<PAGE>
[PHOTO]
Smith Barney
[GRAPHIC] Aggressive Growth
Fund Inc.
ANNUAL REPORT
August 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NO BANK GUARANTEE . MAY LOSE VALUE
<PAGE>
Smith Barney Aggressive
Growth Fund Inc.
- -----------------------
The Smith Barney Aggressive Growth Fund Inc. ("Fund") seeks capital appreciation
through investment primarily in common stocks of companies that are
experiencing, or have the potential to experience, growth in earnings that
exceed the average rate of earnings growth of companies whose securities are
included in the S&P 500 Index, which is a broad-based measurement of changes in
stock market conditions based on the average performance of 500 widely held
common stocks.
Smith Barney Aggressive Growth Fund Inc.
Average Annual Total Returns
August 31, 1999
Without Sales Charges/(1)/
------------------------------------------
Class A Class B Class L
- -------------------------------------------------------------------------
One-Year 104.42% 102.78% 102.87%
- -------------------------------------------------------------------------
Five-Year 25.86 24.86 24.92
=========================================================================
Ten-Year 18.33 N/A N/A
- -------------------------------------------------------------------------
Since Inception++ 16.96 22.12 23.60
=========================================================================
With Sales Charges/(2)/
------------------------------------------
Class A Class B Class L
=========================================================================
One-Year 94.19% 97.78% 99.81%
- -------------------------------------------------------------------------
Five-Year 24.58 24.78 24.67
- -------------------------------------------------------------------------
Ten-Year 17.72 N/A N/A
- -------------------------------------------------------------------------
Since Inception++ 16.58 22.12 23.41
=========================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the applicable
sales charges with respect to Class A and L shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and L
shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase. 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.
++ Inception dates for Class A, B and L shares are October 24, 1983, November
6, 1992 and May 13, 1993, respectively.
- --------------
FUND HIGHLIGHT
- --------------
Since the Fund's inception in 1983, we have employed a bottom-up, stock-specific
approach rather than choosing stocks based on forecasts of the strength of the
economy, direction of interest rates and inflation or other factors that are
beyond the control of the individual companies in the Fund's portfolio. Nothing
has changed our fundamental view that if you design a growth portfolio properly,
you should be able to find companies to buy and hold not just for one or two
quarters (which, in our view, is short-term trading) but rather for many years.
We prefer to own companies where quality managements work to build dynamic,
financially strong companies and who own meaningful equity stakes themselves.
- -------------
NASDAQ SYMBOL
- -------------
Class A SHRAX
Class B SAGBX
Class L SAGLX
- -------------
WHAT'S INSIDE
- -------------
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
Tax Information.........................................................19
Independent Auditors' Report............................................20
<PAGE>
- ------------------
Shareholder Letter
- ------------------
[PHOTO OF HEATH B. McLENDON APPEARS HERE]
HEATH B.
McLENDON
Chiarman
[PHOTO OF RICHARD A. FREEMAN APPEARS HERE]
RICHARD A.
FREEMAN
Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the annual report for the Smith Barney Aggressive
Growth Fund ("Fund") for the year ended August 31, 1999. We hope you find this
report to be useful and informative. 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.
Performance Update
We are proud to report that for the year ended August 31, 1999, the Fund
returned 104.42%, 102.78% and 102.87% for its Class A, B and L shares,
respectively, without sales charges. During the period under review, the Russell
2500 Growth Index* and the Value Line Composite Index-Geometric** returned
32.40% and 18.08%, respectively. For the six months ended August 31, 1999, the
Fund returned 27.53%, 27.00% and 27.04% for its Class A, B and L shares,
respectively, without sales charges. For the same period, the Russell 2500
Growth Index* and the Value Line Composite Index-Geometric** returned 12.90% and
6.60%, respectively.
Market Overview
In contrast to the troubled conditions that existed in the equity markets last
summer, investor confidence returned during the Fund's fiscal year. In our view,
the series of three interest-rate reductions instituted by the Federal Reserve
Board ("Fed") beginning in September 1998 were the catalysts to restoring
confidence in the markets. A year ago, investors were concerned that the U.S.
economy would be negatively affected by the forces that were hurting many
overseas economies. A credit crunch in the United States was also feared with a
concomitant contraction of money available to finance growth in business. The
Fed's injection of funds into the banking system alleviated those concerns and
enabled the economy to continue growing in an uninterrupted manner.
Beginning in the fall of 1998, bond investors began to bid up long-term interest
rates focusing on an economy that appeared to be too strong with the potential
to cause an increase in the rate of inflation, the ultimate villain of long-term
bonds and equities. Fears of an overheated economy did not go unnoticed by the
Fed, which raised short-term interest rates twice this summer, with some
analysts predicting further increases later on this year.
