Registration No. 2-84199
811-3762
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
X
Pre-Effective Amendment No.
Post-Effective Amendment No. 18
X
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
X
Amendment No. 19
X
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
(Exact name of Registrant as Specified in Charter)
388Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip
Code)
Registrant's Telephone Number, including Area Code
(212) 723-9218
Christina T. Sydor
Secretary
Smith Barney Aggressive Growth Fund Inc.
388 Greenwich Street
New York, New York 10013
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment
becomes effective.
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to Rule
485(b)
__X___ on December 29, 1995 pursuant to Rule 485(b)
_____ 60 days after filing pursuant to Rule 485(a)
on January 1, 1994 pursuant to Rule 485(a)
__________________________________________________________
__ __________________
______
The Registrant has previously filed a declaration of
indefinite registration
of its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940,
as amended. Registrant's Rule 24f-2 Notice for the fiscal
year ended
August 31, 1995 was filed on October 31, 1995.
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following
pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
FORM N-1A CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Part A
Item No. and Caption
Prospectus Caption
1. Cover Page Cover
Page
2. Synopsis Prospectus
Summary
3. Condensed Financial Information
Financial Highlights;
4. General Description of Registrant
Cover Page; Prospectus Summary;
Investment Objective and
Policies;
Distributor; Additional
Information
5 Management of the Fund
Prospectus Summary; Management
of the Trust
and the Fund;
Distributor;
Additional
Information
5A Management's Discussion of
Management of the Trust and the
Fund Performance Fund
6. Capital Stock and Other Securities
Investment Objective and Policies;
Dividends,
Distributions and
Taxes; Additional
Information
7. Purchase of Securities Being Offered
Valuation of Shares; Purchase of
Shares; Exchange
Privilege;
Redemption of
Shares; Minimum
Account Size;
Distributor
8. Redemption or Repurchase of Shares
Purchase of Shares; Redemption of
Shares; Exchange
Privilege
9. Pending Legal Proceedings Not
Applicable
Part B
Item No. and Caption
Statement
of Additional
Information
Caption
10. Cover Page Cover
page
11. Table of Contents Contents
12. General Information and History
Distributor; Additional
Information
13. Investment Objectives and Policies
Investment Objectives and
Management
Policies
14. Management of the Fund
Management
of the Trust and the
Funds; Distributor
15. Control Persons and Principal
Management of the Trust and the
Funds Holders of
Securities
16 Investment Advisory and Other Services
Management of the Trust and the
Funds;
Distributor
17 Brokerage Allocation
Investment Objectives and
Management
Policies; Distributor
18. Capital Stock and Other Securities
Investment Objectives and
Management
Policies; Purchase of
Shares; Redemption
of Shares;
Taxes
19. Purchase, Redemption and Pricing
Purchase of Shares; Redemption of
Securities Being Offered
Shares; Valuation of Shares;
Distributor;
Exchange Privilege
20. Tax Status
Taxes
21. Underwriters
Distributor
22. Calculation of Performance Data
Performance Data
23. Financial Statements
Financial Statements
PROSPECTUS
SMITH BARNEY
Aggressive
Growth
Fund Inc.
DECEMBER 29, 1995
Prospectus begins on page one
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus
December 29, 1995
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388 Greenwich Street
New York, New York 10013
(212) 723-9218
Smith Barney Aggressive Growth Fund Inc. (the "Fund")
is a diversified
mutual fund that seeks capital appreciation by investing
primarily in common
stock of companies the Fund's investment adviser believes
are experiencing, or
have the potential to experience, growth in earnings that
exceed the average
earnings growth rate of companies whose securities are
included in the Standard
& Poor's Daily Price Index of 500 Common Stocks (the "S&P
500"), a weighted
index which measures the aggregate change in market value of
400 industrials, 60
transportation stocks and utility companies and 40 financial
issues. Companies
whose earnings grow at a rate more rapidly than those of S&P
500 companies are
often small- or medium-sized companies that stand to benefit
from new products
or services, technological developments or changes in
management. Consequently,
the Fund invests principally in the securities of small- or
medium-sized
companies. Because of its objective and policies, the Fund
may be subject to
greater investment risks than those assumed by some other
investment companies.
This Prospectus sets forth concisely certain
information about the Fund,
including sales charges, distribution and service fees and
expenses, that
prospective investors will find helpful in making an
investment decision.
Investors are encouraged to read this Prospectus carefully
and retain it for
future reference.
Additional information about the Fund is contained in a
Statement of
Additional Information dated December 29, 1995, as amended
or supplemented from
time to time, that is available upon request and without
charge by calling or
writing the Fund at the telephone number or address set
forth above, or by
contacting a Smith Barney Financial Consultant. The
Statement of Additional
Information has been filed with the Securities and Exchange
Commission (the
"SEC") and is incorporated by reference into this Prospectus
in its entirety.
Smith Barney Inc.
Distributor
Smith Barney Mutual Funds Management Inc.
Investment Adviser and Administrator
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
1
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Table of Contents
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Prospectus Summuary
3
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Financial Highlights
10
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Investment Objective and Management Policies
14
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Valuation of Shares
17
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Dividends, Distributions and Taxes
18
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Purchase of Shares
19
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Exchange Privilege
29
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Redemption of Shares
33
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Minimum Account Size
36
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Performance
36
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Management of the Fund
37
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Distributor
38
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Additional Information
39
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============================================================
====================
No person has been authorized to give any information or to
make any
representations in connection with this offering other than
those contained in
this Prospectus and, if given or made, such other
information and
representations must not be relied upon as having been
authorized by the Fund or
the Distributor. This Prospectus does not constitute an
offer by the Fund or the
Distributor to sell or a solicitation of an offer to buy any
of the securities
offered hereby in any jurisdiction to any person to whom it
is unlawful to make
such offer or solicitation in such jurisdiction.
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====================
2
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Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary
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The following summary is qualified in its entirety by
detailed information
appearing elsewhere in this Prospectus and in the Statement
of Additional
Information. Cross references in this summary are to
headings in the Prospectus.
See "Table of Contents."
Investment Objective The Fund is an open-end, diversified
management investment
company that seeks capital appreciation by investing
primarily in common stock
of companies believed to be experiencing, or having the
potential to experience,
growth in earnings that exceed the average earnings growth
rate of companies
whose securities are included in the S&P 500. Although the
Fund invests
primarily in common stocks, it may invest in convertible
securities, preferred
stocks and warrants. See "Investment Objective and
Management Policies."
Alternative Purchase Arrangements The Fund offers several
classes of shares
("Classes") to investors designed to provide them with the
flexibility of
selecting an investment best suited to their needs. The
general public is
offered three classes of shares: Class A shares, Class B
shares and Class C
shares, which differ principally in terms of sales charges
and rate of expenses
to which they are subject. A fourth Class of shares, Class Y
shares, is offered
only to investors meeting an initial investment minimum of
$5,000,000. In
addition, a fifth Class, Class Z shares, which is offered
pursuant to a separate
prospectus, is offered exclusively to (a) tax-exempt
employee benefit and
retirement plans of Smith Barney Inc. ("Smith Barney") and
its affiliates and
(b) unit investment trusts ("UITs") sponsored by Smith
Barney and its
affiliates. See "Purchase of Shares" and "Redemption of
Shares."
Class A Shares. Class A shares are sold at net asset
value plus an initial
sales charge of up to 5.00% and are subject to an annual
service fee of 0.25% of
the average daily net assets of the Class. The initial sales
charge may be
reduced or waived for certain purchases. Purchases of Class
A shares, which when
combined with current holdings of Class A shares offered
with a sales charge
equal or exceed $500,000 in the aggregate, will be made at
net asset value with
no sales charge, but will be subject to a contingent
deferred sales charge
("CDSC") of 1.00% on redemptions made within 12 months of
purchase. See
"Prospectus Summary--Reduced or No Initial Sales Charge."
Class B Shares. Class B shares are offered at net asset
value subject to a
maximum CDSC of 5.00% of redemption proceeds, declining by
1.00% each year after
the date of purchase to zero. This CDSC may be waived for
certain
3
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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redemptions. Class B shares are subject to an annual service
fee of 0.25% and an
annual distribution fee of 0.75% of the average daily net
assets of the Class.
The Class B shares' distribution fee may cause that Class to
have higher
expenses and pay lower dividends than Class A shares.
Class B Shares Conversion Feature. Class B shares will
convert
automatically to Class A shares, based on relative net asset
value, eight years
after the date of the original purchase. Upon conversion,
these shares will no
longer be subject to an annual distribution fee. In
addition, a certain portion
of Class B shares that have been acquired through the
reinvestment of dividends
and distributions ("Class B Dividend Shares") will be
converted at that time.
See "Purchase of Shares-Deferred Sales Charge Alternatives."
Class C Shares. Class C shares are sold at net asset
value with no initial
sales charge. They are subject to an annual service fee of
0.25% and an annual
distribution fee of 0.75% of the average daily net assets of
the Class, and
investors pay a CDSC of 1.00% if they redeem Class C shares
within 12 months of
purchase. The CDSC may be waived for certain redemptions.
The Class C shares'
distribution fee may cause that Class to have higher
expenses and pay lower
dividends than Class A shares. Purchases of Class C shares,
which when combined
with current holdings of Class C shares of the Fund equal or
exceed $500,000 in
the aggregate, should be made in Class A shares at net asset
value with no sales
charge, and will be subject to a CDSC of 1.00% on
redemptions made within 12
months of purchase.
Class Y Shares. Class Y shares are available only to
investors meeting an
initial investment minimum of $5,000,000. Class Y shares are
sold at net asset
value with no initial sales charge or CDSC. They are not
subject to any service
or distribution fees.
In deciding which Class of Fund shares to purchase,
investors should
consider the following factors, as well as any other
relevant facts and
circumstances:
Intended Holding Period. The decision as to which Class
of shares is more
beneficial to an investor depends on the amount and intended
length of his or
her investment. Shareholders who are planning to establish a
program of regular
investment may wish to consider Class A shares; as the
investment accumulates
shareholders may qualify for reduced sales charges and the
shares are subject to
lower ongoing expenses over the term of the investment. As
an investment
alternative, Class B and Class C shares are sold without any
initial sales
charge so the entire purchase price is immediately invested
in the Fund. Any
investment return on these additional invested amounts may
partially or wholly
offset the
4
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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higher annual expenses of these Classes. Because the Fund's
future
return cannot be predicted, however, there can be no
assurance that this would
be the case.
Finally, investors should consider the effect of the
CDSC period and any
conversion rights of the Classes in the context of their own
investment time
frame. For example, while Class C shares have a shorter CDSC
period than Class B
shares, they do not have a conversion feature, and
therefore, are subject to an
ongoing distribution fee. Thus, Class B shares may be more
attractive than Class
C shares to investors with longer term investment outlooks.
Investors investing a minimum of $5,000,000 must
purchase Class Y shares,
which are not subject to an initial sales charge, CDSC or
service or
distribution fee. The maximum purchase amount for Class A
shares is $4,999,999,
Class B shares is $249,999 and Class C shares is $499,999.
There is no maximum
purchase amount for Class Y shares.
Reduced or No Initial Sales Charge. The initial sales
charge on Class A
shares may be waived for certain eligible purchasers, and
the entire purchase
price will be immediately invested in the Fund. In addition,
Class A share
purchases, which when combined with current holdings of
Class A shares offered
with a sales charge equal or exceed $500,000 in the
aggregate, will be made at
net asset value with no initial sales charge, but will be
subject to a CDSC of
1.00% on redemptions made within 12 months of purchase. The
$500,000 aggregate
investment may be met by adding the purchase to the net
asset value of all Class
A shares held in funds sponsored by Smith Barney listed
under "Exchange
Privilege." Class A share purchases may also be eligible for
a reduced initial
sales charge. See "Purchase of Shares." Because the ongoing
expenses of Class A
shares may be lower than those for Class B and Class C
shares, purchasers
eligible to purchase Class A shares at net asset value or at
a reduced sales
charge should consider doing so.
Smith Barney Financial Consultants may receive
different compensation for
selling each Class of shares. Investors should understand
that the purpose of
the CDSC on the Class B and Class C shares is the same as
that of the initial
sales charge on the Class A shares.
See "Purchase of Shares" and "Management of the Fund"
for a complete
description of the sales charges and service and
distribution fees for each
Class of shares and "Valuation of Shares," "Dividends,
Distributions and Taxes"
and "Exchange Privilege" for other differences between the
Classes of shares.
Smith Barney 401(k) Program Investors may be eligible
to participate in the
Smith Barney 401(k) Program, which is generally designed to
assist plan sponsors
in the creation and operation of retirement plans under
Section
5
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), as well as
other types of participant directed, tax-qualified employee
benefit plans
(collectively, "Participating Plans"). Class A, Class B,
Class C and Class Y
shares are available as investment alternatives for
Participating Plans. See
"Purchase of Shares-Smith Barney 401(k) Program."
