SMITH BARNEY SHEARSON AGGRESSIVE GROWTH FUND INC, 485APOS, 1999-10-20

SMITH BARNEY SHEARSON AGGRESSIVE GROWTH FUND INC
485APOS, 1999-10-20

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Registration No. 2-84199
811-3762

SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

Form N 1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ ] Pre-Effective Amendment No.

[X] Post-Effective Amendment No. 22

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X] Amendment No. 23

SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
(Exact name of Registrant as Specified in Charter)

388 Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)

(800) 451-2010
(Registrant's Telephone Number, including Area Code)

Christina T. Sydor
Smith Barney Aggressive Growth Fund Inc.
388 Greenwich Street
New York, New York 10013
(Name and Address of Agent for Service)

Continuous
(Approximate Date of Proposed Offering)

It is proposed that this filing will become effective:

[ ] immediately upon filing pursuant to
Rule 485(b)
[ ] on (date) pursuant to Rule
485(b)
[ ] 60 days after filing pursuant to paragraph
(a)(1) of Rule 485(a)
[XX] On December 20, 1999 pursuant to paragraph (a)(1) of
Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2)
of Rule 485
[ ] On (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box

[ ] This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

Title of Securities being Registered: Common Stock

PART A
<PAGE>

- ------------------------

Smith Barney Mutual
Funds

- ------------------------

Prospectus Smith Barney
Mutual Funds

- --------------------------------------------------------------------------------

December 20, 1999 Aggressive Growth Fund Inc.

Class A, B, L and Y Shares

The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.

<PAGE>

Aggressive Growth Fund Inc.

Contents

<TABLE>
<S> <C>
Investments, risks and performance.......................................... 2
More on the fund's investments.............................................. 6
Management.................................................................. 7
Choosing a class of shares to buy........................................... 8
Comparing the fund's classes................................................ 9
Sales charge................................................................ 10
More about deferred sales charges........................................... 12
Buying shares............................................................... 13
Exchanging shares........................................................... 14
Redeeming shares............................................................ 16
Other things to know about share transactions............................... 18
Smith Barney 401(k) and ExecChoice(TM) program.............................. 20
Distributions, dividends and taxes.......................................... 21
Share price................................................................. 22
Financial highlights........................................................ 23
</TABLE>

You should know: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.

Smith Barney Mutual Funds 1
<PAGE>

Investments, risks and performance

Investment objective
The fund seeks capital appreciation.

Principal Investment Strategies
Key investments The fund invests primarily in common stocks of companies that
the manager believes are experiencing, or will experience, growth in earnings
that exceeds the average rate of earnings growth of the companies which com-
prise the S&P 500 Index. The fund may invest in the securities of large, well-
known companies which offer prospects of long-term earnings growth. However,
because higher earnings growth rates are often achieved by small to medium-
sized companies, a significant portion of the fund's assets are invested in the
securities of such companies.

Selection process The manager emphasizes individual security selection while
diversifying the fund's investments across industries, which may help to reduce
risk. The manager focuses primarily, but not exclusively, on emerging growth
companies that have passed their "start-up" phase and show positive earnings
and the prospect of achieving significant profit gains beginning in the two to
three years after the fund acquires their stocks. When evaluating an individual
stock, the manager considers whether the company may benefit from:

.new technologies, products or services;
.new cost reducing measures;
.changes in management; or
.favorable changes in government regulations.

2 Aggressive Growth Fund Inc.

<PAGE>

Principal risks of investing in the fund

Investors could lose money on their investment in the fund, or the fund may not
perform as well as other investments, if:

.Stock prices decline generally
.Small or medium capitalization companies fall out of favor with investors
.The manager's judgment about the attractiveness, growth prospects or potential
appreciation of a particular stock proves to be incorrect
.A particular product or service developed by a company in which the fund
invests is unsuccessful, the company does not meet earnings expectations or
other events depress the value of the company's stock

Compared to mutual funds that focus only on large capitalization companies, the
fund's share price may be more volatile because the fund also invests a signif-
icant portion of its assets in small and medium capitalization companies.

Compared to large companies, small and medium capitalization companies are more
likely to have:

.More limited product lines
.Fewer capital resources
.More limited management depth

Further, securities of small and medium capitalization companies are more
likely to:

.Experience sharper swings in market values
.Be harder to sell at times and at prices the manager believes appropriate
.Offer greater potential for gains and losses

Who may want to invest The fund may be an appropriate investment if you:

.Are seeking to participate in the long term growth potential of small and
medium capitalization companies
.Currently have exposure to the stocks commonly held by large capitalization
and value oriented mutual funds and wish to broaden your investment portfolio
.Are willing to accept the risks of the stock market and the special risks and
potential long-term rewards of investing in smaller companies with more lim-
ited track records

Smith Barney Mutual Funds 3
<PAGE>

Risk return bar chart
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not neces-
sarily indicate how the fund will perform in the future.

The bar chart shows the performance of the fund's Class A shares for each of
the past 10 calendar years. Class B, L and Y shares would have different per-
formance because of their different expenses. The performance information in
the chart does not reflect sales charges, which would reduce your return.

Total Return for Class A Shares

[BAR CHART TO APPEAR HERE]

Quarterly returns:
Highest: xx% in quarter 199X; Lowest: xx% in quarter 199X Year to date: xx%
through 9/30/00

Risk return table
This table indicates the risks of investing in the fund by comparing the aver-
age annual total return of each class for the periods shown with that of the
Russell 2500 Growth Index (the "Russell Index"), a broad-based unmanaged index
of stocks of small to medium capitalization companies, and the Lipper Growth
Fund Average (the "Lipper Average"), an average composed of the fund's peer
group of mutual funds. This table assumes imposition of the maximum sales
charge applicable to the class, redemption of shares at the end of the period,
and reinvestment of distributions and dividends.

Average Annual Total Returns
Calendar Years Ended December 31, 1998
<TABLE>
<CAPTION>
Class 1 year 5 years 10 years Since inception Inception date
<S> <C> <C> <C> <C> <C>
A [xx/xx/xx]
B n/a 11/6/92
L n/a 5/13/93
Y n/a n/a 10/12/95
Russell Index n/a
Lipper Average n/a
</TABLE>

* Index comparison begins on .

4 Aggressive Growth Fund Inc.

<PAGE>

Fee table
This table sets forth the fees and expenses you will pay if you invest in fund
shares.

Shareholder fees
<TABLE>
<CAPTION>
(fees paid directly from your investment) Class A Class B Class L Class Y
<S> <C> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases
(as a % of offering price) 5.00% None 1.00% None
Maximum deferred sales charge (load) (as a
% of the lower of net asset value at
purchase or redemption) None* 5.00% 1.00% None

Annual fund operating expenses
<CAPTION>
(expenses deducted from fund assets) Class A Class B Class L Class Y
<S> <C> <C> <C> <C>
Management fee** 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
Other expenses
----- ----- ----- -----
Total annual fund operating expenses
===== ===== ===== =====
</TABLE>

*You may buy Class A shares in amounts of $500,000 or more at net asset value
(without an initial charge) but if you redeem those shares within 12 months of
their purchase, you will pay a deferred sales charge of 1.00%.

Example
This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
.You invest $10,000 in the fund for the period shown
.Your investment has a 5% return each year
.You reinvest all distributions and dividends without a sales charge
.The fund's operating expenses remain the same

Number of years you own your shares
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A (with or without redemption) $ $ $ $
Class B (redemption at end of period) $ $ $ $
Class B (no redemption) $ $ $ $
Class L (redemption at end of period) $ $ $ $
Class L (no redemption) $ $ $ $
Class Y (with or without redemption) $ $ $ $
</TABLE>

Smith Barney Mutual Funds 5
<PAGE>

More on the fund's investments

Foreign investments The fund may invest up to 10% of its assets (at the
time of investment) in foreign securities. The fund may invest directly
in foreign issuers or invest in depositary receipts. The fund's
investments in foreign securities may involve greater risk than investments
in securities of U.S. issuers. Because the value of a depositary receipt is
dependent upon the market price of an underlying foreign security, depositary
receipts are subject to most of the risk associated with investing in foreign
securities directly. Foreign countries generally have markets that are
less liquid and more volatile than markets in the U.S. In some foreign coun-
tries, less information is available about foreign issuers and markets because
of less rigorous accounting and regulatory standards than in the U.S. Currency
fluctuations could erase investment gains or add to investment losses.

Defensive investing The fund may depart from its principal investment strate-
gies in response to adverse market, economic or political conditions by taking
temporary defensive positions in all types of money market and short-term debt
securities. If the fund takes a temporary defensive position, it may be unable
to achieve its investment goal.

6 Aggressive Growth Fund Inc.

<PAGE>

Management

Manager The fund's investment adviser and administrator (the manager) is SSB
Citi Fund Management LLC, an affiliate of Salomon Smith Barney Inc. The manag-
er's address is 388 Greenwich Street, New York, New York 10013. The manager
selects the fund's investments and oversees its operations. The manager and
Salomon Smith Barney are subsidiaries of Citigroup Inc. Citigroup businesses
produce a broad range of financial services--asset management, banking and con-
sumer finance, credit and charge cards, insurance, investments, investment
banking and trading--and use diverse channels to make them available to con-
sumer and corporate customers around the world.

Richard Freeman, investment officer of SSB Citi Fund Management LLC and manag-
ing director of Salomon Smith Barney, has been responsible for the day-to-day
management of the fund's portfolio since October 1983. Mr. Freeman has 16 years
of experience with the manager or its predecessors.

Management fees During the fiscal year ended August 31, 1999, the manager
received a management fee and administrative fee equal to 0.60% and 0.20%,
respectively, of the fund's average daily net assets.

Distributor The fund has entered into an agreement with CFBDS, Inc. to distrib-
ute the fund's shares. A selling group consisting of Salomon Smith Barney and
other broker-dealers sells fund shares to the public.

Distribution plans The fund has adopted Rule 12b-1 distribution plans for its
Class A, B and L shares. Under each plan, the fund pays distribution and serv-
ice fees. These fees are an ongoing expense and, over time, may cost you more
than other types of sales charges.

Year 2000 issue Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the fund. The cost of addressing the Year 2000 issue, if sub-
stantial, could adversely affect companies and governments that issue securi-
ties held by the fund. The manager and Salomon Smith Barney are addressing the
Year 2000 issue for their systems. The fund has been informed by other service
providers that they are taking similar measures. Although the fund does not
expect the Year 2000 issue to adversely affect it, the fund cannot guarantee
that the efforts of the fund, which are limited to requesting and receiving
reports from its service providers, or the efforts of its service providers to
correct the problem will be successful.

Smith Barney Mutual Funds 7

<PAGE>

Choosing a class of shares to buy

You can choose among four classes of shares: Classes A, B, L and Y. Each class
has different sales charges and expenses, allowing you to choose the class that
best meets your needs. Which class is more beneficial to an investor depends on
the amount and intended length of the investment.

.If you plan to invest regularly or in large amounts, buying Class A shares may
help you reduce sales charges and ongoing expenses.
.For Class B shares, all of your purchase amount and, for Class L shares, more
of your purchase amount (compared to Class A shares) will be immediately
invested. This may help offset the higher expenses of Class B and Class L
shares, but only if the fund performs well.
.Class L shares have a shorter deferred sales charge period than Class B
shares. However, because Class B shares convert to Class A shares, and Class
L shares do not, Class B shares may be more attractive to long term invest-
ors.

You may buy shares from:
.A Salomon Smith Barney Financial Consultant
.An investment dealer in the selling group or a broker that clears through Sal-
omon Smith Barney--a dealer representative
.The fund, but only if you are investing through certain qualified plans or
certain dealer representatives

Investment minimums Minimum initial and additional investment amounts vary
depending on the class of shares you buy and the nature of your investment
account.

<TABLE>
<CAPTION>
Initial Additional
Classes A, B, L Class Y All Classes
<S> <C> <C> <C>
General $1,000 $15 million $50
IRAs, Self Employed Retirement Plans,
Uniform Gift to Minor Accounts $250 $15 million $50
Qualified Retirement Plans $25 $15 million $25
Simple IRAs $1 n/a $1
Monthly Systematic Investment Plans $25 n/a $25
Quarterly Systematic Investment Plans $50 n/a $50
</TABLE>

Qualified Retirement Plans are retirement plans qualified under Section
403(b)(7) or Section 401(a) of the Internal Revenue Code, including 401(k)
plans

8 Aggressive Growth Fund Inc.

<PAGE>

Comparing the fund's classes

Your Salomon Smith Barney Financial Consultant or dealer representative can
help you decide which class meets your goals. They may receive different com-
pensation depending upon which class you choose.

<TABLE>
<CAPTION>
Class A Class B Class L Class Y
<S> <C> <C> <C> <C>
Key features .Initial .No initial .Initial .No initial
sales sales sales or
charge charge charge is deferred
.You may .Deferred lower than sales
qualify sales Class A charge
for reduc- charge .Deferred .Must
tion or declines sales invest at
waiver of over time charge for least $15
initial .Converts only 1 million
sales to Class A year .Lower
charge after 8 .Does not annual
.Lower years convert to expenses
annual .Higher Class A than the
expenses annual .Higher other
than Class expenses annual classes
B and than Class expenses
Class L A than Class
A
- ------------------------------------------------------------------------
Initial sales charge Up to None 1.00% None
5.00%;
reduced for
large pur-
chases and
waived for
certain
investors.
No charge
for pur-
chases of
$500,000 or
more
- ------------------------------------------------------------------------
Deferred sales charge 1% on pur- Up to 5% 1% if you None
chases of charged redeem
$500,000 or when you within 1
more if you redeem year of
redeem shares. The purchase
within 1 charge is
year of reduced
purchase over time
and there
is no
deferred
sales
charge
after 6
years
- ------------------------------------------------------------------------
Annual distribution and 0.25% of 1% of aver- 1% of aver- None
service fees average age daily age daily
daily net net assets net assets
assets
- ------------------------------------------------------------------------
Exchange privilege Class A Class B Class L Class Y
shares of shares of shares of shares of
most Smith most Smith most Smith most Smith
Barney Barney Barney Barney
funds funds funds funds
- ------------------------------------------------------------------------
</TABLE>
*Ask your Salomon Smith Barney Financial Consultant or dealer representative or
visit the web site for the Smith Barney funds available for exchange.

Smith Barney Mutual Funds 9

<PAGE>

Sales charge:

Class A shares
You buy Class A shares at the offering price, which is the net asset value plus
a sales charge. You pay a lower sales charge as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge
on the fund's distributions or dividends you reinvest in additional Class A
shares.

<TABLE>
<CAPTION>
Sales Charge as a % of
Offering Net amount
Amount of purchase price (%) invested (%)
<S> <C> <C>
Less than $25,000 5.00 5.26
$25,000 but less than $50,000 4.00 4.17
$50,000 but less than $100,000 3.50 3.63
$100,000 but less than $250,000 3.00 3.09
$250,000 but less than $500,000 2.00 2.04
$500,000 or more -0- -0-
</TABLE>

Investments of $500,000 or more You do not pay an initial sales charge when you
buy $500,000 or more of Class A shares. However, if you redeem these Class A
shares within one year of purchase, you will pay a deferred sales charge of 1%.

Qualifying for a reduced Class A sales charge There are several ways you can
combine multiple purchases of Class A shares of Smith Barney funds to take
advantage of the breakpoints in the sales charge schedule.

.Accumulation privilege - lets you combine the current value of Class A shares
owned

.by you, or
.by members of your immediate family,

and for which a sales charge was paid, with the amount of your next purchase of
Class A shares for purposes of calculating the initial sales charge. Certain
trustees and fiduciaries may be entitled to combine accounts in determining
their sales charge.

.Letter of intent - lets you purchase Class A shares of the fund and other
Smith Barney funds over a 13-month period and pay the same sales charge, if
any, as if all shares had been purchased at once. You may include purchases
on which you paid a sales charge within 90 days before you sign the letter.

Aggressive Growth Fund Inc. 10

<PAGE>

Waivers for certain Class A investors Class A initial sales charges are waived
for certain types of investors, including:

.Employees of members of the NASD
.403(b) or 401(k) retirement plans, if certain conditions are met
.Clients of newly employed Salomon Smith Barney Financial Consultants if cer-
tain conditions are met
.Investors who redeemed Class A shares of a Smith Barney fund in the past 60
days, if the investor's Salomon Smith Barney Financial Consultant or dealer
representative is notified

If you want to learn about additional waivers of Class A initial sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the Statement of Additional Information ("SAI").

Class B shares
You buy Class B shares at net asset value without paying an initial sales
charge. However, if you redeem your Class B shares within six years of pur-
chase, you will pay a deferred sales charge. The deferred sales charge
decreases as the number of years since your purchase increases.

<TABLE>
<CAPTION>
Year after purchase 1st 2nd 3rd 4th 5th 6th through 8th
<S> <C> <C> <C> <C> <C> <C>
Deferred sales charge 5% 4% 3% 2% 1% 0%
</TABLE>

Class B conversion After 8 years, Class B shares automatically convert into
Class A shares. This helps you because Class A shares have lower annual
expenses. Your Class B shares will convert to Class A shares as follows:

<TABLE>
<CAPTION>
Shares issued: Shares issued:
At initial Shares issued: Upon exchange from
purchase On reinvestment of another Smith
dividends and Barney
distributions mutual fund
<S> <C> <C>
Eight years after the date of purchase In same proportion On the date the
that the number of shares originally
Class B shares acquired would
converting is to have converted
total Class B into Class A
shares you own shares
</TABLE>

Smith Barney Mutual Funds 11

<PAGE>

Class L shares
You buy Class L shares at the offering price, which is the net asset value plus
a sales charge of 1% (1.01% of the net amount invested). In addition, if you
redeem your Class L shares within one year of purchase, you will pay a deferred
sales charge of 1%. If you held Class C shares of the fund on June 12, 1998,
you will not pay an initial sales charge on Class L shares you buy before June
22, 2001.

Class Y shares
You buy Class Y shares at net asset value with no initial sales charge and no
deferred sales charge when you redeem. You must meet the $15,000,000 initial
investment requirement. You can use a letter of intent to meet this requirement
by buying Class Y shares of the fund over a 6-month period. To qualify, you
must initially invest $5,000,000.

More about deferred sales charges

The deferred sales charge is based on the net asset value at the time of pur-
chase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.

In addition, you do not pay a deferred sales charge on:

.Shares exchanged for shares of another Smith Barney fund
.Shares representing reinvested distributions and dividends
.Shares no longer subject to the deferred sales charge

If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your Salomon Smith Barney Financial Consultant or dealer representative.
Salomon Smith Barney receives deferred sales charges as partial compensation
for its expenses in selling shares, including the payment of compensation to
your Salomon Smith Barney Financial Consultant or dealer representative.

Deferred sales charge waivers
The deferred sales charge for each share class will generally be waived:

.On payments made through certain systematic withdrawal plans
.On certain distributions from a retirement plan
.For involuntary redemptions of small account balances

12 Aggressive Growth Fund Inc.

<PAGE>

.For 12 months following the death or disability of a shareholder

If you want to learn more about additional waivers of deferred sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the SAI.

