Growth Fund Inc. (formerly Smith Barney Shearson Ag-
gressive Growth Fund Inc.) (the "Fund") was incorporated under the laws of the
State of Maryland on May 12, 1983 and is registered as a diversified, open-end
management investment company with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, (the "1940 Act"). Effective No-
vember 7, 1994, the Fund began offering Class Y shares and continued to offer
Class A, Class B, Class C (Class C shares were previously designated "Class D"
shares) and Class Z shares (Class Z shares were previously designated "Class C"
shares). As of February 28, 1995, no Class Y shares had been sold. Class A
shares are sold with a front-end sales charge. Class B and Class C 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 original purchase date. Class Y shares are available to invest-
ors making an initial investment of at least $5 million and are not subject to
any sales charges, distribution or service fees. Class Z shares are offered ex-
clusively to tax-exempt employee benefit and retirement plans of Smith Barney
Inc. ("Smith Barney") and certain unit investment trusts sponsored by Smith
Barney and its affiliates and are offered without any sales charges, distribu-
tion or service fees. All classes of shares have identical rights and privi-
leges except with respect to the effect of the respective sales charges to each
class, if any, the distribution and/or service fees borne by each class, ex-
penses allocable exclusively 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 poli-
cies consistently followed by the Fund in the preparation of its financial
statements.
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 equiva-
lent as obtained from one or more of the major market makers in the securities.
Investments in securities for which market 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 transactions.
Under the terms of a typical repurchase agreement, the Fund takes possession of
an
17
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
underlying debt obligation subject to an obligation of the seller to repur-
chase, 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 arrange-
ment results in a fixed rate of return that is not subject to market fluctua-
tions during the Fund's holding period. 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 collateral 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
dispose of the collateral securities, including the risk of a possible decline
in the value of the underlying securities during the period while the Fund
seeks to assert its rights. The Fund's investment adviser or 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 agreements to evaluate potential risks.
Securities transactions and investment income: Securities transactions are re-
corded 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 identified 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 investment
income, if any, are determined on a class level and will be declared and paid
at least annually. Distributions from net realized capital gains, if any, after
utilization of capital loss carryforwards, are determined on a Fund level and
will be distributed at least annually. Additional distributions may be made at
the discretion of the Board of Directors 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 determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various investment
securities 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 requirements
of the Internal Revenue Code of 1986, as amended, applicable to regulated in-
vestment companies and to distribute substantially all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is required.
18
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
2. Investment Advisory Fee, Administration Fee and Other Transactions
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Smith Barney Mutual Funds Management Inc. (formerly known as
Smith Barney Advisers Inc.) ("SBMFM"), which is controlled by Smith Barney
Holdings Inc. ("Holdings"). Holdings is a wholly owned subsidiary of The Trav-
elers 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.
The Fund has entered into an administration agreement (the "Administration
Agreement") with SBMFM. Under the Administration Agreement, the Fund pays a
monthly fee at the annual rate of 0.20% of the value of its average daily net
assets.
The Fund and SBMFM have entered into a sub-administration agreement (the "Sub-
Administration Agreement") with The Boston Company Advisors Inc. ("Boston Ad-
visors"), an indirect wholly owned subsidiary of Mellon Bank Corporation
("Mellon"). Under the Sub-Administration Agreement, SBMFM pays Boston Advisors
a portion of its fee at a rate agreed upon from time to time between SBMFM and
Boston Advisors.
For the six months ended February 28, 1995, the Fund incurred total brokerage
commissions of $54,990, none of which was paid to Smith Barney.
For the six months ended February 28, 1995, Smith Barney received from invest-
ors $153,464 representing commissions (sales charges) on sales of Class A
shares.
A CDSC is generally payable by a shareholder in connection with the redemption
of certain Class A, Class B and Class C shares. In circumstances in which the
CDSC is imposed, the amount of the charge will vary depending on the number of
years since the date of purchase. For the six months ended February 28, 1995,
Smith Barney received $80,686 in CDSCs on the redemption of Class B shares.
No officer, director or employee of Smith Barney, or any of its affiliates re-
ceives any compensation from the Fund for serving as a Director or officer of
the Fund. The Fund pays each Director who is not an officer, director or em-
ployee 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.
19
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
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 transfer agent.
3. Distribution Plan
Smith Barney acts as distributor of the Fund's shares pursuant to a distribu-
tion 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 C
shareholders, and covers expenses incurred in distributing Class B and Class C
shares. Smith Barney is paid an annual service fee with respect to Class A,
Class B and Class C 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 C shares
at the rate of 0.75% of the value of the average daily net assets of each re-
spective class of shares. For the six months ended February 28, 1995, the Fund
incurred service fees of $219,469, $63,342 and $1,031 for Class A, Class B and
Class C shares, respectively. For the six months ended February 28, 1995, the
Fund incurred distribution fees of $190,027 and $3,095 for Class B and Class C
shares, respectively.
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 distri-
bution fees, class specific operating expenses include transfer agent fees. For
the six months ended February 28, 1995, transfer agent fees for Class A, Class
B, Class C and Class Z shares were $142,641, $53,960, $491 and $101, respec-
tively.
5. Securities Transactions
Cost of purchases and proceeds from sales of securities, excluding short-term
investments and long-term U.S. government securities, for the six months ended
February 28, 1995, were $29,154,910 and $26,628,791, respectively.
20
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
At February 28, 1995, aggregate gross unrealized appreciation for all securi-
ties in which there was an excess of value over tax cost was $134,018,571, and
aggregate gross unrealized depreciation for all securities in which there was
an excess of tax cost over value was $11,303,736.