Purchase of Shares Shares may be purchased through the
Fund's distributor,
Smith Barney, a broker that clears securities transactions
through Smith Barney
on a fully disclosed basis (an "Introducing Broker") or an
investment dealer in
the selling group. Direct purchases by certain retirement
plans may be made
through the Fund's transfer agent, First Data Investor
Services Group, Inc.
("FDISG") formerly known as The Shareholder Services Group.
See "Purchase of
Shares."
Investment Minimums Investors in Class A, Class B and
Class C shares may
open an account by making an initial investment of at least
$1,000 for each
account, or $250 for an individual retirement account
("IRA") or a Self-Employed
Retirement Plan. Investors in Class Y shares may open an
account for an initial
investment of $5,000,000. Subsequent investments of at least
$50 may be made for
all Classes. For participants in retirement plans qualified
under Section
403(b)(7) or Section 401(a) of the Code, the minimum initial
investment
requirement for Class A, Class B and Class C shares and the
subsequent
investment requirement for all Classes is $25. The minimum
initial investment
requirement for Class A, Class B and Class C shares and the
subsequent
investment requirement for all Classes through the
Systematic Investment Plan
described below is $50. There is no minimum investment
requirement in Class A
for unitholders who invest distributions from a UIT
sponsored by Smith Barney.
See "Purchase of Shares."
Systematic Investment Plan The Fund offers shareholders a
Systematic Investment
Plan under which they may authorize the automatic placement
of a purchase order
each month or quarter for Fund shares in an amount of at
least $50. See
"Purchase of Shares."
Redemption of Shares Shares may be redeemed on each day the
New York Stock
Exchange, Inc. ("NYSE") is open for business. See "Purchase
of Shares" and
"Redemption of Shares."
Management of the Fund Smith Barney Mutual Funds Management
Inc. ("SBMFM")
serves as the Fund's investment adviser and administrator.
SBMFM provides
investment advisory and management services to investment
companies affiliated
with Smith Barney. SBMFM is a wholly owned subsidiary of
Smith Barney Holdings
Inc. ("Holdings"). Holdings is a wholly owned subsidiary of
Travelers Group Inc.
("Travelers"), a diversified financial services holding
company engaged, through
6
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Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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its subsidiaries, principally in four business segments:
Investment Services,
Consumer Finance Services, Life Insurance Services and
Property & Casualty
Insurance Services. See "Management of the Trust and the
Fund."
Exchange Privilege Shares of a Class may be exchanged for
shares of the same
Class of certain other funds of the Smith Barney Mutual
Funds. Certain exchanges
may be subject to a sales charge differential. See "Exchange
Privilege."
Valuation of Shares Net asset value of the Fund for the
prior day generally is
quoted daily in the financial section of most newspapers and
is also available
from Smith Barney Financial Consultants. See "Valuation of
Shares."
Dividends and Distributions Dividends from net investment
income and
distributions of net realized capital gains, if any, are
declared and paid
annually. See "Dividends, Distributions and Taxes."
Reinvestment of Dividends Dividends and distributions paid
on shares of a Class
will be reinvested automatically, unless otherwise specified
by an investor, in
additional shares of the same Class at current net asset
value. Shares acquired
by dividend and distribution reinvestments will not be
subject to any sales
charge or CDSC. Class B shares acquired through dividend and
distribution
reinvestments will become eligible for conversion to Class A
shares on a pro
rata basis. See "Dividends, Distributions and Taxes."
Risk Factors and Special Considerations There can be no
assurance that the
Fund's investment objective will be achieved. Securities of
the kinds of
companies in which the Fund invests may be subject to
significant price
fluctuation and above-average risk. In addition, companies
achieving an earnings
growth rate higher than that of S&P 500 companies tend to
reinvest their
earnings rather than distribute them. As a result, the Fund
is not likely to
receive significant dividend income on its portfolio
securities. Accordingly, an
investment in the Fund should not be considered as a
complete investment program
and may not be appropriate for all investors. See
"Investment Objective and
Management Policies."
7
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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The Fund's Expenses The following expense table lists the
costs and expenses an
investor will incur either directly or indirectly as a
shareholder of the Fund,
based on the maximum sales charge or maximum CDSC that may
be incurred at the
time of purchase or redemption and, unless otherwise noted,
the Fund's operating
expenses for its most recent fiscal year:
<TABLE>
<CAPTION>
Class A
Class B Class C Class Y
============================================================
===================================
<S> <C>
<C> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00%
None None None
Maximum CDSC
(as a percentage of original cost or
redemption proceeds whichever is lower) None*
5.00% 1.00% None
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===================================
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees 0.80%
0.80% 0.80% 0.80%
12b-1 fees** 0.25%
1.00% 1.00% None
Other expenses*** 0.32%
0.32% 0.32% 0.32%
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TOTAL FUND OPERATING EXPENSES 1.37%
2.12% 2.12% 1.12%
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</TABLE>
* Purchases of Class A shares, which when combined with
current holdings of
Class A shares offered with a sales charge, equal or
exceed $500,000 in the
aggregate, will be made at net asset value with no
sales charge, but will
be subject to a CDSC of 1.00% on redemptions made
within 12 months.
** Upon conversion of Class B shares to Class A shares,
such shares will no
longer be subject to a distribution fee. Class C shares
do not have a
conversion feature and, therefore, are subject to an
ongoing distribution
fee. As a result, long-term shareholders of Class C
shares may pay more
than the economic equivalent of the maximum front-end
sales charge
permitted by the National Association of Securities
Dealers, Inc.
*** For Class Y shares, "Other expenses" have been
estimated based on expenses
incurred by the Class A shares because as of August 31,
1995 there were no
Class Y shares outstanding.
The sales charge and CDSC set forth in the above table
are the maximum
charges imposed on purchases or redemptions of Fund shares
and investors may
actually pay lower or no charges, depending on the amount
purchased and, in the
case of Class B, Class C and certain Class A shares, the
length of time the
shares are held and whether the shares are held through the
Smith Barney 401(k)
Program. See "Purchase of Shares" and "Redemption of
Shares." Smith Barney
receives an annual 12b-1 service fee of 0.25% of the value
of average daily net
assets of Class A shares. Smith Barney also receives, with
respect to Class B
shares, an annual 12b-1 fee of 1.00% of the value of average
daily net assets of
that Class, consisting of a 0.75% distribution fee and a
0.25% service fee. For
Class C shares, Smith Barney receives an annual 12b-1 fee of
1.00% of the value
of average daily net assets of this Class, consisting of a
0.75% distribution
fee and a 0.25% service fee.
8
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Prospectus Summary (continued)
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"Other expenses" in the above table include fees for
shareholder services,
custodial fees, legal and accounting fees, printing costs
and registration fees.
Example The following example is intended to assist an
investor in understanding
the various costs that an investor in the Fund will bear
directly or indirectly.
The example assumes payment by the Fund of operating
expenses at the levels set
forth in the table above. See "Purchase of Shares,"
"Redemption of Shares" and
"Management of the Fund."
<TABLE>
<CAPTION>
1 Year
3 Years 5 Years 10 Years*
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<S> <C>
<C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment, assuming
(1) 5.00% annual return and (2) redemption
at the end of each time period:
Class A $63
$91 $121 $206
Class B 72
96 124 226
Class C 32
66 114 245
Class Y 11
36 62 136
An investor would pay the following
expenses on the same investment, assuming
the same annual return and no redemption:
Class A 63
91 121 206
Class B 22
66 114 226
Class C 22
66 114 245
Class Y 11
36 62 136
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====================================
</TABLE>
* Ten-year figures assume conversion of Class B shares to
Class A shares at
the end of the eighth year following the date of
purchase.
The example also provides a means for the investor to
compare expense
levels of funds with different fee structures over varying
investment periods.
To facilitate such comparison, all funds are required to
utilize a 5.00% annual
return assumption. However, the Fund's actual return will
vary and may be
greater or less than 5.00%. This example should not be
considered a
representation of past or future expenses and actual
expenses may be greater or
less than those shown.
9
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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Financial Highlights
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The following information for the fiscal year ended August
31, 1995 has been
audited by KPMG Peat Marwick LLP, independent auditors,
whose report thereon
appears in the Fund's Annual Report dated August 31, 1995.
The following
information for the fiscal years ended August 31, 1985
through August 31, 1994
has been audited by Coopers & Lybrand L.L.P. The information
set out below
should be read in conjunction with the financial statements
and related notes
that also appear in the Fund's Annual Report, which is
incorporated by reference
into the Statement of Additional Information. No information
is presented for
Class Y shares because no Class Yshares were outstanding for
the periods shown.
For a share of each class of capital stock outstanding
throughout each year:
<TABLE>
<CAPTION>
Class A Shares 1995 1994
1993(1) 1992(1) 1991(1) 1990(1)
============================================================
============================================================
=====
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value, Beginning
of Year $26.76 $23.59
$18.94 $20.12 $16.16 $19.25
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- -----
Income (Loss) From
Operations:
Net investment loss (0.34) (0.32)
(0.21) (0.07) (0.05) (0.02)
Net realized and
unrealized gain (loss)
on investments 8.48 3.49
4.86 (0.35) 4.95 (1.02)
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Total Income (Loss) From
Operations 8.14 3.17
4.65 (0.42) 4.90 (1.04)
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Less Distributions From:
Net investment income -- --
- -- -- -- (0.02)
Net realized gains (1.37) --
- -- (0.76) (0.94) (2.03)
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Total Distributions (1.37) --
- -- (0.76) (0.94) (2.05)
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Net Asset Value,
End of Year $33.53 $26.76
$23.59 $18.94 $20.12 $16.16
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Total Return 31.95% 13.44%
24.55% (2.42)% 31.97% (6.38)%
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Net Assets, End of Year
(000s) $292,402 $180,917
$150,471 $181,459 $144,587 $86,169
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Ratios to Average Net Assets:
Expenses 1.37%
1.42%* 1.34% 1.05% 1.17%
1.13%
Net investment loss (1.05) (1.23)
(1.01) (0.31) (0.24) (0.11)%
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Portfolio Turnover Rate 44% 11%
13% 3% 23% 14%
============================================================
============================================================
=====
</TABLE>
(1) 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.
* The operating expense ratio excludes interest expense.
The operating
expense ratio including interest expense would have
been 1.43%.
10
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a Class A share of capital stock outstanding throughout
each year.
<TABLE>
<CAPTION>
1989(1)
1988(1) 1987(1) 1986(1) 1985(1)
============================================================
======================================================
<S> <C>
<C> <C> <C> <C>
Net Asset Value, Beginning of Year $13.68
$21.63 $16.43 $11.45 $10.62
- ------------------------------------------------------------
- ------------------------------------------------------
Income (Loss) From
Operations:
Net investment income (loss) 0.02
(0.12) (0.11) (0.09) (0.04)
Net realized and unrealized
gain (loss) on investments 5.98
(5.36) 6.15 5.07 1.00
- ------------------------------------------------------------
- ------------------------------------------------------
Total Income (Loss) From Operations 6.00
(5.48) 6.04 4.98 0.96
- ------------------------------------------------------------
- ------------------------------------------------------
Less Distributions From:
Net investment income --
- -- -- -- (0.08)
Net realized gains (0.43)
(2.47) (0.84) -- (0.05)
- ------------------------------------------------------------
- ------------------------------------------------------
Total Distributions (0.43)
(2.47) (0.84) -- (0.13)
- ------------------------------------------------------------
- ------------------------------------------------------
Net Asset Value, End of Year $19.25
$13.68 $21.63 $16.43 $11.45
- ------------------------------------------------------------
- ------------------------------------------------------
Total Return 44.97%
(24.40)% 39.36% 43.49% 9.22%
- ------------------------------------------------------------
- ------------------------------------------------------
Net Assets, End of Year (000s) $94,228
$81,287 $143,572 $115,212 $100,140
- ------------------------------------------------------------
- ------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.25%
1.10% 1.10% 1.20% 1.20%
Net investment income (loss) 0.15%
(0.60)% (0.60)% (0.60)% (0.30)%
- ------------------------------------------------------------
- ------------------------------------------------------
Portfolio Turnover Rate 8%
10% 25% 24% 33%
============================================================
======================================================
</TABLE>
11
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a Class B share of capital stock outstanding throughout
each year:
Class B Shares 1995 1994
1993(1)(2)
============================================================
====================
Net Asset Value, Beginning of Year $26.42
$23.46 $20.52
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment loss (0.33)
(0.29) (0.30)
Net realized and unrealized gain
on investments 8.10
3.25 3.24
- ------------------------------------------------------------
- --------------------
Total Income From Operations 7.77
2.96 2.94
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income -- --
- --
Net realized gains (1.37) --
- --
- ------------------------------------------------------------
- --------------------
Total Distributions (1.37) --
- --
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Year $32.82
$26.42 $23.46
- ------------------------------------------------------------
- --------------------
Total Return 30.93%
12.62% 14.33%++
- ------------------------------------------------------------
- --------------------
Net Assets, End of Year (000s) $97,438
$49,741 $18,139
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets:
Expenses 2.12%
2.22%* 2.18%+
Net investment loss (1.80)
(2.04) (1.86)+
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 44%
11% 13%
============================================================
====================
(1) For the period from November 6, 1992 (inception date)
to August 31, 1993.