Buying shares

Through a You should contact your Salomon Smith Barney Financial Con-
Salomon Smith sultant or dealer representative to open a brokerage account
Barney and make arrangements to buy shares.
Financial
representative If you do not provide the following information, your order
will be rejected:
.Class of shares being bought
.Dollar amount or number of shares being bought

You should pay for your shares through your brokerage account
no later than the third business day after you place your
order. Salomon Smith Barney or your dealer representative may
charge an annual account maintenance fee.
- --------------------------------------------------------------------------------
Through the Qualified retirement plans and certain other investors who
fund's are clients of the selling group are eligible to buy shares
transfer directly from the fund.
agent
.Write the transfer agent at the following address:
Smith Barney Aggressive Growth Fund Inc.
(Specify class of shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
.Enclose a check to pay for the shares. For initial pur-
chases, complete and send an account application
.For more information, call the transfer agent at 1-800-451-
2010

Smith Barney Mutual Funds 13

<PAGE>

Systematic You may authorize Salomon Smith Barney, your dealer represen-
investment tative or the transfer agent to transfer funds automatically
plan from a regular bank account, cash held in a Salomon Smith
Barney brokerage account or Smith Barney money market fund to
buy shares on a regular basis.

.Amounts transferred should be at least: $25 monthly or $50
quarterly
.If you do not have sufficient funds in your account on a
transfer date, Salomon Smith Barney, your dealer represen-
tative or the transfer agent may charge you a fee

For more information, contact your Salomon Smith Barney
Financial Consultant, dealer representative or the transfer
agent or consult the SAI.

Exchanging shares

Smith Barney You should contact your Salomon Smith Barney Financial Con-
offers a sultant or dealer representative to exchange into other Smith
distinctive Barney funds. Be sure to read the prospectus of the Smith
family of Barney fund you are exchanging into. An exchange is a taxable
funds transaction.
tailored to
help meet the .You may exchange shares only for shares of the same class of
varying needs another Smith Barney fund. Not all Smith Barney funds offer
of both large all classes.
and small .Not all Smith Barney funds may be offered in your state of
investors residence. Contact your Smith Barney Financial Consultant,
dealer representative or the transfer agent.
.You must meet the minimum investment amount for each fund.
.If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with
signed stock powers (documents transferring ownership of
certificates) before the exchange is effective.
.The fund may suspend or terminate your exchange privilege if
you engage in an excessive pattern of exchanges.

14 Aggressive Growth Fund Inc.

<PAGE>

Waiver of Your shares will not be subject to an initial sales charge at
additional the time of the exchange.
sales charges

Your deferred sales charge (if any) will continue to be mea-
sured from the date of your original purchase. If the fund
you exchange into has a higher deferred sales charge, you
will be subject to that charge. If you exchange at any time
into a fund with a lower charge, the sales charge will not be
reduced.
- --------------------------------------------------------------------------------
By telephone If you do not have a brokerage account, you may be eligible
to exchange shares through the transfer agent. You must com-
plete an authorization form to authorize telephone transfers.
If eligible, you may make telephone exchanges on any day the
New York Stock Exchange is open. Call the transfer agent at
1-800-451-2010 between 9:00 a.m. and 4:00 p.m. (Eastern
time). Requests received after the close of regular trading
on the Exchange are priced at the net asset value next deter-
mined.

You can make telephone exchanges only between accounts that
have identical registrations.
- --------------------------------------------------------------------------------
By mail If you do not have a Salomon Smith Barney brokerage account,
contact your dealer representative or write to the transfer
agent at the address on the opposite page.

Smith Barney Mutual Funds 15

<PAGE>

Redeeming shares

Generally Contact your Salomon Smith Barney Financial Consultant or
dealer representative to redeem shares of the fund.

If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with signed
stock powers before the redemption is effective.

If the shares are held by a fiduciary or corporation, other
documents may be required.

Your redemption proceeds will be sent within three business
days after your request is received in good order. However,
if you recently purchased your shares by check, your redemp-
tion proceeds will not be sent to you until your original
check clears which may take up to 15 days.

If you have a Salomon Smith Barney brokerage account, your
redemption proceeds will be placed in your account and not
reinvested without your specific instruction. In other cases,
unless you direct otherwise, your redemption proceeds will be
paid by check mailed to your address of record.
- --------------------------------------------------------------------------------
By mail For accounts held directly at the fund, send written requests
to the transfer agent at the following address:
Smith Barney Aggressive Growth Fund Inc.
(Specify class of shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128

Your written request must provide the following:

.Your account number
.The class of shares and the dollar amount or number of
shares to be redeemed
.Signatures of each owner exactly as the account is regis-
tered

16 Aggressive Growth Fund Inc.

<PAGE>

By telephone If you do not have a brokerage account, you may be eligible
to redeem shares (except those held in retirement plans) in
amounts up to $10,000 per day through the transfer agent. You
must complete an authorization form to authorize telephone
redemptions. If eligible, you may request redemptions by tel-
ephone on any day the New York Stock Exchange is open. Call
the transfer agent at 1-800-451-2010 between 9:00 a.m. and
4:00 p.m. (Eastern time). Requests received after the close
of regular trading on the Exchange are priced at the net
asset value next determined.

Your redemption proceeds can be sent by check to your address
of record or by wire transfer to a bank account designated on
your authorization form. You must submit a new authorization
form to change the bank account designated to receive wire
transfers and you may be asked to provide certain other docu-
ments.
- --------------------------------------------------------------------------------
Automatic You can arrange for the automatic redemption of a portion of
cash your shares on a monthly or quarterly basis. To qualify you
withdrawal must own shares of the fund with a value of at least $10,000
plans ($5,000 for retirement plans) and each automatic redemption
must be at least $50. If your shares are subject to a
deferred sales charge, the sales charge will be waived if
your automatic payments do not exceed 1% per month of the
value of your shares subject to a deferred sales charge.

The following conditions apply:

.Your shares must not be represented by certificates
.All dividends and distributions must be reinvested

For more information, contact your Salomon Smith Barney
Financial Consultant or dealer representative or consult the
SAI.

Smith Barney Mutual Funds 17

<PAGE>

Other things to know about share transactions

When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information without which your
request will not be processed:

.Name of the fund
.Account number
.Class of shares being bought, exchanged or redeemed
.Dollar amount or number of shares being bought, exchanged or redeemed
.Signature of each owner exactly as the account is registered

The transfer agent will try to confirm that any telephone exchange or redemp-
tion request is genuine by recording calls, asking the caller to provide a per-
sonal identification number for the account, sending you a written confirmation
or requiring other confirmation procedures from time to time.

Signature guarantees To be in good order, your redemption request must include
a signature guarantee if you:

.Are redeeming over $10,000 of shares
.Are sending signed share certificates or stock powers to the transfer agent
.Instruct the transfer agent to mail the check to an address different from the
one on your account
.Changed your account registration
.Want the check paid to someone other than the account owner(s)
.Are transferring the redemption proceeds to an account with a different regis-
tration

You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.

The fund has the right to:

.Suspend the offering of shares
.Waive or change minimum and additional investment amounts
.Reject any purchase or exchange order
.Change, revoke or suspend the exchange privilege
.Suspend telephone transactions

18 Aggressive Growth Fund Inc.

<PAGE>

.Suspend or postpone redemptions of shares on any day when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the Securi-
ties and Exchange Commission
.Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities

Small account balances If your account falls below $500 because of a redemption
of fund shares, the fund may ask you to bring your account up to $500. If your
account is still below $500 after 60 days, the fund may close your account and
send you the redemption proceeds.

Excessive exchange transactions The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other share-
holders. If so, the fund may limit additional purchases and/or exchanges by the
shareholder.

Share certificates The fund does not issue share certificates unless a written
request signed by all registered owners is made to the transfer agent. If you
hold share certificates it will take longer to exchange or redeem shares.

Smith Barney Mutual Funds 19

<PAGE>

Smith Barney 401(k) and ExecChoiceTM programs

You may be eligible to participate in the Smith Barney 401(k) program or the
Smith Barney ExecChoice(TM) program. The fund offers Class A and Class L shares
to participating plans as investment alternatives under the programs. You can
meet minimum investment and exchange amounts by combining the plan's invest-
ments in any of the Smith Barney mutual funds.

There are no sales charges when you buy or sell shares and the class of shares
you may purchase depends on the amount of your initial investment. Once a class
of shares is chosen, all additional purchases must be of that class.

.Class A shares may be purchased by plans investing at least $1 million.
.Class L shares may be purchased by plans investing less than $1 million. Class
L shares are eligible for exchange into Class A shares not later than 8 years
after the plan joined the program. They are eligible for conversion sooner:

If the account was opened on or after June 21, 1996 and an aggregate of $1
million is invested in Smith Barney Funds Class L shares (other than money
market funds), all Class L shares are eligible for exchange after the plan
is in the program 5 years.

If the account was opened before June 21, 1996 and $500,000 in the aggre-
gate is invested in Smith Barney Funds Class L shares (other than money
market funds), all Class L shares are eligible for exchange on each Decem-
ber 31 and the exchange will occur no later than March 31 of the following
year.

For more information, call your Salomon Smith Barney Financial Consultant or
the transfer agent, or consult the SAI.

20 Aggressive Growth Fund Inc.

<PAGE>

Distributions, dividends and taxes

Dividends The fund generally makes capital gain distributions and pays divi-
dends, if any, once a year, typically in December. The fund may pay additional
distributions and dividends at other times if necessary for the fund to avoid a
federal tax. Capital gain distributions and dividends are reinvested in addi-
tional fund shares of the same class you hold. The fund expects distributions
to be primarily from capital gains. You do not pay a sales charge on reinvested
distributions or dividends. Alternatively, you can instruct your Salomon Smith
Barney Financial Consultant, dealer representative or the transfer agent to
have your distributions and/or dividends paid in cash. You can change your
choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.

Taxes In general, redeeming shares, exchanging shares and receiving distribu-
tions (whether in cash or additional shares) are all taxable events.

<TABLE>
<CAPTION>
Transaction Federal tax status
<S> <C>
Redemption or exchange of shares Usually capital gain or
loss; long-term only if
shares owned more than
one year
Long-term capital gain distributions Long-term capital gain
Short-term capital gain distributions Ordinary income
Dividends Ordinary income
</TABLE>

Long-term capital gain distributions are taxable to you as long-term capital
gain regardless of how long you have owned your shares. You may want to avoid
buying shares when the fund is about to declare a long-term capital gain dis-
tribution or a dividend, because it will be taxable to you even though it may
actually be a return of a portion of your investment.

After the end of each year, the fund will provide you with information about
the distributions and dividends you received and any redemptions of shares dur-
ing the previous year. If you do not provide the fund with your correct tax-
payer identification number and any required certifications, you may be subject
to back-up withholding of 31% of your distributions, dividends, and redemption
proceeds. Because each shareholder's circumstances are different and special
tax rules may apply, you should consult your tax adviser about your investment
in the fund.

Smith Barney Mutual Funds 21

<PAGE>

Share price

You may buy, exchange or redeem shares at their net asset value, plus applica-
ble sales charge, next determined after receipt of your request in good order.
The fund's net asset value is the value of its assets minus its liabilities.
Net asset value is calculated separately for each class of shares. The fund
calculates its net asset value every day the New York Stock Exchange is open.
This calculation is done when regular trading closes on the Exchange (normally
4:00 p.m., Eastern time).

The fund generally values its fund securities based on market prices or quota-
tions. The fund's currency conversions are done when the London stock exchange
closes, which is 12 noon Eastern time. When reliable market prices or quota-
tions are not readily available, or when the value of a security has been mate-
rially affected by events occurring after a foreign exchange closes, the fund
may price those securities at fair value. Fair value is determined in accor-
dance with procedures approved by the fund's board. A fund that uses fair value
to price securities may value those securities higher or lower than another
fund using market quotations to price the same securities.

International markets may be open on days when U.S. markets are closed and the
value of foreign securities owned by the fund could change on days when you
cannot buy or redeem shares.

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Salomon Smith Barney Financial Consultant or dealer repre-
sentative before the New York Stock Exchange closes. If the New York Stock
Exchange closes early, you must place your order prior to the actual closing
time. Otherwise, you will receive the next business day's price.

Salomon Smith Barney or members of the selling group must transmit all orders
to buy, exchange or redeem shares to the fund's agent before the agent's close
of business.

22 Aggressive Growth Fund Inc.

<PAGE>

Financial highlights

The financial highlights tables are intended to help you understand the perfor-
mance of each class for the past 5 years (or since inception if less than 5
years). Certain information reflects financial results for a single share.
Total return represents the rate that a shareholder would have earned (or lost)
on a fund share assuming reinvestment of all dividends and distributions. The
information in the following tables was audited by KPMG Peat Marwick LLP, inde-
pendent accountants, whose report, along with the fund's financial statements,
are included in the annual report (available upon request).

For a Class A share of capital stock outstanding throughout each year ended
August 31:
<TABLE>
<CAPTION>
1998 1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 41.80 $ 28.76 $ 33.53 $ 26.76
- -------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income (loss) (0.42) (0.33) (0.31) (0.34)
Net realized and unrealized gain
(loss) (5.64) 14.18 (2.09) 8.48
- -------------------------------------------------------------------------------
Total income (loss) from operations (6.06) 13.85 (2.40) 8.14
- -------------------------------------------------------------------------------
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 year $ 33.78 $ 41.80 $ 28.76 $ 33.53
- -------------------------------------------------------------------------------
Total return++ (15.16)% 49.11% (7.44)% 31.95%
- -------------------------------------------------------------------------------
Net assets, end of year (000)'s $296,376 $333,877 $252,531 $292,402
- -------------------------------------------------------------------------------
Ratios to average net assets:
Expenses(/1/) 1.21% 1.21% 1.30% 1.37%
Net investment income (loss) (0.97) (0.93) (0.97) (1.05)
- -------------------------------------------------------------------------------
Portfolio turnover rate 7% 6% 13% 44%
- -------------------------------------------------------------------------------
</TABLE>
* The operating expense ratio excludes interest expense. The operating expense
ratio including interest expense would have been 1.43%.
++ Total return indicated does not reflect any applicable sales charge.

Smith Barney Mutual Funds 23

<PAGE>

For a Class B share of capital stock outstanding throughout each year ended
August 31:
<TABLE>
<CAPTION>
1998 1997 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 40.17 $ 27.88 $ 32.82 $ 26.42
- ------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income (0.66) (0.56) (0.53) (0.33)
Net realized and unrealized gain
(loss) (5.43) 13.66 (2.04) 8.10
- ------------------------------------------------------------------------------
Total income (loss) from operations (6.09) 13.10 (2.57) 7.77
- ------------------------------------------------------------------------------
Less distribution from:
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 year $ 32.12 40.17% $ 27.88 $ 32.82
- ------------------------------------------------------------------------------
Total return++ (15.90)% 47.94% (8.16)% 30.93%
- ------------------------------------------------------------------------------
Net assets, end of year (000)'s $185,808 $197,559 $136,322 $97,438
- ------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 2.20% 2.01% 2.07% 2.12%
Net investment (loss) (1.78) (1.73) (1.75) (1.80)
- ------------------------------------------------------------------------------
Portfolio turnover rate 3% 6% 13% 44%
- ------------------------------------------------------------------------------
</TABLE>
++ Total return indicated does not reflect any applicable sales charge.

For a Class L share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
1998 1997 1996 1995
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of year $ 40.22 $ 27.91 $ 32.84 $ 26.42
- ----------------------------------------------------------------
Income (loss) from
operations:
Net investment income (0.68) (0.59) (0.53) (0.40)
Net realized and
unrealized gain (loss) (5.39) 13.71 (2.03) 8.19
- ----------------------------------------------------------------
Total income (loss) from
operations (6.07) 13.12 (2.56) 7.79
- ----------------------------------------------------------------
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 assets value, end of
year $ 32.12 $ 40.22 $ 27.91 $ 32.84
- ----------------------------------------------------------------
Total return++ (15.80)% 47.97% (8.12)% 31.01%
- ----------------------------------------------------------------
Net assets, end of year
(000)'s $65,312 $77,297 $63,786 $72,324
- ----------------------------------------------------------------
Ratios to average net
assets:
Expenses 1.97% 1.97% 2.06% 2.12%
Net investment income
(loss) (1.73) (1.68) (1.75) (1.80)
- ----------------------------------------------------------------
Portfolio turnover rate 7% 6% 13% 44%
- ----------------------------------------------------------------
</TABLE>
(/1/) On June 12, 1998, the Class C share were renamed Class L shares.
++ Total returns do not reflect any applicable sales charges.

24 Aggressive Growth Fund Inc.

<PAGE>

For a Class Y share of capital stock outstanding throughout each year ended
August 31:
<TABLE>
<CAPTION>
1998 1997 1996
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year $ 42.07 $ 28.84 $ 31.86
- ---------------------------------------------------------------------------
Income (loss) from operations:
Net investment income (0.25) (0.16) (0.12)
Net realized and unrealized gain (loss) (5.73) 14.20 (0.53)
- ---------------------------------------------------------------------------
Total income (loss) from operations (5.98) 14.04 (0.65)
- ---------------------------------------------------------------------------
Less distribution from:
Realized gains (1.96) (0.81) (2.37)
- ---------------------------------------------------------------------------
Total distributions (1.96) (0.81) (2.37)
- ---------------------------------------------------------------------------
Net asset value, end of year $ 34.13 $ 42.07 $ 28.84
- ---------------------------------------------------------------------------
Total return (14.86)% 49.64% (10.13)%*++
- ---------------------------------------------------------------------------
Net assets, end of year (000)'s $89,675 $158,146 $58,641
- ---------------------------------------------------------------------------
Ratios to average net assets:
Expenses (0.85)% 0.84% 0.84%+
Net investment (loss) (0.62) (0.56) (0.49)+
- ---------------------------------------------------------------------------
Portfolio turnover rate 7% 6% 13%
- ---------------------------------------------------------------------------
</TABLE>
(/1/For)the period from October 12, 1995 (inception date) to August 31, 1996.
* Performance for Class Y shares is for the period 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.

Smith Barney Mutual Funds 25

<PAGE>

(This page is intentionally left blank.)
<PAGE>

[SALOMON SMITH BARNEY LOGO APPEARS HERE]
Aggressive
Growth Fund Inc.

Shareholder reports Annual and semiannual reports to shareholders provide addi-
tional information about the fund's investments. These reports discuss the mar-
ket conditions and investment strategies that affected the fund's performance.

The fund sends only one report to a household if more than one account has the
same address. Contact your Salomon Smith Barney Financial Consultant, dealer
representative or the transfer agent if you do not want this policy to apply to
you.

Statement of additional information The statement of additional information
provides more detailed information about the fund and is incorporated by refer-
ence into (is legally part of) this prospectus.

You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Salomon
Smith Barney Financial Consultant or dealer representative, by calling the fund
at 1-800-451-2010, or by writing to the fund at Smith Barney Mutual Funds, 388
Greenwich Street, MF2, New York, New York 10013.

Visit our web site. Our web site is located at www.smithbarney.com

You can also review and copy the fund's shareholder reports, prospectus and
statement of additional information at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. You can get copies of these materials
for a duplicating fee by writing to the Public Reference Section of the Commis-
sion, Washington, D.C. 20549-6009. Information about the public reference room
may be obtained by calling 1-800-SEC-0330. You can get the same information
free from the Commission's Internet web site at http:www.sec.gov

If someone makes a statement about the fund that is not in this prospectus, you
should not rely upon that information. Neither the fund nor the distributor is
offering to sell shares of the fund to any person to whom the fund may not law-
fully sell its shares.