Dramatic recoveries occurred in nearly all indices during the past year,
including the Russell 2500 Growth Index. However, the Russell 2500 Growth Index
failed to record an all-time high, unlike many of the major large capitalization
stock indices, including the Dow Jones Industrial Average (a price-weighted
average of 30 actively traded blue chip stocks) and the Standard & Poor's 500
Stock Index.
- -----------------
* Russell 2500 Stock Growth Index is a broad-based index representing
smaller-sized U.S. companies.
** The Value Line Composite Index-Geometric is composed of the 1,700 stocks
tracked by the Value Line Investment Survey.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 1
<PAGE>
Investment Strategy
Since the Fund's inception in 1983, we have employed a stock-specific approach
rather than choosing stocks based on forecasts of the strength of the economy,
direction of interest rates and inflation or other factors that are beyond the
control of the individual companies in the Fund's portfolio. Nothing has changed
our fundamental view that if you design a growth portfolio properly, you should
be able to find companies to buy and hold not just for one or two quarters
(which, in our view, is short-term trading) but rather for many years. We prefer
to own companies where quality managements work to build dynamic, financially
strong companies and who own meaningful equity stakes themselves.
We try to identify and invest in companies that supply a product or offer a
service that allows people to live more enjoyable lives, saves businesses time
and money or, in the case of pharmaceutical companies, offer drugs which are so
efficacious that it becomes virtually impossible for doctors not to prescribe
the drugs broadly. Also, we strive to own companies that have some measure of
exclusivity with their products or services either through patent protection or
the establishment of a strong franchise position. These companies typically
possess a degree of pricing flexibility afforded them by their strong market
positions. This pricing power in turn has often enabled these companies to
achieve above-average profitability over the long-term.
Portfolio Update*
The last six months of our fiscal year witnessed broad gains in the stocks of
our portfolio, with particular strength in our biotechnology holdings. Once
again, all-time highs were recorded by our major biotechnology holdings
including Amgen, Genzyme and IDEC Pharmaceuticals. Unfortunately, long-time
holding Genentech saw the remaining portion of its shares acquired by Roche
Holdings AG, which then sold a minority stake back to the public at a premium to
the price at which they exercised their option. While we participated in this
offering, Genentech now makes up a smaller portion of the Fund's assets than in
the past.
We are particularly pleased that Wall Street has begun to recognize the
attractive characteristics and growth potential of the biotechnology industry.
The industry's positive outlook has not gone unnoticed by large pharmaceutical
companies, as evidenced by a pickup in acquisition activity that has occurred in
recent months.
Very strong results were recorded by several of our technology stocks, including
semiconductor companies Intel and Micron Technology. Adaptive Broadband, a
participant in the emerging field of wireless Internet access, made excellent
progress with their product offerings. Tyco International, the Fund's largest
holding at the close of the reporting period, announced yet another stock split
and has continued to exceed Wall Street's earnings expectations. In addition,
Weatherford International, a leading provider of oilfield service equipment, and
a company in which we doubled our position during the past six months, saw its
share price double.
During the last six month period, we added to our holdings in Genzyme General
Division, and Vertex Pharmaceuticals while establishing initial positions in
Imclone Systems, ISIS Pharmaceuticals, Genzyme Surgical Products and SUGEN
(which accepted a takeover offer from Pharmacia Upjohn at a significant premium
to our cost). We also established initial positions in two New York area savings
and loan companies, Astoria Financial and Roslyn Bancorp, banks that sell at
depressed price-to-earnings multiples and offer above-average dividend yields.
We established an initial position in Core Laboratories, an oil-service-related
company as well as in Quantum Corporation Hard Disk Drive, one of the two
tracking stocks created by Quantum Corporation. The acquisition of Netscape
Communications by America Online ("AOL") became effective during this reporting
period and that is why AOL appears as a Fund holding for the first time.
- -----------
* Portfolio holdings are subject to change.
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
Conclusion
In summary, the last six and 12-month periods were rewarding ones for the Fund.
While a doubling in our net asset value in fiscal 1999 is a steep and unlikely
target for the year ahead*, we will work as diligently as always in seeking to
achieve above average returns for shareholders.
