<PAGE>
[LOGO OF SMITH BARNEY]
SMITH BARNEY
AGGRESSIVE
GROWTH Fund Inc.
CLASSIC INVESTOR SERIES
SEMI-ANNUAL REPORT
FEBRUARY 29, 2000
[LOGO OF SMITH BARNEY]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
SSB Citi Fund Management LLC ("SSBC") represents more than a century of managing
serious money. Our clients range from Fortune 500 companies to private family
businesses and individuals around the world. With a tradition of integrity and
hard work dating back to our present company's origins in 1873, SSBC today
offers professionally managed solutions for the serious investor.
Aggressive Growth
FUND
For over 16 years, this portfolio has delivered overall, long-term growth
through a "bottom-up" approach to investing.* The Fund is well diversified
across capitalization ranges and among several industrial and service sectors,
and typically holds only a select number of stocks allowing the portfolio
manager to cultivate a long-term investment focus. Generally, all the companies
in the portfolio share three significant features:
Potential for Rapid Earnings Growth
We seek dynamic businesses with the capability for growth, especially since many
are currently found in expanding industries such as biotechnology and
telecommunications.
Dedicated Management
We look to companies where managers have an ownership stake; a personal equity
stake is an additional motivation for management to outperform.
Unrecognized Values
Our research approach is broad enough to include companies that may not be
widely followed by Wall Street analysts; hence, an opportunity exists for
identifying inefficiencies in pricing.
* Keep in mind, past performance is no guarantee of future results. An
investor's shares, where redeemed, may be worth more or less than their
original cost.
<PAGE>
Smith Barney Aggressive
Growth Fund Inc.
The Smith Barney Aggressive Growth Fund Inc.("Fund") seeks capital appreciation
by investing 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 comprise the Standard &
Poor's 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.
Smith Barney Aggressive Growth Fund Inc.
Average Annual Total Returns
February 29, 2000
Without Sales Charges(1)
-------------------------------
Class A Class B Class L
=============================================================
Six Months+ 45.41% 44.84% 44.86%
- -------------------------------------------------------------
One-Year 85.44 83.95 84.03
- -------------------------------------------------------------
Five-Year 34.33 33.26 33.33
- -------------------------------------------------------------
Ten-Year 22.93 N/A N/A
- -------------------------------------------------------------
Since Inception++ 19.10 26.73 28.51
=============================================================
With Sales Charges(2)
-------------------------------
Class A Class B Class L
=============================================================
Six Months+ 38.15% 39.84% 42.40%
- -------------------------------------------------------------
One-Year 76.15 78.95 81.18
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Five-Year 32.96 33.20 33.06
- -------------------------------------------------------------
Ten-Year 22.31 N/A N/A
- -------------------------------------------------------------
Since Inception++ 18.72 26.73 28.32
=============================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to Class
B and L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase. All figures represent past
performance and are not a guarantee of future results. Investment returns
and principal value will fluctuate, and redemption value may be more or
less than the original cost.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
++ Inception dates for Class A, B and L shares are October 24, 1983, November
6, 1992 and May 13, 1993, respectively.
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FUND HIGHLIGHT
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The gains witnessed in the Fund during the first six months of its fiscal year
were once again broadly-based, with particular strength enjoyed by our
biotechnology, technology and telecommunications holdings. Biotechnology stocks
have been important contributors to our results since the Fund's inception and
the gains experienced in the past six months have been some of the strongest we
have ever seen from this group.
- --------------------------------------------------------------------------------
NASDAQ SYMBOL
- --------------------------------------------------------------------------------
Class A SHRAX
Class B SAGBX
Class L SAGLX
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WHAT'S INSIDE
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A Message from the Chairman ................................ 2
Shareholder Letter ......................................... 3
An Interview with Manager Richard Freeman .................. 7
Historical Performance ..................................... 10
Smith Barney Aggressive Growth Fund Inc.
at a Glance ................................................ 13
Schedule of Investments .................................... 14
Statement of Assets and Liabilities ........................ 17
Statement of Operations .................................... 18
Statements of Changes in Net Assets ........................ 19
Notes to Financial Statements .............................. 20
Financial Highlights ....................................... 24
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Smith Barney Aggressive Growth Fund Inc.
1
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A Message from the Chairman
Heath B. McLendon
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[PHOTO]
HEATH B.
MCLENDON
Chairman
The U.S. economy continues its tremendous growth. Unemployment is at an all-time
low as consumer confidence reaches all-time highs. While this economic strength
has proven to be supportive of stocks, it has hurt bonds as fears of
inflationary pressures rise and the Fed continues to raise rates.
In recent weeks, we have experienced an unprecedented performance dichotomy
between "New Economy" and "Old Economy" stocks. The New Economy is represented
primarily by high-tech stocks -- biotechnology, communications, Internet,
software and technology. Many of these companies have little or no capital,
appear to be unaffected by rising interest rates and were the catalysts that
sent the tech-laden NASDAQ Index/1/ up 85.6% in 1999. On the other hand, many
Old Economy stocks -- represented by established blue chip companies -- have
seen their stock prices decline. Yet, we believe a convergence may be at hand.
While some New Economy stocks may offer excellent investment options, many Old
Economy stocks have become undervalued relative to their intrinsic value,
opening up more opportunities for investors than ever before.
Despite more volatile markets and the great debate about the future shape of the
global economy, putting clients needs first has been Citigroup's tradition for
over a century. We provide some 100 million people, businesses, governments and
institutions in 100 countries with a broad range of financial products and
services. SSB Citi Asset Management, Citigroup's asset management division,
offers you access to a broad range of products including equities, fixed income
and money markets. Our global resources are extensive, far-reaching and
powerful, with a strong presence in the U.S., Europe, Japan, Latin America, Asia
Pacific and Australia.
We invite you to explore our capabilities as a market leader in areas such as
retirement, tax and estate planning, and we encourage you to work closely with
your Salomon Smith Barney Financial Consultant to discuss the full range of
services we offer. He or she can further discuss the unique advantages of
professional investment management and how SSB Citi Asset Management can help
you develop a long-term disciplined plan to help you achieve your investment
goals.
When you invest with SSB Citi Asset Management, you can do so with the
confidence that your interests come first, your investment success is paramount,
and that the ultimate in resources is being committed to your financial future.
Thank you for investing with us.
Also, please note that an interview with the Fund's Portfolio Manager Richard A.
Freeman appears on page seven.
/S/ Heath B. McLendon
----------------------
Heath B. McLendon
Chairman
March 22, 2000
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1 National Association of Securities Dealers Automated Quotation System
("NASDAQ") Index covers 4,500 stocks traded over the counter. It is a
value-weighted index calculated on price change only and does not include
income.
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2 2000 Semi-Annual Report to Shareholders
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Shareholder Letter
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[PHOTO]
RICHARD A.
FREEMAN
Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Aggressive
Growth Fund ("Fund") for the period ended February 29, 2000. In this report, we
summarize the period's prevailing economic and market conditions and outline our
portfolio strategy. Any discussion of the Fund's holdings is as of February 29,
2000 and is subject to change. Please refer to pages 14 through 16 for a list of
the Fund's holdings. We hope that you find this report to be useful and
informative.
Performance Update
We are proud to report that for the six months ended February 29, 2000, the Fund
returned 45.41%, 44.84% and 44.86% for its Class A, B and L shares,
respectively, excluding the effects of sales charges. During the period under
review, the Russell 2500 Growth Index,/1/ the Value Line Composite Index-
Geometric/2/ and the Russell 3000 Growth Index/3/ returned 75.38%, negative
7.14% and 25.32%, respectively. This followed the strongest performance year in
the Fund's 16-year history (fiscal 1999). Please note that past performance is
not indicative of future results. For additional Fund performance information
please refer to pages ten through 12.