SMSalomon Smith Barney is a service mark of Salomon Smith Barney Inc.

(Investment Company Act
file no. 811-03762)
FD01060 12/99
<PAGE>

Smith Barney Mutual
Funds

PROSPECTUS

December 20, 1999 Aggressive Growth Fund Inc.

Class Z Shares

The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.
<PAGE>

AGGRESSIVE GROWTH FUND

CONTENTS
<TABLE>
<S> <C>
Investments, risks and performance.......................................... 2
More on the fund's investments.............................................. 6
Management.................................................................. 7
Buying, selling and exchanging Class Z shares.............................. 8
Share price................................................................. 9
Distributions, dividends and taxes.......................................... 10
Financial highlights........................................................ 11
</TABLE>

The Class Z shares described in this prospectus are offered exclusively for
sale to tax-exempt employee benefit and retirement plans of Saloman Smith Bar-
ney Inc. or any of its affiliates.

YOU SHOULD KNOW: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.

Smith Barney Mutual Funds 1
<PAGE>

INVESTMENTS, RISKS AND PERFORMANCE

INVESTMENT OBJECTIVE
The fund seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES
KEY INVESTMENTS The fund invests primarily in common stocks of companies that
the manager believes are experiencing, or will experience, growth in earnings
that exceeds the average rate of earnings growth of the companies which com-
prise the S&P 500 Index. The fund may invest in the securities of large, well-
known companies which offer prospects of long-term earnings growth. However,
because higher earnings growth rates are often achieved by small to medium-
sized companies, a significant portion of the fund's assets are invested in the
securities of such companies.

SELECTION PROCESS The manager emphasizes individual security selection while
diversifying the fund's investments across industries, which may help to reduce
risk. The manager focuses primarily, but not exclusively, on emerging growth
companies that have passed their "start-up" phase and show positive earnings
and the prospect of achieving significant profit gains beginning in the two to
three years after the fund acquires their stocks. When evaluating an individual
stock, the manager considers whether the company may benefit from

. new technologies, products or services;
. new cost reducing measures;
. changes in management; or
. favorable changes in government regulations.

PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors could lose money on their investment in the fund, or the fund may not
perform as well as other investments, if:

. Stock prices decline generally
. Small or medium capitalization companies fall out of favor with investors
. The manager's judgment about the attractiveness, growth prospects or potential
appreciation of a particular stock proves to be incorrect
. A particular product or service developed by a company in which the fund
invests is unsuccessful, the company does not meet earnings expectations or
other events depress the value of the company's stock

2 Aggressive Growth Fund--Class Z Shares

<PAGE>

Compared to large companies, small and medium capitalization companies are more
likely to have:

. More limited product lines
. Fewer capital resources
. More limited management depth

Further, securities of small and medium capitalization companies are more
likely to:

. Experience sharper swings in market values
. Be harder to sell at times and at prices the manager believes appropriate
. Offer greater potential for gains and losses

WHO MAY WANT TO INVEST
The fund may be an appropriate investment if you:

. Are seeking to participate in the long term growth potential of small and
medium capitalization companies
. Currently have exposure to the stocks commonly held by large capitalization
and value oriented mutual funds and wish to broaden your investment portfolio
. Are willing to accept the risks of the stock market and the special risks and
potential long-term rewards of investing in smaller companies with more lim-
ited track records

Smith Barney Mutual Funds 3
<PAGE>

RISK RETURN BAR CHART
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not neces-
sarily indicate how the fund will perform in the future.

TOTAL RETURN FOR CLASS A SHARES

[CHART TO COME]

The bar chart shows the performance of the fund's Class Z shares for each of
the past 6 calendar years. On November 7, 1994, the former Class C shares were
renamed Class Z shares. Performance for the period prior to that date reflects
the performance of the Class C shares.

QUARTERLY RETURNS:
Highest: xx% in quarter 199x; Lowest: xx% in quarter 199x
Year to date: xx% through 9/30/00

RISK RETURN TABLE
This table indicates the risks of investing in the fund by comparing the aver-
age annual total return of Class Z shares of the fund for the periods shown
with that of the Russell 2500 Growth Index (the "Russell Index"), a broad-based
unmanaged index of stocks of small to medium capitalization companies, and the
Lipper Growth Fund Average (the "Lipper Average"), an average composed of the
fund's peer group of mutual funds. This table assumes reinvestment of distribu-
tions and dividends.

AVERAGE ANNUAL TOTAL RETURNS
CALENDAR YEARS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION INCEPTION DATE
<S> <C> <C> <C> <C> <C>
Class Z [11/6/92]
Russell Index n/a
Lipper Average n/a
</TABLE>
*Index comparison begins on

4 Aggressive Growth Fund--Class Z Shares

<PAGE>

FEE TABLE
This table sets forth the fees and expenses you will pay if you invest in Class
Z shares of the fund.

ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
(EXPENSES DEDUCTED FROM FUND ASSETS)
<S> <C>
Management fee 0.80%
Other expenses
-----
Total annual fund operating expenses
</TABLE>

EXAMPLE
This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
. You invest $10,000 in the fund for the period shown
. Your investment has a 5% return each year
. You reinvest all distributions and dividends
. The fund's operating expenses remain the same

NUMBER OF YEARS YOU OWN YOUR SHARES
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class Z (with or without redemption) $ $ $ $
</TABLE>

Smith Barney Mutual Funds 5
<PAGE>

MORE ON THE FUND'S INVESTMENTS

DEFENSIVE INVESTING The fund may depart from its principal investment strate-
gies in response to adverse market, economic or political conditions by taking
temporary defensive positions in all types of money market and short-term debt
securities. If the fund takes a temporary defensive position, it may be unable
to achieve its investment goal.

6 Aggressive Growth Fund--Class Z Shares

<PAGE>

MANAGEMENT

MANAGER The fund's investment adviser and administrator (the manager) is SSB
Citi Fund Management LLC, an affiliate of Salomon Smith Barney Inc. The manag-
er's address is 388 Greenwich Street, New York, New York 10013. The manager
selects the fund's investments and oversees its operations. The manager and
Salomon Smith Barney are subsidiaries of Citigroup Inc. Citigroup businesses
produce a broad range of financial services--asset management, banking and con-
sumer finance, credit and charge cards, insurance, investments, investment
banking and trading--and use diverse channels to make them available to con-
sumer and corporate customers around the world.

MANAGEMENT FEES During the fiscal year ended August 31, 1999, the manager
received a management fee and administrative fee equal to 0.60% and 0.20%,
respectively, of the fund's average daily net assets.

DISTRIBUTOR The fund has entered into an agreement with CFBDS, Inc. to distrib-
ute the fund's shares. A selling group consisting of Salomon Smith Barney and
other broker-dealers sells fund shares to the public.

YEAR 2000 ISSUE Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the fund. The cost of addressing the Year 2000 issue, if sub-
stantial, could adversely affect companies and governments that issue securi-
ties held by the fund. The manager and Salomon Smith Barney are addressing the
Year 2000 issue for their systems. The fund has been informed by other service
providers that they are taking similar measures. Although the fund does not
expect the Year 2000 issue to adversely affect it, the fund cannot guarantee
that the efforts of the fund, which are limited to requesting and receiving
reports from its service providers, or the efforts of its service providers to
correct the problem will be successful.

Smith Barney Mutual Funds 7

<PAGE>

BUYING, SELLING AND EXCHANGING CLASS Z SHARES

Through a You may buy, sell or exchange Class Z shares only through a
qualified "qualified plan." A qualified plan is a tax-exempt employee
plan benefit or retirement plan of Salomon Smith Barney, Inc. or
one of its affiliates.

There are no minimum investment requirements for Class Z
shares. However, the fund reserves the right to change this
policy at any time.
- --------------------------------------------------------------------------------
Buying Orders to buy Class Z shares must be made in accordance with
the terms of a qualified plan. If you are a participant in a
qualified plan, you may place an order with your plan to buy
Class Z shares at net asset value, without any sales charge.
Payment is due to Salomon SmithBarney on settlement date,
which is the third business day after your order is accepted.
If you make payment prior to this date, you may designate a
temporary investment (such as a money market fund of the
Smith Barney funds) for payment until settlement date. The
fund reserves the right to reject any order to buy shares and
to suspend the offering of shares for a period of time.
- --------------------------------------------------------------------------------
Selling Qualified plans may redeem their shares on any day on which
the fund calculates its net asset value. You should consult
the terms of your qualified plan for special redemption pro-
visions.
- --------------------------------------------------------------------------------
Exchanging You should consult your qualified plan for information about
available exchange options.

8 Aggressive Growth Fund--Class Z Shares

<PAGE>

SHARE PRICE

Qualified plans may buy, exchange or redeem Class Z shares of the fund at the
net asset value next determined after receipt of your request in good order.
The fund's net asset value is the value of its assets minus its liabilities.
Net asset value is calculated separately for each class of shares. The fund
calculates its net asset value every day the New York Stock Exchange is open.
The Exchange is closed on certain holidays listed in the Statement of Addi-
tional Information. This calculation is done when regular trading closes on the
Exchange (normally 4:00 p.m., Eastern time).

The fund generally values its fund securities based on market price or quota-
tions. The fund's currency conversions are done when the London stock exchange
closes, which is 12 noon Eastern time. When reliable market prices are not
readily available, or when the value of a security has been materially affected
by events occurring after a foreign exchange closes, the fund may price those
securities at fair value. Fair value is determined in accordance with proce-
dures approved by the fund's board. A fund that uses fair value to price secu-
rities may value those securities higher or lower than another fund that uses
market quotations to price the same securities.

International markets may be open on days when U.S. markets are closed and the
value of foreign securities owned by the fund could change on days when your
qualified plan cannot buy or redeem shares.

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your qualified plan before the New York Stock Exchange closes.
If the New York Stock Exchange closes early, you must place your order with
your qualified plan prior to the actual closing time. Otherwise, you will
receive the next business day's price.

Your qualified plan must transmit all orders to buy, exchange or redeem shares
to the fund's agent before the agent's close of business.

Smith Barney Mutual Funds 9

<PAGE>

DISTRIBUTIONS, DIVIDENDS AND TAXES

DIVIDENDS The fund generally makes capital gain distributions and pays divi-
dends, if any, once a year, typically in December. The fund may pay additional
distributions and dividends at other times if necessary for the fund to avoid a
federal tax. Capital gain distributions and dividends are reinvested in Class Z
shares. The fund expects distributions to be primarily from capital gains. No
sales charge is imposed on reinvested distributions or dividends.
Alternatively, a qualified plan can instruct its Salomon Smith
Barney Financial Consultant, dealer representative or the transfer agent to
have distributions and/or dividends paid in cash. It can change that
choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.

Taxes Provided that a qualified plan has not borrowed to finance its
investment in the fund, it will not be taxable on the receipt of dividends and
distributions from the fund.

Dividends and interest received by the fund from investing in foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. The fund's foreign tax payments will reduce the amount of
its dividends and distribution.

Because each shareholder's circumstances are different and special tax rules
may apply, you should consult with your tax adviser about your investment in
the fund.

10 Aggressive Growth Fund--Class Z Shares

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the perfor-
mance of Class Z shares of the fund for the past 5 years (or since inception if
less than 5 years). Certain information reflects financial results for a single
share. Total return represents the rate that a shareholder would have earned
(or lost) on a fund share assuming reinvestment of all dividends and distribu-
tions. The information in the following tables was audited by KPMG Peat Marwick
LLP, independent accountants, whose report, along with the fund's financial
statements, are included in the annual report (available upon request).

FOR A CLASS Z SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR ENDED
AUGUST 31:

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995/(1)/ 1994 1993/(2)//(3)/
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $42.60 $29.20 $33.88 $26.94 $23.67 $20.52
- ------------------------------------------------------------------------------------------
Income (loss) from
operations:
Net investment income
(loss) (0.28) (0.20) (0.20) (0.34) (0.31) (0.12)
Net realized and
unrealized gain (loss) (5.78) 14.41 (2.11) 8.65 3.58 3.27
- ------------------------------------------------------------------------------------------
Total income (loss) from
operations (6.06) 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
year $34.58 $42.60 $29.20 $33.88 $26.94 $23.67
- ------------------------------------------------------------------------------------------
Total return+ (14.86)% 49.61% (7.07)% 32.38% 13.81% $15.35%*
- ------------------------------------------------------------------------------------------
Net assets, end of year
(000)'s $42,155 $43,553 $30,837 $27,209 $24,467 $53,599
- ------------------------------------------------------------------------------------------
Ratios to average net
assets:
Expenses/(1)/ 0.85% 0.85% 0.93% 1.12% 1.01%* 0.99
Net investment (loss) (0.97) (0.93) (0.97) (1.05) (0.83) (0.67)+
- ------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 6% 13% 44% 11% 13%
- ------------------------------------------------------------------------------------------
</TABLE>
/(1)/ On November 7, 1994, the former Class C shares were renamed Class Z
shares.
/(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.
* 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 Mutual Funds 11

<PAGE>

[LOGO OF SALOMON SMITH BARNEY APPEARS HERE]

AGGRESSIVE GROWTH FUND INC.

SHAREHOLDER REPORTS Annual and semiannual reports to shareholders provide addi-
tional information about the fund's investments. These reports discuss the mar-
ket conditions and investment strategies that affected the fund's performance.

STATEMENT OF ADDITIONAL INFORMATION The statement of additional information
provides more detailed information about the fund and is incorporated by refer-
ence into (is legally part of) this prospectus.

Visit our web site. Our web site is located at WWW.SMITHBARNEY.COM

SM Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.

(Investment Company Act file no. 811-03762)
FD01061 12/99

PART B

Smith Barney Aggressive Growth Fund, Inc.
388 Greenwich Street
New York, NY 10013

Statement of Additional Information
December 20, 1999

This Statement of Additional Information (the "SAI")
expands upon and supplements the information contained in
the current prospectus of the Smith Barney Aggressive
Growth Fund, Inc. dated December 20, 1999, as amended or
supplemented from time to time, and should be read in
conjunction with the prospectus. Additional information
about the fund's investments is available in the fund's
annual and semi-annual reports to shareholders. The fund's
prospectus may be obtained free of charge from your Salomon
Smith Barney Financial Consultant or by writing or calling
the fund at the address or telephone number set forth
above. This SAI, although not in itself a prospectus, is
incorporated by reference into the prospectus in its
entirety.

TABLE OF CONTENTS
P
a
g
e

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 2
DIRECTORS AND OFFICERS 8
PURCHASE OF SHARES 12
REDEMPTION OF SHARES 17
VALUATION OF SHARES 19
EXCHANGE PRIVILEGE 19
PERFORMANCE DATA 20
TAXES 22
ADDITIONAL INFORMATION 24
FINANCIAL STATEMENTS 25

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES tc "INVESTMENT
OBJECTIVE AND MANAGEMENT POLICIES"

The prospectus discusses the fund's investment
objective and policies. The following discussion
supplements the description of the fund's investment
policies in its prospectus. SSB CitiFund Management LLC
("SSB" or the "Manager") serves as investment manager and
administrator to the fund.

The investment objective of the fund is capital
appreciation. Although the fund may receive current income
from dividends, interest and other sources, income is only
an incidental consideration of the fund. The fund attempts
to achieve its investment objective by investing primarily
in common stocks of companies that the manager believes are
experiencing, or have the potential to experience, growth
in earnings that exceed the average earnings growth rate of
companies having securities included in the S&P 500.
Although the manager anticipates that the assets of the
fund ordinarily will be invested primarily in common stocks
of U.S. companies, the fund may invest in convertible
securities, preferred stocks, securities of foreign
issuers, warrants and restricted securities. In addition,
when the manager believes that market conditions warrant,
the fund may invest for temporary defensive purposes in
corporate and U.S. government bonds and notes and money
market instruments. The fund is also authorized to borrow
in an amount of up to 5% of its total assets for
extraordinary or emergency purposes, and may borrow up to
33 1/3% of its total assets less liabilities, for
leveraging purposes. See "Leveraging."

Certain Risk Considerations. Securities of the
kinds of companies in which the fund invests may be subject
to significant price fluctuation and above-average risk.
In addition, companies achieving an earnings growth rate
higher than that of S&P 500 companies tend to reinvest
their earnings rather than distribute them. As a result,
the fund is not likely to receive significant dividend
income on its portfolio securities. Accordingly, an
investment in the fund should not be considered as a
complete investment program and may not be appropriate for
all investors.

Convertible Securities. Convertible securities are
fixed-income securities that may be converted at either a
stated price or stated rate into underlying shares of
common stock. Convertible securities have general
characteristics similar to both fixed income and equity
securities. Although to a lesser extent than with fixed
income securities generally, the market value of
convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest
rates decline. In addition, because of the conversion
feature, the market value of convertible securities tends
to vary with fluctuations in the market value of the
underlying common stocks and therefore also will react to
variations in the general market for equity securities. A
unique feature of convertible securities is that as the
market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value
declines to the same extent as the underlying common stock.
When the market price of the underlying common stock
increases, the prices of the convertible securities tend to
rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk,
investments in convertible securities generally entail less
risk than investments in common stock of the same issuer.

As fixed-income securities, convertible securities
are investments that provide for a stable stream of income
with generally higher yields than common stocks. Of
course, like all fixed-income securities, there can be no
assurance of current income because the issuers of the
convertible securities may default on their obligations.
Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities
of similar quality because of the potential for capital
appreciation. A convertible security, in addition to
providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables
the holder to benefit from increases in the market price of
the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices
fluctuate.

Convertible securities generally are subordinated to
other similar but nonconvertible securities of the same
issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all
equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the
subordination feature, however, convertible securities
typically have lower ratings than similar non-convertible
securities.

Foreign Securities. The fund may invest up to 10%
of its net assets (at the time of investment) in foreign
securities. The fund may invest directly in foreign issuers
or invest in depositary receipts. The fund's investments
in foreign securities may involve greater risk than
investments in securities of U.S. issuers. Because the
value of a depositary receipt is dependent upon the market
price of an underlying foreign security, depositary
receipts are subject to most of the risk associated with
investing in foreign securities directly. There are
certain risks involved in investing in foreign securities,
including those resulting from fluctuations in currency
exchange rates, revaluation of currencies, future political
or economic developments and the possible imposition of
currency exchange blockages or other foreign governmental
laws or restrictions, reduced availability of public
information concerning issuers, and the fact that foreign
companies are not generally subject to uniform accounting,
auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those
applicable to domestic companies. Moreover, securities of
many foreign companies may be less liquid and their prices
more volatile than securities of comparable domestic
companies. In addition, with respect to certain foreign
countries, there is the possibility of expropriation,
confiscatory taxation and limitations on the use or removal
of funds or other assets of the fund, including the
withholding of dividends. The risks of investing in foreign
securities are greater for securities of emerging market
issuers because political or economic instability, lack of
market liquidity, and negative government actions like
currency controls or seizure of private businesses or
property are more likely.