Thank you for your investment in the Smith Barney Aggressive Growth Fund. We
look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
/s/ Richard A. Freeman
Richard A. Freeman
Vice President and
Investment Officer
September 23, 1999
- -----------------------------------------------------------------
Top Ten Holdings+ As of August 31, 1999
- -----------------------------------------------------------------
1. Tyco International Ltd. 9.2%
- -----------------------------------------------------------------
2. Intel Corp. 8.6
- -----------------------------------------------------------------
3. IDEC Pharmaceuticals Corp. 6.5
- -----------------------------------------------------------------
4. Amgen Inc. 6.3
- -----------------------------------------------------------------
5. Forest Laboratories Inc., Class A Shares 4.9
- -----------------------------------------------------------------
6. CBS Corp. 4.8
- -----------------------------------------------------------------
7. Weatherford International, Inc. 4.5
- -----------------------------------------------------------------
8. Genzyme Corp.-- General Division 4.4
- -----------------------------------------------------------------
9. America Online, Inc. 4.2
- -----------------------------------------------------------------
10. Chiron Corp. 4.1
- -----------------------------------------------------------------
+ As a percentage of total common stock.
- -----------
* Past performance is not indicative of future results.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 3
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- ---------------------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
=============================================================================================
<S> <C> <C> <C> <C> <C>
8/31/99 $33.78 $67.73 $0.00 $0.88 104.42%
- ---------------------------------------------------------------------------------------------
8/31/98 41.80 33.78 0.00 1.96 (15.16)
- ---------------------------------------------------------------------------------------------
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)
=============================================================================================
Total $0.02 $11.12
=============================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Historical Performance -- Class B Shares
- ------------------------------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
======================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/99 $32.12 $63.82 $0.00 $0.88 102.78%
- ------------------------------------------------------------------------------------------------------
8/31/98 40.17 32.12 0.00 1.96 (15.90)
- ------------------------------------------------------------------------------------------------------
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 $7.39
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Historical Performance -- Class L Shares
- ------------------------------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
======================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/99 $32.19 $63.99 $0.00 $0.88 102.87%
- ------------------------------------------------------------------------------------------------------
8/31/98 40.22 32.19 0.00 1.96 (15.80)
- ------------------------------------------------------------------------------------------------------
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 $7.39
======================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/99 $34.13 $68.69 $0.00 $0.88 105.15%
- ----------------------------------------------------------------------------------------------------------
8/31/98 42.07 34.13 0.00 1.96 (14.86)
- ----------------------------------------------------------------------------------------------------------
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 $6.02
==========================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class Z Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/99 $34.58 $69.63 $0.00 $0.88 105.20%
- ----------------------------------------------------------------------------------------------------------
8/31/98 42.60 34.58 0.00 1.96 (14.86)
- ----------------------------------------------------------------------------------------------------------
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 $7.39
==========================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charges(1)
-------------------------------------------------------------------------------
Class A Class B Class L Class Y Class Z
==============================================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended 8/31/99 104.42% 102.78% 102.87% 105.15% 105.20%
- --------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/99 25.86 24.86 24.92 N/A 26.31
- --------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/99 18.33 N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------
Inception* through 8/31/99 16.96 22.12 23.60 26.89++ 23.51
==============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
With Sales Charges(2)
-------------------------------------------------------------------------------
Class A Class B Class L Class Y Class Z
=============================================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended 8/31/99 94.19% 97.78% 99.81% 105.15% 105.20%
- -------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/99 24.58 24.78 24.67 N/A 26.31
- -------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/99 17.72 N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------
Inception* through 8/31/99 16.58 22.12 23.41 26.89++ 23.51
=============================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Cumulative Total Returns
- --------------------------------------------------------------------------------
Without Sales Charges/(1)/
================================================================================
Class A (8/31/89 through 8/31/99) 438.06%
- --------------------------------------------------------------------------------
Class B (Inception* through 8/31/99) 290.77
- --------------------------------------------------------------------------------
Class L (Inception* through 8/31/99) 280.25
- --------------------------------------------------------------------------------
Class Y (Inception* through 8/31/99) 134.91++
- --------------------------------------------------------------------------------
Class Z (Inception* through 8/31/99) 322.14
================================================================================
(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 and L shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and Class
L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%;
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase.
* Inception dates for Class A, B, L, 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 calculations for Class Y shares use January 31, 1996 as the
inception date since all Class Y shares redeemed during November 1995 and
new shares in Class Y were not purchased until January 31, 1996.
- --------------------------------------------------------------------------------
6 1999 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. Russell 2500 Growth Index+
- --------------------------------------------------------------------------------
Smith Barney
Aggressive Growth Fund Inc. Russell 2500 Growth Index
Aug\1989 9,502 10,000
Aug\1990 8,896 8,189
Aug\1991 11,740 11,062
Aug\1992 11,456 11,998
Aug\1993 14,268 15,579
Aug\1994 16,185 16,497
Aug\1995 21,357 20,116
Aug\1996 19,769 22,750
Aug\1997 29,477 29,925
Aug\1998 25,009 24,880
Aug\1999 51,124 32,941
+ Hypothetical illustration of $10,000 invested in Class A shares on August
31, 1989, 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 August 31, 1999. Russell 2500 Growth Index measures
the performance of those Russell 2500 companies with higher price-to-book
ratios and higher forecasted growth values. The index is unmanaged and is
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.
