<PAGE>
-------------------------------------------------------------------------------
SMITH BARNEY
AGGRESSIVE GROWTH
FUND INC.
-------------------------------------------------------------------------------
CLASSIC SERIES | ANNUAL REPORT | AUGUST 31, 2000
[SMITH BARNEY MUTUAL FUNDS LOGO]
Your Serious Money Professionally Managed.(TM)
-------------------------------------------------------
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
-------------------------------------------------------
<PAGE>
[PHOTO OF RICHIE FREEMAN]
RICHIE FREEMAN
PORTFOLIO MANAGER
[LOGO OF CLASSIC SERIES]
Annual Report . August 31, 2000
SMITH BARNEY
AGGRESSIVE GROWTH FUND
RICHIE FREEMAN
Richie Freeman has more than 25 years of securities business experience and has
been managing the Fund since its inception in 1983.
Education: BS from Brooklyn College, MBA from New York University
FUND OBJECTIVE
The 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.
FUND FACTS
FUND INCEPTION
October 24, 1983
MANAGER TENURE
17 Years
MANAGER INVESTMENT
INDUSTRY EXPERIENCE
25 Years
CLASS A CLASS B CLASS L
--------------------------------------------
NASDAQ SHRAX SAGBX SAGCX
--------------------------------------------
INCEPTION 10/24/83 11/6/92 5/13/93
--------------------------------------------
Average Annual Total Returns as of August 31, 2000
Without Sales Charges(1)
Class A Class B Class L
----------------------------------------------------------------------
One-Year 64.91% 63.58% 63.62%
----------------------------------------------------------------------
Five-Year 31.60 30.55 30.60
----------------------------------------------------------------------
Ten-Year 25.22 N/A N/A
----------------------------------------------------------------------
Since Inception+ 19.36 26.77 28.43
----------------------------------------------------------------------
With Sales Charges(2)
Class A Class B Class L
----------------------------------------------------------------------
One-Year 56.68% 58.58% 60.97%
----------------------------------------------------------------------
Five-Year 30.26 30.48 30.34
----------------------------------------------------------------------
Ten-Year 24.58 N/A N/A
----------------------------------------------------------------------
Since Inception+ 19.00 26.77 28.25
----------------------------------------------------------------------
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of all applicable
sales charges with respect to Class A and L shares of 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 sales charge of 5.00% and 1.00%, respectively; and Class B
shares reflect the deduction of a 5.00% CDSC, which applies if shares are
redeemed within one year from initial purchase. Thereafter, this 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 classes of shares are not available
through all investment professionals. You should contact your investment
professional for further information.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
+ Inception dates for Class A, B and L shares are October 24, 1983, November 6,
1992 and May 13, 1993, respectively.
What's Inside
Your Investment in the Smith Barney
Aggressive Growth Fund Inc. . . . . . . . . . . . . . . . . . . . . . . . . 1
A Message from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . 2
Fund at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Letter from the Portfolio Manager . . . . . . . . . . . . . . . . . . . . . 4
Historical Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Growth of $10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . 16
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Statements of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . 18
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 26
Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
[SMITH BARNEY MUTUAL FUNDS LOGO]
Your Serious Money, Professionally Managed(SM)
----------------------------------------------------------------------------
Investment Products: Not FDIC Insured . Not Bank Guaranteed . May Lose Value
----------------------------------------------------------------------------
<PAGE>
----------------------------------------------------------
YOUR INVESTMENT IN THE SMITH BARNEY AGGRESSIVE GROWTH FUND
----------------------------------------------------------
For nearly 17 years, the Smith Barney Aggressive Growth Fund has delivered
overall long-term growth by carefully scanning the investment landscape to find
innovative companies in dynamic industries. Seasoned portfolio manager Richie
Freeman looks for companies that exhibit three significant features:
. Potential for Significant Growth
Richie seeks out dynamic businesses with the capability for extraordinary
growth. Many are currently found in expanding industries such as biotechnology
and telecommunications.
. Dedicated and Effective Management
Richie looks to invest in those companies where managers have an ownership
stake. In his view, a personal equity stake is an added motivation for
management to do better.
. Unrecognized Values
Richie's research approach is broad enough to include companies that may not
be widely followed by Wall Street analysts. And while no guarantees can be
given, Richie thinks this lack of coverage often creates pricing
inefficiencies.
. A Distinguished History of Managing Your Serious Money
Founded in 1873 and 1892, respectively, the firms of Charles D. Barney and
Edward B. Smith were among the earliest providers of securities information,
research and transactions. Merged in 1937, Smith Barney & Co. offered its
clients a powerful, blue-chip investment capability able to provide timely
information, advice and insightful asset management. Today, SSB Citi Fund
Management LLC ("SSB Citi") unites the distinguished history of Smith Barney &
Co. with the global reach of its parent, Citigroup.
At SSB Citi, you gain access to blue-chip management delivered professionally.
We are proud to offer you, the serious investor, a variety of managed
solutions.
1 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
---------------------------
A MESSAGE FROM THE CHAIRMAN
---------------------------
The new millennium, so far, has been marked by higher volatility and concerns
that the bull market in stocks may be running out of steam. At SSB Citi Fund
Management LLC ("SSB Citi"), we have instituted many positive changes, with the
ultimate goal of offering our investors a well-rounded menu of stock and bond
funds that can be tailored to a wide range of investment objectives. Through the
course of the year, we have announced plans to rebrand and merge our CitiFunds
and Concert offerings to bring these funds under one recognized fund family
brand -- Smith Barney Mutual Funds.