Repurchase Agreements. The fund will enter into
repurchase agreements with banks which are the issuers of
instruments acceptable for purchase by the fund and with
certain dealers on the Federal Reserve Bank of New York's
list of reporting dealers. Under the terms of a typical
repurchase agreement, the fund would acquire an underlying
obligation for a relatively short period (usually not more
than one week) subject to an obligation of the seller to
repurchase, and the fund to resell, the obligation at an
agreed-upon price and time, thereby determining the yield
during the fund's holding period. This arrangement results
in a fixed rate of return that is not subject to market
fluctuations during the fund's holding period. Under each
repurchase agreement, the selling institution will be
required to maintain the value of the securities subject to
the repurchase agreement at not less than their repurchase
price. Repurchase agreements could involve certain risks
in the event of default or insolvency of the other party,
including possible delays or restrictions upon the fund's
ability to dispose of the underlying securities, the risk
of a possible decline in the value of the underlying
securities during the period in which the fund seeks to
assert its rights to them, the risk of incurring expenses
associated with asserting those rights and the risk of
losing all or part of the income from the agreement. The
manager, acting under the supervision of the Board of
Directors, reviews on an ongoing basis to evaluate
potential risks the value of the collateral and the
creditworthiness of those banks and dealers with which the
fund enters into repurchase agreements.

Lending of Portfolio Securities. The fund has the
ability to lend securities from its portfolio to brokers,
dealers and other financial organizations. Such loans, if
and when made, will be consistent with applicable
regulatory requirements. The fund may not lend its
portfolio securities to Salomon Smith Barney or its
affiliates unless it has applied for and received specific
authority from the SEC. Loans of portfolio securities by
the fund will be collateralized by cash, letters of credit
or securities issued or guaranteed by the United States
government, its agencies or instrumentalities ("U.S.
government securities") which will be maintained at all
times in an amount equal to at least 100% of the current
market value of the loaned securities. From time to time,
the fund may return a part of the interest earned from the
investment of collateral received for securities loaned to
the borrower and/or a third party, which is unaffiliated
with the fund or with Salomon Smith Barney, and which is
acting as a "finder."

In lending its portfolio securities, the fund can
increase its income by continuing to receive interest on
the loaned securities as well as by either investing the
cash collateral in short-term instruments or obtaining
yield in the form of interest paid by the borrower when
government securities are used as collateral. Requirements
of the SEC, which may be subject to future modifications,
currently provide that the following conditions must be met
whenever portfolio securities are loaned: (a) the fund must
receive at least 100% cash collateral or equivalent
securities from the borrower; (b) the borrower must
increase such collateral whenever the market value of the
securities rises above the level of such collateral; (c)
the fund must be able to terminate the loan at any time;
(d) the fund must receive reasonable interest on the loan,
as well as an amount equal to any dividends, interest or
other distributions on the loaned securities, and any
increase in market value; (e) the fund may pay only
reasonable custodian fees in connection with the loan; and
(f) voting rights on the loaned securities may pass to the
borrower; however, if a material event adversely affecting
the investment occurs, the fund's Board of Directors must
terminate the loan and regain the right to vote the
securities. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of
possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Loans
will be made to firms deemed by the manager to be of good
standing and will not be made unless, in the judgment of
the manager the consideration to be earned from such loans
would justify the risk.

Leveraging. The fund may from time to time leverage
its investments by purchasing securities with borrowed
money. The fund may borrow money only from banks and in an
amount not to exceed 33 1/3% of the total value of its
assets less its liabilities. The amount of the fund's
borrowings also may be limited by the availability and cost
of credit and by restrictions imposed by the Federal
Reserve Board.

The fund is required under the Investment Company
Act of 1940, as amended (the "1940 Act") to maintain at
all times an asset coverage of 300% of the amount of its
borrowings. If, as a result of market fluctuations or for
any other reason, the fund's asset coverage drops below
300%, the fund must reduce its outstanding bank debt within
three business days so as to restore its asset coverage to
the 300% level.

Any gain in the value of securities purchased with
borrowed money that exceeds the interest paid on the amount
borrowed would cause the net asset value of the fund's
shares to increase more rapidly than otherwise would be the
case. Conversely, any decline in the value of securities
purchased would cause the net asset value of the fund's
shares to decrease more rapidly than otherwise would be the
case. Borrowed money thus creates an opportunity for
greater capital gain but at the same time increases
exposure to capital risk. The net cost of any borrowed
money would be an expense that otherwise would not be
incurred, and this expense could restrict or eliminate the
fund's net investment income in any given period.

Warrants. Because a warrant does not carry with it
the right to dividends or voting rights with respect to the
securities that the warrant holder is entitled to purchase,
and because it does not represent any rights to the assets
of the issuer, warrants may be considered more speculative
than certain other types of investments. Also, the value of
a warrant does not necessarily change with the value of the
underlying securities and a warrant ceases to have value if
it is not exercised prior to its expiration date.

Restricted Securities. Restricted securities are
those that may not be sold publicly without first being
registered under the Securities Act of 1933, as amended
(the "1933 Act"). For that reason, the fund may not be
able to dispose of restricted securities at a time when, or
at a price at which, it desires to do so and may have to
bear expenses associated with registering the securities.
At any one time, the fund's aggregate holdings of
restricted securities, repurchase agreements having a
duration of more than five business days, and securities
lacking readily available market quotations will not exceed
15% of the fund's total assets.

Portfolio Turnover. The fund's investment policies
may result in its experiencing a greater portfolio turnover
rate than those of investment companies that seek to
produce income or to maintain a balanced investment
position. Although the fund's portfolio turnover rate
cannot be predicted and will vary from year to year, the
manager expects that the fund's annual portfolio turnover
rate may exceed 100%, but will not exceed 200%. A 100%
portfolio turnover rate would occur, for instance, if all
securities in the fund's portfolio were replaced once
during a period of one year. A high rate of portfolio
turnover in any year will increase brokerage commissions
paid and could result in high amounts of realized
investment gain subject to the payment of taxes by
shareholders. Any realized short-term investment gain will
be taxed to shareholders as ordinary income. For the 1997,
1998 and 1999 fiscal years, the fund's portfolio turnover
rates were 6%, 7% and ___%, respectively.

Money Market Instruments. As stated in the
prospectus, the fund may invest for defensive purposes in
corporate and government bonds and notes and money market
instruments. Money market instruments in which the fund
may invest include: U.S. government securities;
certificates of deposit, time deposits and bankers'
acceptances issued by domestic banks (including their
branches located outside the United States and subsidiaries
located in Canada), domestic branches of foreign banks,
savings and loan associations and similar institutions;
high grade commercial paper; and repurchase agreements with
respect to the foregoing types of instruments. The
following is a more detailed description of such money
market instruments.

Bank Obligations. Certificates of deposits ("CDs")
are short-term, negotiable obligations of commercial banks.
Time deposits ("TDs") are non-negotiable deposits
maintained in banking institutions for specified periods of
time at stated interest rates. Bankers' acceptances are
time drafts drawn on commercial banks by borrowers, usually
in connection with international transactions.

Domestic commercial banks organized under federal
law are supervised and examined by the Comptroller of the
Currency and are required to be members of the Federal
Reserve System and to be insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks
organized under state law are supervised and examined by
state banking authorities but are members of the Federal
Reserve System only if they elect to join. Most state
banks are insured by the FDIC (although such insurance may
not be of material benefit to the fund, depending upon the
principal amount of CDs of each bank held by the fund) and
are subject to federal examination and to a substantial
body of federal law and regulation. As a result of
governmental regulations, domestic branches of domestic
banks are, among other things, generally required to
maintain specified levels of reserves, and are subject to
other supervision and regulation designed to promote
financial soundness.

Obligations of foreign branches of domestic banks,
such as CDs and TDs, may be general obligations of the
parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and
governmental regulation. Such obligations are subject to
different risks than are those of domestic banks or
domestic branches of foreign banks. These risks include
foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment
of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes
on interest income. Foreign branches of domestic banks are
not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping
requirements. In addition, less information may be
publicly available about a foreign branch of a domestic
bank than about a domestic bank. CDs issued by wholly
owned Canadian subsidiaries of domestic banks are
guaranteed as to repayment of principal and interest (but
not as to sovereign risk) by the domestic parent bank.

Obligations of domestic branches of foreign banks
may be general obligations of the parent bank in addition
to the issuing branch, or may be limited by the terms of a
specific obligation and by governmental regulation as well
as governmental action in the country in which the foreign
bank has its head office. A domestic branch of a foreign
bank with assets in excess of $1 billion may or may not be
subject to reserve requirements imposed by the Federal
Reserve System or by the state in which the branch is
located if the branch is licensed in that state. In
addition, branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State
Branches") may or may not be required to: (a) pledge to the
regulator by depositing assets with a designated bank
within the state, an amount of its assets equal to 5% of
its total liabilities; and (b) maintain assets within the
state in an amount equal to a specified percentage of the
aggregate amount of liabilities of the foreign bank payable
at or through all of its agencies or branches within the
state. The deposits of State Branches may not necessarily
be insured by the FDIC. In addition, there may be less
publicly available information about a domestic branch of a
foreign bank than about a domestic bank.

In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of
domestic banks or by domestic branches of foreign banks,
the manager will carefully evaluate such investments on a
case-by-case basis.

Savings and loans associations whose CDs may be
purchased by the fund are supervised by the Office of
Thrift Supervision and are insured by the Savings
Association Insurance Fund which is administered by the
FDIC and is backed by the full faith and credit of the
United States government. As a result, such savings and
loan associations are subject to regulation and
examination.

Investment Restrictions

The fund has adopted the following investment
restrictions for the protection of shareholders.
Restrictions 1 through 7 cannot be changed without approval
by the holders of a majority of the outstanding shares of
the fund, defined as the lesser of (a) 67% or more of the
fund's shares present at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or
by proxy or (b) more than 50% of the fund's outstanding
shares. The remaining restrictions may be changed by the
Board of Directors at any time. The fund may not:

1. Invest in a manner that would cause it to fail to be
a "diversified company" under the 1940 Act and the
rules, regulations and orders thereunder.

2. Issue "senior securities" as defined in the 1940 Act
and the rules, regulations and orders thereunder,
except as permitted under the 1940 Act and the
rules, regulations and orders thereunder.

3. Invest more than 25% of its total assets in
securities, the issuers of which conduct their
principal business activities in the same industry.
For purposes of this limitation, securities of the
U.S. government (including its agencies and
instrumentalities) and securities of state or
municipal governments and their political
subdivisions are not considered to be issued by
members of any industry.

4. Make loans. This restriction does not apply to: (a)
the purchase of debt obligations in which the fund
may invest consistent with its investment objective
and policies; (b) repurchase agreements and; (c)
loans of its portfolio securities, to the fullest
extent permitted under the 1940 Act.

5. Engage in the business of underwriting securities
issued by other persons, except to the extent that
the fund may technically be deemed to be an
underwriter under the Securities Act of 1933, as
amended, in disposing of portfolio securities.

6. Purchase or sell real estate, real estate mortgages,
commodities or commodity contracts, but this
restriction shall not prevent the fund from: (a)
investing in securities of issuers engaged in the
real estate business or the business of investing in
real estate (including interests in limited
partnerships owning or otherwise engaging in the
real estate business or the business of investing in
real estate) and securities which are secured by
real estate or interests therein; (b) holding or
selling real estate received in connection with
securities it holds or held; (c) trading in futures
contracts and options on futures contracts
(including options on currencies to the extent
consistent with the funds investment objective and
policies); or (d) investing in real estate
investment trust securities.

7. Borrow money except that (a) the fund may borrow
from banks for temporary or emergency (not
leveraging) purposes, including the meeting of
redemption requests which might otherwise require
the untimely disposition of securities, and (b) the
fund may, to the extent consistent with its
investment policies, enter into reverse repurchase
agreements, forward roll transactions and similar
investment strategies and techniques. To the extent
that it engages in transactions described in (a) and
(b), the fund will be limited so that no more than
33-1/3% of the value of its total assets (including
the amount borrowed), valued at the lesser of cost
or market, less liabilities (not including the
amount borrowed) valued at the time the borrowing is
made, is derived from such transactions.

8. Purchase any securities on margin (except for such
short-term credits as are necessary for the
clearance of purchases and sales of portfolio
securities) or sell any securities short (except
"against the box"). For purposes of this
restriction, the deposit or payment by the fund of
underlying securities and other assets in escrow and
collateral agreements with respect to initial or
maintenance margin in connection with futures
contracts and related options and options on
securities, indexes or similar items is not
considered to be the purchase of a security on
margin.

9. Purchase or otherwise acquire any security if, as a
result, more than 15% of its net assets would be
invested in securities that are illiquid.

10. Invest more than 5% of the value of its net assets
(valued at the lower of cost or market) in warrants,
of which no more than 2% of net assets may be
invested in warrants not listed on the New York
Stock Exchange, Inc. (the "NYSE") or the American
Stock Exchange. The acquisition of warrants
attached to other securities is not subject to this
restriction.

11. Purchase, sell or write put, call, straddle or
spread options.

12. Purchase participations or other direct interests in
oil, gas or other mineral exploration or development
programs.

13. Invest in companies for the purpose of exercising
management or control.

14. Invest more than 5% of the value of its total assets
in securities of issuers having a record of fewer
than three years of continual operation except that
the restriction will not apply to U.S. government
securities. (For purposes of this restriction,
issuers include predecessors, sponsors, controlling
persons, general partners, and guarantors of
underlying assets.)

Certain restrictions listed above permit the fund
without shareholder approval to engage in investment
practices that the fund does not currently pursue. The
fund has no present intention of altering its current
investment practices as otherwise described in the
prospectus and this SAI and any future change in these
practices would require Board approval. If any percentage
restriction described above is complied with at the time of
an investment, a later increase or decrease in percentage
resulting from a change in values or assets will not
constitute a violation of such restriction.

DIRECTORS AND OFFICERS tc "DIRECTORS AND OFFICERS"

Set forth below is a list of each Trustee and
executive officer of the fund, including a description of
principal occupation during the last 5 years, age and
address of each such person. All officers of the fund have
their business address at 388 Greenwich Street, New York,
NY 10013.

Paul R. Ades, Director (Age 58). Partner in the law
firm of Murov & Ades. His address is 272 South Wellwood
Avenue, P.O. Box 504, Lindenhurst, New York 11757.

Herbert Barg, Director (Age 75). Private investor.
His address is 273 Montgomery Avenue, Bala Cynwyd,
Pennsylvania 19004.

Dwight B. Crane, Director (Age 60). Professor,
Graduate School of Business Administration, Harvard
University. His address is Graduate School of Business
Administration, Harvard University, Boston, Massachusetts
02163.

Frank G. Hubbard, Director (Age 60). President of
Avatar International; Former Vice President of S&S
Industries; Former Corporate Vice President, Materials
Management and Marketing Services of Huls America, Inc.
His address is 80 Centennial Avenue, P.O. Box 456,
Piscataway, New Jersey 08855-0456.

*Heath B. McLendon, Chairman of the Board, President
and Chief Executive Office (Age 65). Managing Director of
Salomon Smith Barney (previously known as Smith Barney);
formerly Chairman of the Board of Smith Barney Strategy
Advisors Inc. (Smith Barney Strategy Advisors Inc.
transferred authority to MMC pursuant to Board of Directors
approval on October 23, 1998) and President of MMC and
Travelers Investment Adviser, Inc. ("TIA"). Mr. McLendon
is Chairman or Co-Chairman of the Board and Director of 58
investment companies associated with Salomon Smith Barney
Holdings, Inc. His address is 388 Greenwich Street, New
York, New York 10013.

Jerome Miller, Director (Age 61). Retired, Former
President, Asset Management Group of Shearson Lehman
Brothers. His address is 27 Hemlock Road, Manhasset, New
York, NY 11030.

Ken Miller, Director (Age 56). President of Young
Stuff Apparel Group, Inc. His address is 1407 Broadway, 6th
Floor, New York, New York 10018.

Richard A. Freeman (Age 44). Managing Director of
Salomon Smith Barney. His address is 388 Greenwich Street,
New York, New York 10013.

Lewis E. Daidone (Age 41). Senior Vice President
and Treasurer. Managing Director of Salomon Smith Barney;
Director and Senior Vice President of MMC. His address is
388 Greenwich Street, New York, New York 10013.

Christina T. Sydor (Age 47). Secretary. Managing
Director of Salomon Smith Barney; General Counsel and
Secretary of MMC. Her address is 388 Greenwich Street, New
York, New York 10013.

*Designates a Trustee that is an "interested person" as
defined in the Investment Company Act of 1940, as amended
(the "Act"). Such persons compensated by Smith Barney and
are not separately compensated by the fund for serving as a
fund officer or Trustee.

The following table shows the compensation paid by
the fund to each person who was a Trustee during the fund's
last fiscal year. None of the officers of the fund
received any compensation from the fund for such period.
Officers and interested Trustees of the fund are
compensated by Salomon Smith Barney.

COMPENSATION TABLE

Name of Person
Aggregate
Compensation
from Fund
For Fiscal Year
Ended 08/31/99
Pension or
Retirement
Benefits
Accrued as
part of Fund
Expenses
Total
Compensation from
Fund Complex for
Calendar Year
Ended 12/31/98
Number of Funds
for Which Person
Serves within
Fund Complex as
of 08/31/99

Paul R. Ades

Herbert Barg

Dwight B. Crane

Frank G. Hubbard

Heath B. McLendon

Jerome Miller

Ken Miller

_________________________

* Upon attainment of age 80 Directors are required to
change to emeritus status. Directors Emeritus are
entitled to serve in emeritus status for a maximum
of 10 years during which time they are paid 50% of
the annual retainer fee and meeting fees otherwise
applicable to the fund Directors together with
reasonable out-of-pocket expenses for each meeting
attended. During the fund's last fiscal year
aggregate compensation paid by the fund to Directors
Emeritus totaled $_____.

On _________ 1999, the Trustees and officers owned
in the aggregate less than 1% of the outstanding shares of
the fund.

To the best knowledge of the Directors, as of
______________, 1999, the following shareholders or
"groups" (as such term is defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) owned
beneficially or of record more than 5% of the shares of the
following classes:

No officer, director or employee of Salomon Smith
Barney or any parent or subsidiary receives any
compensation from the fund for serving as an officer or
Director of the Fund. The fund pays each Director who is
not an officer, director or employee of Salomon Smith
Barney or any of its affiliates a fee of $3,000 per annum
plus $500 per meeting attended and reimburses travel and
out-of-pocket expenses. For the fiscal year ended August
31, 1999, such expenses totaled $_____.

Investment Manager and Administrator

SSB CitiFund Management LLC serves as investment
manager to the fund pursuant to a written agreement (the
"Advisory Agreement"). The services provided by the
manager under the Advisory Agreement are described in the
prospectus under "Management." The manager pays the salary
of any officer and employee who is employed by both it and
the fund. The manager bears all expenses in connection with
the performance of its services. The manager is a wholly
owned subsidiary of Citigroup Inc. ("Citigroup").

As compensation for investment advisory services,
the fund pays the manager a fee computed daily and paid
monthly at an annual rate of 0.60% of the fund's average
daily net assets. For the 1997, 1998 and 1999 fiscal
years, the fund incurred $3,956,238, $5,176,481 and
$_______, respectively, in investment advisory fees.

SSB also serves as administrator to the fund
pursuant to a written agreement (the "Administration
Agreement"). The services provided by SSB under the
Administration Agreement are described in the prospectus
under "Management". SSB pays the salary of any officer and
employee who is employed by both it and the fund and bears
all expenses in connection with the performance eof its
services.