Industry Diversification of Common Stock*
- --------------------------------------------------------------------------------
Biotechnology 17.80%
Pharmaceuticals 13.80%
Broadcasting/Cable 12.80%
Semiconductors 11.80%
Multi-Industry 9.20%
Investment Banking Services 6.40%
Computer Software/Internet 6.30%
Oil Field Equipment/Services 5.10%
Communications 5.90%
Managed Healthcare Providers 3.50%
Other 7.40%
* As a percentage of total common stock.
Investment Breakdown**
- --------------------------------------------------------------------------------
[PIE CHART]
3.3% Repurchase Agreement
96.7% Common Stock
** As a percentage of total investments.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Schedule of Investments August 31, 1999
- -----------------------------------------------------------------------------------------------
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 96.7%
Biotechnology -- 17.2%
400,000 Alkermes, Inc.+ $ 14,850,000
1,200,000 Amgen Inc.+ 99,825,000
2,000,000 Chiron Corp.+@ 64,250,000
250,000 COR Therapeutics, Inc.+ 5,453,125
66,500 Genentech, Inc. 10,922,625
Genzyme Corp.:
1,225,000 General Division+@ 69,135,938
124,257 Molecular Oncology Division+ 559,157
400,000 ImClone Systems Inc.+ 11,600,000
580,000 NABI Inc.+ 3,153,750
- ----------------------------------------------------------------------------------------------
279,749,595
- ----------------------------------------------------------------------------------------------
Broadcasting/Cable -- 12.4%
1,450,000 AT&T - Liberty Media Group, Class A Shares+@ 46,400,000
500,000 Cablevision Systems Development Corp., Class A Shares+@ 35,000,000
1,600,000 CBS Corp.@ 75,200,000
Comcast Corp.:
100,000 Class A Shares 2,943,750
1,300,000 Class A Special Shares 42,412,500
- ----------------------------------------------------------------------------------------------
201,956,250
- ----------------------------------------------------------------------------------------------
Communications -- 5.7%
1,000,000 Adaptive Broadband Corp.+ 31,875,000
1,000,000 Arch Communications Group, Inc.+ 5,500,000
600,000 AT&T Corp. 27,000,000
600,000 C-Cor.net Corp.+ 13,575,000
168,768 Nokia Oyj, ADR 14,071,032
26,000 Time Warner Telecom Inc.+ 702,000
- ----------------------------------------------------------------------------------------------
92,723,032
- ----------------------------------------------------------------------------------------------
Computer Hardware -- 2.9%
Quantum Corp.:
2,000,000 DLT & Storage Systems+@ 36,625,000
1,500,000 Hard Disk Drive+ 10,687,500
- ----------------------------------------------------------------------------------------------
47,312,500
- ----------------------------------------------------------------------------------------------
Computer Software/Internet -- 6.1%
720,000 America Online, Inc.+@ 65,745,000
20,000 Interactive Pictures Corp.+@ 400,000
3,750 IVillage Inc.+@ 136,172
5,000 Juniper Networks, Inc.+@ 1,025,000
340,400 Microsoft Corp.+ 31,508,275
- ----------------------------------------------------------------------------------------------
98,814,447
- ----------------------------------------------------------------------------------------------
Diversified Technology -- 1.3%
350,000 Drexler Technology Corp.+ 2,668,750
589,000 Excel Technology, Inc.+ 7,914,687
500,000 GenRad, Inc.+ 9,437,500
100,000 Vivid Technologies, Inc.+ 368,750
- ----------------------------------------------------------------------------------------------
20,389,687
- ----------------------------------------------------------------------------------------------
See Notes to Finacial Statements.