6. Common Stock
At February 28, 1995, the Fund had authorized 100 million shares of $.01 par
value common stock divided into five classes: Class A, Class B, Class C, Class
Z and Class Y.
Changes in common stock outstanding were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
2/28/95 8/31/94
Class A shares: Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 3,606,439 $ 95,087,810 3,336,796 $ 75,925,637
Issued in exchange for
shares of Smith Barney
Shearson 1990's Fund
(Note 8) -- -- 997,919 26,604,524
Issued as reinvestment of
dividends 219,462 5,596,265 -- --
Redeemed (3,651,506) (96,116,198) (3,951,101) (101,215,041)
- -------------------------------------------------------------------------------
Net increase 174,395 $ 4,567,877 383,614 $ 1,315,120
- -------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
2/28/95 8/31/94
Class B shares: Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 1,423,662 $ 37,199,471 3,421,611 $ 87,244,483
Issued in exchange for
shares of Smith Barney
Shearson 1990's Fund
(Note 8) -- -- 18,212 482,442
Issued as reinvestment of
dividends 69,988 1,756,701 -- --
Redeemed (1,277,686) (33,100,513) (2,330,261) (59,327,287)
- -------------------------------------------------------------------------------
Net increase 215,964 $ 5,855,659 1,109,562 $ 28,399,638
- -------------------------------------------------------------------------------
</TABLE>
21
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
2/28/95 8/31/94
Class C shares:+ Shares Amount Shares Amount
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 120,145 $ 3,136,128 13,833 $ 358,452
Issued as reinvestment of
dividends 962 24,151 -- --
Redeemed (41,924) (1,092,051) (974) (23,347)
- --------------------------------------------------------------------------
Net increase 79,183 $ 2,068,228 12,859 $ 335,105
- --------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
2/28/95 8/31/94
Class Z shares:++ Shares Amount Shares Amount
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 4,366 $ 118,144 281,446 $ 7,536,528
Issued as reinvestment of
dividends 28,879 742,482 -- --
Redeemed (72,201) (1,906,583) (1,637,144) (42,250,295)
- --------------------------------------------------------------------------
Net decrease (38,956) $(1,045,957) (1,355,698) $(34,713,767)
- --------------------------------------------------------------------------
</TABLE>
+ Class C shares were previously designated Class D shares.
++ Class Z shares were previously designated Class C shares.
As of February 28, 1995 no Class Y shares had been sold.
7. Notes Payable
The Fund and several affiliated entities participate in a $50 million line of
credit provided by Bank of America (formerly known as Continental Bank N.A.)
under an Amended and Restated Line of Credit Agreement (the "Agreement") dated
April 30, 1992 and renewed effective May 31, 1994, primarily for temporary or
emergency purposes, 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 25% of its net assets. How-
ever, pursuant to the Fund's prospectus, the Fund may only borrow up to 5% of
its total assets. 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 allocated equally among each of the participants. The Agree-
ment requires, among other provisions, each participating fund to maintain a
ratio of net assets (not including funds borrowed pursuant to the Agreement) to
aggregate amount of indebtedness pursuant to the Agreement of no less than 5 to
1. During the six months ended February 28, 1995, the Fund had an average out-
standing daily balance of $411,602 with interest rates ranging from 5.1250% to
6.625%. Interest expense for the six
22
Smith Barney
Aggressive Growth Fund Inc.
Notes to Financial Statements (unaudited) (continued)
months ended February 28, 1995 totalled $11,877. At February 28, 1995, the Fund
had an outstanding balance of $100,000 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 and the total net assets of the
Acquired Fund and the Acquiring Fund are as follows:
<TABLE>
<CAPTION>
Shares Total Net Total Net
Acquiring Issued by Assets of Assets of
Fund Acquired Fund Acquiring Fund Acquired Fund Acquiring Fund
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Smith Barney
The Fund Shearson 1990s Fund 1,016,131 $27,086,966 $247,422,920
- --------------------------------------------------------------------------
</TABLE>
The total net assets of the Acquired Fund before acquisition included
unrealized appreciation of $9,088,361. The total net assets of the Acquiring
Fund immediately after the acquisition were $274,509,886.
23
Smith Barney
Aggressive Growth Fund Inc.
Participants
Distributor Auditors and Counsel
Smith Barney Inc. KPMG Peat Marwick L.L.P.
388 Greenwich Street 345 Park Avenue
New York, New York 10013 New York, New York 10054
Investment Adviser Willkie Farr & Gallagher
153 East 53rd Street
Smith Barney Mutual New York, New York 10022
Funds Management
388 Greenwich Street
New York, New York 10013 Transfer Agent
The Shareholder Services
Group, Inc.
Administrator Exchange Place
Boston, Massachusetts 02109
Smith Barney Mutual
Funds Management
388 Greenwich Street
New York, New York 10013
Custodian
Boston Safe Deposit
Sub-Administrator and Trust Company
One Boston Place
The Boston Company Advisors, Inc. Boston, Massachusetts 02108
One Boston Place
Boston, Massachusetts 02108
24
Aggressive Growth Fund Inc.
Trustees
Paul R. Ades
Herbert Barg
Alger B. Chapman
Dwight B. Crane
Allan Johnson
Ken Miller
John F. White
Officers
Heath B. McLendon
Chairman of the Board and Investment Officer
Jessica M. Bibliowicz
President
Richard A. Freeman
Vice President and Investment Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Christina T. Sydor
Secretary
[LOGO OF RECYCLED RECYCLABLE APPEARS HERE]
[LOGO OF SMITH BARNEY A MEMBER OF TRAVELERS GROUP APPEARS HERE]
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 Mutual Funds
388 Greenwich Street
New York, New York 10013
Fund 9, 188, 189, 214, 443
FD 2208 D5
