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[GRAPHIC]
[GRAPHIC]
Smith Barney
Aggressive Growth
Fund Inc.
---------------------------------------------
SEMI-ANNUAL REPORT
---------------------------------------------
February 28, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
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Smith Barney Aggressive Growth Fund Inc.
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The Smith Barney Aggressive Growth Fund Inc. seeks capital appreciation
through investment primarily in common stocks of companies that the investment
advisor believes are experiencing, or have the potential to experience, growth
in earnings that exceeds the average growth rate of companies with securities
included in the S&P 500 Index. They are often small- or medium-sized companies
that stand to benefit from new products or services, technological developments
or changes in management.
Smith Barney Aggressive Growth Fund Inc.
Average Annual Total Returns
February 28, 1998
<TABLE>
<CAPTION>
Without Sales Charges*
----------------------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Six-Month+ 9.08% 8.62% 8.68%
- --------------------------------------------------------------------------------
One-Year 33.95 32.86 32.94
- --------------------------------------------------------------------------------
Five-Year 21.05 20.11 N/A
- --------------------------------------------------------------------------------
Ten-Year 16.79 N/A N/A
- --------------------------------------------------------------------------------
Since Inception++ 15.12 18.71 20.21
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<CAPTION>
With Sales Charges**
----------------------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Six-Month+ 3.63% 3.62% 7.68%
- --------------------------------------------------------------------------------
One-Year 27.26 27.86 31.94
- --------------------------------------------------------------------------------
Five-Year 19.81 20.02 N/A
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Ten-Year 16.19 N/A N/A
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Since Inception++ 14.70 18.71 20.21
================================================================================
</TABLE>
* Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and C
shares.
** Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 5.00% and Class B shares reflect the
deduction of a 5.00% CDSC, which applies if shares are redeemed within one
year from initial purchase. Thereafter, the CDSC declines by 1.00% per year
until no CDSC is incurred. Class C shares reflect the deduction of a 1.00%
CDSC which applies if shares are redeemed within the first year of
purchase.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
++ Inception dates for Class A, B and C shares are October 24, 1983, November
6, 1992 and May 13, 1993, respectively.
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FUND HIGHLIGHT
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The Smith Barney Aggressive Growth Fund remains committed to generating
above-average returns for our shareholders. One important by-product of our
long-term, low-turnover investing approach is the potential to achieve superior
after-tax returns for our investors. We are strong believers in the philosophy
behind the expression, "it's not what you make, but what you keep that counts."
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NASDAQ SYMBOL
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Class A SHRAX
Class B SAGBX
Class C SAGCX
<TABLE>
<CAPTION>
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WHAT'S INSIDE
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<S> <C>
Shareholder Letter ............................................................1
Historical Performance.........................................................4
Smith Barney Aggressive Growth Fund Inc.
at a Glance....................................................................7
Schedule of Investments........................................................8
Statement of Assets and Liabilities...........................................11
Statement of Operations.......................................................12
Statements of Changes in Net Assets...........................................13
Notes to Financial Statements.................................................14
Financial Highlights..........................................................17
</TABLE>
<PAGE>
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Shareholder Letter
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[PHOTO] [PHOTO]
HEATH B. RICHARD A.
MCLENDON FREEMAN
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Aggressive
Growth Fund Inc. ("Fund") for the six months ended February 28, 1998. In this
report, we summarize the period's prevailing economic and market conditions and
outline our portfolio strategy. A detailed summary of the Fund's performance and
current holdings can be found in the appropriate sections that follow.
Fund Performance
For the six months ended February 28, 1998, the Fund had a total return of
9.08%, 8.62% and 8.68% for its Class A, B and C shares, respectively without
sales charges. During the period under review, the Russell 2500 Growth Index*
and the Value Line Composite Index-Geometric** returned 5.54% and 8.29%,
respectively. The following table shows how the Fund's Class A shares
performance compares based on calendar year results to the Russell 2500 Growth
Index and its Lipper Analytical Services, Inc.+ capital appreciation peer group
average as of December 31, 1997.
Smith Barney Aggressive Growth Fund Inc.
Class A Shares Historical Performance (as of 12/31/97)
<TABLE>
<CAPTION>
1 Year 3 Year 5 year 10 Year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth Fund 28.55% 21.48% 16.40% 16.31%
- --------------------------------------------------------------------------------
Russell 2500
Growth Index 14.76% 20.82% 14.32% 15.13%
- --------------------------------------------------------------------------------
Lipper Capital
Appreciation Peer
Group Average 19.86% 21.94% 15.41% 15.00%
- --------------------------------------------------------------------------------
</TABLE>
Market Overview
Although the stock market finished higher than it began during the reporting
period, greater levels of volatility characterized the period under review. In
the past several years, investors have displayed a decided preference for the
shares of large-capitalization companies. However, a brief period of
outperformance for small- and mid-capitalization stocks versus
large-capitalization stocks occurred from May into September. (Market
capitalization is the market value of a company's outstanding shares of common
stock determined by the number of shares outstanding multiplied by the share
price.)
While the U.S. economy continued to perform almost flawlessly and was marked by
low rates of inflation, strong economic growth and robust corporate profits,
events in Asia began to cast an ominous pall over worldwide stock markets as the
summer drew to a close. Dramatic declines in many Asian currencies contributed
to sharp declines in their respective stock markets, fueling an overall decrease
in wealth and contraction of Asian economic activity. The Asian "contagion" had
a domino effect on other world stock markets with the pervasive fear that
companies that sell a portion of their goods to Asia would experience a slowdown
in their own businesses.
For the first time since 1990, the U.S. stock market, as represented by the S&P
500 Index, sustained a greater than 10% correction culminating in a 7% one day
drop in October. (The S&P 500 Index is a
- -----------
* Russell 2500 Growth Index measures the performance of those Russell 2500
companies with higher price-to-book ratios and higher forecasted growth
values.