Market Overview
During the first half of the Fund's fiscal year, investors faced a number of
crosscurrents. These factors ranged from economic ones, including rising
interest rates to market-related ones, including shifts in stock market
leadership towards smaller capitalization companies accompanied by a surging
NASDAQ stock market. (The NASDAQ Composite Index covers approximately 4,500
companies traded over the counter. It is a value-weighted index calculated by
price change only and does not include income.)
During the period, the U.S. economy displayed resilience to the continued rise
in interest rates implemented by the Federal Reserve Board ("Fed"). The Fed has
raised interest rates five times since the summer of 1999, with many analysts
predicting further increases later this year until evidence is in place that
shows that growth in the U.S. economy is slowing. Long-term interest rates,
which had increased by almost 200 basis points (i.e., 100 basis points are equal
to one percent) from the lows reached in the fall of 1998, have eased, leading
to an inverted yield curve where shorter dated government debt securities now
yield more than longer dated bonds. (The yield curve is the graphical depiction
of the relationship between the yield on the bonds of the same credit quality
but different maturities.)
This normally would indicate that the economy could be expected to slow, but
that analysis may be distorted by the U.S. government's buyback of bonds using
some of the dollars generated by the budget surplus.
During the fourth quarter of 1999, investors, economists and even the Fed looked
ahead with uncertainty to the Y2K changeover and its possible
- ----------
1 The Russell 2500 Growth Index is a broad-based unmanaged index which
measures the performance of those 2,500 companies with higher price-to-book
ratios and higher forecasted growth values (A price-to-book ratio is the
price of a stock dividend divided by its net asset value.) The Russell 2500
Growth Index measures the performance of the 2,500 smallest companies in
the Russell 3000 Index.
2 The Value Line Composite Index-Geometric is composed of the 1,700 stocks
traded by the Value Line Investment Survey.
3 The Russell 3000 Growth Index measures the performance of those Russell
3000 Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 3000 Index measures the performance of the 3,000
largest U.S. companies based on total market capitalization which
represents approximately 98% of the investable U.S. equity market.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 3
<PAGE>
negative ramifications. Companies ranging from parts suppliers to drug companies
stockpiled inventories "just in case" they would be unable to operate normally
when the millennium began. The Fed, which had been undertaking a policy of
monetary tightening over fears of an overheated economy, put its rate increases
on hold and instead supplied an enormous amount of reserves to the banking
system, expecting the consumers to hoard cash at the end of the year. To
everyone's relief, with the possible exception of the alarmists, Y2K proved to
be an economic non-event.
Not only did the Fed resume its pattern of rate increases in 2000, but it began
to refer more and more to the high valuation levels of the stock market and the
impact that the "wealth effect" may be having on consumer spending. While the
Fed tried to distance itself from directly pegging monetary policy to the level
of stock prices, the message was not lost on investors, and the broad market
averages declined sharply in the first two months of the year.
For many years, large-capitalization stocks significantly outperformed smaller
ones, but the situation changed in 1999 when many highly visible
large-capitalization members of the Standard and Poor's 500 Index ("S&P 500")4
reported disappointing earnings and were treated harshly by investors. So far in
calendar year 2000, we are seeing a significant dichotomy between the favorable
performance of small- and mid-capitalization stocks in contrast to the sharp
declines seen in the Dow Jones Industrial Average (an unmanaged index of common
stocks comprised of major industrial companies) and the broad-based S&P 500.5
Investment Strategy
The Fund seeks capital appreciation through investing primarily in common stocks
of companies that we believe are experiencing, or will experience, growth in
earnings that exceeds the average rate of earnings growth of the companies which
comprise the S&P 500.
Since the Fund's inception in 1983, we have employed a stock-specific approach
rather than choosing stocks based on forecasts of the strength of the economy,
direction of interest rates and inflation or other factors that are beyond the
control of the individual companies in the Fund's portfolio. Nothing has changed
our fundamental view that if you design a growth portfolio properly, you should
be able to find companies to buy and hold not just for one or two quarters
(which, in our view, is short-term trading) but rather for many years. We prefer
to own companies where quality managements work to build dynamic, financially
strong companies and who own meaningful equity stakes themselves.
Portfolio Update
The gains witnessed in the Fund during the first six months of its fiscal year
were once again broadly-based, with particular strength enjoyed by our
biotechnology, technology and telecommunications holdings. Biotechnology stocks
have been important contributors to our results since the Fund's inception and
the gains experienced in the past six months have been some of the strongest we
have ever seen from this group.
In a climate of generally rising interest rates, many investors have gravitated
towards those companies that do not rely on bank financings to support their
activities. They are in noncyclical businesses and have the possibility for
outstanding short as well as long-term earnings growth and are still in the
early phases of their life cycles. In our view, these characteristics describe
the biotechnology industry. Advances in genomics leading to productivity gains
in drug
- ---------------
4 The S&P 500 is a market-capitalization weighted measure of 500 widely held
common stocks.
5 Please note that after this letter was written, the performance of the Dow
Jones Industrial Average began to improve and then became increasingly
volatile.
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4 2000 Semi-Annual Report to Shareholders
<PAGE>
discovery have led to significant gains in this sector of the stock market. Very
strong sales in IDEC Pharmaceutical's treatment for B cell lymphoma have led to
strong sales and earnings growth with this stock becoming the Fund's largest
holding for the first time. Strong performances by Chiron, Genentech, ImClone
Systems, Nanogen and Alkermes also aided the Fund's results during the period.
Communications equipment suppliers were strong performers in the last six
months. Particular strength was exhibited by Adaptive Broadband Corp. as
acceptance of their wireless Internet access product gained momentum. We
significantly added to our position in the company as we believe that their
wireless broadband product has the potential to capture a meaningful share of a
burgeoning business. This exemplifies our investment strategy -- to take
advantage of the inefficiencies in the stock market by trying to own companies
with outstanding potential prior to their gaining "recognition" on Wall Street.
We believe that this attribute differentiates our investment style from many
other aggressive growth funds, many of which prefer to buy stocks after they
have already shown positive stock price momentum. We prefer to anticipate the
momentum and not just react to it.
During the last six months, we added to our holdings in:
. Chiron Corporation -- a biotechnology company that participates in three
global health care businesses: biopharmaceuticals, blood testing and
vaccines
. Genzyme General Division -- a biotechnology company that develops,
manufactures and markets therapeutic and diagnostic products,
pharmaceutical and diagnostic services
. ImClone Systems, Inc.-- a biopharmaceutical company primarily engaged in
the research and the development of drugs
. Forest Laboratories, Inc.-- a company that manufactures and sells both
branded and generic forms of ethical drug products
. Isis Pharmaceuticals -- a leader in the discovery and development of a new
class of drugs based on antisense technology
. Arch Communications Group -- a leading provider of wireless messaging
services, primarily paging services
. C-Cor.net Corporation -- a company that designs, manufactures and markets
network transmission products and provides services and support to cable
service providers
. Quantum-DLT & Storage -- a company that designs, develops, manufactures,
licenses and markets DLTtape drives and DLTtape media cartridges that are
used to back-up and archive business-critical data from mid-range servers
and high-end workstations
. Quantum-Hard Disk Drive -- a company that designs, develops and markets a
diversified product portfolio of hard disk drives featuring leading-edge
technology
. Excel Technology, Inc.-- a company that designs, develops, manufactures and
markets laser systems and electro-optical components for scientific and
industrial applications
. L-3 Communications Holdings, Inc.-- a merchant supplier of sophisticated
secure communication systems and specialized communication products
. Nanogen, Inc.-- a company that integrates advanced microelectronics and
molecular biology into a platform technology with broad commercial
applications
. Lehman Brothers Holdings -- a leading global investment bank
. Roslyn Bancorp, Inc.-- a holding company for The Roslyn Savings Bank, a
community-oriented stock savings bank
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Smith Barney Aggressive Growth Fund Inc. 5
<PAGE>
. Astoria Financial -- the bank holding company for Astoria Federal Savings &
Loan Association, a community-oriented federally charted savings
association offering a variety of financial services
. Micron Technology -- a company that designs, develops, manufactures and
markets semiconductor memory products.