(2) 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.
* The operating expense ratio excludes interest expense.
The operating
expense ratio including interest expense would have
been 2.23%.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
12
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a Class C share of capital stock outstanding throughout
each year:
Class C Shares(1) 1995
1994 1993(2)(3)
============================================================
====================
Net Asset Value, Beginning of Year $26.42
$23.47 $21.14
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment loss (0.40)
(0.17) (0.13)
Net realized and unrealized gain
on investments 8.19
3.12 2.46
- ------------------------------------------------------------
- --------------------
Total Income From Operations 7.79
2.95 2.33
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income -- --
- --
Net realized gains (1.37) --
- --
- ------------------------------------------------------------
- --------------------
Total Distributions (1.37) --
- --
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Year $32.84
$26.42 $23.47
- ------------------------------------------------------------
- --------------------
Total Return 31.01%
12.57% 11.02%++
- ------------------------------------------------------------
- --------------------
Net Assets, End of Year (000s) $72,324
$367 $24
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets:
Expenses 2.12%
2.08%* 2.11%+
Net investment loss (1.80)
(1.90) (1.76)+
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 44%
11% 13%
============================================================
====================
(1) On November 7, 1994, the former Class D shares were
renamed Class C shares.
(2) For the period from May 13, 1993 (inception date) to
August 31, 1993.
(3) 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.
* The operating expense ratio excludes interest expense.
The operating
expense ratio including interest expense would have
been 2.09%.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
13
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Investment Objective and Management Policies
- ------------------------------------------------------------
- --------------------
The investment objective of the Fund is capital
appreciation. Although the
Fund may receive current income from dividends, interest and
other sources,
income is only an incidental consideration of the Fund. The
Fund's investment
objective may not be changed without the approval of the
holders of a majority
of the Fund's outstanding shares. There can be no assurance
that the Fund will
achieve its investment objective.
The Fund attempts to achieve its investment objective
by investing
primarily in common stocks of companies that SBMFM believes
are experiencing, or
have the potential to experience, growth in earnings that
exceed the average
earnings growth rate of companies having securities included
in the S&P 500. An
earnings growth rate exceeding that of S&P 500 companies is
often achieved by
small or medium-sized companies, generally referred to as
"emerging growth
companies," that stand to benefit from new products or
services, technological
developments or changes in management, but it also may be
achieved by seasoned,
established companies. As a result, SBMFM anticipates that
the Fund will invest
principally in the securities of small or medium-sized
companies and to a lesser
degree in the securities of large, well-known companies.
SBMFM focuses its stock selection for the Fund on a
diversified group of
emerging growth companies that have passed their "start-up"
phase and show
positive earnings and the prospect of achieving significant
profit gains in the
two to three years after the Fund acquires their stocks.
These companies
generally may be expected to benefit from new technologies,
techniques, products
or services or cost-reducing measures, and may be affected
by changes in
management, capitalization or asset deployment, government
regulations or other
external circumstances.
Although SBMFM anticipates that the assets of the Fund
ordinarily will be
invested primarily in common stocks of U.S. companies, the
Fund may invest in
convertible securities, preferred stocks, securities of
foreign issuers,
warrants and restricted securities. In addition, when SBMFM
believes that market
conditions warrant, the Fund may invest for temporary
defensive purposes in
corporate and U.S. government bonds and notes and money
market instruments. The
Fund also is authorized to borrow in an amount of up to 5%
of its total assets
for extraordinary or emergency purposes, and may borrow up
to 331/3% of its
total assets less liabilities, for leveraging purposes. See
"Investment Policies
and Strategies -- Leveraging."
Further information about the Fund's investment
policies, including a list
of those restrictions on its investment activities that
cannot be changed
without shareholder approval, appears in the Statement of
Additional
Information.
14
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Investment Objective and Management Policies (continued)
- ------------------------------------------------------------
- --------------------
INVESTMENT POLICIES AND STRATEGIES
Restricted Securities. Restricted securities are those
that may not be sold
publicly without first being registered under the Securities
Act of 1933, as
amended. For that reason, the Fund may not be able to
dispose of restricted
securities at a time when, or at a price at which, it
desires to do so and may
have to bear expenses associated with registering the
securities. At any one
time, the Fund's aggregate holdings of restricted
securities, repurchase
agreements having a duration of more than five business
days, and securities
lacking readily available market quotations will not exceed
15% of the Fund's
total assets.
Foreign Securities. The Fund may invest up to 10% of
its net assets in the
securities of foreign issuers. There are certain risks
involved in investing in
foreign securities, including those resulting from
fluctuations in currency
exchange rates, revaluation of currencies, future political
or economic
developments and the possible imposition of currency
exchange blockages or other
foreign governmental laws or restrictions, reduced
availability of public
information concerning issuers, and the fact that foreign
companies are not
generally subject to uniform accounting, auditing and
financial reporting
standards or to other regulatory practices and requirements
comparable to those
applicable to domestic companies. Moreover, securities of
many foreign companies
may be less liquid and their prices more volatile than
securities of comparable
domestic companies. In addition, with respect to certain
foreign countries,
there is the possibility of expropriation, confiscatory
taxation and limitations
on the use or removal of funds or other assets of the Fund,
including the
withholding of dividends.
Lending of Portfolio Securities. From time to time, the
Fund may lend its
portfolio securities to brokers, dealers and other financial
organizations.
These loans may not exceed 331/3% of the Fund's total assets
taken at value.
Loans of portfolio securities by the Fund will be
collateralized by cash,
letters of credit or obligations of the United States
government or its agencies
and instrumentalities ("U.S. government securities") which
are maintained at all
times in an amount equal to at least 100% of the current
market value of the
loaned securities. By lending its portfolio securities, the
Fund will seek to
generate income by continuing to receive interest on loaned
securities, by
investing the cash collateral in Smith Barney short-term
instruments or by
obtaining yield in the form of interest paid by the borrower
when U.S.
government securities are used as collateral. The risks in
lending portfolio
securities, as with other extensions of secured credit,
consist of possible
delays in receiving additional collateral or in the recovery
of the securities
or possible loss of rights in the collateral should the
borrower fail
financially. Loans
15
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Investment Objective and Management Policies (continued)
- ------------------------------------------------------------
- --------------------
will be made to firms deemed by SBMFM to be of good standing
and will not be made unless, in the judgment of SBMFM, the
consideration to be
earned from such loans would justify the risk.
Leveraging. The Fund may from time to time leverage its
investments by
purchasing securities with borrowed money. The Fund may
borrow money only from
banks and in an amount not to exceed 331/3% of the total
value of its assets
less its liabilities. Borrowed money creates an opportunity
for greater capital
gain but at the same time increases exposure to capital
risk, as any gain in the
value of securities purchased with borrowed money that
exceeds the interest paid
on the amount borrowed would cause the Fund's net asset
value to increase more
rapidly than otherwise, while any decline in the value of
securities purchased
would cause the Fund's net asset value to decrease more
rapidly than otherwise.
Money Market Instruments. As noted above, in certain
circumstances the Fund
may invest in short-term money market instruments, such as
U.S. government
securities, certificates of deposit, time deposits, and
bankers' acceptances
issued by domestic banks (including their branches located
outside the United
States and subsidiaries located in Canada), domestic
branches of foreign banks,
savings and loan associations and similar institutions, high-
grade commercial
paper, and repurchase agreements with respect to such
instruments.
Repurchase Agreements. The Fund will enter into
repurchase agreements with
banks which are the issuers of instruments acceptable for
purchase by the Fund
and with certain dealers on the Federal Reserve Bank of New
York's list of
reporting dealers. Under the terms of a typical repurchase
agreement, the Fund
would acquire an underlying obligation for a relatively
short period (usually
not more than one week) 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 period. Under each repurchase agreement, the
selling institution
will be required to maintain the value of the securities
subject to the
repurchase agreement at not less than their repurchase
price. Repurchase
agreements could involve certain risks in the event of
default or insolvency of
the other party, including possible delays or restrictions
upon the Fund's
ability to dispose of the underlying securities, the risk of
a possible decline
in the value of the underlying securities during the period
in which the Fund
seeks to assert its rights to them, the risk of incurring
expenses associated
with asserting those rights and the risk of losing all or
part of the income
from the agreement. SBMFM, acting under the supervision of
the Board of
Directors,
16
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Investment Objective and Management Policies (continued)
- ------------------------------------------------------------
- --------------------
reviews on an ongoing basis to evaluate potential risks the
value of
the collateral and the creditworthiness of those banks and
dealers with which
the Fund enters into repurchase agreements.
Certain Risk Considerations. Securities of the kinds of
companies in which
the Fund invests may be subject to significant price
fluctuation and
above-average risk. In addition, companies achieving an
earnings growth rate
higher than that of S&P 500 companies tend to reinvest their
earnings rather
than distribute them. As a result, the Fund is not likely to
receive significant
dividend income on its portfolio securities. Accordingly, an
investment in the
Fund should not be considered as a complete investment
program and may not be
appropriate for all investors.
Portfolio Transactions. Portfolio securities
transactions on behalf of the
Fund are placed by SBMFM with a number of brokers and
dealers, including Smith
Barney. Smith Barney has advised the Fund that in
transactions with the Fund,
Smith Barney charges a commission rate at least as favorable
as the rate Smith
Barney charges its comparable unaffiliated customers in
similar transactions.
- ------------------------------------------------------------
- --------------------
Valuation of Shares
- ------------------------------------------------------------
- --------------------
The Fund's net asset value per share is determined as
of the close of
regular trading on the NYSE on each day that the NYSE is
open, by dividing the
value of the Fund's net assets attributable to each Class by
the total number of
shares of the Class outstanding.
Generally, the Fund's investments are valued at market
value or, in the
absence of a market value with respect to any securities, at
fair value as
determined by or under the direction of the Fund's Board of
Directors.
Short-term investments that mature in 60 days or less are
valued at amortized
cost whenever the Directors determine that amortized cost
reflects fair value of
those investments. Further information regarding the Fund's
valuation policies
is contained in the Statement of Additional Information.
17
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Dividends, Distributions and Taxes
- ------------------------------------------------------------
- --------------------
DIVIDENDS AND DISTRIBUTIONS
The Fund's policy is to distribute its investment
income (that is, its
income other than its net realized capital gains) and net
realized capital
gains, if any, once a year, normally at the end of the year
in which earned or
at the beginning of the next year.
If a shareholder does not otherwise instruct, dividends
and capital gain
distributions will be reinvested automatically in additional
shares of the same
Class at net asset value, subject to no sales charge or
CDSC. In order to avoid
the application of a 4% nondeductible excise tax on certain
undistributed
amounts of ordinary income and capital gains, the Fund may
make an additional
distribution shortly before December 31 in each year of any
undistributed
ordinary income or capital gains and expects to pay any
other dividends and
distributions necessary to avoid the application of this
tax.
The per share dividends on Class B and Class C shares
of the Fund may be
lower than the per share dividends on Class A and Class Y
shares principally as
a result of the distribution fee applicable with respect to
Class B and Class C
shares. The per share dividends on Class A shares of the
Fund may be lower than
the per share dividends on Class Y shares principally as a
result of the service
fee applicable to Class A shares. Distributions of capital
gains, if any, will
be in the same amount for Class A, Class B, Class C and
Class Y shares.
TAXES
The Fund has qualified and intends to continue to
qualify each year as a
"regulated investment company" under Subchapter M of the
Internal Revenue Code
of 1986, as amended. Dividends from net investment income
and distributions of
realized short-term capital gains are taxable to
shareholders as ordinary
income, regardless of how long shareholders have held their
Fund shares and
whether such dividends and distributions are received in
cash or reinvested in
additional Fund shares. Distributions of net realized long-
term capital gains
are taxable to shareholders as long-term capital gains,
regardless of how long
shareholders have held Fund shares and whether such
distributions are received
in cash or are reinvested in additional Fund shares.
Furthermore, as a general
rule, a shareholder's gain or loss on a sale or redemption
of Fund shares will
be a long-term capital gain or loss if the shareholder has
held the shares for
more than one year and will be a short-term capital gain or
loss if the
shareholder has held the shares for one year or less. Some
of the Fund's
dividends declared from net investment income may qualify
for the Federal
dividends-received deduction for corporations.
18
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Dividends, Distributions and Taxes
- ------------------------------------------------------------
- --------------------
Statements as to the tax status of each shareholder's
dividends and
distributions are mailed annually. Each shareholder will
also receive, if
appropriate, various written notices after the close of the
Fund's prior taxable
year as to the Federal income tax status of his or her
dividends and
distributions which were received from the Fund during the
Fund's prior taxable
year. Shareholders should consult their tax advisors about
the status of the
Fund's dividends and distributions for state and local tax
liabilities.