** The Value Line Composite Index is composed of the 1,700 stocks tracked by
the Value Line Investment Survey.
+ Lipper Analytical Services, Inc. is a major independent fund-tracking
organization.
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Smith Barney Aggressive Growth Fund Inc. 1
<PAGE>
capitalization-weighted measure of 500 widely held common stocks.) This was the
fourth such significant decline experienced by smaller company stocks since
1994. Following the stock market lows in late October, the divergence in
performance between large- and small-company stocks returned as investors again
gravitated toward large-company stocks even though their earnings in many cases
were more vulnerable to the fallout from Asia than many pure domestic small-cap
companies.
One positive ramification for the U.S. from the crisis in Asian has been a
decline in interest rates, inflation and import prices. In addition, the Federal
Reserve Board's ("Fed") monetary policy and its previous bias toward tightening
has shifted to neutral as some Fed members have expressed concerns that the U.S.
economy could be negatively impacted by the situation in Asia.
Investment Strategy
The Fund's strategy continues to be to invest in young, innovative companies in
dynamic industries that we believe have the potential to generate above-average
growth in earnings and/or cash flow over a three-to-five year period. Ideally,
this growth should come smoothly, immediately and predictably. However,
investing in these kinds of young and innovative companies often means growth
does not necessarily proceed in a straightline. Nevertheless, if these
relatively new and dynamic companies are able to generate above-average earnings
growth and sell at a reasonable multiple of those earnings, they usually remain
a Fund holding.
Traditionally, our holdings reinvest significant sums of capital back into their
businesses, with research and development spending often a meaningful percentage
of revenues. In addition, we also tend to favor companies that keep their
product lines fresh. While investment spending may at times hold back the
near-term earnings of these types of companies, we believe it is a necessary
strategy to drive their long-term growth rates. Moreover, we prefer to own
companies whose management teams are given incentive through the performance of
their stock. When the stock underperforms, we want management to be as concerned
as we are. In addition, while large stock holdings by management do not
guarantee rising stock prices, we believe it does increase the likelihood that
management will take remedial steps to improve the price of the stock if they
have a big ownership stake.
Market Outlook
Three important factors continue to positively affect the U.S. stock market:
o Low interest rates
o Continued positive inflows into mutual funds
o Intense merger and stock buyback activity
For the first time in a generation, Washington, D.C. is forecasting a budget
surplus. Years of uninterrupted economic growth leading to a low rate of
unemployment (contributing to smaller government transfer payments) is one
factor leading to the improved budgetary condition. Another factor is the
significant increase in capital gains generated by the high level of the stock
market and cash merger activity. The decline in the maximum rate on long-term
capital gains from 28% to 20% last summer has made some investors less reluctant
to sell their holdings given the more favorable tax treatments. Moreover, we
believe that stock buybacks and merger activity are even more important factors
behind the market's incredible climb than the publicized inflow of large sums of
money into mutual funds.
The Fund remains committed to generating above-average returns for our
shareholders. One important by-product of our long-term, low-turnover investing
approach is the potential to achieve superior after-tax returns for our
investors. We are strong believers in the philosophy behind the expression,
"it's not what you make, but what you keep that counts."
During the reporting period, we added to our positions in Amgen (biotechnology
company), Netscape (internet software company), Excel Technology (commercial
laser
- --------------------------------------------------------------------------------
2 1998 Semi-Annual Report to Shareholders
<PAGE>
technologies company), and EVI (oil field service equipment company). We sold
Computervision and Technologies Modelling Associates, two technology companies,
following their acceptances of takeover offers.
We also sold our positions in Gulfmark Offshore (energy company), Synaptic
Pharmaceuticals (biotechnology company), Dennison International (hydraulics
manufacturing company) and Metra Biosystems (biotechnology company). We tendered
our Tele-Communications Inc. stock receiving shares in TCI Ventures for about
1/3 of our shares. Following a couple of years of underperformance, when
investors shunned the stocks of cable television operators, the group has now
reached all-time highs. Strong growth in cash flows, exciting new revenue
streams and a business unencumbered by worries over Asia turned the shares from
"value" investments into strong growth stocks once again.
While overall corporate earnings may come under some pressure because of weak
business conditions in Asia, those companies that are able to report favorable
relative earnings will likely see their P/E ratios rise in an environment of low
inflation and low interest rates. (The P/E ratio, or price-to-earnings ratio, is
a common method used by investors to determine a stock's relative value. The P/E
ratio compares a stock's price to its earnings per share.) We believe that the
Fund is well positioned to benefit from these expected conditions.
In closing, thank you for your confidence in our investment approach. We look
forward to helping you pursue your financial goals in the year ahead.
Sincerely,
/s/ Heath B. McLendon /s/ Richard A. Freeman
Heath B. McLendon Richard A. Freeman
Chairman Vice President and
Investment Officer
March 24, 1998
<TABLE>
<CAPTION>
================================================================================
Top Ten Holdings* As of February 28, 1998
================================================================================
<S> <C>
1. Intel Corp. 10.3%
- --------------------------------------------------------------------------------
2. Tyco International Ltd. 9.6
- --------------------------------------------------------------------------------
3. Quantum Corp. 5.7
- --------------------------------------------------------------------------------
4. Forest Laboratories Inc., Class A Shares 5.6
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5. CBS Corp. 5.5
- --------------------------------------------------------------------------------
6. EVI, Inc. 5.5
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7. Lehman Brothers Holdings Inc. 5.3
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8. United Healthcare Corp. 4.8
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9. IDEC Pharmaceuticals Corp. 3.8
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10. Genzyme Corp.-- General Division 3.8
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</TABLE>
* As a percentage of total common stock.