As compensation for administrative services rendered
to the fund, the manager receives a fee computed daily and
paid monthly at the annual rate of 0.20% of the fund's
average daily net assets. For the 1997, 1998 and 1999
fiscal years, the fund paid SSB $1,318,746, $1,725,494 and
$________, respectively in administration fees.

The fund bears expenses incurred in its operation,
including: taxes, interest, brokerage fees and commissions,
if any; fees of Directors who are not officers, directors,
shareholders or employees of Salomon Smith Barney, or
manager, Securities and Exchange Commission (the "SEC")
fees and state Blue Sky qualification fees; charges of
custodians; transfer and dividend disbursing agent's fees;
certain insurance premiums; outside auditing and legal
expenses; costs of maintenance of corporate existence;
investor services (including allocated telephone and
personnel expenses); and costs of preparation and printing
of prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
shareholders, shareholders' reports and corporate meetings.

The manager has voluntarily agreed to waive its fees
if in any fiscal year the aggregate expenses of any Class
of the following funds, exclusive of 12b-1 fees, taxes
brokerage, interest and extraordinary expenses, such as
litigation costs, exceed the indicated percentage of the
fund's average net assets for that fiscal year.

DISTRIBUTION

Distributor. CFBDS, Inc., located at 20 Milk
Street, Boston, MA 02109-5408, serves as the fund's
distributor on a best efforts basis pursuant to a
distribution agreement dated October 8, 1998 (the
"Distribution Agreement"), which was approved by the fund's
board of directors. Prior to the merger of Travelers
Group, Inc. and Citicorp on October 8, 1998, Salomon Smith
Barney served as the fund's distributor.

For the 1999 fiscal year, CFBDS, Inc. received
$______, and for the two fiscal years 1997 and 1998,
Salomon Smith Barney served as distributor and received
$346,000 and $759,000, respectively, in sales charges for
the sale of Class A shares, and did not reallow any portion
thereof to dealers. For the 1999 fiscal year, CFBDS, Inc.
received $______ in sales charges for the sale of Class L
shares and Salomon Smith Barney received $25,000 for the
1998 fiscal year, and did not reallow any portion thereof
to dealers.

For the 1999 fiscal year, CFBDS, Inc. received from
shareholders $________ and for the 1997 and 1998 fiscal
years, Salomon Smith Barney received from shareholders
$5,000 and $1,000, respectively, in CDSC on the redemption
of Class A shares. For the 1999 fiscal year, CFBDS, Inc.
received from shareholders $_________ and for the 1997 and
1998 fiscal years, Salomon Smith Barney received from
shareholders $497,000 and $341,000, respectively, in CDSC
on the redemption of Class B shares. For the 1999 fiscal
year, CFBDS, Inc. received from shareholders $__________
and for the 1997 and 1998 fiscal years, Salomon Smith
Barney received from shareholders $7,000 and $9,000.

When payment is made by the investor before
settlement date, unless otherwise directed by the investor,
the funds will be held as a free credit balance in the
investor's brokerage account and Salomon Smith Barney may
benefit from the temporary use of the funds. The investor
may designate another use for the funds prior to settlement
date, such as an investment in a money market fund (other
than Smith Barney Exchange Reserve Fund) of the Smith
Barney Mutual Funds. If the investor instructs Salomon
Smith Barney to invest the funds in a Smith Barney money
market fund, the amount of the investment will be included
as part of the average daily net assets of both the fund
and the Smith Barney money market fund, and affiliates of
Salomon Smith Barney that serve the funds in an investment
advisory capacity or administrative capacity will benefit
form the fact that they are receiving fees from both such
investment companies for managing these assets computed on
the basis of their average daily net assets. The fund's
Board of Directors has been advised of the benefits to
Salomon Smith Barney resulting from these settlement
procedures and will take such benefits into consideration
when reviewing the Advisory and Administration Agreements
for continuance.

For the fiscal year ended August 31, 1999, CFBDS,
Inc. incurred distribution expenses totaling approximately
$________, consisting of approximately $________ for
advertising, $_______ for printing and mailing
prospectuses, $_________for support services and overhead
expenses, $_______ to Salomon Smith Barney to compensate
financial consultants and $______ for accruals for interest
on the excess of Salomon Smith Barney expenses incurred in
distribution of the fund's shares over the sum of the
distribution fees and CDSC received by Salomon Smith
Barney.

Services and Distribution Plan

To compensate Salomon Smith Barney for the services
it provides and for the expense it bears, the fund has
adopted a services and distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. Under the Plan,
the fund pays Salomon Smith Barney a service fee, accrued
daily and paid monthly, calculated at the annual rate of
0.25% of the value of the fund's average daily net assets
attributable to the Class A, Class B and Class L shares.
In addition, the fund pays Salomon Smith Barney a
distribution fee with respect to Class B and Class L shares
primarily intended to compensate Salomon Smith Barney for
its initial expense of paying Financial Consultants a
commission upon sales of those shares. The Class B and
Class L distribution fee is calculated at the annual rate
of 0.75% of the value of the fund's average net assets
attributable to the shares of the respective Class.

For the fiscal years ended August 31, 1999, 1998,
and 1997 the fund incurred $__________, $927,437 and
$717,814 for Class A shares, $__________, $2,247,276 and
$1,601,273 in Class B shares and $_________, $809,577 and
$677,779 in Class L shares, respectively, in distribution
plan fees.

Under its terms, the Plans continues from year to
year, provided such continuance is approved annually by
vote of the Board of Directors, including a majority of the
Directors who are not interested persons of the fund and
who have no director indirect financial interested in the
operation of the Plan or in the Distribution Agreement (the
"Independent Directors"). The Plan may not be amended to
increase the amount of the service and distribution fees
without shareholder approval, and all material amendments
of the Plan also must be approved by the Directors and
Independent Directors in the manner described above. The
Plan may be terminated with respect to a Class of the fund
at any time, without penalty, by vote of a majority of the
Independent Directors or by vote of a majority of the
outstanding voting securities of the Class (as defined in
the 1940 Act). Pursuant to the Plan, Salomon Smith Barney
will provide the fund's Board of Directors with periodic
reports of amounts expended under the Plan and the purpose
for which such expenditures were made.

Custodian

The fund securities and cash owned by the fund will
be held in the custody of PNC Bank, National Association,
17th and Chestnut Streets, Philadelphia, Pennsylvania
19103.

Auditors

KPMG LLP, 345 Park Avenue, New York, New York 10154,
has been selected as independent auditors to examine and
report on the fund's financial statements for the fiscal
year ending August 31, 2000.

PURCHASE OF SHARES tc "PURCHASE OF SHARES"

The fund offers four classes ("Classes") of shares:
Class A, Class B, Class L and Class Y. Class A shares are
sold to investors with an initial sales charge and Class B
shares are sold without an initial sales charge but with
higher ongoing expenses and a Contingent Deferred Sales
Charge ("CDSC") payable upon certain redemption's. Class L
shares are sold with a lower initial sales charge than
Class A shares but with higher ongoing expenses and a CDSC.
Class Y shares are sold without an initial sales charge and
are available only to investors investing a minimum of
$15,000,000. These alternatives are designed to provide
investors with the flexibility of selecting an investment
best suited to his or her needs based on the amount of
purchase, the length of time the investor expects to hold
the shares and other circumstances.

The following classes of shares are available for
purchase. See the prospectus for a discussion of factors
to consider in selecting which Class of shares to purchase.

Class A Shares. Class A shares are sold to investors at
the public offering price, which is the net asset value
plus an initial sales charge as follows:

Amount of Investment

Sales Charge as a %
Of Transaction

Sales Charge as a %
of Amount Invested
Dealers'
Reallowance as %
Of Offering Price
Less than $25,000
5.00%
5.26%
4.50%
$ 25,000 - 49,999
4.00%
4.17%
3.60%
50,000 - 99,999
3.50%
3.63%
3.15%
100,000 - 249,999
3.00%
3.09%
2.70%
250,000 - 499,999
2.00%
2.04%
1.80%
500,000 and over
*
*
*

* Purchases of Class A shares of $500,000 or more will be
made at net asset value without any initial sales charge,
but will be subject to a deferred sales charge of 1.00% on
redemptions made within 12 months of purchase. The
deferred sales charge on Class A shares is payable to
Salomon Smith Barney, which compensates Salomon Smith
Barney Financial Consultants and other dealers whose
clients make purchases of $500,000 or more. The deferred
sales charge is waived in the same circumstances in which
the deferred sales charge applicable to Class B and Class
L shares is waived. See "Deferred Sales Charge Provisions"
and "Waivers of Deferred Sales Charge."

Members of a selling group may receive up to 90% of the
sales charge and may be deemed to be underwriters of a fund
as defined in the Securities Act of 1933. The reduced
sales charges shown above apply to the aggregate of
purchases of Class A shares of a fund made at one time by
"any person," which includes an individual and his or her
immediate family, or a trustee or other fiduciary of a
single trust estate or single fiduciary account.

Class B Shares. Class B shares are sold without an initial
sales charge but are subject to a deferred sales charge
payable upon certain redemptions. See "Deferred Sales
Charge Provisions" below.

Class L Shares. Class L shares are sold with an initial
sales charge of 1.00% (which is equal to 1.01% of the
amount invested) and are subject to a deferred sales charge
payable upon certain redemptions. See "Deferred Sales
Charge Provisions" below. Until June 22, 2001 purchases of
Class L shares by investors who were holders of Class C
shares of the fund on June 12, 1998 will not be subject to
the 1% initial sales charge.

Class Y Shares. Class Y shares are sold without an initial
sales charge or deferred sales charge and are available
only to investors investing a minimum of $15,000,000
(except purchases of Class Y shares by Smith Barney Concert
Allocation Series Inc., for which there is no minimum
purchase amount).

Class Z Shares. Class Z shares are sold exclusively to (a)
tax-exempt employee benefit and retirement plans of Salomon
Smith Barney, Inc. and its affiliates and (b) unit
investment trusts sponsored by Salomon Smith Barney and its
affiliates.

General

Investors may purchase shares from a Salomon Smith Barney
Financial Consultant or a Dealer Representative. In
addition, certain investors, including qualified retirement
plans purchasing through certain Dealer Representatives,
may purchase shares directly from a fund. When purchasing
shares of a fund, investors must specify which class is
being purchased. Salomon Smith Barney and Dealer
Representatives may charge their customers an annual
account maintenance fee in connection with a brokerage
account through which an investor purchases or holds
shares. Accounts held directly at First Data Investor
Services Group, Inc. ("First Data" or "transfer agent") are
not subject to a maintenance fee.

Investors in Class A, Class B and Class L shares may open
an account in a fund by making an initial investment of at
least $1,000 for each account, in the fund. Investors in
Class Y shares may open an account by making an initial
investment of $15,000,000. Subsequent investments of at
least $50 may be made for all Classes. For shareholders
purchasing shares of a fund through the Systematic
Investment Plan on a monthly basis, the minimum initial
investment requirement for Class A, Class B and Class L
shares and subsequent investment requirement for all
Classes is $25. For shareholders purchasing shares of a
fund through the Systematic Investment Plan on a quarterly
basis, the minimum initial investment required for Class A,
Class B and Class L shares and the subsequent investment
requirement for all Classes is $50. There are no minimum
investment requirements for Class A shares for employees of
Citigroup and its subsidiaries, including Salomon Smith
Barney, unitholders who invest distributions from a Unit
Investment Trust ("UIT") sponsored by Salomon Smith Barney,
and Directors/Trustees of any of the Smith Barney Mutual
Funds, and their spouses and children. The fund reserves
the right to waive or change minimums, to decline any order
to purchase its shares and to suspend the offering of
shares from time to time. Shares purchased will be held in
the shareholder's account by First Data. Share certificates
are issued only upon a shareholder's written request to
First Data.

Purchase orders received by the fund or a Salomon Smith
Barney Financial Consultant prior to the close of regular
trading on the NYSE, on any day the fund calculates its net
asset value, are priced according to the net asset value
determined on that day (the ''trade date''). Orders
received by a Dealer Representative prior to the close of
regular trading on the NYSE on any day a fund calculates
its net asset value, are priced according to the net asset
value determined on that day, provided the order is
received by a fund or the fund's agent prior to its close
of business. For shares purchased through Salomon Smith
Barney or a Dealer Representative purchasing through
Salomon Smith Barney, payment for shares of the fund is due
on the third business day after the trade date. In all
other cases, payment must be made with the purchase order.

Systematic Investment Plan. Shareholders may make
additions to their accounts at any time by purchasing
shares through a service known as the Systematic Investment
Plan. Under the Systematic Investment Plan, Salomon Smith
Barney or First Data is authorized through preauthorized
transfers of at least $25 on a monthly basis or at least
$50 on a quarterly basis to charge the shareholder's
account held with a bank or other financial institution on
a monthly or quarterly basis as indicated by the
shareholder, to provide for systematic additions to the
shareholder's fund account. A shareholder who has
insufficient funds to complete the transfer will be charged
a fee of up to $25 by Salomon Smith Barney or First Data.
The Systematic Investment Plan also authorizes Salomon
Smith Barney to apply cash held in the shareholder's
Salomon Smith Barney brokerage account or redeem the
shareholder's shares of a Smith Barney money market fund to
make additions to the account. Additional information is
available from the fund or a Salomon Smith Barney Financial
Consultant or a Dealer Representative.

Sales Charge Waivers and Reductions

Initial Sales Charge Waivers. Purchases of Class A shares
may be made at net asset value without a sales charge in
the following circumstances: (a) sales to (i) Board Members
and employees of Citigroup and its subsidiaries and any
Citigroup affiliated funds including the Smith Barney
Mutual Funds (including retired Board Members and
employees); the immediate families of such persons
(including the surviving spouse of a deceased Board Member
or employee); and to a pension, profit-sharing or other
benefit plan for such persons and (ii) employees of members
of the National Association of Securities Dealers, Inc.,
provided such sales are made upon the assurance of the
purchaser that the purchase is made for investment purposes
and that the securities will not be resold except through
redemption or repurchase; (b) offers of Class A shares to
any other investment company to effect the combination of
such company with the fund by merger, acquisition of assets
or otherwise; (c) purchases of Class A shares by any client
of a newly employed Salomon Smith Barney Financial
Consultant (for a period up to 90 days from the
commencement of the Financial Consultant's employment with
Salomon Smith Barney), on the condition the purchase of
Class A shares is made with the proceeds of the redemption
of shares of a mutual fund which (i) was sponsored by the
Financial Consultant's prior employer, (ii) was sold to the
client by the Financial Consultant and (iii) was subject to
a sales charge; (d) purchases by shareholders who have
redeemed Class A shares in the fund (or Class A shares of
another Smith Barney Mutual Fund that is offered with a
sales charge) and who wish to reinvest their redemption
proceeds in the fund, provided the reinvestment is made
within 60 calendar days of the redemption; (e) purchases by
accounts managed by registered investment advisory
subsidiaries of Citigroup; (f) purchases by a separate
account used to fund certain unregistered variable annuity
contracts; (g) investments of distributions from a UIT
sponsored by Salomon Smith Barney; and (h) purchases by
investors participating in a Salomon Smith Barney fee-based
arrangement. In order to obtain such discounts, the
purchaser must provide sufficient information at the time
of purchase to permit verification that the purchase would
qualify for the elimination of the sales charge.

Right of Accumulation. Class A shares of the fund may be
purchased by ''any person'' (as defined above) at a reduced
sales charge or at net asset value determined by
aggregating the dollar amount of the new purchase and the
total net asset value of all Class A shares of the fund and
of other Smith Barney Mutual Funds that are offered with a
sales charge as currently listed under ''Exchange
Privilege'' then held by such person and applying the sales
charge applicable to such aggregate. In order to obtain
such discount, the purchaser must provide sufficient
information at the time of purchase to permit verification
that the purchase qualifies for the reduced sales charge.
The right of accumulation is subject to modification or
discontinuance at any time with respect to all shares
purchased thereafter.

Letter of Intent - Class A Shares. A Letter of Intent for
an amount of $50,000 or more provides an opportunity for an
investor to obtain a reduced sales charge by aggregating
investments over a 13 month period, provided that the
investor refers to such Letter when placing orders. For
purposes of a Letter of Intent, the "Amount of Investment''
as referred to in the preceding sales charge table includes
(i) all Class A shares of the fund and other Smith Barney
Mutual Funds offered with a sales charge acquired during
the term of the letter plus (ii) the value of all Class A
shares previously purchased and still owned. Each
investment made during the period receives the reduced
sales charge applicable to the total amount of the
investment goal. If the goal is not achieved within the
period, the investor must pay the difference between the
sales charges applicable to the purchases made and the
charges previously paid, or an appropriate number of
escrowed shares will be redeemed. The term of the Letter
will commence upon the date the Letter is signed, or at the
options of the investor, up to 90 days before such date.
Please contact a Salomon Smith Barney Financial Consultant
or First Data to obtain a Letter of Intent application.

Letter of Intent - Class Y Shares. A Letter of Intent may
also be used as a way for investors to meet the minimum
investment requirement for Class Y shares (except purchases
of Class Y shares by Smith Barney Concert Allocation Series
Inc., for which there is no minimum purchase amount). Such
investors must make an initial minimum purchase of
$5,000,000 in Class Y shares of the fund and agree to
purchase a total of $15,000,000 of Class Y shares of the
fund within thirteen months from the date of the Letter.
If a total investment of $15,000,000 is not made within the
13-month period, as applicable, all Class Y shares
purchased to date will be transferred to Class A shares,
where they will be subject to all fees (including a service
fee of 0.25%) and expenses applicable to the fund's Class A
shares, which may include a deferred sales charge of 1.00%.
Please contact a Salomon Smith Barney Financial Consultant
or First Data for further information.

Deferred Sales Charge Provisions

"Deferred Sales Charge Shares'' are: (a) Class B shares;
(b) Class L shares; and (c) Class A shares that were
purchased without an initial sales charge but are subject
to a deferred sales charge. A deferred sales charge may be
imposed on certain redemptions of these shares.

Any applicable deferred sales charge will be assessed on an
amount equal to the lesser of the original cost of the
shares being redeemed or their net asset value at the time
of redemption. Deferred Sales Charge Shares that are
redeemed will not be subject to a deferred sales charge to
the extent the value of such shares represents: (a) capital
appreciation of fund assets; (b) reinvestment of dividends
or capital gain distributions; (c) with respect to Class B
shares, shares redeemed more than five years after their
purchase; or (d) with respect to Class L shares and Class A
shares that are Deferred Sales Charge Shares, shares
redeemed more than 12 months after their purchase.

Class L shares and Class A shares that are Deferred Sales
Charge Shares are subject to a 1.00% deferred sales charge
if redeemed within 12 months of purchase. In circumstances
in which the deferred sales charge is imposed on Class B
shares, the amount of the charge will depend on the number
of years since the shareholder made the purchase payment
from which the amount is being redeemed. Solely for
purposes of determining the number of years since a
purchase payment, all purchase payments made during a month
will be aggregated and deemed to have been made on the last
day of the preceding Salomon Smith Barney statement month.
The following table sets forth the rates of the charge for
redemptions of Class B shares by shareholders.