We believe that your serious money demands professional management. Since 1937,
Smith Barney has managed the serious money of individuals, their families and
their businesses. Today, with over $399 billion in assets under management,* SSB
Citi offers choices and solutions, uniting the distinguished history of Smith
Barney with the unparalleled global reach of its parent, Citigroup.
[PHOTO OF HEATH B. MCLENDON]
CHAIRMAN
For those of you who are new shareholders, I would like to extend a warm welcome
to you on behalf of everyone at SSB Citi. The Smith Barney Aggressive Growth
Fund seeks capital appreciation by investing in companies that the manager
believes are growing or will grow their earnings at a faster rate than companies
included in the Standard & Poor's 500 Index. Portfolio manager Richie Freeman
maintains a diversified portfolio of small-, medium- and large-sized companies
he believes are best positioned to benefit over time from new products or
services, technological developments or changes in management.
Richie utilizes a buy and hold strategy -- that is, he buys what he thinks are
high-quality companies and typically holds onto them, rather than looking for a
quick profit. The objective of his investment strategy is to identify fairly
priced companies with the potential for sustainable growth of capital and hold
them for the long term. This strategy rests on the belief that the best way to
build wealth is to own companies that will appreciate in value. An investment in
the Smith Barney Aggressive Growth Fund provides you with an opportunity to
invest in fast-moving, yet wisely managed companies, in our view a necessary
part of a well-balanced portfolio.
When you invest with SSB Citi, 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 success.
Thank you for your confidence in our investment management approach.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
September 20, 2000
----------
* As of August 31, 2000. Please note this figure represents retail,
institutional money and separate accounts.
2 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
----------------------------------------------------------------
Smith Barney Aggressive Growth Fund Inc. at a Glance (unaudited)
----------------------------------------------------------------
Top Ten Holdings+*
1. Tyco International Ltd. ............................... 6.6%
2. Lehman Brothers Holdings Inc. ......................... 5.7
3. Intel Corp. ........................................... 5.7
4. IDEC Pharmaceuticals Corp. ............................ 5.2
5. Chiron Corp. .......................................... 4.9
6. Forest Laboratories, Inc. ............................. 4.5
7. UnitedHealth Group Inc. ............................... 4.4
8. Comcast Corp., Class A Special Shares ................. 4.3
9. Amgen Inc. ............................................ 4.2
10. America Online, Inc. .................................. 4.1
Industry Diversification of Common Stock+*
18.4% Biotechnology
11.0% Broadcasting/Cable
11.3% Communications
4.8% Computer Software/Internet
9.4% Investment Banking Services
4.4% Managed Healthcare Providers
6.6% Multi-Industry
3.9% Oil Field Equipment/Services
12.8% Pharmaceuticals
10.1% Semiconductors
7.3% Other
Investment Breadown++*
[PIE CHART]
5.8% Repurchase Agreement
94.2% Common Stock and Warrants
+ As a percentage of total common stock.
++ As a percentage of total investments.
* All information is as of August 31, 2000. Please note that Portfolio
holdings are subject to change.
3 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Dear Shareholder,
We are pleased to provide the annual report for the Smith Barney Aggressive
Growth Fund Inc. ("Fund") for the year ended August 31, 2000. In this report we
have summarized the period's prevailing economic and market conditions and
outlined our investment strategy. The information provided in this letter
represents the opinion of the manager and is not intended to be a forecast of
future events, a guarantee of future results nor investment advice. Please refer
to pages 13 through 15 for a complete list and percentage breakdown of the
Fund's holdings. Further, there is no assurance that certain securities will
remain in or out of the Fund. A detailed summary of the Fund's performance can
be found in the appropriate sections that follow.
Performance Update
For the year ended August 31, 2000, the Fund's Class A shares, without and with
sales charges, returned 64.91% and 56.68%, respectively. During the period under
review, the Russell 2500 Growth Index/1/ and the Value Line Composite Index-
Geometric/2/ returned 56.13% and 0.54%, respectively.
We were particularly pleased with the Fund's fiscal 2000 performance in that it
followed the strongest performance year in the Fund's history (fiscal 1999).
We are also proud to report that the Fund's Class A shares received a 5-star
Morningstar Overall Rating(TM)/3/ among 3,839 domestic equity funds as of
August 31, 2000. But remember past performance is not indicative of future
results.
RICHIE FREEMAN PURSUES A BUY AND HOLD
STRATEGY THAT POSSIBLY ALLOWS THE FUND'S
INVESTMENTS TO GROW AND FLOURISH OVER TIME.
Market Overview
Continuing the pattern seen early in 2000, market volatility increased
dramatically during the second half of the Fund's fiscal year. In fact, one can
break down the stock market's performance so far this calendar year through
August 31, 2000 into three separate periods: a strong first quarter, followed by
one of the sharpest declines in the Nasdaq Composite Index/4/ on record of over
40% followed by a recovery that began toward the end of May. In our view, the
catalyst for the severe weakness in the second quarter of 2000 were the fears of
higher interest rates engendered by the Federal Reserve Board ("Fed") which grew
increasingly concerned about the high valuation level of the stock market and
its impact on consumer spending.
__________
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 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.
Please note that an investor cannot invest directly in an index.