- ----------------------------------------------------------------------------------------------
8 1999 Annual Report to Shareholders
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) August 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Drug Delivery/Testing -- 1.3%
499,500 Advanced Polymer Systems, Inc.+ $ 2,403,844
100,000 Albany Molecular Research, Inc.+ 3,125,000
250,000 Cygnus, Inc.+ 2,921,875
400,000 SUGEN, Inc.+@ 12,500,000
- --------------------------------------------------------------------------------
20,950,719
- --------------------------------------------------------------------------------
Electronics - Military -- 1.1%
400,000 L-3 Communications Holdings, Inc.+ 15,875,000
109,900 Tech-Sym Corp.+ 2,149,919
- --------------------------------------------------------------------------------
18,024,919
- --------------------------------------------------------------------------------
Healthcare - Miscellaneous -- 0.6%
100,000 Biosite Diagnostics Inc.+ 912,500
1,000,287 Genzyme Surgical Products+ 6,501,865
320,000 Nanogen, Inc.+ 2,300,000
- --------------------------------------------------------------------------------
9,714,365
- --------------------------------------------------------------------------------
Investment Banking Services -- 6.2%
500,000 Astoria Financial Corp. 16,437,500
1,000,000 Lehman Brothers Holdings Inc. 53,750,000
200,000 Merrill Lynch & Co., Inc. 14,925,000
800,000 Roslyn Bancorp, Inc. 13,600,000
30,000 Goldman Sachs Group, Inc. 1,794,375
- --------------------------------------------------------------------------------
100,506,875
- --------------------------------------------------------------------------------
Managed Healthcare Providers -- 3.4%
900,000 United HealthCare Corp. 54,731,250
- --------------------------------------------------------------------------------
Multi-Industry -- 8.9%
1,430,000 Tyco International Ltd.@ 144,876,875
- --------------------------------------------------------------------------------
Oil Field Equipment/Services -- 4.9%
450,000 Core Laboratories N.V.+ 8,606,250
2,000,000 Weatherford International, Inc.+@ 71,250,000
- --------------------------------------------------------------------------------
79,856,250
- --------------------------------------------------------------------------------
Pharmaceuticals -- 13.3%
80,000 EP MedSystems, Inc.+ 235,000
1,600,000 Forest Laboratories, Inc.+ 77,600,000
800,000 IDEC Pharmaceuticals Corp.+@ 101,650,000
500,000 Isis Pharmaceuticals, Inc.+ 5,062,500
362,400 Pfizer Inc. 13,680,600
2,000,000 SICOR Inc.+ 8,000,000
375,000 Vertex Pharmaceuticals Inc.+ 10,406,250
- --------------------------------------------------------------------------------
216,634,350
- --------------------------------------------------------------------------------
Semiconductors -- 11.4%
800,000 Cirrus Logic, Inc.+ 8,950,000
1,640,000 Intel Corp. 134,787,500
500,000 Micron Technology, Inc.@ 37,281,250
630,000 Standard Microsystems Corp.+ 5,197,500
- --------------------------------------------------------------------------------
186,216,250
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $584,841,510) 1,572,457,364
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggeressive Growth Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------------------------
WARRANTS -- 0.0%
1,642,028 Arch Communications Group, Inc., Expire 9/1/03+ (Cost -- $0) $ 410,507
- --------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.3%
$ 52,771,000 Goldman, Sachs & Co., 5.400% due 9/1/99;
Proceeds at maturity -- $52,778,916;
(Fully collateralized by U.S. Treasury Notes and Bonds,
5.500% to 14.250% due 10/31/00 to 8/15/26;
Market value -- $53,826,524) (Cost -- $52,771,000) 52,771,000
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost $637,612,510*) $1,625,638,871
- --------------------------------------------------------------------------------------------------
</TABLE>
+ Non-income producing security.
@ All or a portion of this security is on loan (See Note 5).
* Aggregate cost for Federal income tax purposes is substantially the
same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (Cost $637,612,510) $1,625,638,871
Cash 900
Collateral for securities on loan (Note 5) 247,426,400
Receivable for Fund shares sold 46,390,170
Dividends and interest receivable 308,108
- ------------------------------------------------------------------------------------------
Total Assets 1,919,764,449
- ------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 5) 247,426,400
Payable for Fund shares purchased 6,366,598
Investment advisory fees payable 849,019
Administration fees payable 282,844
Distribution fees payable 175,023
Accrued expenses 307,153
- ------------------------------------------------------------------------------------------
Total Liabilities 255,407,037
- ------------------------------------------------------------------------------------------
Total Net Assets $1,664,357,412
- ------------------------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 250,315
Capital paid in excess of par value 661,897,518
Accumulated net investment loss (2,095)
Accumulated net realized gain from securities transactions 14,185,313
Net unrealized appreciation of investments 988,026,361
- ------------------------------------------------------------------------------------------
Total Net Assets $1,664,357,412
- ------------------------------------------------------------------------------------------
Shares Outstanding:
Class A 10,188,393
-------------------------------------------------------------------------------------
Class B 7,365,883
-------------------------------------------------------------------------------------
Class L 2,527,898
-------------------------------------------------------------------------------------
Class Y 2,509,328
-------------------------------------------------------------------------------------
Class Z 2,439,972