. Core Laboratories, N.V.-- a provider of proprietary and patented reservoir
description, production enhancement and reservoir management services for
the oil industry
Tyco International, Ltd., one of the Fund's original holdings sold off sharply
in the fourth quarter of 1999 on an analyst's allegation of aggressive
accounting for its acquisitions which we believe is unsubstantiated./6/ (Tyco
International, Ltd. is a diversified manufacturing and service company that
designs, manufactures and distributes disposable medical supplies, electronics
flow control products and fire detection/suppression and security systems.)
Tyco's management, which, in our view, has always been very forthright with
investors, used the weakness in the price of its shares to buy back stock for
the corporation, and recently filed with the Securities and Exchange Commission
("SEC") to offer an initial public offering ("IPO") for their world leading
underwater fiber optic cable business, to unlock its value in the company. We
used the weakness in Tyco's shares to add to our position.
Conclusion
The unusual nature of the stock market in recent months whereby the NASDAQ
market, and small and mid capitalization stocks have risen while the Dow Jones
Industrial Average and the S&P 500 has declined is not unprecedented. In 1977
through 1978 large cap stocks declined, secondary stock measures rose, and
similar to the experience last year, interest rates increased. We offer no stock
market forecast, but rather will continue our strategy of buying promising
micro-cap, small-cap and mid-cap companies that we believe over the next three
to five years have the potential to prosper and eventually become mid- and
large-capitalization stocks.
Undoubtedly some of the Fund's technology and biotechnology holdings have
enjoyed an expansion in their price/earnings ratio ("P/E") because of investor's
preference to own companies addressing emerging technology. (A P/E ratio is the
price of the stock divided by its earnings per share.) And while no guarantees
can be given, we believe that every one of our holdings has the potential to
become important factors in their respective markets in the years ahead. We will
therefore not add marginal companies to the portfolio simply because they are
being swept up in the periphery of euphoria.
Thank you for your investment in the Smith Barney Aggressive Growth Fund. We
look forward to continuing to help you pursue your financial goals in the new
century.
Sincerely,
/S/ [ILLEGIBLE]
----------------
Richard A. Freeman
Vice President and
Investment Officer
March 20, 2000
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/6/ The views expressed in this letter were current as of February 29, 2000
(unless otherwise stated), are subject to change and do not constitute
investment advice.
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6 2000 Semi-Annual Report to Shareholders
<PAGE>
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An Interview with Smith Barney Aggressive Growth Fund Inc.
Manager Richard Freeman
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A Focus on Dynamic Companies Wisely Managed
For more than 16 years, the Smith Barney Aggressive Growth Fund Inc. ("Fund")
has delivered overall long-term capital appreciation through a bottom-up
approach to investing./1/ Richard A. Freeman, the Fund's manager, seeks out
dynamic companies deemed to be wisely managed. The Fund remains well diversified
across capitalization ranges and among several industries and sectors.
Richard A. Freeman is a Managing Director of Smith Barney Asset Management and
has been the manager of the Fund since its inception in October 1983. He began
his investment career as an aerospace and electrical equipment analyst with
Drexel Burnham Lambert and later with Chemical Bank. He became a portfolio
manager in 1983 when the Fund was launched. Richard holds a BS in accounting
from Brooklyn College and an MBA from New York University.
Richie, how would you describe the Fund's investment
strategy?
The Fund has maintained a consistent investment strategy since its inception and
is managed much more like a traditional "buy and hold" growth fund. This
explains the portfolio's very low turnover and why we are committed to
maintaining our long-term investment horizon. While our companies may be
aggressive growth candidates, the Fund is certainly not managed that way.
As disciplined, "bottom-up" investors, we try to identify the stocks of
companies with outstanding growth potential that we believe can grow their
earnings rapidly. While we are aware of the impact of broad economic trends, we
do not make economic forecasts. The Fund continues to be well diversified across
different industries and market sectors.
How would you characterize your stock selection process?
We seek to identify micro-, small- and mid-cap companies that we think have the
strongest growth potential. We look for companies with a product or service that
could power earnings and/or growth in cash flow. Ideally, our goal is to buy
companies that are selling for less than one times their growth rate.
Once we have targeted promising companies, we look closely at how their
management teams are compensated for the companies' performance. If a rising
stock price is a major incentive for management to work hard, we think that
should benefit shareholders as well. We tend to favor management teams that own
stock and benefit from options programs. We also like to see a board of
directors that also is paid with stock, as opposed to them receiving a cash
stipend every time they attend a board meeting.
The Fund's 1999 gain was very broadly based. This was in stark contrast to the
performance of the overall market, in which just a few stocks dominated returns.
We evaluate companies and are not overly influenced by short-term market
conditions. If there happens to be a lot of attractive opportunities in one
particular area, we are usually aggressive buyers. Particular sectors that
helped the Fund's performance last year were biotechnology, technology and
telecommunications.
What changes have you made to the Fund's portfolio
during the period?
We've added to existing holdings based on the Fund's positive cash flows. For
example, we recently added to our position in Tyco, which has been a substantial
Fund holding since we first purchased it as a small-cap company in 1983. Tyco's
stock declined amidst, what we believe are, unfounded accounting questions in
recent months, and we viewed this as an opportunity to buy
- ---------------
/1/ Bottom-up investing is a management style that de-emphasizes the
significance of economic and market cycles, focusing instead on the
analysis of individual stocks. Please note that past performance is not
indicative of future results.
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Smith Barney Aggressive Growth Fund Inc. 7
<PAGE>
more shares. We remained impressed with Tyco management and believe the
company's earnings outlook is strong.
Early in the Fund's fiscal year, we added to our positions in select
biotechnology stocks. We think that the biotechnology industry may be one of the
most dynamic growth sectors over the next few years.
You tend to buy micro-, small- and mid-cap companies long before they are
discovered by Wall Street. Why?
Our research approach is broad enough to include companies that may not be
widely followed by Wall Street analysts. This in turn may result in greater
opportunities to identify inefficiencies in pricing. We try to seek out
companies that we can own not just for one or two quarters, but for three years,
five years, ten years, and even beyond that. The Fund is a classic buy and hold
fund, and that's exemplified by the turnover, which, in recent years, has
averaged less than 10% a year./2/ (Portfolio turnover is a measure of trading
activity during the previous year, expressed as a percentage of the average
market value of the securities of the Fund.)
We tend to let our winners ride. We sell a stock when the original premise for
buying it has changed dramatically or we see a material degradation of a
company's balance sheet. But even then we try to be prudent. In our view,
acquisition cost is everything and that factor is arguably one of the most
important determinations a portfolio manager can make.
What type of stocks are typically the best candidates for the Fund?
Companies with products that can save people's lives (as in the case of
pharmaceuticals), change people's lives for the better or make things easier to
do are the qualities that we look for. In many cases, companies will be able to
charge a lot for those products. Therefore, these dynamic leaders stand a good
chance of being very profitable, and we like to see that those products have a
good patent life.