2 The Value Line Composite Index-Geometric is composed of 1,700 stocks traded
by the Value Line Investment Survey. Please note that an investor cannot
invest directly in an index.
3 Morningstar proprietary ratings reflect historical risk-adjusted performance
as of August 31, 2000. The ratings are subject to change every month. Past
performance is no guarantee of future results. Morningstar ratings are
calculated from the fund's three-, five-, and 10-year average annual returns
(if applicable) in excess of 90-day Treasury bill returns with appropriate
fee adjustments, and a risk factor that reflects fund performance below 90-
day T-bill returns. The Fund's Class A shares received 5 stars for the three-
, five-, and 10-year periods ended August 31, 2000, respectively. The top 10%
of the funds in a broad asset class receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the
bottom 10% receive 1 star. The Class A shares of the Fund were rated among
3,839, 2,375 and 792 for domestic equity funds for the three-, five-, and 10-
year periods respectively. Ratings are for the Class A share class only;
other classes may vary. Classes less than three years old will not be rated.
4 The Nasdaq Composite Index is a market value-weighted index which measures
all domestic and non-U.S. based securities listed on the NASDAQ stock market.
Please note that an investor cannot invest directly in an index.
4 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Coming into 2000, valuations on many emerging growth stocks, particularly
technology companies that had yet to achieve profitability, were quite high by
historical measures, yet many investors continued to purchase such shares using
margin. (Margin is a form of credit whereby an investor borrows money using his
current stockholdings as a form of collateral.) When the stock market began to
decline in March, a pattern of margin calls developed, which began to feed upon
itself and led to more selling by leveraged investors.
DURING THE PERIOD, IT BECAME EVIDENT THAT
OWNING A "DOT COM" DID NOT NECESSARILY
LEAD DOWN A ROAD TO FINANCIAL NIRVANA IN
THE STOCK MARKET.
The sharp decline of the Nasdaq Composite Index during the spring combined with
the series of interest rate hikes by the Fed, in our opinion, helped to
contribute to a slowdown in the U.S. economy. In spite of the tight labor market
and the rising price of oil, inflation statistics have remained remarkably
benign, aided by a sharp increase in productivity. The major investment in
technology undertaken by U.S. corporations during the prior decade has, in our
view, been a major factor in this productivity gain. We believe the Fed has
accomplished its goal of slowing economic growth and may be done raising
interest rates for the balance of the year.
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 Standard & Poor's 500 Index ("S&P 500")./5/
Since the Fund's inception in 1983, we continue to employ a stock-specific
approach rather than choosing stocks based on forecasts of the strength of the
economy, direction of interest rates and inflation or other factors that are
beyond the control of the individual companies in the Fund's portfolio. Nothing
has changed our fundamental view that if you design a growth portfolio properly,
you should be able to find companies to buy and hold not just for one or two
quarters (which, in our view, is short-term trading) but rather for many years.
We prefer to own companies where quality managements work to build dynamic,
financially strong companies and who own meaningful equity stakes themselves.
We 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 enable companies to become leaders in their
respective fields.
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.
__________
5 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note an investor cannot invest directly in an index.
5 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Portfolio Update
Increased volatility became more prevalent in the market averages this year with
2% - 3% daily moves in either direction becoming commonplace, particularly in
the Nasdaq Composite Index.
WHILE WE ARE NOT FANS OF VOLATILE MARKETS,
WE HAVE USED SUCH PERIODS OF MARKET
VOLATILITY TO CONTINUE BUILDING POSITIONS IN
WHAT WE DEEM TO BE WELL-RUN AND FINANCIALLY
SOUND COMPANIES WITH OUTSTANDING GROWTH
PROSPECTS IN THE YEARS AHEAD.
We have used uncertainty regarding Fed policy in the spring to add to positions
in several financial services companies. We added to our stakes in financial
services company Lehman Brothers Holdings, one of the Fund's largest positions,
as well as Neuberger Berman, a noted asset management company. Both stocks were
selling at low price-to-earnings ratios/6/ with the market apparently unwilling
at the time to reward each company for its excellent positions in a
consolidating industry.
Another area that we found to be very attractive from a risk and reward basis
was the cable television industry. We significantly added to our positions in
cable companies Comcast, Cablevision, and Liberty Media, three companies that
have displayed strong growth in cash flows and possess attractive portfolios of
assets. AT&T, a Fund holding for a number of years following its takeover of
Telecommunications Inc., has been a disappointing stock this year. We have
recently increased our position in the company believing that its growth
businesses in cable, wireless and telephony over broadband are being masked by
disappointing results in their old line businesses.
Our approach to adding to AT&T is similar to what we did with computer software
company Lotus Development and Internet company Netscape years ago. Somehow, we
think growth businesses eventually get monetized by either the stock market or
by an outside company.
We further added to our holdings in diversified manufacturing company Tyco
International and are pleased to report that the company was vindicated by the
Securities and Exchange Commission ("SEC") following a review of its accounting
policies. The company completed an initial public offering for their world-
leading underwater fiber optic business, Tycom, and we purchased a sizeable
position in the spin-off.
__________
6 The price-to-earnings ("P/E") ratio is the price of a stock divided by its
earnings per share.
6 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
During periodic weakness in biotechnology stocks, we added to certain holdings
in the group such as Genzyme General, Chiron and Imclone Systems. Health care
stocks remain the largest sector in the Fund and we continue to be impressed
with the strides that many of our companies have made both in earnings and in
the growth of their respective product pipelines, in our opinion the necessary
preconditions for future growth.