- ------------------------------------------------------------
- --------------------
Purchase of Shares
- ------------------------------------------------------------
- --------------------
GENERAL
The Fund offers five Classes of shares. Class A shares
are sold to
investors with an initial sales charge and Class B and Class
C shares are sold
without an initial sales charge but are subject to a CDSC
payable upon certain
redemptions. Class Y shares are sold without an initial
sales charge or a CDSC
and are available only to investors investing a minimum of
$5,000,000. Class Z
shares are offered without a sales charge, CDSC or service
or distribution fee,
exclusively to: (a) tax-exempt employee benefit and
retirement plans of Smith
Barney and its affiliates and (b) certain UITs sponsored by
Smith Barney and its
affiliates. Investors meeting either of these criteria who
are interested in
acquiring Class Z shares should contact a Smith Barney
Financial Consultant for
a Class Z Prospectus. See "Prospectus Summary-Alternative
Purchase Arrangements"
for a discussion of factors to consider in selecting which
Class of shares to
purchase.
Purchases of Fund shares must be made through a
brokerage account
maintained with Smith Barney, an Introducing Broker or an
investment dealer in
the selling group, except for investors purchasing shares of
the Fund through a
qualified retirement plan who may do so directly through
FDISG. When purchasing
shares of the Fund, investors must specify whether the
purchase is for Class A,
Class B, Class C or Class Y shares. No maintenance fee will
be charged by the
Fund in connection with a brokerage account through which an
investor purchases
or holds shares.
Investors in Class A, Class B and Class C shares may
open an account by
making an initial investment of at least $1,000 for each
account, or $250 for an
IRA or a Self-Employed Retirement Plan in the Fund.
Investors in Class Y shares
may open an account by making an initial investment of
$5,000,000. Subsequent
19
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
investments of at least $50 may be made for all Classes. For
participants in
retirement plans qualified under Section 403(b)(7) or
Section 401(a) of the
Code, the minimum initial investment requirement for Class
A, Class B and Class
C shares and the subsequent investment requirement for all
Classes in the Fund
is $25. For the Fund's Systematic Investment Plan, the
minimum initial
investment requirement for Class A, Class B and Class C
shares and the
subsequent investment requirement for all Classes is $50.
There are no minimum
investment requirements for Class A shares for employees of
Travelers and its
subsidiaries, including Smith Barney, Directors of the Fund
and their spouses
and children and unitholders who invest distributions from a
UIT sponsored by
Smith Barney. The Fund reserves the right to waive or change
minimums, to
decline any order to purchase its shares and to suspend the
offering of shares
from time to time. Shares purchased will be held in the
shareholder's account by
the Fund's transfer agent, FDISG. Share certificates are
issued only upon a
shareholder's written request to FDISG.
Purchase orders received by the Fund or Smith Barney
prior to the close of
regular trading on the NYSE, on any day the Fund calculates
its net asset value,
are priced according to the net asset value determined on
that day. Orders
received by dealers or Introducing Brokers prior to the
close of regular trading
on the NYSE on any day the Fund calculates its net asset
value, are priced
according to the net asset value determined on that day,
provided the order is
received by the Fund or Smith Barney prior to Smith Barney's
close of business
(the "trade date"). Payment for Fund shares is due on the
third business day
after the trade date.
SYSTEMATIC INVESTMENT PLAN
Shareholders may make additions to their accounts at
any time by purchasing
shares through a service known as the Systematic Investment
Plan. Under the
Systematic Investment Plan, Smith Barney or FDISG is
authorized through
preauthorized transfers of $50 or more to charge the regular
bank account or
other financial institution indicated by the shareholder on
a monthly or
quarterly basis to provide systematic additions to the
shareholder's Fund
account. A shareholder who has insufficient funds to
complete the transfer will
be charged a fee of up to $25 by Smith Barney or FDISG. The
Systematic
Investment Plan also authorizes Smith Barney to apply cash
held in the
shareholder's Smith Barney brokerage account or redeem the
shareholder's shares
of a Smith Barney money market fund to make additions to the
account. Additional
information is available from the Fund or a Smith Barney
Financial Consultant.
20
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
INITIAL SALES CHARGE ALTERNATIVE-CLASS A SHARES
The sales charges applicable to purchases of Class A
shares of the Fund are
as follows:
Sales
Dealers
Sales Charge as Charge as
Reallowance
% of % of
as % of
Amount of Investment Offering Price Amount
Invested Offering Price
============================================================
====================
Less than $25,000 5.00% 5.26%
4.50%
$25,000 - $49,999 4.00% 4.17%
3.60%
$50,000 - $99,999 3.50% 3.63%
3.15%
$100,000 - $249,999 3.00% 3.09%
2.70%
$250,000 - $499,999 2.00% 2.04%
1.80%
$500,000 and over * *
*
============================================================
====================
* Purchases of Class A shares, which when combined with
current holdings of
Class A shares offered with a sales charge equal or
exceed $500,000 in the
aggregate, will be made at net asset value without any
initial sales
charge, but will be subject to a CDSC of 1.00% on
redemptions made within
12 months of purchase. The CDSC on Class A shares is
payable to Smith
Barney, which compensates Smith Barney Financial
Consultants and other
dealers whose clients make purchases of $500,000 or
more. The CDSC is
waived in the same circumstances in which the CDSC
applicable to Class B
and Class C shares is waived. See "Deferred Sales
Charge Alternatives" and
"Waivers of CDSC."
Members of the selling group may receive up to 90% of
the sales charge and
may be deemed to be underwriters of the Fund as defined in
the Securities Act of
1933, as amended.
The reduced sales charges shown above apply to the
aggregate of purchases
of Class A shares of the Fund made at one time by "any
person," which includes
an individual, his or her spouse and children, or a trustee
or other fiduciary
of a single trust estate or single fiduciary account. The
reduced sales charge
minimums may also be met by aggregating the purchase with
the net asset value of
all Class A shares held in funds sponsored by Smith Barney
that are offered with
a sales charge listed under "Exchange Privilege."
INITIAL SALES CHARGE WAIVERS
Purchases of Class A shares may be made at net asset
value without a sales
charge in the following circumstances: (a) sales of Class A
shares to Directors
of the Fund, employees of Travelers and its subsidiaries, or
the spouses and
children of such persons (including the surviving spouse of
a deceased Director
or employee, and retired Directors or employees), or
employees of members of the
National Association of Securities Dealers, Inc., or sales
to any trust,
pension,
21
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
profit-sharing or other benefit plan for such persons
provided such
sales are made upon the assurance of the purchaser that the
purchase is made for
investment purposes and that the securities will not be re-
sold except through
redemption or repurchase; (b) offers of Class A shares to
any other investment
company in connection with the combination of such company
with the Fund by
merger, acquisition of assets or otherwise; (c) purchases of
Class A shares by
any client of a newly employed Smith Barney Financial
Consultant (for a period
up to 90 days from the commencement of the Financial
Consultant's employment
with Smith Barney), on the condition the purchase of Class A
shares is made with
the proceeds of the redemption of shares of a mutual fund
which (i) was
sponsored by the Financial Consultant's prior employer, (ii)
was sold to the
client by the Financial Consultant and (iii) was subject to
a sales charge; (d)
shareholders who have redeemed Class A shares in the Fund
(or Class A shares of
another fund of the Smith Barney Mutual Funds that are
offered with a sales
charge equal to or greater than the maximum sales charge of
the Fund) and who
wish to reinvest their redemption proceeds in the Fund,
provided the
reinvestment is made within 60 calendar days of the
redemption; (e) accounts
managed by registered investment advisory subsidiaries of
Travelers; and (f)
investments of distributions from a UIT sponsored by Smith
Barney. In order to
obtain such discounts, the purchaser must provide sufficient
information at the
time of purchase to permit verification that the purchase
would qualify for the
elimination of the sales charge.
RIGHT OF ACCUMULATION
Class A shares of the Fund may be purchased by "any
person" (as defined
above) at a reduced sales charge or at net asset value
determined by aggregating
the dollar amount of the new purchase and the total net
asset value of all Class
A shares of the Fund and of funds sponsored by Smith Barney,
which are offered
with a sales charge listed under "Exchange Privilege" then
held by such person
and applying the sales charge applicable to such aggregate.
In order to obtain
such discount, the purchaser must provide sufficient
information at the time of
purchase to permit verification that the purchase qualifies
for the reduced
sales charge. The right of accumulation is subject to
modification or
discontinuance at any time with respect to all shares
purchased thereafter.
GROUP PURCHASES
Upon completion of certain automated systems, a reduced
sales charge or
purchase at net asset value will also be available to
employees (and partners)
of the same employer purchasing as a group, provided each
participant makes the
22
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
minimum initial investment required. The sales charge
applicable to purchases by
each member of such a group will be determined by the table
set forth above
under "Initial Sales Charge Alternative-Class A Shares," and
will be based upon
the aggregate sales of Class A shares of Smith Barney Mutual
Funds offered with
a sales charge to, and share holdings of, all members of the
group. To be
eligible for such reduced sales charges or to purchase at
net asset value, all
purchases must be pursuant to an employer- or partnership-
sanctioned plan
meeting certain requirements. One such requirement is that
the plan must be open
to specified partners or employees of the employer and its
subsidiaries, if any.
Such plan may, but is not required to, provide for payroll
deductions, IRAs or
investments pursuant to retirement plans under Sections 401
or 408 of the Code.
Smith Barney may also offer a reduced sales charge or net
asset value purchase
for aggregating related fiduciary accounts under such
conditions that Smith
Barney will realize economies of sales efforts and sales
related expenses. An
individual who is a member of a qualified group may also
purchase Class A shares
at the reduced sales charge applicable to the group as a
whole. The sales charge
is based upon the aggregate dollar value of Class A shares
offered with a sales
charge that have been previously purchased and are still
owned by the group,
plus the amount of the current purchase. A "qualified group"
is one which (a)has
been in existence for more than six months, (b) has a
purpose other than
acquiring Fund shares at a discount and (c) satisfies
uniform criteria which
enable Smith Barney to realize economies of scale in its
costs of distributing
shares. A qualified group must have more than 10 members,
must be available to
arrange for group meetings between representatives of the
Fund and the members,
and must agree to include sales and other materials related
to the Fund in its
publications and mailings to members at no cost to Smith
Barney. In order to
obtain such reduced sales charge or to purchase at net asset
value, the
purchaser must provide sufficient information at the time of
purchase to permit
verification that the purchase qualifies for the reduced
sales charge. Approval
of group purchase reduced sales charge plans is subject to
the discretion of
Smith Barney.
LETTER OF INTENT
Class A Shares. A Letter of Intent for amounts of
$50,000 or more provides
an opportunity for an investor to obtain a reduced sales
charge by aggregating
investments over a 13 month period, provided that the
investor refers to such
Letter when placing orders. For purposes of a Letter of
Intent, the "Amount of
Investment" as referred to in the preceding sales charge
table includes
purchases of all Class A shares of the Fund and other funds
of the Smith Barney
Mutual Funds
23
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
offered with a sales charge over the 13 month period based
on the
total amount of intended purchases plus the value of all
Class A shares
previously purchased and still owned. An alternative is to
compute the 13 month
period starting up to 90 days before the date of execution
of a Letter of
Intent. Each investment made during the period receives the
reduced sales charge
applicable to the total amount of the investment goal. If
the goal is not
achieved within the period, the investor must pay the
difference between the
sales charges applicable to the purchases made and the
charges previously paid,
or an appropriate number of escrowed shares will be
redeemed. Please contact a
Smith Barney Financial Consultant or FDISG to obtain a
Letter of Intent
application.
Class Y Shares. A Letter of Intent may also be used as
a way for investors
to meet the minimum investment requirement for Class Y
shares. Such investors
must make an initial minimum purchase of $1,000,000 in Class
Y shares of the
Portfolio and agree to purchase a total of $5,000,000 of
Class Y shares of the
same Portfolio within six months from the date of the
Letter. If a total
investment of $5,000,000 is not made within the six-month
period, all Class
Yshares purchased to date will be transferred to Class A
shares, where they will
be subject to all fees (including a service fee of 0.25%)
and expenses
applicable to the Portfolio's Class A shares, which may
include a CDSC of 1.00%.
The Portfolio expects that such transfer will not be subject
to Federal income
taxes. Please contact a Smith Barney Financial Consultant or
FDISG for further
information.
DEFERRED SALES CHARGE ALTERNATIVES
"CDSC Shares" are sold at net asset value next
determined without an
initial sales charge so that the full amount of an
investor's purchase payment
may be immediately invested in the Fund. A CDSC, however,
may be imposed on
certain redemptions of these shares. "CDSC Shares" are: (a)
Class B shares; (b)
Class C shares; and (c) Class A shares which when combined
with Class A shares
offered with a sales charge currently held by an investor
equal or exceed
$500,000 in the aggregate.