We focus on micro-, small- and mid-cap companies with the potential to become
large-cap companies. We like to see management with a big personal stake in the
company, and we look for strong, predictable cash flows, little or no debt, and
products that we believe will lead their respective fields.
Can you provide some insight into the multi-cap nature of the Fund?
If you take a look at our top holdings, you will see a number of large cap
names, but it is important to remember that we first purchased these stocks when
they were not yet trading in the large-cap range. So while some of these
companies might be large-cap, nearly every one of them was initially bought when
they were either micro-, small- or mid-cap.
Last year was difficult for many investors because of higher market volatility.
How do you manage money in more challenging markets?
We've used the volatility to our advantage by actually adding to our positions
during periods of market weakness. I have followed the stock market closely
since the mid-1960s and have seen the passage of numerous market cycles. In my
view, a well-designed growth fund should own companies that ideally will be top
performers over five or ten years rather than potential winners for just one or
two quarters.
- ---------------
/2/ There is no guarantee that the portfolio turnover will continue to average
less than 10% a year.
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8 2000 Semi-Annual Report to Shareholders
<PAGE>
What are your thoughts on the "New Economy," in which a dichotomy apparently
exists between powerful Internet stocks (the so-called "dot.coms") and
technology stocks versus established blue chip companies (the "Old Economy")?
We have not been caught up in the controversy. We think it's more important to
anticipate the relative strength in the market rather than react to it. There
has been such a cataclysmic perception about the weakness of the Old Economy
stocks and the relative strength of the New Economy stocks. While naysayers
think this is an unprecedented event, I recall the stock market of 1977 through
1978, in which many large cap companies were in a bear market while secondary
companies did quite well. Also, during that period of time interest rates rose,
creating conditions not unlike what we are seeing today.
Market narrowness and the outperformance of a handful of stocks over the past
couple of years may have exacerbated difficult market conditions, but we are
happy to report that the Fund was invested in many of the strongest sectors and
strongest companies in the market. We think our performance results have been
favorable in large part because of our rigorous stock selection process that has
led us to invest in successful companies. (Of course, past performance is not
indicative of future results.)
What advice can you give for new stock fund investors?
It is our hope that our shareholders genuinely share our long-term time horizon.
However, we would caution new investors against expecting the same kind of
returns from the Fund achieved during the last six months. Reasonable
expectations should be maintained. If I may paraphrase a quote from Edwin
Lefevre's book Reminiscences of a Stock Operator, "Big money is made with the
sitting and not the trading."
Richie, thanks for spending time with us today.
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Smith Barney Aggressive Growth Fund Inc. 9
<PAGE>
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Historical Performance -- Class A Shares
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<TABLE>
<CAPTION>
Net Asset Value
--------------------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/29/00 $67.73 $97.46 $0.00 $0.72 45.41%+
- --------------------------------------------------------------------------------------------------------------------------
8/31/99 33.78 67.73 0.00 0.88 104.42
- --------------------------------------------------------------------------------------------------------------------------
8/31/98 41.80 33.78 0.00 1.96 (15.16)
- --------------------------------------------------------------------------------------------------------------------------
8/31/97 28.76 41.80 0.00 0.81 49.11
- --------------------------------------------------------------------------------------------------------------------------
8/31/96 33.53 28.76 0.00 2.37 (7.44)
- --------------------------------------------------------------------------------------------------------------------------
8/31/95 26.76 33.53 0.00 1.37 31.95
- --------------------------------------------------------------------------------------------------------------------------
8/31/94 23.59 26.76 0.00 0.00 13.44
- --------------------------------------------------------------------------------------------------------------------------
8/31/93 18.94 23.59 0.00 0.00 24.55
- --------------------------------------------------------------------------------------------------------------------------
8/31/92 20.12 18.94 0.00 0.76 (2.42)
- --------------------------------------------------------------------------------------------------------------------------
8/31/91 16.16 20.12 0.00 0.94 31.97
- --------------------------------------------------------------------------------------------------------------------------
8/31/90 19.25 16.16 0.02 2.03 (6.38)
- --------------------------------------------------------------------------------------------------------------------------
Total $0.02 $11.84
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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Historical Performance -- Class B Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/29/00 $63.82 $91.41 $0.00 $0.72 44.84%+
- -----------------------------------------------------------------------------------------------------------------------
8/31/99 32.12 63.82 0.00 0.88 102.78
- -----------------------------------------------------------------------------------------------------------------------
8/31/98 40.17 32.12 0.00 1.96 (15.90)
- -----------------------------------------------------------------------------------------------------------------------
8/31/97 27.88 40.17 0.00 0.81 47.94
- -----------------------------------------------------------------------------------------------------------------------
8/31/96 32.82 27.88 0.00 2.37 (8.16)
- -----------------------------------------------------------------------------------------------------------------------
8/31/95 26.42 32.82 0.00 1.37 30.93
- -----------------------------------------------------------------------------------------------------------------------
8/31/94 23.46 26.42 0.00 0.00 12.62
- -----------------------------------------------------------------------------------------------------------------------
Inception* -- 8/31/93 20.52 23.46 0.00 0.00 14.33+
- -----------------------------------------------------------------------------------------------------------------------
Total $0.00 $8.11
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class L Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/29/00 $63.99 $91.67 $0.00 $0.72 44.86%+
- ---------------------------------------------------------------------------------------------------------------------
8/31/99 32.19 63.99 0.00 0.88 102.87
- ---------------------------------------------------------------------------------------------------------------------
8/31/98 40.22 32.19 0.00 1.96 (15.80)
- ---------------------------------------------------------------------------------------------------------------------
8/31/97 27.91 40.22 0.00 0.81 47.97
- ---------------------------------------------------------------------------------------------------------------------
8/31/96 32.84 27.91 0.00 2.37 (8.12)
- ---------------------------------------------------------------------------------------------------------------------
8/31/95 26.42 32.84 0.00 1.37 31.01
- ---------------------------------------------------------------------------------------------------------------------
8/31/94 23.47 26.42 0.00 0.00 12.57
- ---------------------------------------------------------------------------------------------------------------------
Inception*--8/31/93 21.14 23.47 0.00 0.00 11.02+
- ---------------------------------------------------------------------------------------------------------------------
Total $0.00 $8.11
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/29/00 $68.69 $99.02 $0.00 $0.72 45.65%+
- ----------------------------------------------------------------------------------------------------------------------
8/31/99 34.13 68.69 0.00 0.88 105.15
- ----------------------------------------------------------------------------------------------------------------------
8/31/98 42.07 34.13 0.00 1.96 (14.86)
- ----------------------------------------------------------------------------------------------------------------------
8/31/97 28.84 42.07 0.00 0.81 49.64
- ----------------------------------------------------------------------------------------------------------------------
Inception*--8/31/96 31.86 28.84 0.00 2.37 (10.13)+++
- ----------------------------------------------------------------------------------------------------------------------
Total $0.00 $6.74
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class Z Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/29/00 $69.63 $100.38 $0.00 $0.72 45.64%+
- -----------------------------------------------------------------------------------------------------------------------
8/31/99 34.58 69.63 0.00 0.88 105.20
- -----------------------------------------------------------------------------------------------------------------------
8/31/98 42.60 34.58 0.00 1.96 (14.86)
- -----------------------------------------------------------------------------------------------------------------------
8/31/97 29.20 42.60 0.00 0.81 49.61
- -----------------------------------------------------------------------------------------------------------------------
8/31/96 33.88 29.20 0.00 2.37 (7.07)
- -----------------------------------------------------------------------------------------------------------------------
8/31/95 26.94 33.88 0.00 1.37 32.38
- -----------------------------------------------------------------------------------------------------------------------
8/31/94 23.67 26.94 0.00 0.00 13.81
- -----------------------------------------------------------------------------------------------------------------------
Inception*--8/31/93 20.52 23.67 0.00 0.00 15.35+
- -----------------------------------------------------------------------------------------------------------------------
Total $0.00 $8.11
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charges(1)
-------------------------------------------------------------------------
Class A Class B Class L Class Y Class Z
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Six Months Ended 2/29/00+ 45.41% 44.84% 44.86% 45.65% 45.64%
- ----------------------------------------------------------------------------------------------------------------------
Year Ended 2/29/00 85.44 83.95 84.03 86.07 86.07
- ----------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/29/00 34.33 33.26 33.33 N/A 34.80
- ----------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/29/00 22.93 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------
Inception* through 2/29/00 19.10 26.73 28.51 35.14++ 28.17
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
With Sales Charges(2)
--------------------------------------------------------------------------
Class A Class B Class L Class Y Class Z
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Six Months Ended 2/29/00+ 38.15% 39.84% 42.40% 45.65% 45.64%
- -----------------------------------------------------------------------------------------------------------------------
Year Ended 2/29/00 76.15 78.95 81.18 86.07 86.07
- -----------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/29/00 32.96 33.20 33.06 N/A 34.80
- -----------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/29/00 22.31 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Inception* through 2/29/00 18.72 26.73 28.32 35.14++ 28.17
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Cumulative Total Returns
- --------------------------------------------------------------------------------
Without Sales Charges(1)
- --------------------------------------------------------------------------------
Class A (2/28/90 through 2/29/00) 688.36%
- --------------------------------------------------------------------------------
Class B (Inception* through 2/29/00) 465.99
- --------------------------------------------------------------------------------
Class L (Inception* through 2/29/00) 450.83
- --------------------------------------------------------------------------------
Class Y (Inception* through 2/29/00) 242.15++
- --------------------------------------------------------------------------------
Class Z (Inception* through 2/29/00) 514.80
- --------------------------------------------------------------------------------
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charges with respect to Class A and L shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and
Class L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%;
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase.