WE CONTINUE TO BE IMPRESSED WITH THE STRIDES
THAT MANY HEALTH CARE COMPANIES HAVE MADE
IN RECENT YEARS.
Conclusion
We think the Fund's favorable performance during the period was driven by our
stock selection methods. While we believe investing in potentially great
concepts is a key aspect of our philosophy, we look to own companies with strong
current earnings and/or the potential to achieve earnings and/or cash flow
growth within a reasonably short period of time.
Since we maintain a low turnover rate7 in managing the Fund, it is imperative
that we initially look to own companies with the potential to become involved in
important business trends and not be caught up in shortsighted fads. The best
example of the difference between a trend and a fad was cellular telephones in
the 1980s versus CB radios in the 1970s. While both areas may have initially
gained popularity with many investors, a portfolio comprised of industry fads
tends to flame out quickly while those involved in important trends should
perform better than the market averages over the long term, our preferred time
frame.
Thank you for your investment in the Smith Barney Aggressive Growth Fund Inc.
and your continued confidence in our investment strategy.
Sincerely,
/s/ Richard A. Freeman
Richard A. Freeman
Vice President and Investment Officer
September 20, 2000
__________
7 Turnover rate refers to how often a portfolio manager buys or sells
securities. There is no guarantee that portfolio turnover will not increase
in the future.
7 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Manager Richie Freeman, as featured in our
new advertising campaign, appearing in
The Wall Street Journal, Barron's and The New York Times.
[PHOTO]
RICHIE FREEMAN
PORTFOLIO MANAGER
ONE QUARTER OF SOLID RESULTS MAKES YOU A STAR. 17 YEARS OF OVERALL
SOLID RESULTS
MAKES YOU RICHIE FREEMAN.
In 1966, with the Dow Jones at 785, Richie Freeman's fascination with the market
began. He was 13. Today, Richie manages roughly $3 billion in assets. His
philosophy: anticipate relative strength, not just react to it. While other fund
managers may be content holding stocks for short periods, Richie refuses to. In
the last several years, he's averaged a mere 7% turnover rate.* His intuition
and non-conformist ways have paid off. So, what makes Richie tick? The market.
To learn more about the Smith Barney Aggressive Growth Fund and Richie Freeman's
investment philosophy, call us at 1-888-SERIOUS, ext. 1609 or visit
www.smithbarney.com/mutualfunds for a free prospectus. The prospectus contains
more complete information, including fees and expenses. Please read it carefully
before you invest or send money.
Your Serious Money. Professionally Managed.(SM) [LOGO OF
SMITH BARNEY
MUTUAL FUNDS]
CALL 1-888-SERIOUS, EXT. 1609 OR VISIT WWW. SMITH BARNEY.COM/MUTUAL FUNDS
(C)2000 SALOMON SMITH BARNEY INC. MEMBER NASD, SIPC.
Your Serious Money. Professionally Managed(SM). is a service mark of Salomon
Smith Barney Inc.
Dow Jones(R) is a registered trademark of Dow Jones L.P.
<PAGE>
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
Net Asset Value
-----------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns/(1)/
================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/00 $ 67.73 $110.53 $0.00 $0.72 64.91%
------------------------------------------------------------------------------------------------
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
================================================================================================
Total $0.00 $9.81
================================================================================================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
Net Asset Value
-----------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns/(1)/
================================================================================================
<S> <C> <C> <C> <C> <C>
8/31/00 $ 63.82 $103.24 $0.00 $0.72 63.58%
------------------------------------------------------------------------------------------------
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>
9 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns(1)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8/31/00 $ 63.99 $103.54 $0.00 $0.72 63.62%
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
---------------------------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
Net Asset Value
--------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns(1)
---------------------------------------------------------------------------------------------------
8/31/00 $ 68.69 $112.46 $0.00 $0.72 65.42%
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
---------------------------------------------------------------------------------------------------
Historical Performance -- Class Z Shares
Net Asset Value
--------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns(1)
---------------------------------------------------------------------------------------------------
8/31/00 $ 69.63 $114.01 $0.00 $0.72 65.42%
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.
10 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<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>
Year Ended 8/31/00 64.91% 63.58% 63.62% 65.42% 65.42%
----------------------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/00 31.60 30.55 30.60 N/A 32.07
----------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/00 25.22 N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------------------------------
Inception* through 8/31/00 19.36 26.77 28.43 34.42++ 28.21
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
With Sales Charges(2)
---------------------------------------------------------------------------
Class A Class B Class L Class Y Class Z
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended 8/31/00 56.68% 58.58% 60.97% 65.42% 65.42%
----------------------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/00 30.26 30.48 30.34 N/A 32.07
----------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/00 24.58 N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------------------------------
Inception* through 8/31/00 19.00 26.77 28.25 34.42++ 28.21
============================================================================================================================
</TABLE>
-------------------------------------------------------------------------------
Cumulative Total Returns
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charges(1)
============================================================================================================================
<S> <C>
Class A (8/31/90 through 8/31/00) 847.75%
----------------------------------------------------------------------------------------------------------------------------
Class B (Inception* through 8/31/00) 539.24
----------------------------------------------------------------------------------------------------------------------------
Class L (Inception* through 8/31/00) 522.15
----------------------------------------------------------------------------------------------------------------------------
Class Y (Inception* through 8/31/00) 288.59++
----------------------------------------------------------------------------------------------------------------------------
Class Z (Inception* through 8/31/00) 598.28
============================================================================================================================
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charges with respect to Class A 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.