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Smith Barney Aggressive Growth Fund Inc. 3
<PAGE>
================================================================================
Historical Performance -- Class A Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
2/28/98 $41.80 $43.43 $0.00 $1.96 9.08%+
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/97 28.76 41.80 0.00 0.81 49.11
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/96 33.53 28.76 0.00 2.37 (7.44)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/95 26.76 33.53 0.00 1.37 31.95
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/94 23.59 26.76 0.00 0.00 13.44
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/93 18.94 23.59 0.00 0.00 24.55
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/92 20.12 18.94 0.00 0.76 (2.42)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/91 16.16 20.12 0.00 0.94 31.97
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/90 19.25 16.16 0.02 2.03 (6.38)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/89 13.68 19.25 0.00 0.43 44.97
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/88 21.63 13.68 0.00 2.47 (24.40)
====================================================================================================================================
Total $0.02 $13.14
====================================================================================================================================
<CAPTION>
================================================================================
Historical Performance -- Class B Shares
================================================================================
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
2/28/98 $40.17 $41.47 $0.00 $1.96 8.62%+
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/97 27.88 40.17 0.00 0.81 47.94
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/96 32.82 27.88 0.00 2.37 (8.16)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/95 26.42 32.82 0.00 1.37 30.93
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/94 23.46 26.42 0.00 0.00 12.62
- ------------------------------------------------------------------------------------------------------------------------------------
Inception*-- 8/31/93 20.52 23.46 0.00 0.00 14.33+
====================================================================================================================================
Total $0.00 $6.51
====================================================================================================================================
<CAPTION>
================================================================================
Historical Performance -- Class C Shares
================================================================================
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
2/28/98 $40.22 $41.55 $0.00 $1.96 8.68%+
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/97 27.91 40.22 0.00 0.81 47.97
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/96 32.84 27.91 0.00 2.37 (8.12)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/95 26.42 32.84 0.00 1.37 31.01
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/94 23.47 26.42 0.00 0.00 12.57
- ------------------------------------------------------------------------------------------------------------------------------------
Inception*-- 8/31/93 21.14 23.47 0.00 0.00 11.02+
====================================================================================================================================
Total $0.00 $6.51
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Historical Performance -- Class Y Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
2/28/98 $42.07 $43.80 $0.00 $1.96 9.27%+
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/97 28.84 42.07 0.00 0.81 49.64
- ------------------------------------------------------------------------------------------------------------------------------------
Inception*-- 8/31/96 31.86 28.84 0.00 2.37 (10.13)+++
====================================================================================================================================
Total $0.00 $5.14
====================================================================================================================================
<CAPTION>
================================================================================
Historical Performance -- Class Z Shares
================================================================================
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
2/28/98 $42.60 $44.38 $0.00 $1.96 9.27%+
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/97 29.20 42.60 0.00 0.81 49.61
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/96 33.88 29.20 0.00 2.37 (7.07)
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/95 26.94 33.88 0.00 1.37 32.38
- ------------------------------------------------------------------------------------------------------------------------------------
8/31/94 23.67 26.94 0.00 0.00 13.81
- ------------------------------------------------------------------------------------------------------------------------------------
Inception*-- 8/31/93 20.52 23.67 0.00 0.00 15.35+
====================================================================================================================================
Total $0.00 $6.51
====================================================================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
<CAPTION>
================================================================================
Average Annual Total Return
================================================================================
Without Sales Charge(1)
---------------------------------------------------------------------------------------
Class A Class B Class C Class Y Class Z
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Six Months Ended 2/28/98+ 9.08% 8.62% 8.68% 9.27% 9.27%
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 2/28/98 33.95 32.86 32.94 34.45 34.42
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/28/98 21.05 20.11 N/A N/A 21.49
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/28/98 16.79 N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 2/28/98 15.12 18.71 20.21 20.31 20.04
====================================================================================================================================
<CAPTION>
With Sales Charge(2)
---------------------------------------------------------------------------------------
Class A Class B Class C Class Y Class Z
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Six Months Ended 2/28/98+ 3.63% 3.62% 7.68% 9.27% 9.27%
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 2/28/98 27.26 27.86 31.94 34.45 34.42
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/28/98 19.81 20.02 N/A N/A 21.49
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/28/98 16.19 N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 2/28/98 14.70 18.71 20.21 20.31 20.04
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 5
<PAGE>
================================================================================
Cumulative Total Return
================================================================================
<TABLE>
<CAPTION>
Without Sales Charge(1)
==========================================================================================================
<S> <C>
Class A (2/29/88 through 2/28/98) 371.97%
- ----------------------------------------------------------------------------------------------------------
Class B (Inception* through 2/28/98) 148.80
- ----------------------------------------------------------------------------------------------------------
Class C (Inception* through 2/28/98) 141.93
- ----------------------------------------------------------------------------------------------------------
Class Y (Inception* through 2/28/98) 46.95
- ----------------------------------------------------------------------------------------------------------
Class Z (Inception* through 2/28/98) 164.03
==========================================================================================================
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges ("CDSC") with respect to Class B and Class C shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 5.00% and Class B shares reflect the
deduction of a 5.00% CDSC, which applies if shares are redeemed within one
year from initial purchase. Thereafter, the CDSC declines by 1.00% per year
until no CDSC is incurred. Class C shares reflect the deduction of a 1.00%
CDSC which applies if shares are redeemed within the first year of
purchase.
* Inception dates for Class A, B, C, Y and Z shares are October 24, 1983,
November 6, 1992, May 13, 1993, October 12, 1995 and November 6, 1992,
respectively.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
++ Performance for Class Y shares is for the period from January 31, 1996
through August 31, 1996 since all Class Y shares redeemed during November
1995 and new shares in Class Y were not purchased until January 31, 1996.