* Inception dates for Class A, B, L, Y and Z shares are October 24, 1983,
November 6, 1992, May 13, 1993, October 12, 1995 and November 6, 1992,
respectively.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
++ Performance calculations for Class Y shares use January 31, 1996 as the
inception date since all Class Y shares redeemed during November 1995 and
new shares in Class Y were not purchased until January 31, 1996.
- --------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. at a Glance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A Shares of the
Smith Barney Aggressive Growth Fund Inc. vs. Russell 2500 Growth Index+
[GRAPH]
Smith Barney Aggressive Russell 2500
Growth Fund Inc. Growth Index
Feb\1990 9,501 10,000
Aug\1990 8,963 9,095
Aug\1991 11,828 12,286
Aug\1992 11,542 13,325
Aug\1993 14,376 17,302
Aug\1994 16,307 18,322
Aug\1995 21,518 22,341
Aug\1996 19,918 25,267
Aug\1997 29,699 33,236
Aug\1998 25,198 27,633
Aug\1999 51,509 36,585
Feb\2000 74,901 64,163
+ Hypothetical illustration of $10,000 invested in Class A shares on February
28, 1990, assuming deduction of the maximum 5.00% sales charge at the time
of investment and reinvestment of dividends and capital gains, if any, at
net asset value through February 29, 2000. Russell 2500 Growth Index
measures the performance of those Russell 2500 companies with higher
price-to-book ratios and higher forecasted growth values. The index is
unmanaged and is not subject to the same management and trading expenses as
a mutual fund. The performance of the Fund's other classes may be greater
or less than the Class A shares' performance indicated on this chart,
depending on whether greater or lesser sales charges and fees were incurred
by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
Industry Diversification of Common Stock*
- ----------------------------------------------
[GRAPH]
21.4% Biotechnology
15.0% Pharmaceuticals
9.1% Broadcasting/Cable
9.8% Semiconductors
4.9% Multi-Industry
6.0% Investment Banking Services
6.1% Computer Software/Internet
3.7% Oil Field Equipment/Services
11.2% Communications
3.3% Managed Healthcare Providers
9.5% Other
* As a percentage of total common stock.
Investment Breakdown**
- ----------------------------------------------
[GRAPH]
3.9% Repurchase Agreement
96.1% Common Stock and Warrants
** As a percentage of total investments.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 96.0%
Biotechnology -- 20.5%
400,000 Alkermes, Inc.+@ $ 76,750,000
2,400,000 Amgen Inc.+ 163,650,000
11,210 Antigenics Inc.+ 504,450
3,150,000 Chiron Corp.+@ 157,500,000
250,000 COR Therapeutics, Inc.+ 22,406,250
133,000 Genentech, Inc.+@ 25,652,375
Genzyme Corp.:
2,000,000 General Division+ 114,875,000
124,257 Molecular Oncology Division+ 3,316,109
500,000 ImClone Systems Inc.+@ 65,531,250
5,000 Maxygen Inc.+ 733,125
580,000 NABI Inc.+ 6,380,000
17,950 Sequenom Inc.+ 2,243,750
- -------------------------------------------------------------------------------------------------------------
639,542,309
- -------------------------------------------------------------------------------------------------------------
Broadcasting/Cable -- 8.7%
1,450,000 AT&T - Liberty Media Group, Class A Shares+@ 75,762,500
500,000 Cablevision Systems Development Corp., Class A Shares+@ 32,093,750
1,600,000 CBS Corp. 95,300,000
Comcast Corp.:
100,000 Class A Shares@ 4,000,000
1,300,000 Class A Special Shares 55,250,000
690,000 World Wrestling Federation Entertainment, Inc.+ 8,970,000
- -------------------------------------------------------------------------------------------------------------
271,376,250
- -------------------------------------------------------------------------------------------------------------
Communications -- 10.8%
1,470,000 Adaptive Broadband Corp.+ 169,095,937
1,838,000 Arch Communications Group, Inc.+@ 25,502,250
600,000 AT&T Corp.@ 29,662,500
4,980 Avanex Corp.+ 1,037,708
1,580,000 C-Cor.net Corp.+ 70,655,625
168,768 Nokia Oyj, ADR 33,468,804
35,000 PNV.net, Inc.+ 144,375
150,000 The Source Information Management Co.+@ 3,103,125
10,275 Sycamore Networks, Inc.+@ 1,520,700
26,000 Time Warner Telecom Inc.+ 2,002,000
- -------------------------------------------------------------------------------------------------------------
336,193,024
- -------------------------------------------------------------------------------------------------------------
Computer Hardware-- 2.4%
Quantum Corp.:
5,000,000 DLT & Storage Systems+ 51,875,000
3,000,000 Hard Disk Drive+ 23,625,000
- -------------------------------------------------------------------------------------------------------------
75,500,000
- -------------------------------------------------------------------------------------------------------------
Computer Software/Internet -- 5.8%
5,880 Akamai Technologies, Inc.+@ 1,536,150
2,400,000 America Online, Inc.+ 141,600,000
27,380 Internet Pictures Corp.+@ 903,540
15,000 Juniper Networks, Inc.+@ 4,114,688
2,500 Lante Corp.+ 199,375
15,000 McAfee.com Corp.+ 511,875
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Computer Software/Internet -- 5.8% (continued)
340,400 Microsoft Corp.+ $ 30,423,250
17,500 Neoforma.com, Inc.+@ 1,041,250
4,930 Niku Corp.+ 340,170
8,220 Organic, Inc.+@ 280,508
2,500 webMethods, Inc.+@ 770,156
- -------------------------------------------------------------------------------------------------------------
181,720,962
- -------------------------------------------------------------------------------------------------------------
Diversified Technology -- 1.3%
35,080 Agilent Technologies, Inc.+ 3,637,358
350,000 Drexler Technology Corp.+ 5,315,625
689,000 Excel Technology, Inc.+ 19,205,875
750,000 GenRad, Inc.+ 11,062,500
1,875 Inforte Corp.+@ 150,820
16,130 PerkinElmer, Inc. 1,042,401
- -------------------------------------------------------------------------------------------------------------
40,414,579
- -------------------------------------------------------------------------------------------------------------
Drug Delivery/Testing -- 1.6%
599,500 Advanced Polymer Systems, Inc.+ 2,472,938
100,000 Albany Molecular Research, Inc.+ 4,825,000
1,000,000 ALZA Corp.+ 36,687,500
250,000 Cygnus, Inc.+@ 4,609,375
- -------------------------------------------------------------------------------------------------------------
48,594,813
- -------------------------------------------------------------------------------------------------------------
Electronic - Military -- 1.5%
1,000,000 L-3 Communications Holdings, Inc.+ 42,562,500
184,900 Tech-Sym Corp.+ 3,235,750
- -------------------------------------------------------------------------------------------------------------
45,798,250
- -------------------------------------------------------------------------------------------------------------
Healthcare - Miscellaneous -- 2.4%
100,000 Biosite Diagnostics Inc.+ 3,500,000
3,320 Diversa Corp.+ 443,220
1,000,287 Genzyme Surgical Products+ 12,628,623
530,000 Nanogen, Inc.+ 41,605,000
200,000 Tularik Inc.+ 15,775,000
- -------------------------------------------------------------------------------------------------------------
73,951,843
- -------------------------------------------------------------------------------------------------------------
Investment Banking Services -- 5.7%
1,500,000 Astoria Financial Corp. 35,718,750
30,000 Goldman Sachs Group, Inc.@ 2,775,000
1,300,000 Lehman Brothers Holdings Inc. 94,250,000
200,000 Merrill Lynch & Co., Inc. 20,500,000
126,700 Neuberger Berman Inc. 3,262,525
1,473,200 Roslyn Bancorp, Inc. 22,650,450
- -------------------------------------------------------------------------------------------------------------
179,156,725
- -------------------------------------------------------------------------------------------------------------
Managed Healthcare Providers -- 3.2%
1,950,000 United HealthCare Corp. 99,693,750