* 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 were redeemed during November 1995
and new shares in Class Y were not purchased until January 31, 1996.
11 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Historical Performance (unaudited)
Growth of $10,000 Invested in Class A Shares of the
Smith Barney Aggressive Growth Fund Inc. vs. Russell 2500 Growth Index+
[GRAPH WITH PLOT POINTS]
Smith Barney
Agressive Growth Russell 2500
Fund Inc. Growth Index
---------------- ------------
Aug 1990 9,500 10,000
Aug 1991 12,537 13,508
Aug 1992 12,234 14,651
Aug 1993 15,238 19,024
Aug 1994 17,285 20,146
Aug 1995 22,808 24,564
Aug 1996 21,112 27,781
Aug 1997 31,480 36,543
Aug 1998 26,709 30,382
Aug 1999 54,598 40,225
Aug 2000 90,039 62,801
+ Hypothetical illustration of $10,000 invested in Class A shares on August 31,
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 August 31, 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.
12 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Schedule of Investments August 31, 2000
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 94.2%
Biotechnology -- 17.3%
1,400,000 Alkermes, Inc.+@ $ 64,750,000
2,400,000 Amgen Inc.+ 181,950,000
22,500 Caliper Technologies Corp.+ 1,397,813
3,900,000 Chiron Corp.+@ 210,843,750
500,000 COR Therapeutics, Inc.+@ 28,125,000
133,000 Genentech, Inc.+@ 25,336,500
2,200,000 Genzyme Corp. -- General Division+@ 165,137,500
124,257 Genzyme Corp. -- Molecular Oncology Division+ 1,739,598
1,000,287 Genzyme Surgical Products+ 10,252,942
350,000 IGEN International, Inc.+ 6,650,000
750,000 ImClone Systems Inc.+@ 72,281,250
5,000 Maxygen Inc.+@ 268,750
580,000 NABI Inc.+ 4,712,500
700,000 Nanogen, Inc.+ 16,887,500
200,000 Tularik Inc.+@ 6,675,000
--------------------------------------------------------------------------------
797,008,103
--------------------------------------------------------------------------------
Broadcasting/Cable -- 10.4%
6,000,000 AT&T Corp. -- Liberty Media Corp., Class A Shares+ 128,250,000
2,025,000 Cablevision Systems Corp., Class A Shares+@ 136,181,250
100,000 Comcast Corp., Class A Shares+@ 3,668,750
5,000,000 Comcast Corp., Class A Special Shares+ 186,250,000
1,000,000 World Wrestling Federation Entertainment, Inc.+ 21,375,000
--------------------------------------------------------------------------------
475,725,000
--------------------------------------------------------------------------------
Communications -- 10.6%
3,280,000 Adaptive Broadband Corp.+ 102,500,000
3,600,000 Arch Communications Group, Inc.+@ 18,675,000
3,000,000 AT&T Corp. 94,500,000
4,980 Avanex Corp.+@ 754,314
2,025,000 C-COR.net Corp.+ 39,487,500
675,072 Nokia Oyj 30,293,934
200,000 The Source Information Management Co.+@ 2,025,000
10,275 Sycamore Networks, Inc.+@ 1,412,812
26,000 Time Warner Telecom Inc., Class A Shares+ 1,688,375
1,900,000 TyCom, Ltd.+@ 79,087,500
1,736,000 Viacom Inc., Class B Shares+ 116,854,500
--------------------------------------------------------------------------------
487,278,935
--------------------------------------------------------------------------------
Computer Hardware -- 2.3%
5,000,000 Quantum Corp. -- DLT & Storage Systems+ 67,812,500
4,000,000 Quantum Corp. -- Hard Disk Drive+ 39,000,000
--------------------------------------------------------------------------------
106,812,500
--------------------------------------------------------------------------------
Computer Software/Internet -- 4.5%
5,880 Akamai Technologies, Inc.+@ 444,308
3,000,000 America Online, Inc.+ 175,875,000
30,000 Juniper Networks, Inc.+@ 6,412,500
340,400 Microsoft Corp.+ 23,764,175
2,500 webMethods, Inc.+@ 268,594
--------------------------------------------------------------------------------
206,764,577
--------------------------------------------------------------------------------
See Notes to Financial Statements.