- --------------------------------------------------------------------------------
6 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Smith Barney Aggressive Growth Fund Inc. at a Glance (unaudited)
================================================================================
Growth of $10,000 Invested in Class A Shares of the Smith Barney Aggressive
Growth Fund Inc. vs. Value Line Composite Index and Russell 2500 Growth Index+
- -------------------------------------------------------------------------------
February 1988--February 1998
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Smith Barney Value Line Value Line Russell
Agressive Composite Index Composite Index 2500 Growth
Growth Fund Inc. (Geometric)++ (Arithmetic)++ Index++
---------------- ------------- -------------- -------
<S> <C> <C> <C> <C>
Feb 1988 $ 9,499 $10,000 $10,000 $10,000
Aug 1988 $ 9,138 $ 7,992 $10,411 $11,192
Aug 1989 $13,248 $ 9,718 $13,207 $14,631
Aug 1990 $12,404 $ 7,304 $10,607 $12,652
Aug 1991 $16,369 $ 8,582 $13,564 $15,699
Aug 1992 $15,973 $ 8,598 $14,744 $14,883
Aug 1993 $19,894 $10,055 $18,292 $18,675
Aug 1994 $22,567 $10,292 $19,801 $19,568
Aug 1995 $29,778 $11,389 $23,093 $24,926
Aug 1996 $27,564 $12,062 $25,798 $28,066
Aug 1997 $41,100 $15,273 $34,306 $34,766
Feb 1998 $44,832 $16,539 $38,385 $36,692
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A shares on February
29, 1988, assuming deduction of the maximum 5.00% sales charge at the time
of investment and reinvestment of dividends and capital gains, if any, at
net asset value through February 28, 1998. The Value Line Composite Index
is composed of approximately 1,700 stocks. The Geometric Index is a
geometric average of the daily price percentage change in each stock
covering both large and small capitalized companies. The Arithmetic Index
is an arithmetic average of the daily price percentage change in each stock
covering both large and small capitalized companies. Russell 2500 Growth
Index measures the performance of those Russell 2500 companies with higher
price-to-book ratios and higher forecasted growth values. The indexes are
unmanaged and are not subject to the same management and trading expenses
as a mutual fund. The performance of the Fund's other classes may be
greater or less than the Class A shares' performance indicated on this
chart, depending on whether greater or lesser sales charges and fees were
incurred by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
++ It is the opinion of management that the Russell 2500 Growth Index more
accurately reflects the current composition of the Smith Barney Aggressive
Growth Fund Inc. than the Value Line Composite Index. In future reporting,
the Russell 2500 Growth Index will be used as a basis of comparison of
total return performance rather than the Value Line Composite Index.
Industry Diversification of Common Stock*
- -----------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<S> <C>
Biotechnology 14.9%
Broadcasting/Cable 12.4%
Computer Hardware 5.7%
Diversified Technology 3.8%
Energy 5.6%
Investment Banking Services 6.9%
Managed Health Care Providers 6.1%
Multi-Industry 9.6%
Pharmaceuticals 13.0%
Semiconductors 14.0%
Other 8.0%
</TABLE>
* As a percentage of total common stock.
Investment Breakdown**
- ----------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<S> <C>
Common Stock 97.4%
Convertible Preferred Stock 0.4%
Foreign Preferred Stock 0.5%
Repurchase Agreement 1.7%
</TABLE>
** As a percentage of total investments.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 7
<PAGE>
================================================================================
Schedule of Investments (unaudited) February 28, 1998
================================================================================
<TABLE>
<CAPTION>
======================================================================================================
SHARES SECURITY VALUE
======================================================================================================
<S> <C> <C>
COMMON STOCK -- 97.4%
Biotechnology -- 14.5%
90,000 Alkermes Inc. (a)(b) $ 2,086,875
600,000 Amgen Inc. (a) 31,875,000
1,675,000 Chiron Corp. (a) 32,139,063
250,000 Cor Therapeutics Inc. (a) 3,156,250
370,000 Genentech Inc. (a) 24,998,125
1,150,000 Genzyme Corp. - General Division (a) 33,996,875
51,500 Genzyme Corp. - Tissue Repair (a) 373,375
730,000 NABI Inc. (a) 2,874,375
150,000 Virus Research Institute Inc. (a) 675,000
- ------------------------------------------------------------------------------------------------------
132,174,938
- ------------------------------------------------------------------------------------------------------
Broadcasting/Cable -- 12.1%
25,000 Cablevision Systems Development Corp., Class A Shares (a)(b) 12,218,750
1,591,998 CBS Corp. (b) 49,252,438
100,000 Comcast Corp., Class A Shares 3,481,250
600,000 Comcast Corp., Class A Special Shares 21,000,000
337,500 Liberty Media, Class A Shares (a) 9,260,156
318,101 Tele-Communications Inc., Class A Shares (a)(b) 9,244,810
363,798 Telecom-TCI Ventures, Class A Shares (a) 5,616,132
- ------------------------------------------------------------------------------------------------------
110,073,536
- ------------------------------------------------------------------------------------------------------
Communications -- 2.8%
750,000 Arch Communications Group, Inc. (a) 3,281,250
1,000,000 California Microwave Inc. (a) 20,437,500
625,000 Telular Corp. (a)(b) 1,933,594
- ------------------------------------------------------------------------------------------------------
25,652,344
- ------------------------------------------------------------------------------------------------------
Computer Hardware -- 5.5%
2,000,000 Quantum Corp. (a)(b) 50,250,000
- ------------------------------------------------------------------------------------------------------
Computer Software -- 2.4%
15,500 Cimatron Inc. (a) 73,625
170,200 Microsoft Corp. (a)(b) 14,424,450
406,000 Netscape Communications Corp. (a) 7,866,250