- -------------------------------------------------------------------------------------------------------------
Multi-Industry -- 4.7%
3,875,000 Tyco International Ltd. 147,007,812
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Oil Field Equipment/Services -- 3.6%
1,025,000 Core Laboratories N.V.+ $ 21,717,187
2,000,000 Weatherford International, Inc.+ 90,000,000
- ------------------------------------------------------------------------------------------------------------
111,717,187
- ------------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 14.4%
80,000 EP MedSystems, Inc.+@ 440,000
2,000,000 Forest Laboratories, Inc.+ 136,625,000
1,600,000 IDEC Pharmaceuticals Corp.+@ 225,400,000
1,005,000 Isis Pharmaceuticals, Inc.+@ 14,195,625
362,400 Pfizer Inc. 11,642,100
243,640 Pharmacia & Upjohn, Inc.@ 11,603,355
2,100,000 SICOR Inc.+ 20,868,750
400,000 Vertex Pharmaceuticals Inc.+ 29,050,000
- ------------------------------------------------------------------------------------------------------------
449,824,830
- ------------------------------------------------------------------------------------------------------------
Semiconductors -- 9.4%
22,500 Caliper Technologies Corp.+ 4,000,781
800,000 Cirrus Logic, Inc.+ 16,650,000
1,640,000 Intel Corp.@ 185,320,000
800,000 Micron Technology, Inc.@ 78,450,000
7,475 Quantum Effect Devices, Inc.+ 720,403
630,000 Standard Microsystems Corp.+ 9,469,688
- ------------------------------------------------------------------------------------------------------------
294,610,872
- ------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $1,113,748,670) 2,995,103,206
- ------------------------------------------------------------------------------------------------------------
WARRANTS -- 0.1%
1,642,028 Arch Communications Group, Inc., Expire 9/1/03+
(Cost -- $0) 3,899,816
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 3.9%
$69,471,000 Morgan Stanley Dean Witter & Co., 5.750% due 3/1/00;
Proceeds at maturity--$69,482,096; (Fully
collateralized by U.S. Treasury Notes and Bonds,
5.375% to 8.750% due 6/30/03 to 5/15/17;
Market value--$71,108,412) 69,471,000
53,351,000 Warburg Dillon Read LLC, 5.750% due 3/1/00;
Proceeds at maturity--$53,359,521; (Fully
collateralized by U.S. Treasury Notes, 4.625%
due 12/31/00; Market value--$54,418,283) 53,351,000
- ------------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $122,822,000) 122,822,000
- ------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $1,236,570,670*) $3,121,825,022
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ Non-income producing security.
@ All or a portion of this security is on loan (See Note 5).
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
ASSETS:
<S> <C>
Investments, at value (Cost--$1,236,570,670) $ 3,121,825,022
Cash 25,318
Collateral for securities on loan (Note 5) 419,309,842
Receivable for Fund shares sold 16,229,301
Dividends and interest receivable 671,406
Receivable for securities sold 37,387
- ----------------------------------------------------------------------------------------
Total Assets 3,558,098,276
- ----------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 5) 419,309,842
Payable for securities purchased 8,908,135
Investment advisory fees payable 1,351,382
Administration fees payable 450,299
Distribution fees payable 381,267
Payable for Fund shares purchased 44,232
Accrued expenses 453,124
- ----------------------------------------------------------------------------------------
Total Liabilities 430,898,281
- ----------------------------------------------------------------------------------------
Total Net Assets $ 3,127,199,995
- ----------------------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 328,841
Capital paid in excess of par value 1,250,334,977
Accumulated net investment loss (9,401,230)
Accumulated net realized gain from security transactions 683,055
Net unrealized appreciation of investments 1,885,254,352
- ----------------------------------------------------------------------------------------
Total Net Assets $3,127,199,995
- ----------------------------------------------------------------------------------------
Shares Outstanding:
Class A 12,184,821
--------------------------------------------------------------------------------------
Class B 10,833,770
--------------------------------------------------------------------------------------
Class L 4,316,287
--------------------------------------------------------------------------------------
Class Y 2,461,920
--------------------------------------------------------------------------------------
Class Z 3,087,343
--------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $97.46
--------------------------------------------------------------------------------------
Class B* $91.41
--------------------------------------------------------------------------------------
Class L** $91.67
--------------------------------------------------------------------------------------
Class Y (and redemption price) $99.02
--------------------------------------------------------------------------------------
Class Z (and redemption price) $100.38
--------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $102.59
--------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $92.60
- ----------------------------------------------------------------------------------------
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if shares
are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if shares
are redeemed within one year from initial purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended February 29, 2000
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 1,900,771
Interest 3,661,334
- --------------------------------------------------------------------------------
Total Investment Income 5,562,105
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 6,344,708
Distribution fees (Note 2) 5,394,254
Administration fees (Note 2) 2,114,903
Shareholder and system servicing fees 869,697
Registration fees 86,844
Shareholder communications 63,062
Custody 33,313
Audit and legal 23,335
Directors' fees 18,968
Other 12,156
- --------------------------------------------------------------------------------
Total Expenses 14,961,240
- --------------------------------------------------------------------------------
Net Investment Loss (9,399,135)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 12,418,753
Cost of securities sold 6,622,196
- --------------------------------------------------------------------------------
Net Realized Gain 5,796,557
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 988,026,361
End of period 1,885,254,352
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 897,227,991
- --------------------------------------------------------------------------------
Net Gain on Investments 903,024,548
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 893,625,413
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended February 29, 2000 (unaudited)
and the Year Ended August 31, 1999
<TABLE>
<CAPTION>
2000 1999
======================================================================================================
OPERATIONS:
<S> <C> <C>
Net investment loss $ (9,399,135) $ (13,173,101)
Net realized gain 5,796,557 25,368,533
Increase in net unrealized appreciation 897,227,991 739,882,957
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 893,625,413 752,078,389
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains (19,298,815) (18,185,655)
- ------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (19,298,815) (18,185,655)
- ------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 2,323,604,848 2,547,281,021
Net asset value of shares issued for reinvestment of dividends 16,911,247 15,315,896
Cost of shares reacquired (1,752,000,110) (2,311,458,577)