-------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $67.73
-------------------------------------------------------------------------------------
Class B* $63.82
-------------------------------------------------------------------------------------
Class L** $63.99
-------------------------------------------------------------------------------------
Class Y (and redemption price) $68.69
-------------------------------------------------------------------------------------
Class Z (and redemption price) $69.63
-------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $71.29
-------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $64.64
- ------------------------------------------------------------------------------------------
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if shares
are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if shares
are redeemed within one year from initial purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended August 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 1,633,136
Interest 1,928,730
- --------------------------------------------------------------------------------
Total Investment Income 3,561,866
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 7,183,426
Distribution fees (Note 2) 5,593,811
Administration fees (Note 2) 2,394,475
Shareholder and system servicing fees 1,092,173
Shareholder communications 163,845
Registration fees 138,694
Audit and legal 60,819
Custody 54,023
Directors' fees 35,050
Other 18,651
- --------------------------------------------------------------------------------
Total Expenses 16,734,967
- --------------------------------------------------------------------------------
Net Investment Loss (13,173,101)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 94,151,758
Cost of securities sold 68,783,225
- --------------------------------------------------------------------------------
Net Realized Gain 25,368,533
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of year 248,143,404
End of year 988,026,361
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 739,882,957
- --------------------------------------------------------------------------------
Net Gain on Investments 765,251,490
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $752,078,389
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets For the Years Ended August 31,
- -------------------------------------------------------------------------------------------------------------------
1999 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (13,173,101) $ (10,153,097)
Net realized gain 25,368,533 20,932,421
Increase (decrease) in net unrealized appreciation 739,882,957 (130,282,524)
- -------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 752,078,389 (119,503,200)
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains (18,185,655) (38,847,159)
- -------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (18,185,655) (38,847,159)
- -------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 2,547,281,021 1,188,296,454
Net asset value of shares issued for reinvestment of dividends 15,315,896 30,686,349
Cost of shares reacquired (2,311,458,577) (1,191,738,320)
- -------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 251,138,340 27,244,483
- -------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 985,031,074 (131,105,876)
NET ASSETS:
Beginning of year 679,326,338 810,432,214
- -------------------------------------------------------------------------------------------------------------------
End of year* $1,664,357,412 $ 679,326,338
- -------------------------------------------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $(2,095) $(1,923)
- -------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
- -------------------------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 13
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements.
- --------------------------------------------------------------------------------
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 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; (i) 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, 1999, 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 $1,989,709 and an accumulated net realized gain of $435 were
reclassified to paid-in capital. Net investment income, net realized gains and
net assets were not affected by this adjustment; and (j) 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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as
investment adviser to the Fund. The Fund pays SSBC 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.
SSBC 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.
On October 8, 1998, CFBDS, Inc. ("CFBDS") became the Fund's distributor. Prior
to the date, Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, was
the Fund's distributor. SSB, as well as certain other broker-dealers, continues
to sell Fund shares to the public as a member of the selling group.
SSB acts as the primary broker for its portfolio agency transactions. For the
year ended August 31, 1999 SSB received total brokerage commissions of $2,819.
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs within one year from initial purchase and
declines thereafter by 1.00% per year until no CDSC is incurred. Class L shares
also have a 1.00% CDSC, which applies if redemption occurs within the first year
of purchase. In certain cases, Class A shares have a 1.00%
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Finacial Statements (continued)
- --------------------------------------------------------------------------------
CDSC, which applies if redemption occurs within the first year of purchase. This
CDSC only applies to those purchases of Class A shares, which, when combined
with current holdings of Class A shares, equal or exceed $500,000 in the
aggregate. These purchases do not incur an initial sales charge.