- ------------------------------------------------------------------------------------------------------
22,364,325
- ------------------------------------------------------------------------------------------------------
Diversified Technology -- 3.7%
585,000 C-Cor Electronics, Inc. (a) 8,555,625
340,000 Drexler Technology Corp. (a)(b) 5,652,500
589,000 Excel Technology Inc. (a) 6,405,375
305,000 GenRad Inc. (a) 8,673,438
150,000 Indigo N.V. (a) 712,500
75,000 Kaynar Technologies, Inc. (a) 2,137,500
100,000 Vivid Technologies, Inc. (a)(b) 1,625,000
- ------------------------------------------------------------------------------------------------------
33,761,938
- ------------------------------------------------------------------------------------------------------
Drug Delivery/Testing -- 0.8%
499,500 Advanced Polymer Systems Inc. (a) 3,465,281
170,000 Cygnus Therapeutic Systems Inc. (a)(b) 3,028,125
115,000 Cytotherapeutics Inc. (a) 402,500
- ------------------------------------------------------------------------------------------------------
6,895,906
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) February 28, 1998
================================================================================
<TABLE>
<CAPTION>
======================================================================================================
SHARES SECURITY VALUE
======================================================================================================
<S> <C> <C>
Energy -- 5.4%
1,000,000 EVI, Inc. (a) 49,062,500
50,000 IRI International Corp. (a) 590,625
- ------------------------------------------------------------------------------------------------------
49,653,125
- ------------------------------------------------------------------------------------------------------
Environmental -- 0.4%
171,800 Wellman Inc. 3,693,700
- ------------------------------------------------------------------------------------------------------
Health Care - Miscellaneous -- 0.2%
100,000 Biosite Diagnostics, Inc. (a) 1,050,000
75,000 EDAP TMS S.A. (a) 450,000
45,000 Symphonix Devices, Inc. (a)(b) 607,500
- ------------------------------------------------------------------------------------------------------
2,107,500
- ------------------------------------------------------------------------------------------------------
Investment Banking Services -- 6.8%
750,000 Lehman Brothers Holdings Inc. 47,296,875
200,000 Merrill Lynch & Co. Inc. 14,312,500
- ------------------------------------------------------------------------------------------------------
61,609,375
- ------------------------------------------------------------------------------------------------------
Machinery -- 0.6%
500,000 Bridgeport Machines Inc. (a) 5,375,000
- ------------------------------------------------------------------------------------------------------
Managed Health Care Providers -- 6.0%
134,760 Aetna, Inc. (b) 11,774,655
700,000 United Healthcare Corp. (b) 42,481,250
- ------------------------------------------------------------------------------------------------------
54,255,905
- ------------------------------------------------------------------------------------------------------
Multi-Industry -- 9.3%
1,680,000 Tyco International Ltd. (b) 85,260,000
- ------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 12.7%
85,000 Ascent Pediatrics, Inc. (a) 456,875
75,000 Corixa Corp. (a)(b) 628,125
80,000 EP Medsystems Inc. (a) 107,500
800,000 Forest Laboratories Inc., Class A Shares (a) 50,050,000
2,000,000 Gensia Sicor, Inc. 11,312,500
500,000 IDEC Pharmaceuticals Corp. (a) 34,031,250
120,800 Pfizer Inc. 10,690,800
200,000 Shaman Pharmaceuticals Inc. (a)(b) 1,000,000
200,000 Vertex Pharmaceuticals Inc. (a)(b) 7,475,000
- ------------------------------------------------------------------------------------------------------
115,752,050
- ------------------------------------------------------------------------------------------------------
Recreation -- 0.5%
110,000 Steiner Leisure Ltd. (a) 4,400,000
- ------------------------------------------------------------------------------------------------------
Semiconductors -- 13.7%
120,000 Applied Materials Inc. (a) 4,417,500
550,000 Cirrus Logic Inc. (a) 6,084,375
1,020,000 Intel Corp. 91,481,250
500,000 Micron Technology Inc. (b) 16,593,750
630,000 Standard Microsystems Corp. (a) 5,985,000
- ------------------------------------------------------------------------------------------------------
124,561,875
- ------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $435,385,885) 887,841,517
======================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith barney Agressive Growth Fund Inc. 9
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) February 28, 1998
================================================================================
<TABLE>
<CAPTION>
======================================================================================================
SHARES SECURITY VALUE
======================================================================================================
<S> <C> <C>
CONVERTIBLE PREFERRED STOCK -- 0.4%
Managed Health Care Providers -- 0.4%
44,940 Aetna, Inc.
(Cost-- $1,702,477) $ 3,746,872
======================================================================================================
FOREIGN PREFERRED STOCK -- 0.5%
Telecommunications -- 0.5%
42,192 Nokia Corp. AB
(Cost-- $1,242,554) 4,250,844
======================================================================================================
FACE
AMOUNT SECURITY VALUE
======================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.7%
$15,874,000 Chase Manhattan Bank, 5.589% due 3/2/98,
Proceeds at maturity -- $15,881,393; (Fully collateralized
by U.S. Treasury Notes, 5.375% due 2/15/2001;
Market value-- $16,199,321) ( Cost-- $15,874,000) 15,874,000
======================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $454,204,916*) $911,713,233
======================================================================================================
</TABLE>
(a) Non-income producing security.