13 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Schedule of Investments (continued) August 31, 2000
SHARES SECURITY VALUE
===============================================================================
Diversified Technology -- 0.9%
35,080 Agilent Technologies, Inc.+ $ 2,115,762
350,000 Drexler Technology Corp.+ 6,540,625
689,000 Excel Technology, Inc.+ 25,449,937
800,000 GenRad, Inc.+ 7,050,000
-------------------------------------------------------------------------------
41,156,324
-------------------------------------------------------------------------------
Drug Delivery/Testing -- 2.3%
599,500 Advanced Polymer Systems, Inc.+ 2,023,313
200,000 Albany Molecular Research, Inc.+ 7,150,000
1,100,000 ALZA Corp.+@ 83,187,500
100,000 Biosite Diagnostics Inc.+ 6,956,250
430,000 Cygnus, Inc.+ 5,240,625
-------------------------------------------------------------------------------
104,557,688
-------------------------------------------------------------------------------
Electronics - Military -- 1.4%
1,000,000 L-3 Communications Holdings, Inc.+ 59,125,000
184,900 Tech-Sym Corp.+ 5,500,775
-------------------------------------------------------------------------------
64,625,775
-------------------------------------------------------------------------------
Investment Banking Services/Financial Services -- 8.9%
1,500,000 Astoria Financial Corp. 52,687,500
30,000 The Goldman Sachs Group, Inc. 3,841,875
1,700,000 Lehman Brothers Holdings Inc. 246,500,000
200,000 Merrill Lynch & Co., Inc. 29,000,000
777,000 Neuberger Berman Inc. 45,988,687
1,500,000 Roslyn Bancorp, Inc. 29,718,750
-------------------------------------------------------------------------------
407,736,812
-------------------------------------------------------------------------------
Managed Healthcare Providers -- 4.1%
2,000,000 UnitedHealth Group Inc. 189,000,000
-------------------------------------------------------------------------------
Multi-Industry -- 6.2%
5,000,000 Tyco International Ltd. 285,000,000
-------------------------------------------------------------------------------
Oil Field Equipment/Services -- 3.7%
1,425,000 Core Laboratories N.V.+ 27,431,250
2,000,000 Grant Prideco, Inc.+ 47,000,000
2,000,000 Weatherford International, Inc.+@ 93,875,000
-------------------------------------------------------------------------------
168,306,250
-------------------------------------------------------------------------------
Pharmaceuticals -- 12.1%
2,000,000 Forest Laboratories, Inc.+ 195,750,000
1,600,000 IDEC Pharmaceuticals Corp.+@ 223,400,000
1,050,000 Isis Pharmaceuticals, Inc.+ 13,715,625
362,400 Pfizer Inc. 15,673,800
289,931 Pharmacia Corp.@ 16,979,084
2,100,000 SICOR Inc.+ 20,343,750
800,000 Vertex Pharmaceuticals Inc.+@ 68,000,000
-------------------------------------------------------------------------------
553,862,259
-------------------------------------------------------------------------------
See Notes to Financial Statements.
14 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Schedule of Investments (continued) August 31, 2000
SHARES SECURITY VALUE
================================================================================
Semiconductors -- 9.5%
1,000,000 Cirrus Logic, Inc.+@ $ 30,250,000
3,280,000 Intel Corp. 245,590,000
1,800,000 Micron Technology, Inc.+@ 147,150,000
2,877 PMC-Sierra, Inc.+@ 679,179
630,000 Standard Microsystems Corp.+ 11,970,000
--------------------------------------------------------------------------------
435,639,179
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $1,911,298,791) 4,323,473,402
================================================================================
WARRANTS+ -- 0.0%
1,642,028 Arch Communications Group, Inc.,
Expire 9/1/01 (Cost -- $0) 1,103,237
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENTS -- 5.8%
$165,253,000 Morgan Stanley Dean Witter & Co., 6.58% due 9/1/00;
Proceeds at maturity -- $165,283,205;
(Fully collateralized by U.S. Treasury Notes,
4.25% to 5.75% due 3/31/03 to 8/15/10;
Market value -- $168,646,798) 165,253,000
98,406,000 Warburg Dillon Read LLC, 6.58% due 9/1/00;
Proceeds at maturity -- $98,423,932;
(Fully collateralized by U.S. Treasury Notes,
5.75% due 6/30/01; Market value -- $100,375,000) 98,406,000
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $263,659,000) 263,659,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $2,174,957,791*) $4,588,235,639
================================================================================
+ 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.
15 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Statement of Assets and Liabilities August 31, 2000
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (Cost -- $2,174,957,791) $ 4,588,235,639
Cash 1,153
Collateral for securities on loan (Note 5) 642,485,582
Receivable for Fund shares sold 63,370,687
Dividends and interest receivable 768,853
Receivable for securities sold 199,051
---------------------------------------------------------------------------------------
Total Assets 5,295,060,965
---------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 5) 642,485,582
Payable for securities purchased 28,345,716
Payable for Fund shares purchased 25,419,317
Investment advisory fees payable 2,124,360
Distribution fees payable 918,685
Administration fees payable 707,958
Accrued expenses 779,744
---------------------------------------------------------------------------------------
Total Liabilities 700,781,362
---------------------------------------------------------------------------------------
Total Net Assets $ 4,594,279,603
=======================================================================================
NET ASSETS:
Par value of capital shares $ 427,781
Capital paid in excess of par value 2,185,824,751
Accumulated net investment loss (3,179)
Accumulated net realized loss from security transactions (5,247,598)
Net unrealized appreciation of investments 2,413,277,848
---------------------------------------------------------------------------------------
Total Net Assets $ 4,594,279,603
=======================================================================================
Shares Outstanding:
Class A 15,661,693
-------------------------------------------------------------------------------------
Class B 14,386,783
-------------------------------------------------------------------------------------
Class L 6,720,498
-------------------------------------------------------------------------------------
Class Y 1,947,937
-------------------------------------------------------------------------------------
Class Z 4,061,231
-------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $110.53
-------------------------------------------------------------------------------------
Class B * $103.24
-------------------------------------------------------------------------------------
Class L ** $103.54
-------------------------------------------------------------------------------------
Class Y (and redemption price) $112.46
-------------------------------------------------------------------------------------
Class Z (and redemption price) $114.01
-------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.27%of net asset value per share) $116.35
-------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $104.59
=======================================================================================
</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.