Any applicable CDSC will be assessed on an amount equal
to the lesser of
the cost of the shares being redeemed or their net asset
value at the time of
redemption. CDSC Shares that are redeemed will not be
subject to a CDSC to the
extent that the value of such shares represents: (a) capital
appreciation of
Fund assets; (b) reinvestment of dividends or capital gain
distributions; (c)
with respect to Class B shares, shares redeemed more than
five years after their
purchase; or (d) with respect to Class C shares and Class A
24
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
shares that are CDSC Shares, shares redeemed more than 12
months after their
purchase. Class C shares and Class A shares that are CDSC
Shares are subject to
a 1.00% CDSC if redeemed within 12 months of purchase. In
circumstances in which
the CDSC is imposed on Class B shares, the amount of the
charge will depend on
the number of years since the shareholder made the purchase
payment from which
the amount is being redeemed. Solely for purposes of
determining the number of
years since a purchase payment, all purchase payments made
during a month will
be aggregated and deemed to have been made on the last day
of the preceding
Smith Barney statement month.The following table sets forth
the rates of the
charge for redemptions of Class B shares by shareholders,
except in the case of
purchases by Participating Plans, as described below. See
"Purchase of
Shares-Smith Barney 401(k) Program."
Year Since Purchase
Payment Was Made
CDSC
============================================================
====================
First
5.00%
Second
4.00%
Third
3.00%
Fourth
2.00%
Fifth
1.00%
Sixth
0.00%
Seventh
0.00%
Eighth
0.00%
============================================================
====================
Class B shares will convert automatically to Class A
shares eight years
after the date on which they were purchased and thereafter
will no longer be
subject to any distribution fees. There also will be
converted at that time such
proportion of Class B Dividend Shares owned by the
shareholder as the total
number of his or her Class B shares converting at the time
bears to the total
number of outstanding Class B shares (other than Class B
Dividend Shares) owned
by the shareholder. In addition, a certain portion of Class
B Dividend Shares
will be converted at that time. Shareholders who held Class
B shares of Smith
Barney Shearson Short-Term World Income Fund (the "Short-
Term World Income
Fund") on July 15, 1994 and who subsequently exchange those
shares for Class B
shares of the Fund will be offered the opportunity to
exchange all such Class B
shares for Class A shares of the Fund four years after the
date on which those
shares were deemed to have been purchased. Holders of such
Class B shares will
be notified of the pending exchange in writing approximately
30 days before the
fourth anniversary of the purchase date and, unless the
exchange has been
rejected in writing, the exchange will occur on or about the
fourth anniversary
date. See "Prospectus Summary--Alternative Purchase
Arrangements--Class B Shares
Conversion Feature."
25
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
The length of time that CDSC Shares acquired through an
exchange have been
held will be calculated from the date that the shares
exchanged were initially
acquired in one of the other applicable Smith Barney Mutual
Funds, and Fund
shares being redeemed will be considered to represent, as
applicable, capital
appreciation or dividend and capital gain distribution
reinvestments in such
other funds. For Federal income tax purposes, the amount of
the CDSC will reduce
the gain or increase the loss, as the case may be, on the
amount realized on
redemption. The amount of any CDSC will be paid to Smith
Barney.
To provide an example, assume an investor purchased 100
Class B shares at
$10 per share for a cost of $1,000. Subsequently, the
investor acquired 5
additional shares through dividend reinvestment. During the
fifteenth month
after the purchase, the investor decided to redeem $500 of
his or her
investment. Assuming at the time of the redemption the net
asset value had
appreciated to $12 per share, the value of the investor's
shares would be $1,260
(105 shares at $12 per share). The CDSC would not be applied
to the amount which
represents appreciation ($200) and the value of the
reinvested dividend shares
($60). Therefore, $240 of the $500 redemption proceeds ($500
minus $260) would
be charged at a rate of 4.00% (the applicable rate for Class
B shares) for a
total deferred sales charge of $9.60.
WAIVERS OF CDSC
The CDSC will be waived on: (a) exchanges (see
"Exchange Privilege"); (b)
automatic cash withdrawals in amounts equal to or less than
1.00% per month of
the value of the shareholder's shares at the time the
withdrawal plan commences
(see "Automatic Cash Withdrawal Plan") (provided, however,
that automatic cash
withdrawals in amounts equal to or less than 2.00% per month
of the value of the
shareholder's shares will be permitted for withdrawal plans
that were
established prior to November 7, 1994); (c) redemptions of
shares within 12
months following the death or disability of the shareholder;
(d) redemption of
shares made in connection with qualified distributions from
retirement plans or
IRAs upon the attainment of age 591/2; (e) involuntary
redemptions; and (f)
redemptions of shares in connection with a combination of
the Fund with any
investment company by merger, acquisition of assets or
otherwise. In addition, a
shareholder who has redeemed shares from other funds of the
Smith Barney Mutual
Funds may, under certain circumstances, reinvest all or part
of the redemption
proceeds within 60 days and receive pro rata credit for any
CDSC imposed on the
prior redemption.
CDSC waivers will be granted subject to confirmation
(by Smith Barney in
the case of shareholders who are also Smith Barney clients
or by FDISG in the
case of all other shareholders) of the shareholder's status
or holdings, as the
case may be.
26
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
SMITH BARNEY 401(K) PROGRAM
Investors may be eligible to participate in the Smith
Barney 401(k)
Program, which is generally designed to assist plan sponsors
in the creation and
operation of retirement plans under Section 401(a) of the
Code. To the extent
applicable, the same terms and conditions are offered to all
Participating Plans
in the Smith Barney 401(k) Program.
The Fund offers to Participating Plans Class A, Class
B, Class C and Class
Y shares as investment alternatives under the Smith Barney
401(k) Program. Class
A, Class B and Class C shares acquired through the Smith
Barney 401(k) Program
are subject to the same service and/or distribution fees as,
but different sales
charge and CDSC schedules than, the Class A, Class B and
Class C shares acquired
by other investors. Similar to those available to other
investors, Class Y
shares acquired through the Smith Barney 401(k) Program are
not subject to any
initial sales charge, CDSC or service or distribution fee.
Once a Participating
Plan has made an initial investment in the Fund, all of its
subsequent
investments in the Fund must be in the same Class of shares,
except as otherwise
described below.
Class A Shares. Class A shares of the Fund are offered
without any initial
sales charge to any Participating Plan that purchases from
$500,000 to
$4,999,999 of Class A shares of one or more funds of the
Smith Barney Mutual
Funds. Class A shares acquired through the Smith Barney
401(k) Program after
November 7, 1994 are subject to a CDSC of 1.00% of
redemption proceeds, if the
Participating Plan terminates within four years of the date
the Participating
Plan first enrolled in the Smith Barney 401(k) Program.
Class B Shares. Class B shares of the Fund are offered
to any Participating
Plan that purchases less than $250,000 of one or more funds
of the Smith Barney
Mutual Funds. Class B shares acquired through the Smith
Barney 401(k) Program
are subject to a CDSC of 3.00% of redemption proceeds, if
the Participating Plan
terminates within eight years of the date the Participating
Plan first enrolled
in the Smith Barney 401(k) Program.
Eight years after the date the Participating Plan
enrolled in the Smith
Barney 401(k) Program, it will be offered the opportunity to
exchange all of its
Class B shares for Class A shares of the Fund. Such Plans
will be notified of
the pending exchange in writing approximately 60 days before
the eighth
anniversary of the enrollment date and, unless the exchange
has been rejected in
writing, the exchange will occur on or about the eighth
anniversary date. Once
the exchange has occurred, a Participating Plan will not be
eligible to acquire
additional Class B shares of the Fund but instead may
acquire Class A shares of
the Fund. If the Participating Plan
27
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
elects not to exchange all of its Class B shares at that
time, each Class B
share held by the Participating Plan will have the same
conversion feature as
Class B shares held by other investors. See "Purchase of
Shares-Deferred Sales
Charge Alternatives."
Class C Shares. Class C shares of the Fund are offered
to any Participating
Plan that purchases from $250,000 to $499,999 of one or more
funds of the Smith
Barney Mutual Funds. Class C shares acquired through the
Smith Barney 401(k)
Program after November 7, 1994 are subject to a CDSC of
1.00% of redemption
proceeds, if the Participating Plan terminates within four
years of the date the
Participating Plan first enrolled in the Smith Barney 401(k)
Program. In any
year after the date a Participating Plan enrolled in the
Smith Barney 401(k)
Program if its total Class C holdings equal at least
$500,000 as of the calendar
year-end, the Participating Plan will be offered the
opportunity to exchange all
of its Class C shares for Class A shares of the Fund. Such
Plans will be
notified in writing within 30 days after the last business
day of the calendar
year, and unless the exchange offer has been rejected in
writing, the exchange
will occur on or about the last business day of the
following March. Once the
exchange has occurred, a Participating Plan will not be
eligible to acquire
Class C shares of the Fund but instead may acquire Class A
shares of the Fund.
Class C shares not converted will continue to be subject to
the distribution
fee.
Class Y Shares. Class Y shares of the Fund are offered
without any service
or distribution fees, sales charge or CDSC to any
Participating Plan that
purchases $5,000,000 or more of Class Y shares of one or
more funds of the Smith
Barney Mutual Funds.
No CDSC is imposed on redemptions of CDSC Shares to the
extent that the net
asset value of the shares redeemed does not exceed the
current net asset value
of the shares purchased through reinvestment of dividends or
capital gain
distributions, plus (a) with respect to Class A and Class C
shares, the current
net asset value of such shares purchased more than one year
prior to redemption
and, with respect to Class B shares, the current net asset
value of Class B
shares purchased more than eight years prior to the
redemption, plus (b) with
respect to Class A and Class C shares, increases in the net
asset value of the
shareholder's Class A or Class C shares above the purchase
payments made during
the preceding year and, with respect to Class B shares,
increases in the net
asset value of the shareholder's Class B shares above the
purchase payments made
during the preceding eight years. Whether or not the CDSC
applies to a
Participating Plan depends on the number of years since the
Participating Plan
first became enrolled in the Smith Barney 401(k)
28
<PAGE>
Smith Barnry Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Purchase of Shares (continued)
- ------------------------------------------------------------
- --------------------
Program, unlike the applicability of the CDSC to other
shareholders, which
depends on the number of years since those shareholders made
the purchase
payment from which the amount is being redeemed.
The CDSC will be waived on redemptions of CDSC Shares
in connection with
lump-sum or other distributions made by a Participating Plan
as a result of: (a)
the retirement of an employee in the Participating Plan; (b)
the termination of
employment of an employee in the Participating Plan; (c) the
death or disability
of an employee in the Participating Plan; (d) the attainment
of age 591/2 by an
employee in the Participating Plan; (e) hardship of an
employee in the
Participating Plan to the extent permitted under Section
401(k) of the Code; or
(f) redemptions of shares in connection with a loan made by
the Participating
Plan to an employee.
Participating Plans wishing to acquire shares of the
Fund through the Smith
Barney 401(k) Program must purchase such shares directly
from FDISG. For further
information regarding the Smith Barney 401(k) Program,
investors should contact
a Smith Barney Financial Consultant.
- ------------------------------------------------------------
- --------------------
Exchange Privilege
- ------------------------------------------------------------
- --------------------
Except as otherwise noted below, shares of each Class
may be exchanged at
the net asset value next determined for shares of the same
Class in the
following funds of the Smith Barney Mutual Funds, to the
extent shares are
offered for sale in the shareholder's state of residence.
Exchanges of Class A,
Class B and Class C shares are subject to minimum investment
requirements and
all shares are subject to the other requirements of the fund
into which
exchanges are made and a sales charge differential may
apply.
FUND NAME
Growth Funds
Smith Barney Appreciation Fund Inc.
Smith Barney Fundamental Value Fund Inc.
Smith Barney Growth Opportunity Fund
Smith Barney Managed Growth Fund
Smith Barney Special Equities Fund
Smith Barney Telecommunications Growth Fund
29
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Exchange Privilege (continued)
- ------------------------------------------------------------
- --------------------
Growth and Income Funds
Smith Barney Convertible Fund
Smith Barney Funds, Inc. -- Income and Growth
Portfolio
Smith Barney Growth and Income Fund
Smith Barney Premium Total Return Fund
Smith Barney Strategic Investors Fund
Smith Barney Utilities Fund
Taxable Fixed-Income Funds
** Smith Barney Adjustable Rate Government Income Fund
Smith Barney Diversified Strategic Income Fund
* Smith Barney Funds, Inc. -- Income Return Account
Portfolio
Smith Barney Funds, Inc. -- Monthly Payment Government
Portfolio
+++ Smith Barney Funds, Inc. -- Short-Term U.S. Treasury
Securities Portfolio
Smith Barney Funds, Inc. -- U.S. Government Securities
Portfolio
Smith Barney Government Securities Fund
Smith Barney High Income Fund
Smith Barney Investment Grade Bond Fund
Smith Barney Managed Governments Fund Inc.
Tax-Exempt Funds
Smith Barney Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund Inc.