(b) A portion of this security is on loan.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
=================================================================================
Statement of Assets and Liabilities (unaudited) February 28, 1998
=================================================================================
<S> <C>
ASSETS:
Investments, at value (Cost-- $454,204,916) $ 911,713,233
Cash 360
Collateral for securities loaned (Note 5) 130,693,040
Receivable for Fund shares sold 820,734
Dividends and interest receivable 172,912
- ---------------------------------------------------------------------------------
Total Assets 1,043,400,279
- ---------------------------------------------------------------------------------
LIABILITIES:
Payable for securities loaned (Note 5) 130,693,040
Payable for securities purchased 710,481
Investment advisory fees payable 401,325
Distribution fees payable 362,164
Administration fees payable 133,613
Payable for Fund shares purchased 19,209
Accrued expenses 78,884
- ---------------------------------------------------------------------------------
Total Liabilities 132,398,716
- ---------------------------------------------------------------------------------
Total Net Assets $ 911,001,563
=================================================================================
NET ASSETS:
Par value of capital shares $ 212,727
Capital paid in excess of par value 457,992,481
Accumulated net investment loss (4,760,898)
Accumulated net realized gain on security transactions 48,936
Net unrealized appreciation of investments 457,508,317
- ---------------------------------------------------------------------------------
Total Net Assets $ 911,001,563
=================================================================================
Shares Outstanding:
Class A 9,044,037
---------------------------------------------------------------------------
Class B 5,800,405
---------------------------------------------------------------------------
Class C 2,041,671
---------------------------------------------------------------------------
Class Y 3,191,324
---------------------------------------------------------------------------
Class Z 1,195,269
---------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 43.43
---------------------------------------------------------------------------
Class B * $ 41.47
---------------------------------------------------------------------------
Class C ** $ 41.55
---------------------------------------------------------------------------
Class Y (and redemption price) $ 43.80
---------------------------------------------------------------------------
Class Z (and redemption price) $ 44.38
---------------------------------------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 5.26% of net asset value per share) $ 45.72
=================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if shares
are redeemed within one year from initial purchase (See Note 2).
** Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase (See Note 2).
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 11
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Statement of Operations (unaudited) For the Six Months Ended February 28, 1998
================================================================================
<S> <C>
INVESTMENT INCOME:
Dividends $ 798,928
Interest 156,753
- --------------------------------------------------------------------------------
Total Investment Income 955,681
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 2,456,972
Distribution fees (Note 2) 1,853,175
Administration fees (Note 2) 818,991
Shareholder and system servicing fees 372,747
Registration fees 78,072
Shareholder communications 61,362
Audit and legal 21,168
Custody 17,161
Directors' fees 16,767
Other 9,353
- --------------------------------------------------------------------------------
Total Expenses 5,705,768
- --------------------------------------------------------------------------------
Net Investment Loss (4,750,087)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 28,264,396
Cost of securities sold 28,214,877
- --------------------------------------------------------------------------------
Net Realized Gain 49,519
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 378,425,928
End of period 457,508,317
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 79,082,389
- --------------------------------------------------------------------------------
Net Gain on Investments 79,131,908
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 74,381,821
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
For the Six Months Ended February 28, 1998 (unaudited) and the Year Ended August
31, 1997
1998 1997
======================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment loss $ (4,750,087) $ (7,389,592)
Net realized gain 49,519 39,280,111
Increase in net unrealized appreciation 79,082,389 235,657,971
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 74,381,821 267,548,490
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains (38,847,159) (15,724,994)
- ------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (38,847,159) (15,724,994)
- ------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 536,143,420 679,494,690
Net asset value of shares issued for reinvestment of dividends 30,686,350 13,250,651
Cost of shares reacquired (501,795,083) (676,253,200)
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 65,034,687 16,492,141
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets 100,569,349 268,315,637
NET ASSETS:
Beginning of period 810,432,214 542,116,577
- ------------------------------------------------------------------------------------------------------
End of period* $ 911,001,563 $ 810,432,214
======================================================================================================
* Includes accumulated net investment loss of: $ (4,760,898) $ (10,811)
======================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 13
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Fund Inc. ("Fund"), a Maryland corporation is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets;
securities for which no sales price was reported and U.S. government and agency
obligations are valued at the bid price. Investments in securities for which
market quotations are not available are valued at fair value as determined in
good faith by the Board of Directors; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis; (e) gains or losses on the sale
of securities are calculated by using the specific identification method; (f)
direct expenses are charged to each class; investment advisory fees and general
Fund expenses are allocated on the basis of relative net assets by class; (g)
dividends and distributions to shareholders are recorded on the ex-dividend
date; (h) the character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles; (i) the Fund intends to comply with the applicable
provisions of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes;
(j) the character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. At August 31, 1997, reclassifications were made to the
Fund's capital accounts to reflect permanent book/tax differences and income and
gains available for distributions under income tax regulations. Accordingly, an
accumulated net investment loss of $6,945,780 and $20,005 of accumulated net
realized gains were reclassified to paid-in capital. Net investment income, net
realized gains and net assets were not affected by this adjustment; and (k)
estimates and assumptions are required to be made regarding assets, liabilities
and changes in net assets resulting from operations when financial statements
are prepared. Changes in the economic environment, financial markets and any
other parameters used in determining these estimates could cause actual results
to differ.
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as investment adviser to the Fund. The Fund pays MMC an advisory fee
calculated at an annual rate of 0.60% of the average daily net assets. This fee
is calculated daily and paid monthly.
MMC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares and primary broker for its portfolio agency transactions. For the
six months ended February 28, 1998, SB received sales charges of approximately
$372,000 on sales of the Fund's Class A shares.
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs less than one year from initial purchase and
declines thereafter by 1.00% per year until no
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption
occurs within the first year of purchase.
For the six months ended February 28, 1998, CDSCs paid to SB were approximately:
<TABLE>
<CAPTION>
Class B Class C
================================================================================
<S> <C> <C>
CDSCs $159,000 $5,000
================================================================================
</TABLE>
Pursuant to a Distribution Plan the Fund pays a service fee with respect to its
Class A, B and C shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class. The Fund also pays a distribution fee
with respect to Class B and C shares calculated at the annual rate of 0.75% of
the average daily net assets of each class, respectively. For the six months
ended February 28, 1998, total Distribution Plan fees were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
====================================================================================
<S> <C> <C> <C>
Distribution Plan Fees $429,871 $1,039,127 $384,177
====================================================================================
</TABLE>
All officers and one Director of the Fund are employees of SB.