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 588,515,985 251,138,340
- ------------------------------------------------------------------------------------------------------
Increase in Net Assets 1,462,842,583 985,031,074
NET ASSETS:
Beginning of period 1,664,357,412 679,326,338
- ------------------------------------------------------------------------------------------------------
End of period* $ 3,127,199,995 $ 1,664,357,412
======================================================================================================
* Includes accumulated net investment loss of: $ (9,401,230) $ (2,095)
======================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund, Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Fund Inc. ("Fund"), a Maryland corporation is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets;
securities for which no sales price was reported and U.S. government and agency
obligations are valued at the bid price. Investments in securities for which
market quotations are not available are valued at fair value as determined in
good faith by the Board of Directors; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis; (e) gains or losses on the sale
of securities are calculated by using the specific identification method; (f)
direct expenses are charged to each class; investment advisory fees and general
Fund expenses are allocated on the basis of relative net assets by class; (g)
dividends and distributions to shareholders are recorded on the ex-dividend
date; (h) the Fund intends to comply with the applicable provisions of the
Internal Revenue Code of 1986, as amended, pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; (i) the character of
income and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
August 31, 1999, reclassifications were made to the Fund's capital accounts to
reflect permanent book/tax differences and income and gains available for
distributions under income tax regulations. Accordingly, an accumulated net
investment loss of $1,989,709 and an accumulated net realized gain of $435 were
reclassified to paid-in capital. Net investment income, net realized gains and
net assets were not affected by this adjustment; and (j) estimates and
assumptions are required to be made regarding assets, liabilities and changes in
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ.
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment adviser to the Fund. The Fund pays SSBC an
advisory fee calculated at an annual rate of 0.60% of the average daily net
assets. This fee is calculated daily and paid monthly.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly.
Effective October 1999, Citi Fiduciary Trust Company ("CFTC"), another
subsidiary of Citigroup, became the Fund's transfer agent and PFPC Global Fund
Services ("PFPC") became the sub-transfer agent. CFTC receives account fees and
asset-based fees that vary according to the size and type of account. PFPC is
responsible for shareholder recordkeeping and financial processing for all
shareholder accounts and is paid by CFTC. During the period October 1, 1999
through February 29, 2000, the Fund paid transfer agent fees of $641,831 to
CFTC.
- --------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
CFBDS, Inc. ("CFBDS") acts as the Fund's distributor. Salomon Smith Barney Inc.
("SSB"), another subsidiary of SSBH, as well as certain other broker-dealers,
continues to sell Fund shares to the public as a member of the selling group.
SSB acts as the primary broker for its portfolio agency transactions. For the
six months ended February 29, 2000, SSB received total brokerage commissions of
$12,100.
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs within one year from initial purchase and
declines thereafter by 1.00% per year until no CDSC is incurred. Class L shares
also have a 1.00% CDSC, which applies if redemption occurs within the first year
of purchase. In certain cases, Class A shares have a 1.00% CDSC, which applies
if redemption occurs within the first year of purchase. This CDSC only applies
to those purchases of Class A shares, which, when combined with current holdings
of Class A shares, equal or exceed $500,000 in the aggregate. These purchases do
not incur an initial sales charge.
For the six months ended February 29, 2000, CFBDS and SSB received sales charges
of $2,103,000 and $1,121,000 on sales of the Fund's Class A and L shares,
respectively. In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
================================================================================
CDSCs $12,000 $210,000 $24,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class. The Fund also pays a distribution fee
with respect to Class B and L shares calculated at the annual rate of 0.75% of
the average daily net assets of each class, respectively. For the six months
ended February 29, 2000, total Distribution Plan fees were as follows:
Class A Class B Class L
================================================================================
Distribution Plan Fees $1,055,790 $3,171,662 $1,166,802
================================================================================
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the six months ended February 29, 2000, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $535,529,357
- --------------------------------------------------------------------------------
Sales 12,418,753
================================================================================
At February 29, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $1,915,467,507
Gross unrealized depreciation (30,213,155)
- --------------------------------------------------------------------------------
Net unrealized appreciation $1,885,254,352
================================================================================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value of the collateral in amounts at least equal to
the repurchase price.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
5. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Fund maintains exposure for the risk of any losses in
the investment of amounts received as collateral.
At February 29, 2000, the Fund loaned common stocks having a value of
approximately $436,809,089 and holds the following collateral for loaned
securities:
Security Description Value
================================================================================
Time Deposits:
Amsouth Bank, 5.91% due 3/1/00 $ 46,770,557
Bank of America, 5.88% due 3/1/00 63,140,252
Bank of Brussels, 5.88% due 3/1/00 60,082,298
Chase Manhattan Bank, 5.88% due 3/1/00 63,140,252
Credit Suisse, 5.91% due 3/1/00 63,140,252
Fifth Third Bank, 5.88% due 3/1/00 63,140,252
Firstar Bank, 5.75% due 3/1/00 903,434
Suntrust Bank, 5.88% due 3/1/00 15,060,100
Commercial Paper:
Atlantis One, 5.94% due 3/6/00 10,682,091
Atlantis One, 5.97% due 3/20/00 2,029,011
Fairway Asset Bank, 5.98% due 4/17/00 7,045,455
Floating Rate Notes:
American Home Products, 5.48% due 4/20/00 3,420,687
Amsouth Bank, 5.73% due 1/25/01 5,880,942
Keybank Corp., 5.88% due 2/14/01 9,358,755
Morgan Stanley, 5.75% due 5/8/00 3,261,156
Sigma Finance Corp., 6.23% due 4/4/00 2,254,348
- --------------------------------------------------------------------------------
Total $419,309,842
================================================================================
Income earned by the Fund from securities lending for the six months ended
February 29, 2000 was $267,007.
6. Capital Shares
At February 29, 2000, the Fund had 100 million shares of capital stock
authorized with a par value of $0.01 per share. The Fund has the ability to
issue multiple classes of shares. Each share of a class represents an identical
interest and has the same rights, except that each class bears certain expenses,
including those specifically related to the distribution of its shares.