* Smith Barney Intermediate Maturity California
Municipals Fund
* Smith Barney Intermediate Maturity New York Municipals
Fund
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
* Smith Barney Muni Funds -- California Limited Term
Portfolio
* Smith Barney Muni Funds -- Florida Limited Term
Portfolio
Smith Barney Muni Funds -- Florida Portfolio
Smith Barney Muni Funds -- Georgia Portfolio
* Smith Barney Muni Funds -- Limited Term Portfolio
Smith Barney Muni Funds -- New York Portfolio
Smith Barney Muni Funds -- Ohio Portfolio
Smith Barney Muni Funds -- Pennsylvania Portfolio
Smith Barney New Jersey Municipals Fund Inc.
Smith Barney Oregon Municipals Fund
Smith Barney Tax-Exempt Income Fund
30
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Exchange Privilege (continued)
- ------------------------------------------------------------
- --------------------
International Funds
Smith Barney Precious Metals and Minerals Fund Inc.
Smith Barney World Funds, Inc. -- Emerging Markets
Portfolio
Smith Barney World Funds, Inc. -- European Portfolio
Smith Barney World Funds, Inc. -- Global Government
Bond Portfolio
Smith Barney World Funds, Inc. -- International
Balanced Portfolio
Smith Barney World Funds, Inc. -- International Equity
Portfolio
Smith Barney World Funds, Inc. -- Pacific Portfolio
Money Market Funds
+ Smith Barney Exchange Reserve Fund
++ Smith Barney Money Funds, Inc. -- Cash Portfolio
++ Smith Barney Money Funds, Inc. -- Government Portfolio
*** Smith Barney Money Funds, Inc. -- Retirement Portfolio
+++ Smith Barney Muni Funds -- California Money Market
Portfolio
+++ Smith Barney Muni Funds -- New York Money Market
Portfolio
+++ Smith Barney Municipal Money Market Fund, Inc.
- -----------
* Available for exchange with Class A, Class C and Class
Y shares of the
Fund.
** Available for exchange with Class A, Class B, and Class
Y shares of the
Fund. In addition, shareholders who own Class C shares
of the Fund through
the Smith Barney 401(k) Program may exchange those
shares for Class C
shares of this fund.
*** Available for exchange with Class A shares of the Fund.
+ Available for exchange with Class B and Class C shares
of the Fund.
++ Available for exchange with Class A and Class Y shares
of the Fund. In
addition, shareholders who own Class C shares of the
Fund through the Smith
Barney 401(k) Program may exchange those shares for
Class C shares of this
fund.
+++ Available for exchange with Class A and Class Y shares
of the Fund.
Class A Exchanges. Class A shares of Smith Barney
Mutual Funds sold without
a sales charge or with a maximum sales charge of less than
the maximum charged
by other Smith Barney Mutual Funds will be subject to the
appropriate "sales
charge differential" upon the exchange of such shares for
Class A shares of a
fund sold with a higher sales charge. The "sales charge
differential" is limited
to a percentage rate no greater than the excess of the sales
charge rate
applicable to purchases of shares of the mutual fund being
acquired in the
exchange over the sales charge rate(s) actually paid on the
mutual fund shares
relinquished in the exchange and on any predecessor of those
shares. For
purposes of the exchange privilege, shares obtained through
automatic
reinvestment of dividends and capital gain distributions are
treated as having
paid the same sales charges applicable to the shares on
which the dividends or
distributions were paid; however, except in the case of the
Smith Barney 401(k)
Program, if no sales charge was imposed upon the
31
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Exchange Privilege (continued)
- ------------------------------------------------------------
- --------------------
initial purchase of the shares, any shares obtained through
automatic
reinvestment will be subject to a sales charge differential
upon exchange.
Class B Exchanges. In the event a Class B shareholder
(unless such
shareholder was a Class B shareholder of the Short-Term
World Income Fund on
July 15, 1994) wishes to exchange all or a portion of his or
her shares into any
of the funds imposing a higher CDSC than that imposed by the
Fund, the exchanged
Class B shares will be subject to the higher applicable
CDSC. Upon an exchange,
the new Class B shares will be deemed to have been purchased
on the same date as
the Class B shares of the Fund that have been exchanged.
Class C Exchanges. Upon an exchange, the new Class C
shares will be deemed
to have been purchased on the same date as the Class C
shares of the Fund that
have been exchanged.
Class Y Exchanges. Class Y shareholders of the Fund who
wish to exchange
all or a portion of their Class Y shares for Class Y shares
in any of the funds
identified above may do so without imposition of any charge.
Additional Information Regarding the Exchange
Privilege. Although the
exchange privilege is an important benefit, excessive
exchange transactions can
be detrimental to the Fund's performance and its
shareholders. SBMFM may
determine that a pattern of frequent exchanges is excessive
and contrary to the
best interests of the Fund's other shareholders. In this
event, SBMFM will
notify Smith Barney and Smith Barney may, at its discretion,
decide to limit
additional purchases and/or exchanges by a shareholder. Upon
such a
determination, Smith Barney will provide notice in writing
or by telephone to
the shareholder at least 15 days prior to suspending the
exchange privilege and
during the 15 day period the shareholder will be required to
(a) redeem his or
her shares in the Fund or (b) remain invested in the Fund or
exchange into any
of the funds of the Smith Barney Mutual Funds listed above,
which position the
shareholder would be expected to maintain for a significant
period of time. All
relevant factors will be considered in determining what
constitutes an abusive
pattern of exchanges.
Certain shareholders may be able to exchange shares by
telephone. See
"Redemption of Shares -- Telephone Redemption and Exchange
Program." Exchanges
will be processed at the net asset value next determined,
plus any applicable
sales charge differential. Redemption procedures discussed
below are also
applicable for exchanging shares, and exchanges will be made
upon receipt of all
supporting documents in proper form. If the account
registration of the shares
of the fund being acquired is identical to the registration
of the shares of the
fund exchanged, no signature guarantee is required. A
capital gain or loss for
tax purposes
32
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Exchange Privilege (continued)
- ------------------------------------------------------------
- --------------------
will be realized upon the exchange, depending upon the cost
or other basis of
shares redeemed. Before exchanging shares, investors should
read the current
prospectus describing the shares to be acquired. The Fund
reserves the right to
modify or discontinue exchange privileges upon 60 days'
prior notice to
shareholders.
- ------------------------------------------------------------
- --------------------
Redemption of Shares
- ------------------------------------------------------------
- --------------------
The Fund is required to redeem the shares of the Fund
tendered to it, as
described below, at a redemption price equal to their net
asset value per share
next determined after receipt of a written request in proper
form at no charge
other than any applicable CDSC. Redemption requests received
after the close of
regular trading on the NYSE are priced at the net asset
value next determined.
If a shareholder holds shares in more than one Class,
any request for
redemption must specify the Class being redeemed. In the
event of a failure to
specify which Class, or if the investor owns fewer shares of
the Class than
specified, the redemption request will be delayed until the
Fund's transfer
agent receives further instructions from Smith Barney, or if
the shareholder's
account is not with Smith Barney, from the shareholder
directly. The redemption
proceeds will be remitted on or before the third day
following receipt of proper
tender, except on any days on which the NYSE is closed or as
permitted under the
Investment Company Act of 1940, as amended ("1940 Act"), in
extraordinary
circumstances. Generally, if the redemption proceeds are
remitted to a Smith
Barney brokerage account, these funds will not be invested
for the shareholder's
benefit without specific instruction and Smith Barney will
benefit from the use
of temporarily uninvested funds. Redemption proceeds for
shares purchased by
check, other than a certified or official bank check, will
be remitted upon
clearance of the check, which may take up to ten days or
more.Shares held by
Smith Barney as custodian must be redeemed by submitting a
written request to a
Smith Barney Financial Consultant.
Shares other than those held by Smith Barney as
custodian may be redeemed
through an investor's Financial Consultant, Introducing
Broker or dealer in the
selling group or by submitting a written request for
redemption to:
Smith Barney Aggressive Growth Fund, Inc.
Class A, B, C or Y (please specify)
c/o First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, Massachusetts 02205-9134
33
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Redemption of Shares (continued)
- ------------------------------------------------------------
- --------------------
A written redemption request must (a) state the Class
and number or dollar
amount of shares to be redeemed, (b) identify the
shareholder's account number
and (c) be signed by each registered owner exactly as the
shares are registered.
If the shares to be redeemed were issued in certificate
form, the certificates
must be endorsed for transfer (or be accompanied by an
endorsed stock power) and
must be submitted to FDISG together with the redemption
request. Any signature
appearing on a written redemption request in excess of
$2,000, share certificate
or stock power must be guaranteed by an eligible guarantor
institution such as a
domestic bank, savings and loan institution, domestic credit
union, member bank
of the Federal Reserve System or member firm of a national
securities exchange.
Written redemption requests of $2,000 or less do not require
a signature
guarantee unless more than one such redemption request is
made in any 10-day
period or the redemption proceeds are to be sent to an
address other than the
address of record. Unless otherwise directed, redemption
proceeds will be mailed
to an investor's address of record. FDISG may require
additional supporting
documents for redemptions made by corporations, executors,
administrators,
trustees or guardians. A redemption request will not be
deemed properly received
until FDISG receives all required documents in proper form.
AUTOMATIC CASH WITHDRAWAL PLAN
The Fund offers shareholders an automatic cash
withdrawal plan, under which
shareholders who own shares with a value of at least $10,000
may elect to
receive cash payments of at least $50 monthly or quarterly.
Retirement plan
accounts are eligible for automatic cash withdrawal plans
only where the
shareholder is eligible to receive qualified distributions
and has an account
value of at least $5,000. The withdrawal plan will be
carried over on exchanges
between funds or Classes of the Fund. Any applicable CDSC
will not be waived on
amounts withdrawn by a shareholder that exceed 1.00% per
month of the value of
the shareholder's shares subject to the CDSC at the time the
withdrawal plan
commences. For further information regarding the automatic
cash withdrawal plan,
shareholders should contact a Smith Barney Financial
Consultant.
TELEPHONE REDEMPTION AND EXCHANGE PROGRAM
Shareholders who do not have a Smith Barney brokerage
account may be
eligible to redeem and exchange Fund shares by telephone. To
determine if a
shareholder is entitled to participate in this program, he
or she should contact
FDISG at 1-800-451-2010. Once eligibility is confirmed, the
shareholder must
complete and return a Telephone/Wire Authorization Form,
along with a signature
34
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Redemption of Shares (continued)
- ------------------------------------------------------------
- --------------------
guarantee that will be provided by FDISG upon request.
(Alternatively, an
investor may authorize telephone redemptions on the new
account application with
the applicant's signature guarantee when making his/her
initial investment in
the Fund.)
Redemptions. Redemption requests of up to $10,000 of
any class or classes
of the Fund's shares may be made by eligible shareholders by
calling FDISG at
1-800-451-2010. Such requests may be made between 9:00 a.m.
and 5:00 p.m. (New
York City time) on any day the NYSE is open. Redemption
requests received after
the close of regular trading on the NYSE are priced at the
net asset value next
determined. Redemptions of shares (i) by retirement plans or
(ii) for which
certificates have been issued are not permitted under this
program.
A shareholder will have the option of having the
redemption proceeds mailed
to his/her address of record or wired to a bank account
predesignated by the
shareholder. Generally, redemption proceeds will be mailed
or wired, as the case
may be, on the next business day following the redemption
request. In order to
use the wire procedures, the bank receiving the proceeds
must be a member of the
Federal Reserve System or have a correspondent with a member
bank. The Fund
reserves the right to charge shareholders a nominal fee for
each wire
redemption. Such charges, if any, will be assessed against
the shareholder's
account from which shares were redeemed. In order to change
the bank account
designated to receive redemption proceeds, a shareholder
must complete a new
Telephone/Wire Authorization Form and, for the protection of
the shareholder's
assets, will be required to provide a signature guarantee
and certain other
documentation.
Exchanges. Eligible shareholders may make exchanges by
telephone if the
account registration of the shares of the fund being
acquired is identical to
the registration of the shares of the fund exchanged. Such
exchange requests may
be made by calling FDISG at 1-800-451-2010 between 9:00 a.m.
and 5:00 p.m. (New
York City time) on any day on which the NYSE is open.
Exchange requests received
after the close of regular trading on the NYSE are processed
at the net asset
value next determined.
Additional Information regarding Telephone Redemption
and Exchange Program.
Neither the Fund nor its agents will be liable for following
instructions
communicated by telephone that are reasonably believed to be
genuine. The Fund
and its agents will employ procedures designed to verify the
identity of the
caller and legitimacy of instructions (for example, a
shareholder's name and
account number will be required and phone calls may be
recorded). The Fund
reserves the right to suspend, modify or discontinue the
telephone redemption
and exchange program or to impose a charge for this service
at any time
following at least seven (7) days' prior notice to
shareholders.