Year Since Purchase Payment Was Made

Deferred sales charge

First

5.00%

Second

4.00

Third

3.00

Fourth

2.00

Fifth

1.00

Sixth and thereafter

0.00

Class B shares will convert automatically to Class A shares
eight years after the date on which they were purchased and
thereafter will no longer be subject to any distribution
fees. There will also be converted at that time such
proportion of Class B Dividend Shares owned by the
shareholders as the total number of his or her Class B
shares converting at the time bears to the total number of
outstanding Class B shares (other than Class B Dividend
Shares) owned by the shareholder.

The length of time that Deferred Sales Charge Shares
acquired through an exchange have been held will be
calculated from the date the shares exchanged were
initially acquired in one of the other Smith Barney Mutual
Funds, and fund shares being redeemed will be considered to
represent, as applicable, capital appreciation or dividend
and capital gain distribution reinvestments in such other
funds. For Federal income tax purposes, the amount of the
deferred sales charge will reduce the gain or increase the
loss, as the case may be, on the amount realized on
redemption. The amount of any deferred sales charge will be
paid to Salomon Smith Barney.

To provide an example, assume an investor purchased 100
Class B shares of the fund at $10 per share for a cost of
$1,000. Subsequently, the investor acquired 5 additional
shares of the fund through dividend reinvestment. During
the fifteenth month after the purchase, the investor
decided to redeem $500 of his or her investment. Assuming
at the time of the redemption the net asset value had
appreciated to $12 per share, the value of the investor's
shares would be $1,260 (105 shares at $12 per share). The
deferred sales charge would not be applied to the amount
which represents appreciation ($200) and the value of the
reinvested dividend shares ($60). Therefore, $240 of the
$500 redemption proceeds ($500 minus $260) would be charged
at a rate of 4.00% (the applicable rate for Class B shares)
for a total deferred sales charge of $9.60.

Waivers of Deferred Sales Charge

The deferred sales charge will be waived on: (a) exchanges
(see ''Exchange Privilege''); (b) automatic cash
withdrawals in amounts equal to or less than 1.00% per
month of the value of the shareholder's shares at the time
the withdrawal plan commences (see ''Automatic Cash
Withdrawal Plan'') (however, automatic cash withdrawals in
amounts equal to or less than 2.00% per month of the value
of the shareholder's shares will be permitted for
withdrawal plans established prior to November 7, 1994);
(c) redemptions of shares within 12 months following the
death or disability of the shareholder; (d) redemptions of
shares made in connection with qualified distributions from
retirement plans or IRAs upon the attainment of age 591/2;
(e) involuntary redemptions; and (f) redemptions of shares
to effect a combination of the fund with any investment
company by merger, acquisition of assets or otherwise. In
addition, a shareholder who has redeemed shares from other
Smith Barney Mutual Funds may, under certain circumstances,
reinvest all or part of the redemption proceeds within 60
days and receive pro rata credit for any deferred sales
charge imposed on the prior redemption.

Deferred sales charge waivers will be granted subject to
confirmation (by Salomon Smith Barney in the case of
shareholders who are also Salomon Smith Barney clients or
by First Data in the case of all other shareholders) of the
shareholder's status or holdings, as the case may be.

Volume Discounts

The schedule of sales charges on Class A shares described
in the prospectus applies to purchases made by any
"purchaser," which is defined to include the following: (a)
an individual; (b) an individual's spouse and his or her
children purchasing shares for their own account; (c) a
trustee or other fiduciary purchasing shares for a single
trust estate or single fiduciary account; and (d) a trustee
or other professional fiduciary (including a bank, or an
investment adviser registered with the SEC under the
Investment Advisers Act of 1940, as amended) purchasing
shares of the fund for one or more trust estates or
fiduciary accounts. Purchasers who wish to combine
purchase orders to take advantage of volume discounts on
Class A shares should contact a Salomon Smith Barney
Financial Consultant.

Determination of Public Offering Price

The fund offers its shares to the public on a continuous
basis. The public offering price for a Class A, Class L
(effective June 12, 1998 the former Class C shares were
renamed Class L shares) and Class Y share of a fund is
equal to the net asset value per share at the time of
purchase, plus for Class A and Class L shares an initial
sales charge based on the aggregate amount of the
investment. The public offering price for a Class B share
(and Class A share purchases, including applicable rights
of accumulation, equaling or exceeding $500,000) is equal
to the net asset value per share at the time of purchase
and no sales charge is imposed at the time of purchase. A
contingent deferred sales charge ("CDSC"), however, is
imposed on certain redemptions of Class B and Class L
shares, and Class A shares when purchased in amounts
equaling or exceeding $500,000. The method of computation
of the public offering price is shown in the fund's
financial statements, incorporated by reference in their
entirety into this SAI.

REDEMPTION OF SHARES tc "REDEMPTION OF SHARES"

The right of redemption may be suspended or the date
of payment postponed (a) for any period during which the
New York Stock Exchange, Inc. ("NYSE") is closed (other
than for customary weekend and holiday closings), (b) when
trading in the markets the fund normally utilizes is
restricted, or an emergency exists, as determined by the
SEC, so that disposal of the fund's investments or
determination of net asset value is not reasonably
practicable or (c) for such other periods as the SEC by
order may permit for protection of the fund's shareholders.

If the shares to be redeemed were issued in
certificate form, the certificates must be endorsed for
transfer (or be accompanied by an endorsed stock power) and
must be submitted to First Data together with the
redemption request. Any signature appearing on a share
certificate, stock power or written redemption request in
excess of $10,000 must be guaranteed by an eligible
guarantor institution such as a domestic bank, savings and
loan institution, domestic credit union, member bank of the
federal Reserve System or member firm of a national
securities exchange. Written redemption requests of
$10,000 or less do not require a signature guarantee unless
more than one such redemption request is made in any 10-day
period or the redemption proceeds are to be sent to an
address other than the address of record. Unless otherwise
directed, redemption proceeds will be mailed to an
investor's address of record. First Data may require
additional supporting documents for redemptions made by
corporations, executors, administrators, trustees or
guardians. A redemption request will not be deemed
properly received until First Data receives all required
documents in proper form.

If a shareholder holds shares in more than one
Class, any request for redemption must specify the Class
being redeemed. In the event of a failure to specify which
Class, or if the investor owns fewer shares of the Class
than specified, the redemption request will be delayed
until the Transfer Agent receives further instructions from
Salomon Smith Barney, or if the shareholder's account is
not with Salomon Smith Barney, form the shareholder
directly. The redemption proceeds will be remitted on or
before the third business day following receipt of proper
tender, except on any days on which the NYSE is closed or
as permitted under the 1940 Act, in extraordinary
circumstances. Generally, if the redemption proceeds are
remitted to a Salomon Smith Barney brokerage account, these
funds will not be invested for the shareholder's benefit
without specific instruction and Salomon Smith Barney will
benefit from the use of temporarily uninvested funds.
Redemption proceeds for shares purchased by check, other
than a certified or official bank check, will be remitted
upon clearance of the check, which may take up to ten days
or more.

Distributions in Kind

If the Board of Directors of the fund determines
that it would be detrimental to the best interests of the
remaining shareholders to make a redemption payment wholly
in cash, each fund may pay, in accordance with SEC rules,
any portion of a redemption in excess of the lesser of
$250,000 or 1.00% of the fund's net assets by a
distribution in kind of fund securities in lieu of cash.
Securities issued as a distribution in kind may incur
brokerage commissions when shareholders subsequently sell
those securities.

Automatic Cash Withdrawal Plan

An automatic cash withdrawal plan (the "Withdrawal
Plan") is available to shareholders who own shares with a
value of at least $10,000 and who wish to receive specific
amounts of cash monthly or quarterly. Withdrawals of at
least $50 may be made under the Withdrawal Plan by
redeeming as many shares of the fund as may be necessary to
cover the stipulated withdrawal payment. Any applicable
CDSC will not be waived on amounts withdrawn by
shareholders that exceed 1.00% per month of the value of a
shareholder's shares at the time the Withdrawal Plan
commences. (With respect to Withdrawal Plans in effect
prior to November 7, 1994, any applicable CDSC will be
waived on amounts withdrawn that do not exceed 2.00% per
month of the value of the shareholder's shares that are
subject to a CDSC). To the extent withdrawals exceed
dividends, distributions and appreciation of a
shareholder's investment in the fund, there will be a
reduction in the value of the shareholder's investment, and
continued withdrawal payments may reduce the shareholder's
investment and ultimately exhaust it. Withdrawal payments
should not be considered as income from investment in the
fund. Furthermore, as it generally would not be
advantageous to a shareholder to make additional
investments in the fund at the same time he or she is
participating in the Withdrawal Plan, purchases by such
shareholder in amounts of less than $5,000 ordinarily will
not be permitted. All dividends and distributions on shares
in the Withdrawal Plan are reinvested automatically at net
asset value in additional shares of the fund.

Shareholders who wish to participate in the
Withdrawal Plan and who hold their shares in certificate
form must deposit their share certificates with the
Transfer Agent as agent for Withdrawal Plan members. For
additional information, shareholders should contact a
Salomon Smith Barney Financial Consultant or their
Financial Consultant, the Introducing Broker or dealer in
the selling group. A shareholder who purchases shares
directly through the Transfer Agent may continue to do so
and applications for participation in the Withdrawal Plan
must be received by the Transfer Agent no later than the
eighth day of the month to be eligible for participation
beginning with that month's withdrawal.

VALUATION OF SHARES tc "VALUATION OF SHARES"

The prospectus states that the net asset value of
the fund's Classes of shares will be determined on any date
that the New York Stock Exchange ("NYSE") is open. The
NYSE is closed on the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.

Securities listed on a national securities exchange
will be valued on the basis of the last sale on the date on
which the valuation is made or, in the absence of sales, at
the mean between the closing bid and asked prices. Over-
the-counter securities will be valued on the basis of the
bid price at the close of business on each day, or, if
market quotations for these securities are not readily
available, at fair value, as determined in good faith by
the fund's Board of Directors. Short-term obligations with
maturities of 60 days or less are valued at amortized cost,
which constitutes fair value as determined by the fund's
Board of Directors. Amortized cost involve valuing an
instrument at its original cost to the fund and thereafter
assuming a constant amortization to maturity of any
discount or premium, regardless of the effect of
fluctuating interest rates on the market value of the
instrument. All other securities and other assets of the
fund will be valued at fair value as determined in good
faith by the fund's Board of Directors.

EXCHANGE PRIVILEGE tc "EXCHANGE PRIVILEGE"

Except as noted below, shareholders of certain Smith
Barney Mutual Funds may exchange all or part of their
shares for shares of the same class of other Smith Barney
Mutual Funds, to the extent such shares are offered for
sale in the shareholder's state of residence, on the basis
of relative net asset value per share at the time of
exchange as follows:

A. Class A and Class Y shareholders of the fund
who wish to exchange all or a portion of their shares for
shares of the respective Class in any of the funds of the
Smith Barney Mutual Fund Complex may do so without
imposition of any charge.

B. Class B shares of the fund exchanged for
Class B shares of another fund will be subject to the
higher applicable CDSC of the two funds. Upon an exchange,
the new Class B shares will be deemed to have been
purchased on the same date as the Class B shares of the
fund that have been exchanged.

C. Upon exchange, the new Class C shares will
be deemed to have been purchased on the same date as the
Class L shares of the fund that have been exchanged.

The exchange privilege enables shareholders to
acquire shares of the same Class in a fund with different
investment objectives when they believe that a shift
between funds is an appropriate investment decision. This
privilege is available to shareholders residing in any
state in which the fund shares being acquired may legally
be sold. Prior to any exchange, the shareholder should
obtain and review a copy of the current prospectus of each
fund into which an exchange is being considered.
prospectuses may be obtained from a Smith Barney Financial
Consultant.

Upon receipt of proper instructions and all
necessary supporting documents, shares submitted for
exchange are redeemed at the then-current net asset value
and, subject to any applicable CDSC, the proceeds
immediately invested, at a price as described above, in
shares of the fund being acquired. Smith Barney reserves
the right to reject any exchange request. The exchange
privilege may be modified or terminated at any time after
written notice to shareholders.

Additional Information Regarding the Exchange Privilege.
Although the exchange privilege is an important benefit,
excessive exchange transactions can be detrimental to either
fund's performance and its shareholders. The manager may
determine that a pattern of frequent exchanges is excessive
and contrary to the best interests of the fund's other
shareholders. In this event, each fund may, at its
discretion, decide to limit additional purchases and/or
exchanges by a shareholder. Upon such a determination, the
fund will provide notice in writing or by telephone to the
shareholder at least 15 days prior to suspending the
exchange privilege and during the 15 day period the
shareholder will be required to (a) redeem his or her shares
in the fund or (b) remain invested in the fund or exchange
into any of the funds of the Smith Barney Mutual funds
ordinarily available, which position the shareholder would
be expected to maintain for a significant period of time.
All relevant factors will be considered in determining what
constitutes an abusive pattern of exchanges.

Additional Information Regarding Telephone Redemption and
Exchange Program.

Neither the fund nor its agents will be liable for
following instructions communicated by telephone that are
reasonably believed to be genuine. The fund and its agents
will employ procedures designed to verify the identity of
the caller and legitimacy of instructions (for example, a
shareholder's name and account number will be required and
phone calls may be recorded). The fund reserves the right
to suspend, modify or discontinue the telephone redemption
and exchange program or to impose a charge for this service
at any time following at least seven (7) days prior notice
to shareholders.

PERFORMANCE DATA tc "PERFORMANCE DATA"

From time to time, the fund may quote yield or total
return of a Class in advertisements or in reports and other
communications to shareholders. The fund may include
comparative performance information in advertising or
marketing the fund's shares. Such performance information
may be included in the following financial publications:
Barron's, Business Week, CDA Investment Technologies, Inc.,
Changing Times, Forbes, Fortune, Institutional Investor,
Investors Daily, Money, Morningstar Mutual Fund Values, The
New York Times, USA Today and The Wall Street Journal. To
the extent any advertisement or sales literature of the
fund describes the expenses or performance of any Class, it
will also disclose such information for the other Classes.

Average Annual Total Return

"Average annual total return" figures are computed
according to a formula prescribed by the SEC. The formula
can be expressed as follows:

P(1 + T)n = ERV
Where P = a hypothetical initial
payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a
hypothetical $1,000
investment made at the
beginning of a 1-, 5- or 10-
year period at the end of the
1-, 5- or 10-year period (or
fractional portion thereof),
assuming reinvestment of all
dividends and distributions.

The ERV assumes complete redemption of the hypothetical
investment at the end of the measuring period. A fund's
net investment income changes in response to fluctuations
in interest rates and the expenses of the fund.

Average Annual Total Return

Class of Shares
1-Year
5-Year
10-Year
Life of
fund
Inception
date
Class A
%
%
%
%
5/12/83
Class B
%
%
%
%
11/6/92
Class L
%
%
%
%
5/13/93
Class Y
%
%
%
%
1/31/96
Class Z
%
%
%
%
11/6/92

Average annual total return figures calculated in
accordance with the above formula assume that the maximum
5.00% sales charge has been deducted from the investment at
the time of purchase.

Aggregate Total Return

"Aggregate total return" figures represent the cumulative
change in the value of an investment in the Class for the
specified period and are computed by the following formula:

ERV - P
P

Where: P = a hypothetical initial
payment of $10,000
ERV = Ending Redeemable Value of a
hypothetical $10,000
investment made at the
beginning of a 1-, 5- or 10-
year period at the end of the
1-, 5- or 10-year period (or
fractional portion thereof),
assuming reinvestment of all
dividends and distributions.

The ERV assumes complete redemption of the hypothetical
investment at the end of the measuring period.

Average Annual Total Return

Class of Shares
1-Year
5-Year
10-Year
Life of
fund
Inception
date
Class A1
%
%
%
%
5/12/83
Class B2
%
%
%
%
11/6/92
Class L3
%
%
%
%
5/13/93
Class Y4
%
%
%
%
1/31/96
Class Z5
%
%
%
%
11/6/92
_______________________

1 The aggregate total return figures do not assume the
maximum 5.00% sales charge has been deducted from the
investment at the time of purchase. If the maximum
sales charge had been deducted, the aggregate total
return for Class A shares for the same period would have
been [ ]%.

2 The aggregate total return figures do not assume the
maximum applicable CDSC has been deducted from the
investment at the time of redemption. If the maximum
CDSC had been deducted, the aggregate total return for
Class B shares for the same period would have been [
]%.

3 The aggregate total return figures do not assume the
maximum 1.00% sales charge has been deducted from the
investment at the time of redemption. If the maximum
sales charge had been deducted, the aggregate total
return for Class L shares for the same period would have
been [ ]%.

4 Class Y shares do not incur sales charges nor CDSCs.

5 Class Z shares do not incur sales charges nor CDSCs.

Performance will vary from time to time depending upon
market conditions, the composition of the fund's portfolio
and operating expenses and the expenses exclusively
attributable to the Class. Consequently, any given
performance quotation should not be considered
representative of the Class' performance for any specified
period in the future. Because the performance will vary, it
may not provide a basis for comparing an investment in the
Class with certain bank deposits or other investments that
pay a fixed yield for a stated period of time. Investors
comparing a Class' performance with that of other mutual
funds should give consideration to the quality and maturity
of the respective investment companies' portfolio
securities.

It is important to note that the total return figures set
forth above are based on historical earnings and are not
intended to indicate future performance. Each Class' net
investment income changes in response to fluctuation in
interest rates and the expenses of the fund.

TAXES tc "TAXES"

The following is a summary of certain federal income tax
considerations that may affect the fund and its
shareholders. The summary is not intended as a substitute
for individual tax advice and investors are urged to
consult their own tax advisers as to the tax consequences
of an investment in the fund.

The fund has qualified and intends to continue to qualify
each year as a regulated investment company under the Code.
Provided that the fund (a) is a regulated investment
company and (b) distributes at least 90% of its net
investment income (including, for this purpose, net
realized short-term capital gains), the fund will not be
liable for federal income taxes to the extent its net
investment income and its net realized long- and short-term
capital gains, if any, are distributed to its shareholders.
Although the fund expects to be relieved of all or
substantially all federal, state, and local income or
franchise taxes, depending upon the extent of its
activities in states and localities in which its offices
are maintained, in which its agents or independent
contractors are located, or in which it is otherwise deemed
to be conducting business, that portion of the fund's
income which is treated as earned in any such state or
locality could be subject to state and local taxes. Any
such taxes paid by the fund would reduce the amount of
income and gains available for distribution to
shareholders. All net investment income and net capital
gains earned by the fund will be reinvested automatically
in additional shares of the same Class of the fund at net
asset value, unless the shareholder elects to receive
dividends and distributions in cash.

Gains or losses on the sales of securities by the fund
generally will be long-term capital gains or losses if the
fund has held the securities for more than one year. Gains
or losses on the sales of securities held for not more than
one year generally will be short-term capital gains or
losses. If the fund acquires a debt security at a
substantial discount, a portion of any gain upon the sale
or redemption will be taxed as ordinary income, rather than
capital gain to the extent it reflects accrued market
discount.