For the year ended August 31, 1999, CFBDS and SSB received sales charges of
$1,237,000 and $319,000 on sales of the Fund's Class A and L shares,
respectively. In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
- -------------------------------------------------------------------------
CDSCs $1,000 $355,000 $10,000
- -------------------------------------------------------------------------
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L 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 L shares calculated at the annual rate of 0.75% of
the average daily net assets of each class, respectively. For the year ended
August 31, 1999, total Distribution Plan fees were as follows:
Class A Class B Class L
- -------------------------------------------------------------------------
Distribution Plan Fees $1,270,442 $3,219,990 $1,103,379
- -------------------------------------------------------------------------
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended August 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
- -------------------------------------------------------------------------
Purchases $219,934,925
- -------------------------------------------------------------------------
Sales 94,151,758
- -------------------------------------------------------------------------
At August 31, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
- -------------------------------------------------------------------------
Gross unrealized appreciation $1,015,586,098
Gross unrealized depreciation (27,559,737)
- -------------------------------------------------------------------------
Net unrealized appreciation $ 988,026,361
- -------------------------------------------------------------------------
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 August 31, 1999, the Fund loaned common stocks having a value of
approximately $239,766,319 and holds the following collateral for loaned
securities:
Security Description Value
- ---------------------------------------------------------------------------
Time Deposits:
Banco Bilbao Vizcaya, 5.562% due 9/1/99 $ 40,594,495
Bank Brussels Lambert, 5.562% due 9/1/99 22,573,965
Bank of Montreal, 5.687% due 9/1/99 29,621,020
Banque Nationale De Paris, 5.562% due 9/1/99 40,594,495
Banque Paribas, 5.562% due 9/1/99 40,594,495
Westdeutsche Landesbank, 5.562% due 9/1/99 27,996,345
Commercial Paper:
Atlantis One Funding Corp., 5.919% due 2/22/00 38,568,736
Certificates of Deposit:
Svenska Handelsbanken, 4.940% due 10/25/99 6,882,849
- ---------------------------------------------------------------------------
Total $247,426,400
- ---------------------------------------------------------------------------
Income earned by the Fund from securities lending for the year ended August 31,
1999 was $275,013.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
6. Capital Shares
At August 31, 1999, 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 August 31, 1999, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class L Class Y Class Z
<S> <C> <C> <C> <C> <C>
===========================================================================================================
Total Paid-in Capital $183,734,858 $256,355,824 $72,276,421 $58,796,600 $90,984,130
===========================================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 1999 August 31, 1998
------------------------------------ --------------------------------------
Shares Amount Shares Amount
==================================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 37,325,388 $2,050,528,985 21,333,538 $902,655,163
Shares issued on reinvestment 171,626 7,692,276 385,804 15,173,658
Shares reacquired (36,082,392) (1,981,741,151) (20,932,711) (889,903,470)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,414,622 $ 76,480,110 786,631 $ 27,925,351
==================================================================================================================================
Class B
Shares sold 6,945,414 $ 357,939,766 5,409,162 $218,854,365
Shares issued on reinvestment 115,516 4,910,603 260,912 9,820,734
Shares reacquired (5,479,074) (273,687,067) (4,805,074) (194,506,323)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,581,856 $ 89,163,302 865,000 $ 34,168,776
==================================================================================================================================
Class L*
Shares sold 1,039,798 $ 56,111,076 786,447 $ 32,005,002
Shares issued on reinvestment 39,585 1,686,340 96,287 3,630,010
Shares reacquired (580,589) (28,676,180) (775,551) (31,661,828)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase 498,794 $ 29,121,236 107,183 $ 3,973,184
==================================================================================================================================
Class Y
Shares sold 124,511 $ 5,795,983 642,321 $ 26,209,826
Shares issued on reinvestment -- -- 9 346
Shares reacquired (242,792) (16,000,000) (1,774,035) (73,189,015)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Decrease (118,281) $ (10,204,017) (1,131,705) $ (46,978,843)
==================================================================================================================================
Class Z
Shares sold 1,413,441 $ 76,905,211 202,137 $ 8,572,098
Shares issued on reinvestment 22,343 1,026,677 51,347 2,061,601
Shares reacquired (214,783) (11,354,179) (56,869) (2,477,684)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,221,001 $ 66,577,709 196,615 $ 8,156,015
==================================================================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares 1999(1) 1998 1997 1996 1995
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 33.78 $ 41.80 $ 28.76 $ 33.53 $ 26.76
- --------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.48) (0.42) (0.33) (0.31) (0.34)
Net realized and unrealized gain (loss) 35.31 (5.64) 14.18 (2.09) 8.48
- --------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 34.83 (6.06) 13.85 (2.40) 8.14
- --------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.88) (1.96) (0.81) (2.37) (1.37)
- --------------------------------------------------------------------------------------------------------------------
Total Distributions (0.88) (1.96) (0.81) (2.37) (1.37)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 67.73 $ 33.78 $ 41.80 $ 28.76 $ 33.53
- --------------------------------------------------------------------------------------------------------------------
Total Return 104.42% (15.16)% 49.11% (7.44)% 31.95%
- --------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 690,142 $ 296,376 $ 333,877 $ 252,531 $ 292,402
- --------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.18% 1.21% 1.21% 1.30% 1.37%