35
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Minimum Account Size
- ------------------------------------------------------------
- --------------------
The Fund reserves the right to involuntarily liquidate
any shareholder's
account in the Fund if the aggregate net asset value of the
shares held in the
Fund account is less than $500. (If a shareholder has more
than one account in
the Fund, each account must satisfy the minimum account
size.) The Fund,
however, will not redeem shares based solely on market
reductions in net asset
value. Before the Fund exercises such right, shareholders
will receive written
notice and will be permitted 60 days to bring accounts up to
the minimum to
avoid automatic redemption.
- ------------------------------------------------------------
- --------------------
Performance
- ------------------------------------------------------------
- --------------------
TOTAL RETURN
From time to time the Fund may include its total
return, average annual
total return and current dividend return in advertisements
and/or other types of
sales literature. These figures are computed separately for
Class A, Class B,
Class C and Class Y shares of the Fund. These figures are
based on historical
earnings and are not intended to indicate future
performance. Total return is
computed for a specified period of time assuming deduction
of the maximum sales
charge, if any, from the initial amount invested and
reinvestment of all income
dividends and capital gain distributions on the reinvestment
dates at prices
calculated as stated in this Prospectus, then dividing the
value of the
investment at the end of the period so calculated by the
initial amount invested
and subtracting 100%. The standard average annual total
return, as prescribed by
the SEC, is derived from this total return, which provides
the ending redeemable
value. Such standard total return information may also be
accompanied with
nonstandard total return information for differing periods
computed in the same
manner but without annualizing the total return or taking
sales charges into
account. The Fund calculates current dividend return for
each Class by
annualizing the most recent monthly distribution and
dividing by the net asset
value or the maximum public offering price (including sales
charge) on the last
day of the period for which current dividend return is
presented. The current
dividend return for each Class may vary from time to time
depending on market
conditions, the composition of its investment portfolio and
operating expenses.
These factors and possible differences in the methods used
in calculating
current dividend return should be considered when comparing
a Class' current
return to yields published for other investment companies
and other investment
vehicles. The Fund may also include comparative performance
information in
advertising or marketing its shares. Such performance
information may include
data from Lipper Analytical Services, Inc. and other
financial publications.
36
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Management of the Fund
- ------------------------------------------------------------
- --------------------
BOARD OF DIRECTORS
Overall responsibility for management and supervision
of the Fund rests
with the Fund's Board of Directors. The Directors approve
all significant
agreements between the Fund and the companies that furnish
services to the Fund,
including agreements with the Fund's distributor, investment
adviser,
administrator, custodian and transfer agent. The day-to-day
operations of the
Fund are delegated to the Fund's investment adviser and
administrator. The
Statement of Additional Information contains background
information regarding
each Director and executive officer of the Fund.
INVESTMENT ADVISER--SBMFM
SBMFM, located at 388 Greenwich Street, New York, New
York 10013 serves as
the Fund's investment adviser. SBMFM (through predecessor
entities) has been in
the investment counselling business since 1940. SBMFM
renders investment advice
to a wide variety of individual, institutional and
investment company clients
which had aggregate assets under management as of September
30, 1995, in excess
of $60 billion.
Subject to the supervision and direction of the Fund's
Board of Directors,
SBMFM manages the Fund's portfolio in accordance with the
Fund's stated
investment objective and policies, makes investment
decisions for the Fund,
places orders to purchase and sell securities and employs
professional portfolio
managers. For investment advisory services rendered to the
Fund, the Fund pays
SBMFM a fee at the annual rate of 0.60% of the value of the
Fund's average daily
net assets.
PORTFOLIO MANAGEMENT
Richard Freeman, a Managing Director of Smith Barney,
is primarily
responsible for management of the Fund's assets. Mr. Freeman
has served in this
capacity since November 1986, and manages the day-to-day
operations of the Fund,
including making all investment decisions.
Management's discussion and analysis, and additional
performance
information regarding the Fund during the fiscal year ended
August 31, 1995 is
included in the Annual Report dated August 31, 1995. A copy
of the Annual Report
may be obtained upon request and without charge from a Smith
Barney Financial
Consultant or by writing or calling the Fund at the address
or phone number
listed on page one of this Prospectus.
37
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Management of the Fund (continued)
- ------------------------------------------------------------
- --------------------
ADMINISTRATOR
SBMFM also serves as the Fund's administrator and
oversees all aspects of
the Fund's administration. For administration services
rendered to the Fund, the
Fund pays SBMFM a fee at the annual rate of 0.20% of the
value of the Fund's
average daily net assets.
- ------------------------------------------------------------
- --------------------
Distributor
- ------------------------------------------------------------
- --------------------
Smith Barney is located at 388 Greenwich Street, New
York, New York 10013.
Smith Barney distributes shares of the Fund as principal
underwriter and as such
conducts a continuous offering pursuant to a "best efforts"
arrangement
requiring Smith Barney to take and pay for only such
securities as may be sold
to the public. Pursuant to a plan of distribution adopted by
the Fund under Rule
12b-1 under the 1940 Act (the "Plan"), Smith Barney is paid
an annual service
fee with respect to Class A, Class B and Class C shares of
the Fund at the
annual rate of 0.25% of the average daily net assets of the
respective Class.
Smith Barney is also paid an annual distribution fee with
respect to Class B and
Class C shares at the annual rate of 0.75% of the average
daily net assets
attributable to those Classes. Class B shares that
automatically convert to
Class A shares eight years after the date of original
purchase will no longer be
subject to distribution fees. The fees are used by Smith
Barney to pay its
Financial Consultants for servicing shareholder accounts
and, in the case of
Class B and Class C shares, to cover expenses primarily
intended to result in
the sale of those shares. These expenses include:
advertising expenses; the cost
of printing and mailing prospectuses to potential investors;
payments to and
expenses of Smith Barney Financial Consultants and other
persons who provide
support services in connection with the distribution of
shares; interest and/or
carrying charges; and indirect and overhead costs of Smith
Barney associated
with the sale of Fund shares, including lease, utility,
communications and sales
promotion expenses.
The payments to Smith Barney Financial Consultants for
selling shares of a
Class include a commission or fee paid by the investor or
Smith Barney at the
time of sale and, with respect to Class A, Class B and Class
C shares, a
continuing fee for servicing shareholder accounts for as
long as a shareholder
remains a holder of that Class. Smith Barney Financial
Consultants may receive
different levels of compensation for selling different
Classes of shares.
Payments under the Plan are not tied exclusively to the
distribution and
38
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Distributor (continued)
- ------------------------------------------------------------
- --------------------
shareholder service expenses actually incurred by Smith
Barney and the payments
may exceed distribution expenses actually incurred. The
Fund's Board of
Directors will evaluate the appropriateness of the Plan and
its payment terms on
a continuing basis and in so doing will consider all
relevant factors, including
expenses borne by Smith Barney, amounts received under the
Plan and proceeds of
the CDSC.
- ------------------------------------------------------------
- --------------------
Additional Information
- ------------------------------------------------------------
- --------------------
The Fund was incorporated under the laws of the State
of Maryland on May
12, 1983, and is registered with the SEC as a diversified,
open-end management
investment company. The Fund offers shares of common stock
currently classified
into five Classes, A, B, C, Y and Z. Each Class represents
an identical interest
in the Fund's investment portfolio. As a result, the Classes
have the same
rights, privileges and preferences, except with respect to:
(a) the designation
of each Class; (b) the effect of the respective sales
charges for each Class;
(c) the distribution and/or service fees borne by each Class
pursuant to the
Plan; (d) the expenses allocable exclusively to each Class;
(e) voting rights on
matters exclusively affecting a single Class; (f) the
exchange privilege of each
Class; and (g) the conversion feature of the Class B shares.
The Fund's Board of
Directors does not anticipate that there will be any
conflicts among the
interests of the holders of the different Classes. The
Directors, on an ongoing
basis, will consider whether any such conflict exists and,
if so, take
appropriate action.
The Fund does not hold annual shareholder meetings.
There normally will be
no meeting of shareholders for the purpose of electing
Directors unless and
until such time as less than a majority of the Directors
holding office have
been elected by shareholders. The Directors will call a
meeting for any purpose
upon written request of shareholders holding at least 10% of
the Fund's
outstanding shares and the Fund will assist stockholders in
calling such a
meeting as required by the 1940 Act. When matters are
submitted for shareholder
vote, shareholders of each Class will have one vote for each
full share owned
and a proportionate, fractional vote for any fractional
share held of that
Class. Generally, shares of the Fund will be voted on a Fund-
wide basis on all
matters except matters affecting only the interests of one
or more of the
Classes.
PNC Bank, is located at 17th and Chestnut Streets,
Philadelphia, PA 19103
and serves as custodian of the Fund's investments.
FDISG is located at Exchange Place, Boston,
Massachusetts 02109, and serves
as the Fund's transfer agent.
39
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
- ------------------------------------------------------------
- --------------------
Additional Information (continued)
- ------------------------------------------------------------
- --------------------
The Fund sends its shareholders a semi-annual report
and an audited annual
report, which include listings of the investment securities
held by the Fund at
the end of the reporting period. In an effort to reduce the
Fund's printing and
mailing costs, the Fund plans to consolidate the mailing of
its semi-annual and
annual reports by household. This consolidation means that a
household having
multiple accounts with the identical address of record will
receive a single
copy of each report. In addition, the Fund also plans to
consolidate the mailing
of its Prospectus so that a shareholder having multiple
accounts (that is,
individual, IRA and/or Self-Employed Retirement Plan
accounts) will receive a
single Prospectus annually. Shareholders who do not want
this consolidation to
apply to their accounts should contact their Smith Barney
Financial Consultants
or the Fund's transfer agent.
40
<PAGE>
SMITH BARNEY
- ------------
A Member of the
Travelers Group [LOGO]
Smith Barney
Agressive
Growth
Fund Inc.
388 Greenwich Street
New
York, New York 10013
FD 01060 12/95
EXHIBIT 18
Rule 18f-3 (d) Multiple Class Plan
for Smith Barney Mutual Funds
Introduction
This plan (the "Plan") is adopted pursuant to Rule 18f-3 (d)
of
the Investment Company Act of 1940, as amended (the "1940
Act").
The purpose of the Plan is to restate the existing
arrangements
previously approved by the Boards of Directors and Trustees
of
certain of the open-end investment companies set forth on
Schedule A (the "Funds" and each a "Fund") distributed by
Smith
Barney Inc. ("Smith Barney") under the Funds' existing order
of
exemption (Investment Company Act Release Nos. 20042
(January 28,
1994) (notice) and 20090 (February 23, 1994)). Shares of
the
Funds are distributed pursuant to a system (the "Multiple
Class
System") in which each class of shares (a "Class") of a Fund
represents a pro rata interest in the same portfolio of
investments of the Fund and differs only to the extent
outlined
below.
I. Distribution Arrangements and Service Fees
One or more Classes of shares of the Funds are offered for
purchase by investors with the following sales load
structure.
In addition, pursuant to Rule 12b-1 under the 1940 Act (the
"Rule"), the Funds have each adopted a plan (the "Services
and
Distribution Plan") under which shares of the Classes are
subject
to the services and distribution fees described below.
1. Class A Shares
Class A shares are offered with a front-end sales load and
under
the Services and Distribution Plan are subject to a service
fee
of up to 0.25% of average daily net assets. In addition,
the
Funds are permitted to asses a contingent deferred sales
charge
("CDSC") on certain redemptions of Class A shares sold
pursuant
to a complete waiver of front-end sales loads applicable to
large
purchases, if the shares are redeemed within one year of the
date
of purchase. This waiver applies to sales of Class A shares
where the amount of purchase is equal to or exceeds $500,000
although this amount may be changed in the future.
2. Class B Shares
Class B shares are offered without a front-end sales load,
but
are subject to a five-year declining CDSC and under the
Services
and Distribution Plan are subject to a service fee at an
annual
rate of up to 0.25% of average daily net assets and a
distribution fee at an annual rate of up to 0.75% of average
daily net assets.
3. Class C Shares
Class C shares are offered without a front-end load, but are
subject to a one-year CDSC and under the Services and
Distribution Plan are subject to a service fee at an annual
rate
of up to 0.25% of average daily net assets and a
distribution fee
at an annual rate of up to 0.75% of average daily net
assets.
Unlike Class B shares, Class C shares do not have the
conversion
feature as discussed below and accordingly, these shares are
subject to a distribution fee for an indefinite period of
time.
The Funds reserve the right to impose these fees at such
higher
rates as may be determined.
4. Class Y Shares
Class Y shares are offered without impositions of either a
sales
charge or a service or distribution fee for investments
where the
amount of purchase is equal to or exceeds $5 million.
5. Class Z Shares
Class Z shares are offered without imposition of either a
sales
charge or a service or distribution fee for purchase (i) by
employee benefit and retirement plans of Smith Barney and
its
affiliates, (ii) by certain unit investment trusts sponsored
by
Smith Barney and its affiliates, and (iii) although not
currently
authorized by the governing boards of the Funds, when and if
authorized, (x) by employees of Smith Barney and its
affiliates
and (y) by directors, general partners or trustees of any
investment company for which Smith Barney serves as a
distributor
and, for each of (x) and (y), their spouses and minor
children.