Dividends of net investment income and distributions of net
realized short-term capital gains will be taxable to
shareholders as ordinary income for federal income tax
purposes, whether received in cash or reinvested in
additional shares. Dividends received by corporate
shareholders will qualify for the dividends-received
deduction only to the extent that the fund designates the
amount distributed as a dividend and the amount so
designated does not exceed the aggregate amount of
dividends received by the fund from domestic corporations
for the taxable year. The federal dividends-received
deduction for corporate shareholders may be further reduced
or disallowed if the shares with respect to which dividends
are received are treated as debt financed or are deemed to
have been held for less than 46 days.

Foreign countries may impose withholding and other taxes on
dividends and interest paid to the fund with respect to
investments in foreign securities. However, certain foreign
countries have entered into tax conventions with the United
States to reduce or eliminate such taxes.

Distributions of long-term capital gains will be taxable to
shareholders as such, whether paid in cash or reinvested in
additional shares and regardless of the length of time that
the shareholder has held his or her interest in the fund.
If a shareholder receives a distribution taxable as long-
term capital gain with respect to his or her investment in
the fund and redeems or exchanges the shares before he or
she has held them for more than six months, any loss on the
redemption or exchange that is less than or equal to the
amount of the distribution will be treated as a long-term
capital loss.

If a shareholder (a) incurs a sales charge in acquiring
shares of the fund, (b) disposes of those shares within 90
days and (c) acquires shares in a mutual fund for which the
otherwise applicable sales charge is reduced by reason of a
reinvestment right (i.e., exchange privilege), the original
sales charge increases the shareholder's tax basis in the
original shares only to the extent the otherwise applicable
sales charge for the second acquisition is not reduced. The
portion of the original sales charge that does not increase
the shareholder's tax basis in the original shares would be
treated as incurred with respect to the second acquisition
and, as a general rule, would increase the shareholder's
tax basis in the newly acquired shares. Furthermore, the
same rule also applies to a disposition of the newly
acquired or redeemed shares made within 90 days of the
second acquisition. This provision prevents a shareholder
from immediately deducting the sales charge by shifting his
or her investment in a family of mutual funds.

Investors considering buying shares of the fund on or just
prior to a record date for a taxable dividend or capital
gain distribution should be aware that, regardless of
whether the price of the fund shares to be purchased
reflects the amount of the forthcoming dividend or
distribution payment, any such payment will be a taxable
dividend or distribution payment.

If a shareholder fails to furnish a correct taxpayer
identification number, fails to report dividend and
interest income in full, or fails to certify that he or she
has provided a correct taxpayer identification number and
that he or she is not subject to such withholding, the
shareholder may be subject to a 31% "backup withholding"
tax with respect to (a) any taxable dividends and
distributions and (b) any proceeds of any redemption of
fund shares. An individual's taxpayer identification number
is his or her social security number. The backup
withholding tax is not an additional tax and may be
credited against a shareholder's regular federal income tax
liability.

The foregoing is only a summary of certain tax
considerations generally affecting the fund and its
shareholders and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult
their tax advisers with specific reference to their own tax
situations, including their state and local tax
liabilities.

ADDITIONAL INFORMATION TC "ADDITIONAL INFORMATION" \f C \l
"1"

The fund was incorporated in the State of Maryland on May
12, 1983 and is registered with the SEC as a diversified,
open-end management investment company.

The fund offers shares of common stock currently classified
into five Classes, A, B, L, Y and Z. Each Class represents
an identical pro rata interest in the Fund's investment
portfolio. As a result, the Classes have the same rights
privileges and preferences, except with respect to: (a)
the designation of each Class; (b) the effect of the
respective sales charges, if any, for each Class; (c) the
distribution and/or service fees borne by each Class
pursuant to a plan adopted by the fund pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"); (d) the expenses allocable to each
Class; (e) voting rights on matters exclusively affecting
a single class; (f) the exchange privileges of each Class;
and (g) the conversion feature of shares of Class B. The
fund's Board of Directors does not anticipate that there
will be any conflicts among the interests of the holders of
the different Classes. The Directors, on an ongoing basis,
will consider whether any such conflict exists and, if so,
take appropriate action.

The fund does not hold annual shareholder meetings. There
normally will be no meeting of shareholders for the purpose
of electing Directors unless and until such time as less
than a majority of the Directors holding office have been
elected by shareholders. The Directors will call a meeting
for any purpose upon written request of shareholders
holding at least 10% of the fund's outstanding shares and
the fund will assist shareholders in calling such a meeting
as required by the 1940 Act. When matters are submitted
for shareholder vote, shareholders of each Class will have
one vote for each full share owned and a proportionate
fractional vote for any fractional share held of that
Class. Generally, shares of the fund will be voted on a
fund-wide basis on all matters except matters affecting
only the interests of one or more of the Classes.

The fund sends its shareholders a semi-annual report and an
audited annual report, which include listings of the
investment securities held by the fund at the end of the
reporting period.

The fund was incorporated on May 12, 1983 under the name
Shearson Aggressive Growth Fund Inc. On May 20, 1988,
November 6, 1992, July 30, 1993 and October 14, 1994, the
fund changed its name to Shearson Lehman Aggressive Growth
Fund Inc., Shearson Lehman Brothers Aggressive Growth Fund
Inc., Smith Barney Shearson Aggressive Growth Fund Inc. and
Smith Barney Aggressive Growth Fund Inc., respectively.

PNC Bank, National Association, located at 17th and
Chestnut Streets, Philadelphia, Pennsylvania 19103, serves
as the custodian of the fund. Under the custody agreement
with the fund, PNC holds the fund's portfolio securities and
keeps all necessary accounts and records. For its services,
PNC receives a monthly fee based upon the month-end market
value of securities held in custody and also receives
certain securities transaction charges. The assets of the
fund are held under bank custodianship in compliance with
the 1940 Act.

First Data, located at Exchange Place, Boston,
Massachusetts 02109, serves as the Transfer Agent of the
fund. Under the transfer agency agreement, the Transfer
Agent maintains the shareholder account records for the
fund, handles certain communications between shareholders
and the fund and distributes dividends and distributions
payable by the fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number
of shareholder accounts it maintains for the fund during the
month, and is reimbursed for certain out-of-pocket expenses.

FINANCIAL STATEMENTS tc "FINANCIAL STATEMENTS"

The Fund's financial information will be incorporated by
reference to the fund's Annual Reports to Shareholders for
the fiscal year ended August 31, 1999 which will be
subsequently filed in a post-effective amendment to this
registration.

DRAFT OF 10/18/99

PART C OTHER INFORMATION

Item 23. Exhibits

All references are to the Registrant's registration
statement on Form N-1A (the "Registration Statement") as
filed with the Securities and Exchange Commission (the
"SEC") on June 5, 1983 (File Nos. 284199 and 811-3762).

(a)(1) Registrant's Articles of Incorporation dated May
12, 1983 and Articles of Amendment dated May 27, 1983,
October 3, 1983, May 20, 1988, November 5, 1992 and
July 30, 1993, respectively, are incorporated by
reference to Post-Effective Amendment No. 15 to the
Registration Statement filed on October 28, 1993
("Post-Effective Amendment No. 15 to the Registration
Statement filed on October 28, 1993 ("Post-Effective
Amendment No. 15").

(a)(2) Articles of Amendment dated October 14, 1994, Form of
Articles Supplementary and Form of Articles of
Amendment filed December 28,1995 ("Post-Effective
Amendment No. 18).

(a)(3) Articles of Amendment dated June 1, 1998 incorporated by reference
to the Post-Effective Amendment No. 21.

(b)(1) Registrant's By-Laws are incorporated by
reference to the Registration Statement.

(b)(2) Amendments dated January 27, 1987, October 22, 1987
and October 20, 1988 to By-Laws are incorporated by
reference to Post-Effective Amendment No. 9.

(c) Registrant's form of stock certificates for Class A,
Class B, Class C and Class Y shares are incorporated
by reference to Post-Effective Amendment No. 14 to the
Registration Statement filed on October 23, 1992
("Post-Effective Amendment No. 14"). to the
Registration Statement.

(d) Investment Advisory Agreement between the Registrant
and Smith Barney Asset Management Division of Smith
Barney Advisers, Inc. is incorporated by reference to
Post-Effective Amendment No. 15.

(e)(1) Distribution Agreement between the Registrant and
Smith Barney Inc. is incorporated by reference to the
Post-Effective Amendment No. 15.

(e)(2) form of Distribution Agreement between the
Registrant and CFBDS, Inc. is incorporated by reference to the
Post-Effective Amendment No. 21.

(e) (3) form of Broker Dealer Contract between the
Registrant and CFBDS, Inc. filed herewith.

(f) Not Applicable.

(g) Custodian Agreement between the Registrant and PNC
Bank, National Association ("PNC Bank") is
incorporated by reference to Pre-Effective Amendment
No. 1.

(h) (1) Transfer Agency Agreement dated August 2, 1993,
between the Registrant and First Data Investors
Services Group, Inc., is incorporated by reference to
Post-Effective Amendment No. 16, filed on January 1,
1994 ("Post-Effective Amendment No. 16").

(h)(2) Administration Agreement dated April 21, 1994,
between the Registrant and Smith Barney Advisers, Inc.
is incorporated by reference to Post-Effective Amendment No. 20.

(i) Opinion of Robert A. Vegliante Assistant Secretary of
the Fund filed with the Registrants Rule 24F-2 Notice
is incorporated by reference.

(j) To be filed by amendment

(k) Not Applicable.

(l) Purchase Agreement between the Registrant and Shearson
Lehman Brothers Inc. is incorporated by reference to
Pre-Effective Amendment No. 1.

(m)(1) Amended Services and Distribution Plans pursuant to
Rule 12b-1 between the Registrant and Smith Barney
Inc. ("Smith Barney") filed on December 28, 1995
(Post-Effective Amendment No. 18).

(m)(2) Form of Amended and Restated Shareholder Services
and Distribution Plan pursuant to Rule 12b-1 between
the Registrant is incorporated by reference to Post-Effective
Amendment No. 21.(n) To be filed by amendment.Form of Plan pursuant to
Rule 18f-3 is
incorporated by reference to Post-Effective Amendment No. 21.

Item 24.

None.

Item 25. Indemnification

Under the Registrant's corporate charter and Maryland law,
directors and officers of the Registrant are not liable to
the Registrant or its stockholders except for receipt of an
improper personal benefit or active and deliberate
dishonesty. The Registrant's corporate charter requires that
it indemnify its directors and officers against liabilities
unless it is proved that a director or officer acted in bad
faith or with active and deliberate dishonesty or received
an improper personal benefit. These Indemnification
provisions are subject to the limitation under the
Investment Company Act of 1940, as amended, that no director
or officer may be protected against liability for willful
misfeasance, bad faith, gross negligence or reckless
disregard for the duties of his office.

Item 26. Business and Other Connections of Investment Adviser

Investment Adviser - - SSB Citi Fund Management LLC ("SSB Citi")
formerly known as SSBC Fund Management Inc. ("SSBC")

SSBC was incorporated in December 1968 under the laws
of the State of Delaware. On September 21, 1999, SSBC
was converted into a Delaware Limited Liability Company.
SSB Citi is a wholly owned subsidiary of Salomon Smith Barney
Holdings Inc. ("Holdings") (formerly known as Smith Barney
Holdings Inc.) which in turn is a wholly owned subsidiary
of Citigroup Inc. ("Citigroup"). SSB Citi is registered
as an investment adviser under the Investment Advisers Act
of 1940 (the "Advisers Act").

The list required by this Item 26 of officers and
directors of SSB Citi together with information as to
any other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors during
the past two years, is incorporated by reference to Schedules A and D
of FORM ADV filed by SSBC pursuant to the Advisers Act
(SEC File No. 801-8314).

Item 27. Principal Underwriters (a) CFBDS, Inc. the Registrant's Distributor,
is also
the distributor for
CitiFundsSM International Growth & Income Portfolio,
CitiFundsSM International Equity Portfolio, CitiFundsSM Large Cap
Growth
Portfolio, CitiFundsSM Intermediate Income Portfolio,
CitiFundsSM Short-Term U.S. Government Income Portfolio,
CitiFundsSM Emerging Asian Markets Equity Portfolio,
CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash Reserves,
CitiFundsSM Premium U.S. Treasury Reserves,
CitiFundsSM Premium Liquid Reserves, CitiFundsSM Institutional U.S.
Treasury Reserves, CitiFundsSM Institutional Liquid Reserves,
SM Institutional Cash Reserves, CitiFundsSM Tax Free Reserves,
CitiFundsSM Institutional Tax Free Reserves,
CitiFundsSM California Tax Free Reserves,
CitiFundsSM Connecticut Tax Free Reserves,
CitiFundsSM New York Tax Free Reserves, CitiFundsSM Balanced Portfolio,
CitiFundsSM Small Cap Value Portfolio, CitiFundsSM Growth & Income
Portfolio,
CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM National
Tax Free Income Portfolio, CitiFundsSM New York Tax Free Income
Portfolio,
CitiSelect VIP Folio 200, Citiselect VIP Folio 300,
CitiSelect (VIP Folio 400, CitiSelect (VIP Folio 500,
CitiFundsSM Small Cap Growth VIP Portfolio, CitiSelect (Folio 200,
CitiSelect (Folio 300, CitiSelect (Folio 400, and CitiSelect (Folio
500.
CFBDS is also the placement agent for Large Cap Value Portfolio,
International Portfolio, Foreign Bond Portfolio,
Intermediate Income Portfolio, Short-Term Portfolio,
Growth & Income Portfolio, Large Cap Growth Portfolio,
Small Cap Growth Portfolio, International Equity Portfolio,
Balanced Portfolio, Government Income Portfolio, Emerging
Asian Markets Equity Portfolio, Tax Free Reserves Portfolio,
Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio.

CFBDS, Inc. is also the distributor for the following
Smith Barney Mutual Fund registrants:
Consulting Group Capital Markets Funds
Greenwich Street Series Fund
Smith Barney Adjustable Rate Government Income Fund
Smith Barney Appreciation Fund Inc.
Smith Barney Arizona Municipals Fund Inc.
Smith Barney California Municipals Fund Inc.
Smith Barney Concert Allocation Series Inc.
Smith Barney Equity Funds
Smith Barney Fundamental Value Fund Inc.
Smith Barney Funds, Inc.
Smith Barney Income Funds
Smith Barney Institutional Cash Management Fund, Inc.
Smith Barney Investment Trust
Smith Barney Investment Funds Inc.
Smith Barney Managed Governments Fund Inc.
Smith Barney Managed Municipals Fund Inc.
Smith Barney Massachusetts Municipals Fund
Smith Barney Money Funds, Inc.
Smith Barney Muni Funds
Smith Barney Municipal Money Market Fund, Inc.
Smith Barney Natural Resources Fund Inc.
Smith Barney New Jersey Municipals Fund Inc.
Smith Barney Oregon Municipals Fund Inc.
Smith Barney Principal Return Fund
Smith Barney Small Cap Blend Fund, Inc.
Smith Barney Telecommunications Trust
Smith Barney Variable Account Funds
Smith Barney World Funds, Inc.
Travelers Series Fund Inc.
And various series of unit investment trusts.

CFBDS, Inc. is also the distributor for the following
Salomon Brothers funds:
Salomon Brothers Opportunity Fund Inc
Salomon Brothers Investors Fund Inc
Salomon Brothers Capital Fund Inc
Salomon Brothers Series Funds Inc
Salomon Brothers Institutional Series Funds Inc
Salomon Brothers Variable Series Funds Inc

The information required by this Item 29 with respect
to each director, officer and partner of CFBDS, Inc.
is incorporated by reference to Schedule A of Form BD
filed by CFBDS, Inc. pursuant to the Securities
Exchange Act of 1934 (SEC File No. 8-32417).

Item 28. Location of Accounts and Records.

(1) Smith Barney Aggressive Growth Fund Inc.
388 Greenwich Street
New York, New York 10013

(2) SSBC Fund Management LLC.
388 Greenwich Street
New York, New York 10013

(3) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, PA, 19103

(4) First Data Investor Services Group, Inc.
P.O. Box 9699
Providence RI 02940-9699(5) CFBDS Inc.21 Milk Street, 5th floor
Boston, Massachusetts 02109

Item 29. Management Services.

Not Applicable.

Item 30. Not Applicable.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant, SMITH BARNEY AGGRESSIVE GROWTH FUND INC., has duly
caused this Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, all
in the City of New York, State of New York on the 20th day of
October, 1999.

SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
By: /s/ Heath B. McLendon
Heath B. McLendon
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment to
the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

Signature Title Date

/s/ Heath B. McLendon* Chairman of the Board 10/20/99
Heath B. McLendon (Chief Executive Officer)

/s/ Lewis E. Daidone* Senior Vice President
and Treasurer 10/20/99
Lewis E. Daidone (Chief Financial and Accounting Officer)

/s/ Paul R. Ades* Director 10/20/99
Paul R. Ades

/s/ Herbert Barg* Director 10/20/99
Herbert Barg

/s/ Dwight B. Crane* Director 10/20/99
Dwight B. Crane

/s/ Frank Hubbard* Director 10/20/99
Frank Hubbard

/s/ Ken Miller* Director 10/20/99
Ken Miller

/s/ Jerome Miller** Director 10/20/99
Jerome Miller

*Signed by Heath B. McLendon, their duly authorized attorney-in-
fact, pursuant to power of attorney dated September 8, 1994.

**Signed by Heath B. McLendon, their duly authorized
attorney-in-fact, pursuant
to power of attorney dated April 15, 1998.

/s/ Heath B. McLendon
Heath B. McLendon

EXHIBITS

Exhibit No. Description of Exhibits

(e) (4) Broker Dealer Contract

Cover

SMITH BARNEY MUTUAL FUNDS

BROKER DEALER CONTRACT
CFBDS, Inc.
21 Milk Street
Boston, Massachusetts 02109

Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

We, CFBDS, Inc. ("CFBDS"), have agreements
with certain investment companies for which Mutual
Management Corp. serves as investment adviser and/or
administrator (each a "Fund") pursuant to which we act
as nonexclusive principal underwriter and distributor
for the sale of shares of capital stock ("shares") of
the various series of such Funds, and as such have the
right to distribute shares for resale. Each Fund is
an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940
Act") and the shares being offered to the public are
registered under the Securities Act of 1933, as
amended (the "1933 Act"). Each series of each Fund
covered by a Distribution Agreement from time to time
is referred to in this agreement as a "Series" and
collectively as the "Series." The term "Prospectus",
as used herein, refers to the prospectus and related
statement of additional information (the "Statement of
Additional Information") incorporated therein by
reference (as amended or supplemented) on file with
the Securities and Exchange Commission at the time in
question. As a broker in the capacity of principal
underwriter and distributor for the Trust, we offer to
sell to you, as a broker or dealer, shares of each
Fund upon the following terms and conditions:

1. PRIVATE In all sales to the public
you shall act as broker for your customers or as
dealer for your own account, and in no transaction
shall you have any authority to act as agent for the
Trust, for us or for any other dealer. tc " In all
sales to the public you shall act as dealer for your
own account, and in no transaction shall you have any
authority to act as agent for the Fund, for us or for
any other dealer."