Net investment loss (0.89) (0.97) (0.93) (0.97) (1.05)
- --------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 7% 6% 13% 44%
=====================================================================================================================
<CAPTION>
Class B Shares 1999(1) 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 32.12 $ 40.17 $ 27.88 $ 32.82 $ 26.42
- --------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.87) (0.66) (0.56) (0.53) (0.33)
Net realized and unrealized gain (loss) 33.45 (5.43) 13.66 (2.04) 8.10
- --------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 32.58 (6.09) 13.10 (2.57) 7.77
- --------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.88) (1.96) (0.81) (2.37) (1.37)
- --------------------------------------------------------------------------------------------------------------------
Total Distributions (0.88) (1.96) (0.81) (2.37) (1.37)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 63.82 $ 32.12 $ 40.17 $ 27.88 $ 32.82
- --------------------------------------------------------------------------------------------------------------------
Total Return 102.78% (15.90)% 47.94% (8.16)% 30.93%
- --------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 470,141 $ 185,808 $ 197,559 $ 136,322 $ 97,438
- --------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 2.00% 2.02% 2.01% 2.07% 2.12%
Net investment loss (1.70) (1.78) (1.73) (1.75) (1.80)
- --------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 7% 6% 13% 44%
====================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares 1999(1) 1998(2) 1997 1996 1995(3)
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $32.19 $40.22 $27.91 $32.84 $26.42
- ---------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.84) (0.68) (0.59) (0.53) (0.40)
Net realized and unrealized gain (loss) 33.52 (5.39) 13.71 (2.03) 8.19
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 32.68 (6.07) 13.12 (2.56) 7.79
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.88) (1.96) (0.81) (2.37) (1.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.88) (1.96) (0.81) (2.37) (1.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $63.99 $32.19 $40.22 $27.91 $32.84
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 102.87% (15.80)% 47.97% (8.12)% 31.01%
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $161,784 $65,312 $77,297 $63,786 $72,324
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.94% 1.97% 1.97% 2.06% 2.12%
Net investment loss (1.64) (1.73) (1.68) (1.75) (1.80)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 7% 6% 13% 44%
=================================================================================================================================
<CAPTION>
Class Y Shares 1999(1) 1998(2) 1997 1996(4)
=================================================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $34.13 $42.07 $28.84 $31.86
- ---------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.29) (0.25) (0.16) (0.12)
Net realized and unrealized gain (loss) 35.73 (5.73) 14.20 (0.53)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 35.44 (5.98) 14.04 (0.65)
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.88) (1.96) (0.81) (2.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.88) (1.96) (0.81) (2.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $68.69 $34.13 $42.07 $28.84
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 105.15% (14.86)% 49.64% (10.13)%++*
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $172,385 $89,675 $158,146 $58,641
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.82% 0.85% 0.84% 0.84%+
Net investment loss (0.53) (0.62) (0.56) (0.49)+
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 7% 6% 13%
=================================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) On November 7, 1994, the former Class D shares were renamed Class C shares.
(4) For the period from October 12, 1995 (inception date) to August 31, 1996.
* 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.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class Z Shares 1999/(1)/ 1998 1997 1996 1995/(2)/
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $34.58 $42.60 $29.20 $33.88 $26.94
- -----------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.30) (0.28) (0.20) (0.20) (0.34)
Net realized and unrealized gain (loss) 36.23 (5.78) 14.41 (2.11) 8.65
- -----------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 35.93 (6.06) 14.21 (2.31) 8.31
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.88) (1.96) (0.81) (2.37) (1.37)
- -----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.88) (1.96) (0.81) (2.37) (1.37)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $69.63 $34.58 $42.60 $29.20 $33.88
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 105.20% (14.86)% 49.61% (7.07)% 32.38%
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $169,905 $42,155 $43,553 $30,837 $27,209
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.82% 0.85% 0.85% 0.93% 1.12%
Net investment loss (0.51) (0.62) (0.57) (0.61) (0.80)
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 7% 6% 13% 44%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) On November 7, 1994, the former Class C shares were renamed Class Z shares.
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
August 31, 1999:
. Total long-term capital gain distributions paid of $18,186,090.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Smith Barney Aggressive Growth Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Smith Barney Aggressive Growth Fund Inc. as of
August 31, 1999, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Smith
Barney Aggressive Growth Fund Inc. as of August 31, 1999, and the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
October 15, 1999
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
Directors
Paul R. Ades
Herbert Barg
Dwight B. Crane
Frank Hubbard
Heath B. McLendon, Chairman
Jerome Miller
Ken Miller
John F. White, Emeritus
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Richard A. Freeman
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser and Administrator
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9699
Providence, RI 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney Aggressive Growth Fund Inc. It is not for distribution to prospective
investors unless accompanied by a current Prospectus for the Fund, which
contains information concerning the Fund's investment policies and expenses as
well as other pertinent information.
[LOGO OF SALOMON SMITH BARNEY]
Smith Barney Aggressive
Growth Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD0433 10/99