6. Additional Classes of Shares
The Boards of Directors and Trustees of the Funds have the
authority to create additional classes, or change existing
Classes, from time to time, in accordance with Rule 18f-3 of
the
1940 Act.
II. Expense Allocations
Under the Multiple Class System, all expenses incurred by a
Fund
are allocated among the various Classes of shares based on
the
net assets of the Fund attributable to each Class, except
that
each Class's net assets value and expenses reflect the
expenses
associated with that Class under the Fund's Services and
Distribution Plan, including any costs associated with
obtaining
shareholder approval of the Services and Distribution Plan
(or an
amendment thereto) and any expenses specific to that Class.
Such
expenses are limited to the following:
(I) transfer agency fees as identified by the transfer
agent as being attributable to a specific Class;
(ii) printing and postage expenses related to
preparing and
distributing materials such as shareholder reports,
prospectuses and proxies to current shareholders;
(iii) Blue Sky registration fees incurred by a Class
of
shares;
(iv) Securities and Exchange Commission registration
fees
incurred by a Class of shares;
(v) the expense of administrative personnel and
services as
required to support the shareholders of a specific Class;
(vi) litigation or other legal expenses relating
solely to
one Class of shares; and
(vii) fees of members of the governing boards of the
funds
incurred as a result of issues relating to one Class of
shares.
Pursuant to the Multiple Class System, expenses of a Fund
allocated to a particular Class of shares of that Fund are
borne
on a pro rata basis by each outstanding share of that Class.
III. Conversion Rights of Class B Shares
All Class B shares of each Fund will automatically convert
to
Class A shares after a certain holding period, expected to
be, in
most cases, approximately eight years but may be shorter.
Upon
the expiration of the holding period, Class B shares (except
those purchases through the reinvestment of dividends and
other
distributions paid in respect of Class B shares) will
automatically convert to Class A shares of the Fund at the
relative net asset value of each of the Classes, and will,
as a
result, thereafter be subject to the lower fee under the
Services
and Distribution Plan. For purposes of calculating the
holding
period required for conversion, newly created Class B shares
issued after the date of implementation of the Multiple
Class
System are deemed to have been issued on (i) the date on
which
the issuance of the Class B shares occurred or (ii) for
Class B
shares obtained through an exchange, or a series of
exchanges,
the date on which the issuance of the original Class B
shares
occurred.
Shares purchased through the reinvestment of dividends and
other
distributions paid in respect of Class B shares are also
Class B
shares. However, for purposes of conversion to Class A, all
Class B shares in a shareholder's Fund account that were
purchased through the reinvestment of dividends and other
distributions paid in respect of Class B shares (and that
have
not converted to Class A shares as provided in the following
sentence) are considered to be held in a separate sub
account.
Each time any Class B shares in the shareholder's Fund
account
(other than those in the sub-account referred to in the
preceding
sentence) convert to Class A, a pro rata portion of the
Class B
shares then in the sub-account also converts to Class A. The
portion is determined by the ratio that the shareholder's
Class B
shares converting to Class A bears to the shareholder's
total
Class B shares not acquired through dividends and
distributions.
The conversion of Class B shares to Class A shares is
subject to
the continuing availability of a ruling of the Internal
Revenue
Service that payment of different dividends on Class A and
Class
B shares does not result in the Fund's dividends or
distributions
constituting "preferential dividends" under the Internal
Revenue
Code of 1986, as amended (the "Code"), and the continuing
availability of an opinion of counsel to the effect that the
conversion of shares does not constitute a taxable event
under
the Code. The conversion of Class B shares to Class A
shares may
be suspended if this opinion is no longer available, In the
event that conversion of Class B shares of not occur, Class
B
shares would continue to be subject to the distribution fee
and
any incrementally higher transfer agency costs attending the
Class B shares for an indefinite period.
IV. Exchange Privileges
Shareholders of a Fund may exchange their shares at net
asset
value for shares of the same Class in certain other of the
Smith
Barney Mutual Funds as set forth in the prospectus for such
Fund.
Class A shareholders who wish to exchange all or part of
their
shares for Class A shares of a Fund sold subject to a sales
charge equal to or lower that that assessed with respect to
the
shares of the Fund being exchanged may do so without paying
a
sales charge. Class A shareholders of a Fund who wish to
exchange all or part of their shares for Class A shares of a
Fund
sold subject to a sales charge higher than that assessed
with
respect to the shares of the Fund being exchanged are
charged the
appropriate "sales charge differential." Funds only permit
exchanges into shares of money market funds having a plan
under
the Rule if, as permitted by paragraph (b) (5) of Rule 11a-3
under the 1940 Act, either (i) the time period during which
the
shares of the money market funds are held is included in the
calculations of the CDSC or (ii) the time period is not
included
but the amount of the CDSC is reduced by the amount of any
payments made under a plan adopted pursuant to the Rule by
the
money market funds with respects to those shares. Currently,
the
Funds include the time period during which shares of the
money
market fund are held in the CDSC period. The exchange
privileges
applicable to all Classes of shares must comply with Rule
11a-3
under the 1940 Act.
Smith Barney Sponsored Investment Companies
Operating under Rule 18f-3 - Schedule A
(as of August 25, 1995)
Smith Barney Adjustable Rate Government Income
Fund Smith Barney Aggressive Growth Fund Inc.
Smith Barney Appreciation Fund Inc. Smith Barney
Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund Smith
Barney Equity Funds -
Smith Barney Strategic Investors Fund Smith
Barney Growth and Income Fund
Smith Barney Florida Municipals Fund Smith
Barney Fundamental Value Fund Inc. Smith Barney
Funds, Inc. -
Income and Growth Portfolio Utilities
Portfolio
Income Return Account Portfolio Monthly
Payment Government Portfolio
Short-Term U.S. Treasury Securities Portfolio
U.S. Government Securities Portfolio
Smith Barney Income Funds -
Smith Barney Premium Total Return Fund
Smith Barney Convertible Fund
Smith Barney Diversified Strategic Income
Fund Smith Barney High Income Fund
Smith Barney Tax-Exempt Income Fund
Smith Barney Exchange Reserve Fund
Smith Barney Utilities Fund
Smith Barney Income Trust -
Smith Barney Limited Maturity Municipals
Fund Smith Barney Limited Maturity Treasury
Fund Smith Barney Intermediate Maturity
California Municipals
Fund
Smith Barney Intermediate Maturity
New York Municipals Fund
Smith Barney Investment Funds Inc. -
Smith Barney Special Equities Fund
Smith Barney Government Securities Fund Smith
Barney Investment Grade Bond Fund Smith
Barney Growth Opportunity Fund Smith Barney
Managed Growth Fund
Smith Barney Institutional Cash Management Fund
Inc. Smith Barney Managed Governments Fund Inc.
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Money Funds, Inc. -
Cash Portfolio
Government Portfolio
Retirement Portfolio
Smith Barney Municipal Money Market Fund,
Inc.
Smith Barney Muni Funds -
California Portfolio
California Limited Portfolio
California Money Market Portfolio
Florida Portfolio
Florida Limited Portfolio
Georgia Portfolio
Limited Term Portfolio
National Portfolio
New Jersey Portfolio
New York Portfolio
New York Money Market Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Smith Barney New Jersey Municipals Fund
Inc. Smith Barney New York Municipals Fund
Inc. Smith Barney Oregon Municipals Fund
Smith Barney Precious Metals and Minerals Fund
Inc. Smith Barney Telecommunications Trust -
Smith Barney Telecommunications Growth Fund
Smith Barney Telecommunications Income
Fund Smith Barney World Funds, Inc. -
International Equity Portfolio
International Balanced Portfolio
European Portfolio
Pacific Portfolio
Global Government Bond Portfolio
u:\legal\data\18f3plan.txt 08/25/95 1:55
PM
Independent Auditors'
Consent
To the Shareholders and Directors of the Smith Barney
Aggressive Growth Fund Inc.:
We consent to the use of our report dated October 27,
1995 with respect to the Smith Barney Aggressive Growth
Fund Inc., incorporated herein by reference, and to the
references to our Firm under the headings "Financial
Highlights" in the Prospectuses and "Counsel and
Auditors" in the Statement of Additional Information.
KPMG PEAT
MARWICK
LLP
New York, New York
December 22, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> SMITH BARNEY AGGRESSIVE GROWTH FUND
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<NET-INVESTMENT-INCOME> (3,748,434)
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<DISTRIBUTIONS-OF-GAINS> (9,265,554)
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<NUMBER-OF-SHARES-SOLD> 8,381,948
<NUMBER-OF-SHARES-REDEEMED> (6,767,114)
<SHARES-REINVESTED> 344,884
<NET-CHANGE-IN-ASSETS> 233,880,802
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> (3,162,240)
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<NAME> SMITH BARNEY AGGRESSIVE GROWTH FUND
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<S> <C>
<PERIOD-TYPE> YEAR <FISCAL-YEAR-END> AUG-
31-1995
<PERIOD-END> AUG-31-1995
[INVESTMENTS-AT-COST] 275,948,321
[INVESTMENTS-AT-VALUE] 481,316,782
[RECEIVABLES] 3,027,485
[ASSETS-OTHER] 9,008,918
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 493,353,185
[PAYABLE-FOR-SECURITIES] 1,898,375
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[OTHER-ITEMS-LIABILITIES] 2,081,415
[TOTAL-LIABILITIES] 3,979,790
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 253,084,173
[SHARES-COMMON-STOCK] 2,968,880
[SHARES-COMMON-PRIOR] 1,882,602
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 33,002,176
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 205,368,461
[NET-ASSETS] 489,373,395
[DIVIDEND-INCOME] 786,912
[INTEREST-INCOME] 165,177
[OTHER-INCOME] 0
[EXPENSES-NET] (4,700,523)
[NET-INVESTMENT-INCOME] (3,748,434)
[REALIZED-GAINS-CURRENT] 36,749,621
[APPREC-INCREASE-CURRENT] 91,092,574
[NET-CHANGE-FROM-OPS] 124,093,761
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (2,972,651)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3,864,620
[NUMBER-OF-SHARES-REDEEMED] (2,891,099)
[SHARES-REINVESTED] 112,757
[NET-CHANGE-IN-ASSETS] 233,880,802
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 13,523,887
[OVERDISTRIB-NII-PRIOR] (3,162,240)
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[GROSS-ADVISORY-FEES] 1,829,883
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[GROSS-EXPENSE] 4,700,523
[AVERAGE-NET-ASSETS] 80,396,126
[PER-SHARE-NAV-BEGIN] 26.42
[PER-SHARE-NII] (0.33)
[PER-SHARE-GAIN-APPREC] 8.10
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] (1.37)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 32.82
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<ARTICLE> 6
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<NAME> SMITH BARNEY AGGRESSIVE GROWTH FUND
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[NUMBER] 003
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<PERIOD-TYPE> YEAR <FISCAL-YEAR-END> AUG-
31-1995
<PERIOD-END> AUG-31-1995
[INVESTMENTS-AT-COST] 275,948,321
[INVESTMENTS-AT-VALUE] 481,316,782
[RECEIVABLES] 3,027,485
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[PAYABLE-FOR-SECURITIES] 1,898,375
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[OTHER-ITEMS-LIABILITIES] 2,081,415
[TOTAL-LIABILITIES] 3,979,790
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 253,084,173
[SHARES-COMMON-STOCK] 2,202,394
[SHARES-COMMON-PRIOR] 13,901
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[ACCUMULATED-NET-GAINS] 33,002,176
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 205,368,461
[NET-ASSETS] 489,373,395
[DIVIDEND-INCOME] 786,912
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[OTHER-INCOME] 0
[EXPENSES-NET] (4,700,523)
[NET-INVESTMENT-INCOME] (3,748,434)
[REALIZED-GAINS-CURRENT] 36,749,621
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[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (111,494)
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[NUMBER-OF-SHARES-SOLD] 2,550,465
[NUMBER-OF-SHARES-REDEEMED] (366,163)
[SHARES-REINVESTED] 4,191
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<ARTICLE> 6
<CIK> 0000720506
<NAME> SMITH BARNEY AGGRESSIVE GROWTH FUND
<SERIES>
[NUMBER] 004
<NAME> CLASS Z
<S> <C>
<PERIOD-TYPE> YEAR <FISCAL-YEAR-END> AUG-
31-1995
<PERIOD-END> AUG-31-1995
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[INVESTMENTS-AT-VALUE] 481,316,782
[RECEIVABLES] 3,027,485
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[SHARES-COMMON-STOCK] 803,045
[SHARES-COMMON-PRIOR] 908,354
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[OVERDISTRIBUTION-GAINS] 0
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[NET-ASSETS] 489,373,395
[DIVIDEND-INCOME] 786,912
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[OTHER-INCOME] 0
[EXPENSES-NET] (4,700,523)
[NET-INVESTMENT-INCOME] (3,748,434)
[REALIZED-GAINS-CURRENT] 36,749,621
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[DISTRIBUTIONS-OF-INCOME] 0
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</TABLE>