3. Investments
During the six months ended February 28, 1998, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
================================================================================
<S> <C>
Purchases $26,590,782
- --------------------------------------------------------------------------------
Sales 28,264,396
================================================================================
</TABLE>
At February 28, 1998, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
<TABLE>
================================================================================
<S> <C>
Gross unrealized appreciation $491,913,374
Gross unrealized depreciation (34,405,057)
- --------------------------------------------------------------------------------
Net unrealized appreciation $457,508,317
================================================================================
</TABLE>
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value of the collateral in amounts at least equal to
the repurchase price.
5. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Fund maintains exposure for the risk of any losses in
the investment of amounts received as collateral.
At February 28, 1998, the Fund loaned common stocks having a value of
approximately $126,137,626 and holds the following collateral for loaned
securities:
<TABLE>
<CAPTION>
Security Description Value
================================================================================
<S> <C>
Banque Paribas Time Deposit,
5.719% due 3/2/98 $ 43,532,172
Credit Suisse Time Deposit,
5.719% due 3/2/98 31,624,078
Morgan Stanley Repurchase Agreement,
5.700% due 3/2/98 40,413,241
Svenka Banken Time Deposit,
5.469% due 3/2/98 15,123,549
- --------------------------------------------------------------------------------
Total $130,693,040
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 15
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
6. Capital Shares
At February 28, 1998, the Fund had 100 million shares of capital stock
authorized with a par value of $0.01 per share. The Fund has the ability to
issue multiple classes of shares. Each share of a class represents an identical
interest and has the same rights, except that each class bears certain expenses,
including those specifically related to the distribution of its shares.
At February 28, 1998, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class C Class Y Class Z
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Total Paid-in Capital $124,243,640 $169,988,206 $ 44,493,059 $ 95,503,105 $ 23,977,198
====================================================================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1998 August 31, 1997
-------------------------------- ----------------------------------
Shares Amount Shares Amount
====================================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 9,497,296 $ 390,431,466 12,458,917 $ 430,880,504
Shares issued on reinvestment 385,804 15,173,658 219,052 6,860,680
Shares redeemed (8,826,203) (364,724,045) (13,470,744) (465,482,694)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 1,056,897 $ 40,881,079 (792,775) $ (27,741,510)
====================================================================================================================================
Class B
Shares sold 2,766,000 $ 109,763,449 4,486,678 $ 148,506,108
Shares issued on reinvestment 260,912 9,820,734 126,231 3,822,271
Shares redeemed (2,145,534) (85,083,073) (4,583,116) (150,883,158)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 881,378 $ 34,501,110 29,793 $ 1,445,221
====================================================================================================================================
Class C
Shares sold 372,772 $ 14,931,730 1,248,662 $ 40,857,598
Shares issued on reinvestment 96,287 3,630,010 56,833 1,722,597
Shares redeemed (349,309) (14,101,515) (1,669,256) (54,155,480)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 119,750 $ 4,460,225 (363,761) $ (11,575,285)
====================================================================================================================================
Class Y
Shares sold 393,958 $ 15,472,951 1,725,792 $ 55,549,740
Shares issued on reinvestment 8 346 3 84
Shares redeemed (961,956) (37,378,256) (107) (3,752)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) (567,990) $ (21,904,959) 1,725,688 $ 55,546,072
====================================================================================================================================
Class Z
Shares sold 133,395 $ 5,543,824 107,263 $ 3,700,740
Shares issued on reinvestment 51,347 2,061,602 26,548 845,019
Shares redeemed (11,829) (508,194) (167,718) (5,728,116)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 172,913 $ 7,097,232 (33,907) $ (1,182,357)
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Shares 1998(1) 1997 1996 1995 1994 1993(2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 41.80 $ 28.76 $ 33.53 $ 26.76 $ 23.59 $ 18.94
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.19) (0.33) (0.31) (0.34) (0.32) (0.21)
Net realized and unrealized gain (loss) 3.78 14.18 (2.09) 8.48 3.49 4.86
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.59 13.85 (2.40) 8.14 3.17 4.65
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 43.43 $ 41.80 $ 28.76 $ 33.53 $ 26.76 $ 23.59
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 9.08%++ 49.11% (7.44)% 31.95% 13.44% 24.55%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $392,796 $333,877 $252,531 $292,402 $180,917 $150,471
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.20%+ 1.21% 1.30% 1.37% 1.42%* 1.34%
Net investment loss (0.96)+ (0.93) (0.97) (1.05) (1.23) (1.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 6% 13% 44% 11% 13%
- ------------------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(3) $ 0.05 $ 0.06 $ 0.06 -- -- --
====================================================================================================================================
</TABLE>
(1) For the six months ended February 28, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
* The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense would have been 1.43%.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 17
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class B Shares 1998(1) 1997 1996 1995 1994 1993(2)(3)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 40.17 $ 27.88 $ 32.82 $ 26.42 $ 23.46 $ 20.52
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.29) (0.56) (0.53) (0.33) (0.29) (0.30)
Net realized and unrealized gain (loss) 3.55 13.66 (2.04) 8.10 3.25 3.24
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.26 13.10 (2.57) 7.77 2.96 2.94
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 41.47 $ 40.17 $ 27.88 $ 32.82 $ 26.42 $ 23.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 8.62%++ 47.94% (8.16)% 30.93% 12.62% 14.33%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $240,561 $197,559 $136,322 $97,438 $49,741 $18,139
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 2.00%+ 2.01% 2.07% 2.12% 2.22%* 2.18%+
Net investment loss (1.77)+ (1.73) (1.75) (1.80) (2.04) (1.86)+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 6% 13% 44% 11% 13%
- ------------------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4) $ 0.05 $ 0.06 $ 0.06 -- -- --
====================================================================================================================================
</TABLE>
(1) For the six months ended February 28, 1998 (unaudited).