- --------------------------------------------------------------------------------
22 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
At February 29, 2000, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class L Class Y Class Z
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Total Paid-in Capital $335,049,176 $510,919,329 $206,221,051 $54,055,684 $144,418,578
========================================================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 29, 2000 August 31, 1999
------------------------------ ---------------------------------
Shares Amount Shares Amount
====================================================================================================================================
Class A
<S> <C> <C> <C> <C>
Shares sold 22,625,954 $ 1,714,547,962 37,325,388 $ 2,050,528,985
Shares issued on reinvestment 107,900 7,386,889 171,626 7,692,276
Shares reacquired (20,737,426) (1,570,620,533) (36,082,392) (1,981,741,151)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,996,428 $ 151,314,318 1,414,622 $ 76,480,110
====================================================================================================================================
Class B
Shares sold 5,559,854 $ 403,532,052 6,945,414 $ 357,939,766
Shares issued on reinvestment 87,740 5,647,803 115,516 4,910,603
Shares reacquired (2,179,707) (154,616,350) (5,479,074) (273,687,067)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 3,467,887 $ 254,563,505 1,581,856 $ 89,163,302
====================================================================================================================================
Class L
Shares sold 2,003,558 $ 149,825,823 1,039,798 $ 56,111,076
Shares issued on reinvestment 31,371 2,025,004 39,585 1,686,340
Shares reacquired (246,540) (17,906,197) (580,589) (28,676,180)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,788,389 $ 133,944,630 498,794 $ 29,121,236
====================================================================================================================================
Class Y
Shares sold 25,841 $ 1,759,084 124,511 $ 5,795,983
Shares issued on reinvestment -- -- -- --
Shares reacquired (73,249) (6,500,000) (242,792) (16,000,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease (47,408) $ (4,740,916) (118,281) $ (10,204,017)
====================================================================================================================================
Class Z
Shares sold 654,222 $ 53,939,927 1,413,441 $ 76,905,211
Shares issued on reinvestment 26,286 1,851,551 22,343 1,026,677
Shares reacquired (33,137) (2,357,030) (214,783) (11,354,179)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 647,371 $ 53,434,448 1,221,001 $ 66,577,709
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares 2000(1)(2) 1999(2) 1998 1997 1996 1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $67.73 $33.78 $41.80 $28.76 $33.53 $26.76
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.24) (0.48) (0.42) (0.33) (0.31) (0.34)
Net realized and unrealized
gain (loss) 30.69 35.31 (5.64) 14.18 (2.09) 8.48
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 30.45 34.83 (6.06) 13.85 (2.40) 8.14
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $97.46 $67.73 $33.78 $41.80 $28.76 $33.53
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 45.41%++ 104.42% (15.16)% 49.11% (7.44)% 31.95%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $1,187,529 $690,142 $296,376 $333,877 $252,531 $292,402
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.15%+ 1.18% 1.21% 1.21% 1.30% 1.37%
Net investment loss (0.63)+ (0.89) (0.97) (0.93) (0.97) (1.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13% 44%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class B Shares 2000(1)(2) 1999(2) 1998 1997 1996 1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $63.82 $32.12 $40.17 $27.88 $32.82 $26.42
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.51) (0.87) (0.66) (0.56) (0.53) (0.33)
Net realized and unrealized
gain (loss) 28.82 33.45 (5.43) 13.66 (2.04) 8.10
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 28.31 32.58 (6.09) 13.10 (2.57) 7.77
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $91.41 $63.82 $32.12 $40.17 $27.88 $32.82
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 44.84%++ 102.78% (15.90)% 47.94% (8.16)% 30.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $990,279 $470,141 $185,808 $197,559 $136,322 $97,438
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.95%+ 2.00% 2.02% 2.01% 2.07% 2.12%
Net investment loss (1.42)+ (1.70) (1.78) (1.73) (1.75) (1.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13% 44%
====================================================================================================================================
</TABLE>
(1) For the six months ended February 29, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
24 2000 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares 2000(1)(2) 1999(2) 1998(3) 1997 1996 1995(4)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $63.99 $32.19 $40.22 $27.91 $32.84 $26.42
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.50) (0.84) (0.68) (0.59) (0.53) (0.40)
Net realized and unrealized
gain (loss) 28.90 33.52 (5.39) 13.71 (2.03) 8.19
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 28.40 32.68 (6.07) 13.12 (2.56) 7.79
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $91.67 $63.99 $32.19 $40.22 $27.91 $32.84
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 44.86%++ 102.87% (15.80)% 47.97% (8.12)% 31.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $395,689 $161,784 $65,312 $77,297 $63,786 $72,324
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.91%+ 1.94% 1.97% 1.97% 2.06% 2.12%
Net investment loss (1.39)+ (1.64) (1.73) (1.68) (1.75) (1.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13% 44%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class Y Shares 2000(1)(2) 1999(2) 1998 1997 1996(5)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $68.69 $34.13 $42.07 $28.84 $31.86
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.11) (0.29) (0.25) (0.16) (0.12)
Net realized and unrealized gain (loss) 31.16 35.73 (5.73) 14.20 (0.53)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 31.05 35.44 (5.98) 14.04 (0.65)
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.72) (0.88) (1.96) (0.81) (2.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.72) (0.88) (1.96) (0.81) (2.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.02 $68.69 $34.13 $42.07 $28.84
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 45.65%++ 105.15% (14.86)% 49.64% (10.13)%*++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $243,781 $172,385 $89,675 $158,146 $58,641
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.81%+ 0.82% 0.85% 0.84% 0.84%+
Net investment loss (0.30)+ (0.53) (0.62) (0.56) (0.49)+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
====================================================================================================================================
</TABLE>
(1) For the six months ended February 29, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) On November 7, 1994, the former Class D shares were renamed Class C shares.
(5) For the period from October 12, 1995 (inception date) to August 31, 1996.
* Performance for Class Y shares is for the period from January 31, 1996 to
August 31, 1996 since all Class Y shares were redeemed during November 1995
and new shares in Class Y were not purchased until January 31, 1996.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class Z Shares 2000(1)(2) 999(2) 1998 1997 1996 1995(3)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $69.63 $34.58 $42.60 $29.20 $33.88 $26.94
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.11) (0.30) (0.28) (0.20) (0.20) (0.34)
Net realized and unrealized
gain (loss) 31.58 36.23 (5.78) 14.41 (2.11) 8.65
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 31.47 35.93 (6.06) 14.21 (2.31) 8.31
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.72) (0.88) (1.96) (0.81) (2.37) (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $100.38 $69.63 $34.58 $42.60 $29.20 $33.88
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 45.64%++ 105.20% (14.86)% 49.61% (7.07)% 32.38%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $309,922 $169,905 $42,155 $43,553 $30,837 $27,209
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.82%+ 0.82% 0.85% 0.85% 0.93% 1.12%
Net investment loss (0.29)+ (0.51) (0.62) (0.57) (0.61) (0.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13% 44%
====================================================================================================================================
</TABLE>
(1) For the six months ended February 29, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On November 7, 1994, the former Class C shares were renamed Class Z shares.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
26 Semi-Annual Report to Shareholders
<PAGE>
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<PAGE>
(This page intentionally left blank.)
<PAGE>
Smith Barney
Aggressive Growth
Fund Inc.
Directors
Paul R. Ades
Herbert Barg
Dwight B. Crane
Frank Hubbard
Heath B. McLendon, Chairman
Jerome Miller
Ken Miller
John F. White, Emeritus
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Richard A. Freeman
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser and Administrator
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PNC Bank
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street
22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, RI 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney Aggressive Growth Fund Inc., but it may also be used as sales literature
when preceeded or accompanied by a current Prospectus, which gives details about
charges, expenses, investment objectives and operating policies of the Fund. If
used as sales material after May 31, 2000, this report must be accompanied by
performance information for the most recently completed calendar quarter.
[LOGO OF SALOMON SMITH BARNEY]
Smith Barney Aggressive
Growth Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