16 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Statement of Operations For the Year Ended August 31, 2000
INVESTMENT INCOME:
Dividends $4,765,938
Interest 8,903,940
Less: Foreign withholding tax (5,554)
-------------------------------------------------------------------------------
Total Investment Income 13,664,324
-------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 17,040,650
Distribution fees (Note 2) 15,301,094
Administration fees (Note 2) 5,680,217
Shareholder and system servicing fees 1,973,750
Registration fees 479,097
Shareholder communications 283,101
Custody 120,128
Audit and legal 59,442
Directors' fees 46,887
Other 22,599
-------------------------------------------------------------------------------
Total Expenses 41,006,965
-------------------------------------------------------------------------------
Net Investment Loss (27,342,641)
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 26,752,484
Cost of securities sold 18,868,642
-------------------------------------------------------------------------------
Net Realized Gain 7,883,842
-------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of year 988,026,361
End of year 2,413,277,848
-------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 1,425,251,487
-------------------------------------------------------------------------------
Net Gain on Investments 1,433,135,329
-------------------------------------------------------------------------------
Increase in Net Assets From Operations $1,405,792,688
===============================================================================
See Notes to Financial Statements.
17 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets For the Years Ended August 31,
2000 1999
===============================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment loss $ (27,342,641) $ (13,173,101)
Net realized gain 7,883,842 25,368,533
Increase in net unrealized appreciation 1,425,251,487 739,882,957
---------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,405,792,688 752,078,389
---------------------------------------------------------------------------------------------------------------
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 6,059,981,046 2,547,281,021
Net asset value of shares issued for reinvestment of dividends 16,911,248 15,315,896
Cost of shares reacquired (4,533,463,976) (2,311,458,577)
---------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 1,543,428,318 251,138,340
---------------------------------------------------------------------------------------------------------------
Increase in Net Assets 2,929,922,191 985,031,074
NET ASSETS:
Beginning of year 1,664,357,412 679,326,338
---------------------------------------------------------------------------------------------------------------
End of year* $4,594,279,603 $ 1,664,357,412
===============================================================================================================
* Includes accumulated net investment loss of: $(3,179) $(2,095)
===============================================================================================================
</TABLE>
See Notes to Financial Statements.
18 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Fund Inc. ("Fund"), a Maryland corporation is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets;
securities for which no sales price was reported and U.S. government and agency
obligations are valued at the bid price. Investments in securities for which
market quotations are not available are valued at fair value as determined in
good faith by the Board of Directors; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis; (e) gains or losses on the sale
of securities are calculated by using the specific identification method; (f)
direct expenses are charged to each class; investment advisory fees and general
Fund expenses are allocated on the basis of relative net assets by class; (g)
dividends and distributions to shareholders are recorded on the ex-dividend
date; (h) the Fund intends to comply with the applicable provisions of the
Internal Revenue Code of 1986, as amended, pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; (i) the character of
income and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
August 31, 2000, 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, a portion of
accumulated net investment loss amounting to $19,323,619 was 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.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Fund's transfer agent and PFPC Global Fund Services ("PFPC") acts as 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 year ended August 31, 2000, the Fund paid transfer agent
fees of $5,000 to CFTC.
Effective June 5, 2000, Salomon Smith Barney Inc. ("SSB"), another subsidiary of
SSBH, became the Fund's distributor replacing CFBDS, Inc. ("CFBDS"). In
addition, SSB acts as the primary broker for the Fund's portfolio agency
transactions. Certain other broker-dealers continue to sell Fund shares to the
public as members of the selling group. For the year ended August 31, 2000, SSB
and its affiliates received $95,150 in brokerage commissions.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. 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
19 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Notes to Financial Statements (continued)
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 year ended August 31, 2000, SSB and CFBDS received sales charges of
$9,995,000 and $3,335,000 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 $27,000 $624,000 $93,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class. The Fund also pays a distribution fee
with respect to Class B and L shares calculated at the annual rate of 0.75% of
the average daily net assets of each class, respectively. For the year ended
August 31, 2000, total Distribution Plan fees were as follows:
Class A Class B Class L
================================================================================
Distribution Plan Fees $2,730,890 $8,893,499 $3,676,705
================================================================================
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended August 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were as follows:
================================================================================
Purchases $1,345,325,923
--------------------------------------------------------------------------------
Sales 26,752,484
================================================================================
At August 31, 2000, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $2,442,614,156
Gross unrealized depreciation (29,336,308)
--------------------------------------------------------------------------------
Net unrealized appreciation $2,413,277,848
================================================================================
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 (plus accrued interest) of the collateral in
amounts at least equal to the repurchase price.
5. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Fund maintains exposure for the risk of any losses in
the investment of amounts received as collateral.