2. PRIVATE Orders received from you
will be accepted through us only at the public
offering price per share (i.e. the net asset value per
share plus the applicable front-end sales charge, if
any) applicable to each order, and all orders for
redemption of any shares shall be executed at the net
asset value per share less any contingent deferred
sales charge, if any, in each case as set forth in the
Prospectus. You will be entitled to receive and
retain any contingent deferred sales charge amounts in
partial consideration of your payment to financial
consultants of commission amounts at the time of sale
and we will obligate any other brokers with whom we
enter into similar agreements to pay such amounts
directly to you. The procedure relating to the
handling of orders shall be subject to paragraph 4
hereof and instructions which we or the Fund shall
forward from time to time to you. All orders are
subject to acceptance or rejection by the applicable
Fund or us in the sole discretion of either. The
minimum initial purchase and the minimum subsequent
purchase of any shares shall be as set forth in the
Prospectus pertaining to the relevant Series. tc "
Orders received from you will be accepted through us
only at the public offering price per share (i.e. the
net asset value per share plus the applicable sales
charge, if any) applicable to each order, and all
orders for redemption of any Fund shares shall be
executed at the net asset value per share less any
contingent deferred sales charge, if any, in each case
as set forth in the Prospectus. The procedure
relating to the handling of orders shall be subject to
paragraph 4 hereof and instructions which we or the
Fund shall forward from time to time to you. All
orders are subject to acceptance or rejection by
Salomon or the Fund in the sole discretion of either.
The minimum initial purchase and the minimum
subsequent purchase shall be as set forth in the
Prospectus of the Fund."

3. PRIVATE You shall not place orders
for any shares unless you have already received
purchase orders for those shares at the applicable
public offering price and subject to the terms hereof.
You agree that you will not offer or sell any shares
except under circumstances that will result in
compliance with the applicable Federal and state
securities laws, the applicable rules and regulations
thereunder and the rules and regulations of applicable
regulatory agencies or authorities and that in
connection with sales and offers to sell shares you
will furnish to each person to whom any such sale or
offer is made, a copy of the Prospectus and, upon
request, the Statement of Additional Information, and
will not furnish to any person any information
relating to shares which is inconsistent in any
respect with the information contained in the
Prospectus or Statement of Additional Information (as
then amended or supplemented). You shall not furnish
or cause to be furnished to any person or display or
publish any information or materials relating to the
shares (including, without limitation, promotional
materials and sales literature, advertisements, press
releases, announcements, statements, posters, signs or
other similar material), except such information and
materials as may be furnished to you by or on behalf
of us or the Funds, and such other information and
materials as may be approved in writing by or on
behalf of us or the Funds. tc " You shall not place
orders for any shares unless you have already received
purchase orders for those shares at the applicable
public offering price and subject to the terms hereof
and of the Distribution Contract. You agree that you
will not"

4. PRIVATE As a broker dealer, you are
hereby authorized (i) to place orders directly with
the applicable Fund or Series for shares subject to
the applicable terms and conditions governing the
placement of orders by us set forth in the Prospectus
and (ii) to tender shares directly to each Fund or its
agent for redemption subject to the applicable terms
and conditions governing the redemption of shares
applicable to us set forth in the Prospectus. tc " As
a dealer, you are hereby authorized (i) to place
orders directly with the Fund for shares to be resold
by us to you subject to the applicable terms and
conditions governing the placement of orders by us set
forth in the Prospectus and the Distribution Contract
and (ii) to tender shares directly to the Fund or its
agent for redemption subject to the applicable terms
and conditions governing the redemption of shares
applicable to us set forth in the Prospectus and the
Distribution Agreement."

5. PRIVATE You shall not withhold
placing orders received from your customers so as to
profit yourself as a result of such withholding, e.g.,
by a change in the "net asset value" from that used in
determining the offering price to your customers. tc "
You shall not withhold placing orders received from
your customers so as to profit yourself as a result of
such withholding, e.g., by a change in the \"net asset
value\" from that used in determining the offering
price to your customers."
6. PRIVATE In determining the amount
of any sales concession payable to you hereunder, we
reserve the right to exclude any sales which we
reasonably determine are not made in accordance with
the terms of the Prospectus and the provisions of this
Agreement. Unless at the time of transmitting an
order we advise you or the transfer agent to the
contrary, the shares ordered will be deemed to be the
total holdings of the specified investor. tc " In
determining the amount of any sales concession payable
to you hereunder, we reserve the right to exclude any
sales which we reasonably determine are not made in
accordance with the terms of the Prospectus and the
provisions of this Agreement. Unless at the time of
transmitting an order we advise you or the transfer
agent to the contrary, the shares ordered will be
deemed to be the total holdings of the specified
investor."

7. PRIVATE (a) You agree that payment
for orders from you for the purchase of shares will be
made in accordance with the terms of the Prospectus.
On or before the business day following the settlement
date of each purchase order for shares, you shall
transfer same day funds to an account designated by us
with the transfer agent in an amount equal to the
public offering price on the date of purchase of the
shares being purchased less your sales concession, if
any, with respect to such purchase order determined in
accordance with the Prospectus. If payment for any
purchase order is not received in accordance with the
terms of the Prospectus, we reserve the right, without
notice, to cancel the sale and to hold you responsible
for any loss sustained as a result thereof. tc " (a)
You agree that payment for orders from you for the
purchase of shares will be made in accordance with the
terms of the Prospectus. On or before the business
day following the settlement date of each purchase
order for shares, you shall transfer same day funds to
an account designated by us with the transfer agent an
amount equal to the public offering price on the date
of purchase of the shares being purchased less your
sales concession, if any, with respect to such
purchase order determined in accordance with the
Prospectus. If payment for any purchase order is not
received in accordance with the terms of the
Prospectus, we reserve the right, without notice, to
cancel the sale and to hold you responsible for any
loss sustained as a result thereof."

(b) PRIVATE If any shares sold under the
terms of this Agreement are sold with a sales charge
and are redeemed or are tendered for redemption within
seven (7) business days after confirmation of your
purchase order for such shares: (i) you shall
forthwith refund to us the full sales concession
received by you on the sale; and (ii) we shall
forthwith pay to the applicable Series our portion of
the sales charge on the sale which has been retained
by us, if any, and shall also pay to the applicable
Series the amount refunded by you. tc " If any shares
sold under the terms of this Agreement are sold with a
sales charge and are redeemed or are tendered for
redemption within seven (7) business days after
confirmation of your purchase order for such shares\:
(i) you shall forthwith refund to us the full sales
concession received by you on the sale; and (ii) we
shall forthwith pay to the applicable Series our
portion of the sales charge on the sale which has been
retained by us, if any, and shall also pay to the
Series the amount refunded by you."

(c) PRIVATE We will not be obligated to
pay or cause to be paid to you any ongoing trail
commission or shareholder service fees with respect to
shares of the Series purchased through you and held by
or for your customers, which you shall collect
directly from the Funds. tc " We will pay you an
ongoing trail commission with respect to holdings by
you of shares of the Funds at such rates and in such
manner as may be described in the Prospectus."

(d) PRIVATE Certificates evidencing
shares shall be available only upon request. Upon
payment for shares in accordance with paragraph 7(a)
above, the transfer agent will issue and transmit to
you or your customer a confirmation statement
evidencing the purchase of such shares. Any
transaction in uncertificated shares, including
purchases, transfers, redemptions and repurchases,
shall be effected and evidenced by book-entry on the
records of the transfer agent. tc " Certificates
evidencing shares shall be available only upon
request. Upon payment for shares in accordance with
paragraph 7(a) above, the transfer agent will issue
and transmit to you a confirmation statement
evidencing the purchase of such shares. Any
transaction in uncertificated shares, including
purchases, transfers, redemptions and repurchases,
shall be effected and evidenced by book-entry on the
records of the transfer agent."

8. PRIVATE No person is authorized to
make any representations concerning shares except
those contained in the current Prospectus and
Statement of Additional Information and in printed
information subsequently issued by us or the Funds as
information supplemental to the Prospectus and the
Statement of Additional Information. In purchasing or
offering shares pursuant to this Agreement you shall
rely solely on the representations contained in the
Prospectus, the Statement of Additional Information
and the supplemental information above mentioned. tc "
No person is authorized to make any representations
concerning shares except those contained in the
current Prospectus and Statement of Additional
Information and in printed information subsequently
issued by us or the Fund as information supplemental
to the Prospectus and the Statement of Additional
Information. In purchasing sor offering shares
pursuant to this Agreement you shall rely solely on
the representations contained in the Prospectus, the
Statement of Additional Information and the
supplemental information above mentioned."

9. PRIVATE You agree to deliver to
each purchaser making a purchase of shares from or
through you a copy of the Prospectus at or prior to
the time of offering or sale, and, upon request, the
Statement of Additional Information. You may instruct
the transfer agent to register shares purchased in
your name and account as nominee for your customers.
You agree thereafter to deliver to any purchaser whose
shares you or your nominee are holding as record
holder copies of the annual and interim reports and
proxy solicitation materials and any other information
and materials relating to the Trust and prepared by or
on behalf of us, the Funds or the investment adviser,
custodian, transfer agent or dividend disbursing agent
for distribution to beneficial holders of shares. The
Funds shall be responsible for the costs associated
with forwarding such reports, materials and other
information and shall reimburse you in full for such
costs. You further agree to make reasonable efforts
to endeavor to obtain proxies from such purchasers
whose shares you or your nominee are holding as record
holder. You further agree to obtain from each
customer to whom you sell shares any taxpayer
identification number certification required under
Section 3406 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated
thereunder, and to provide us or our designee with
timely written notice of any failure to obtain such
taxpayer identification number certification in order
to enable the implementation of any required backup
withholding in accordance with Section 3406 of the
Code and the regulations thereunder. Additional
copies of the Prospectus, Statement of Additional
Information, annual or interim reports, proxy
solicitation materials and any such other information
and materials relating to the Trust will be supplied
to you in reasonable quantities upon request. tc "
You agree to deliver to each purchaser making a
purchase of shares from you a copy of the Prospectus
at or prior to the time of offering or sale, and, upon
request, the Statement of Additional Information. You
may instruct the transfer agent to register shares
purchased in your name and account as nominee for your
customers. You agree thereafter to deliver to any
purchaser whose shares you are holding as record
holder copies of the annual and interim reports and
proxy solicitation materials and any other information
and materials relating to the Fund and prepared by or
on behalf of us, the Fund or its investment adviser,
custodian, transfer agent or dividend disbursing agent
for distribution to such customer. The Fund shall be
responsible for the costs associated with forwarding
such reports, materials and other information and
shall reimburse you in full for such costs. You
further agree to make reasonable efforts to endeavor
to obtain proxies from such purchasers whose shares
you are holding as record holder. You further agree
to obtain from each customer to whom you sell shares
any taxpayer identification number certification
required under Section 3406 of the Internal Revenue
Code of 1986, as amended (the \"Code\"), and the
regulations promulgated thereunder, and to provide us
or our designee with timely written notice of any
failure to obtain such taxpayer identification number
certification in order to enable the implementation of
any required backup withholding in accordance with
Section 3406 of the Code and the regulations
thereunder. Additional copies of the Prospectus,
Statement of Additional Information, annual or interim
reports, proxy solicitation materials and any such
other information and materials relating to the Fund
will be supplied to you in reasonable quantities upon
request."

10. PRIVATE (a) In accordance with the
terms of the Prospectus, a reduced sales charge may be
available to customers, depending on the amount of the
investment or proposed investment. In each case where
a reduced sales charge is applicable, you agree to
furnish to the transfer agent sufficient information
to permit confirmation of qualification for a reduced
sales charge, and acceptance of the purchase order is
subject to such confirmation. Reduced sales charges
may be modified or terminated at any time in the sole
discretion of each Fund. tc " (a) In accordance
with the terms of the Prospectus, a reduced sales
charge may be available to customers, depending on the
amount of the investment. In each case where a
reduced sales charge is applicable, you agree to
furnish to the transfer agent sufficient information
to permit confirmation of qualification for a reduced
sales charge, and acceptance of the purchase order is
subject to such confirmation. Reduced sales charges
may be modified or terminated at any time in the sole
discretion of the Fund."

(b) PRIVATE You acknowledge that
certain classes of investors may be entitled to
purchase shares at net asset value without a sales
charge as provided in the Prospectus and Statement of
Additional Information. tc " You acknowledge that
certain classes of investors may be entitled to
purchase shares at net asset value without a sales
charge as provided in the Prospectus and Statement of
Additional Information."

(c) PRIVATE You agree to advise us
promptly as to the amount of any and all sales by you
qualifying for a reduced sales charge or no sales
charge. tc " You agree to advise us promptly as to
the amount of any and all sales by you qualifying for
a reduced sales charge or no sales charge."

(d) PRIVATE Exchanges (i.e., the
investment of the proceeds from the liquidation of
shares of one Series in the shares of another Series,
each of which is managed by the same or an affiliated
investment adviser) shall, where available, be made in
accordance with the terms of each Prospectus. tc "
Exchanges (i.e., the investment of the proceeds from
the liquidation of shares of one fund in the shares of
another fund, each of which is managed by the Fund's
investment adviser) shall, where available, be made in
accordance with the terms of each Prospectus."

11. PRIVATE We and each Fund reserve
the right in our discretion, without notice, to
suspend sales or withdraw the offering of any shares
entirely. Each party hereto has the right to cancel
the portions of this Agreement to which it is party
upon notice to the other parties; provided, however,
that no cancellation shall affect any party's
obligations hereunder with respect to any transactions
or activities occurring prior to the effective time of
cancellation. We reserve the right to amend this
Agreement in any respect effective on notice to
you. tc " We reserve the right in our discretion,
without notice, to suspend sales or withdraw the
offering of shares entirely. Each party hereto has
the right to cancel this agreement upon notice to the
other part parties; provided; however, that no
cancellation shall affect any party's obligations
hereunder with respect to any transactions or
activities occurring prior to the effective time of
cancellation. We reserve the right to amend this
Agreement in any respect effective on notice to you."

12. PRIVATE We shall have full authority
to take such action as we may deem advisable in respect
of all matters pertaining to the continuous offering of
shares. We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed
by us herein. Nothing contained in this paragraph 12 is
intended to operate as, and the provisions of this
paragraph 12 shall not in any way whatsoever constitute a
waiver by you of compliance with, any provisions of the
1933 Act or of the rules and regulations of the
Securities and Exchange Commission issued thereunder.
tc " We shall have full authority to take such action
as we may deem advisable in respect of all matters
pertaining to the continuous offering of shares. We
shall be under no liability to you except for lack of
good faith and for obligations expressly assumed by us
herein. Nothing contained in this paragraph 12 is
intended to operate as, and the provisions of this
paragraph 12 shall not in any way whatsoever constitute a
waiver by you of compliance with, any provisions of the
1933 Act or of the rules and regulations of the
Securities and Exchange Commission issued thereunder."

13. PRIVATE You agree that: (a) you
shall not effect any transactions (including, without
limitation, any purchases and tc " You agree that\:
(a) you shall not effect any transactions (including,
without limitation, any purchases and" redemptions)
in any shares registered in the name of, or
beneficially owned by, any customer unless such
customer has granted you full right, power and
authority to effect such transactions on his behalf,
(b) we shall have full authority to act upon your
express instructions to sell, repurchase or exchange
shares through us on behalf of your customers under
the terms and conditions provided in the Prospectus
and (c) we, the Funds, the investment adviser, the
administrator, the transfer agent and our and their
respective officers, directors or trustees, agents,
employees and affiliates shall not be liable for, and
shall be fully indemnified and held harmless by you
from and against, any and all claims, demands,
liabilities and expenses (including, without
limitation, reasonable attorneys' fees) which may be
incurred by us or any of the foregoing persons
entitled to indemnification from you hereunder arising
out of or in connection with (i) the execution of any
transactions in shares registered in the name of, or
beneficially owned by, any customer in reliance upon
any oral or written instructions believed to be
genuine and to have been given by or on behalf of you,
(ii) any statements or representations that you or
your employees or representatives make concerning the
Funds that are inconsistent with the applicable Fund's
Prospectus, (iii) any written materials used by you or
your employees or representatives in connection with
making offers or sales of shares that were not
furnished by us, the Funds or the investment adviser
or an affiliate thereof and (iv) any sale of shares of
a Fund where the Fund or its shares were not properly
registered or qualified for sale in any state, any
U.S. territory or the District of Columbia, when we
have indicated to you that the Fund or its shares were
not properly registered or qualified. The
indemnification agreement contained in this Paragraph
13 shall survive the termination of this Agreement.

14. PRIVATE You represent that: (a) you
are a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"),
or, if a foreign dealer who is not eligible for
membership in the NASD, that (i) you will not make any
sales of shares in, or to nationals of, the United
States of America, its territories or its possessions,
and (ii) in making any sales of shares you will comply
with the NASD's Conduct Rules and (b) you are a member
in good standing of the Securities Investor Protection
Corporation ("SIPC"). You agree that you will provide
us with timely written notice of any change in your
NASD or SIPC status. tc " You represent that you are
a member in good standing of the National Association
of Securities Dealers, Inc. (the \"NASD\"), or, if a
foreign dealer who is not eligible for membership in
the NASD, that (a) you will not make any sales of
shares in, or to nationals of, the United States of
America, its territories or its possessions, and (b)
in making any sales of shares you will comply with the
NASD's Rules of Fair Practice."

15. PRIVATE We shall inform you as to
the states or other jurisdictions in which the Fund has
advised us that shares have been qualified for sale
under, or are exempt from the requirements of, the
respective securities laws of such states, but we
assume no responsibility or obligation as to your
qualification to sell shares in any jurisdiction.

16. Any claim, controversy, dispute or
deadlock arising under this Agreement (collectively, a
"Dispute") shall be settled by arbitration administered
under the rules of the American Arbitration Association
("AAA") in New York, New York. Any arbitration and
award of the arbitrators, or a majority of them, shall
be final and the judgment upon the award rendered may
be entered in any state or federal court having
jurisdiction. No punitive damages are to be awarded.

17. PRIVATE All communications to us
should be sent, postage prepaid, to 21 Milk Street,
Boston, Massachusetts 02109 Attention: Philip
Coolidge. Any notice to you shall be duly given if
mailed, telegraphed or telecopied to you at the
address specified by you below. Communications
regarding placement of orders for shares should be
sent, postage prepaid, to First Data Investor Services
Group, Inc., P.O. Box 5128, Westborough, Massachusetts
01581-5128. tc " All communications to us should be
sent, postage prepaid, to 7 World Trade Center, New
York, New York 10048. Attention\: Robert J. Leonard.
Any notice to you shall be duly given if mailed,
telegraphed or telecopied to you at the address
specified by you below. Communications regarding
placement of orders for shares should be sent, postage
prepaid, to The Shareholder Services Group, Inc., P.O.
Box 9109, Boston, Massachusetts 02205-9109."

18. PRIVATE This Agreement shall be
binding upon both parties hereto when signed by us and
accepted by you in the space provided below tc " This
Agreement shall be binding upon both parties hereto
when signed by us and accepted by you in the space
provided below until July 14, 1995 or such earlier
date upon negotiation of section 3 and 12 of this
agreement. " .

19. PRIVATE This Agreement and the
terms and conditions set forth herein shall be
governed by, and construed in accordance with, the
laws of the State of New York. tc " This Agreement and
the terms and conditions set forth herein shall be
governed by, and construed in accordance with, the
laws of the State of New York."

CFBDS, INC.

By:/s/

(Authorized
Signature)

Accepted:

Firm Name:

Address:

Accepted By (signature):

Name (print):

Title: Date:

u:\legal\general\forms\agreemts\dist12b-1\dealerag1.doc