(2) For the period from November 6, 1992 (inception date) to August 31, 1993.
(3) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(4) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
* 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.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class C Shares 1998(1) 1997 1996 1995(2) 1994 1993(3)(4)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 40.22 $ 27.91 $ 32.84 $ 26.42 $ 23.47 $ 21.14
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.31) (0.59) (0.53) (0.40) (0.17) (0.13)
Net realized and unrealized gain (loss) 3.60 13.71 (2.03) 8.19 3.12 2.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.29 13.12 (2.56) 7.79 2.95 2.33
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 41.55 $ 40.22 $ 27.91 $ 32.84 $ 26.42 $ 23.47
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 8.68%++ 47.97% (8.12)% 31.01% 12.57% 11.02%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 84,823 $ 77,297 $ 63,786 $ 72,324 $ 367 $ 24
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.95%+ 1.97% 2.06% 2.12% 2.08%* 2.11%+
Net investment loss (1.72)+ (1.68) (1.75) (1.80) (1.90) (1.76)+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 6% 13% 44% 11% 13%
Average commissions per share
paid on equity transactions(5) $ 0.05 $ 0.06 $ 0.06 -- -- --
====================================================================================================================================
</TABLE>
(1) For the six months ended February 28, 1998 (unaudited).
(2) On November 7, 1994, the former Class D shares were renamed Class C shares.
(3) For the period from May 13, 1993 (inception date) to August 31, 1993.
(4) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(5) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
* 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.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 19
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class Y Shares 1998(1) 1997 1996(2)
================================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 42.07 $ 28.84 $ 31.86
- ------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.11) (0.16) (0.12)
Net realized and unrealized gain (loss) 3.80 14.20 (0.53)
- ------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.69 14.04 (0.65)
- ------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (1.96) (0.81) (2.37)
- ------------------------------------------------------------------------------------------------
Total Distributions (1.96) (0.81) (2.37)
- ------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 43.80 $ 42.07 $ 28.84
- ------------------------------------------------------------------------------------------------
Total Return 9.27%++ 49.64% (10.13)%*++
- ------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 139,772 $ 158,146 $ 58,641
- ------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.86%+ 0.84% 0.84%+
Net investment loss (0.63)+ (0.56) (0.49)+
- ------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 6% 13%
- ------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(3) $ 0.05 $ 0.06 $ 0.06
================================================================================================
</TABLE>
(1) For the six months ended February 28, 1998 (unaudited).
(2) For the period from October 12, 1995 (inception date) to August 31, 1996.
(3) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
* Performance for Class Y shares is for the period from January 31, 1996 to
August 31, 1996 since all Class Y shares were redeemed during November 1995
and new shares in Class Y were not purchased until January 31, 1996.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class Z Shares 1998(1) 1997 1996 1995(2) 1994 1993(3)(4)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 42.60 $ 29.20 $ 33.88 $ 26.94 $ 23.67 $ 20.52
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.14) (0.20) (0.20) (0.34) (0.31) (0.12)
Net realized and unrealized gain (loss) 3.88 14.41 (2.11) 8.65 3.58 3.27
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.74 14.21 (2.31) 8.31 3.27 3.15
Less Distributions From:
Net realized gains (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.96) (0.81) (2.37) (1.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 44.38 $ 42.60 $ 29.20 $ 33.88 $ 26.94 $ 23.67
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 9.27%++ 49.61% (7.07)% 32.38% 13.81% 15.35%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 53,050 $ 43,553 $ 30,837 $ 27,209 $ 24,467 $ 53,599
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.84%+ 0.85% 0.93% 1.12% 1.01%* 0.99%+
Net investment loss (0.61)+ (0.57) (0.61) (0.80) (0.83) (0.67)+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 6% 13% 44% 11% 13%
Average commissions per share
paid on equity transactions(5) $ 0.05 $ 0.06 $ 0.06 -- -- --
====================================================================================================================================
</TABLE>
(1) For the six months ended February 28, 1998 (unaudited).
(2) On November 7, 1994, the former Class C shares were renamed Class Z shares.
(3) For the period from November 6, 1992 (inception date) to August 31, 1993.
(4) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(5) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
* The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense would have been 1.02%.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 21
<PAGE>
Smith Barney
Aggressive Growth
Fund Inc.
Directors Investment Adviser and Administrator
Paul R. Ades Mutual Management Corp.
Herbert Barg
Dwight B. Crane
Frank Hubbard Distributor
Heath B. McLendon, Chairman
Jerome Miller Smith Barney Inc.
Ken Miller
Allan R. Johnson, Emeritus Custodian
John F. White, Emeritus
PNC Bank, N.A.
Officers
Shareholder Servicing Agent
Heath B. McLendon
President and Chief Executive Officer First Data Investor Services Group, Inc.
P.O. Box 9134
Lewis E. Daidone Boston, MA 02205-9134
Senior Vice President and Treasurer
Richard A. Freeman This report is submitted for the general
Vice President and Investment Officer information of shareholders of Smith
Barney Aggressive Growth Fund Inc. It is
Thomas M. Reynolds not for distribution to prospective
Controller investors unless accompanied by an
effective Prospectus for the Fund, which
Christina T. Sydor contains information concerning the
Secretary Fund's investment policies and expenses
as well as other pertinent information.
SMITH BARNEY
------------
A Member of TravelersGroup[LOGO]
Smith Barney Aggressive
Growth Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street
New York, New York 10013
www.smithbarney.com
FD2208 4/98