20 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Notes to Financial Statements (continued)
At August 31, 2000, the Fund loaned common stocks having a value of
approximately $637,283,324 and holds the following collateral for loaned
securities:
Security Description Value
================================================================================
Time Deposits:
Bank Brussels Lambert, 6.67% due 9/1/00 $ 67,842,590
Barclays, 6.63% due 9/1/00 88,402,006
Barclays DeZoete, 6.66% due 9/1/00 85,540,657
Chase Manhattan Bank, 6.69% due 9/1/00 85,540,657
Wells Fargo Bank, 6.66% due 9/1/00 224,819,492
Certificates of Deposit:
Comerica Bank, 5.86% due 2/14/01 3,816,294
Floating Rate Notes:
AMSouth Bank, 5.73% due 1/25/01 15,867,557
Bank One Corp., 6.68% due 7/2/01 3,509,978
Bear Stearns, 6.68% due 7/13/01 11,603,199
Commerzbank AG, 5.89% due 3/12/01 11,066,310
First Union National Bank, 6.51% due 5/21/01 7,368,016
First Union National Bank, 6.61% due 5/23/01 1,970,192
Key Bank Corp., 5.88% due 2/14/01 8,801,149
Morgan Stanley, 5.75% due 11/2/00 2,185,145
Sigma Finance Corp., 6.02% due 9/14/00 15,688,726
Sigma Finance Corp., 6.48% due 11/6/00 3,325,111
Sigma Finance Corp., 6.63% due 12/4/00 5,138,503
--------------------------------------------------------------------------------
Total $642,485,582
================================================================================
Interest income earned by the Fund from securities lending for the year ended
August 31, 2000 was $637,889.
6. Capital Shares
At August 31, 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.
At August 31, 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 $671,249,807 $837,871,708 $429,775,798 $3,440,257 $243,914,962
========================================================================================================
</TABLE>
21 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Notes to Financial Statements (continued)
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 2000 August 31, 1999
--------------------------------- ---------------------------------
Shares Amount Shares Amount
=============================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 51,766,850 $ 4,574,819,783 37,325,388 $ 2,050,528,985
Shares issued on reinvestment 107,901 7,386,889 171,626 7,692,276
Shares reacquired (46,401,451) (4,087,260,703) (36,082,392) (1,981,741,151)
-----------------------------------------------------------------------------------------------------------------------------
Net Increase 5,473,300 $ 494,945,969 1,414,622 $ 76,480,110
=============================================================================================================================
Class B
Shares sold 10,704,397 $ 879,136,034 6,945,414 $ 357,939,766
Shares issued on reinvestment 87,740 5,647,804 115,516 4,910,603
Shares reacquired (3,771,237) (297,215,302) (5,479,074) (273,687,067)
-----------------------------------------------------------------------------------------------------------------------------
Net Increase 7,020,900 $ 587,568,536 1,581,856 $ 89,163,302
=============================================================================================================================
Class L
Shares sold 4,852,659 $ 416,240,720 1,039,798 $ 56,111,076
Shares issued on reinvestment 31,371 2,025,004 39,585 1,686,340
Shares reacquired (691,430) (58,262,033) (580,589) (28,676,180)
-----------------------------------------------------------------------------------------------------------------------------
Net Increase 4,192,600 $ 360,003,691 498,794 $ 29,121,236
=============================================================================================================================
Class Y
Shares sold 276,407 $ 25,659,145 124,511 $ 5,795,983
Shares issued on reinvestment -- -- -- --
Shares reacquired (837,798) (79,609,972) (242,792) (16,000,000)
-----------------------------------------------------------------------------------------------------------------------------
Net Decrease (561,391) $ (53,950,827) (118,281) $ (10,204,017)
=============================================================================================================================
Class Z
Shares sold 1,714,770 $ 164,125,364 1,413,441 $ 76,905,211
Shares issued on reinvestment 26,286 1,851,551 22,343 1,026,677
Shares reacquired (119,797) (11,115,966) (214,783) (11,354,179)
-----------------------------------------------------------------------------------------------------------------------------
Net Increase 1,621,259 $ 154,860,949 1,221,001 $ 66,577,709
=============================================================================================================================
</TABLE>
22 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Financial Highlights
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
Class A Shares 2000/(1)/ 1999/(1)/ 1998 1997 1996
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 67.73 $ 33.78 $ 41.80 $ 28.76 $ 33.53
---------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.59) (0.48) (0.42) (0.33) (0.31)
Net realized and unrealized gain (loss) 44.11 35.31 (5.64) 14.18 (2.09)
---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 43.52 34.83 (6.06) 13.85 (2.40)
---------------------------------------------------------------------------------------------------------------------------
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 Year $ 110.53 $ 67.73 $ 33.78 $ 41.80 $ 28.76
---------------------------------------------------------------------------------------------------------------------------
Total Return 64.91% 104.42% (15.16)% 49.11% (7.44)%
---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $1,731,025 $ 690,142 $ 296,376 $ 333,877 $ 252,531
---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.14% 1.18% 1.21% 1.21% 1.30%
Net investment loss (0.66) (0.89) (0.97) (0.93) (0.97)
---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
===========================================================================================================================
<CAPTION>
Class B Shares 2000/(1)/ 1999/(1)/ 1998 1997 1996
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 63.82 $ 32.12 $ 40.17 $ 27.88 $ 32.82
---------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (1.23) (0.87) (0.66) (0.56) (0.53)
Net realized and unrealized gain (loss) 41.37 33.45 (5.43) 13.66 (2.04)
---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 40.14 32.58 (6.09) 13.10 (2.57)
---------------------------------------------------------------------------------------------------------------------------
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 Year $ 103.24 $ 63.82 $ 32.12 $ 40.17 $ 27.88
---------------------------------------------------------------------------------------------------------------------------
Total Return 63.58% 102.78% (15.90)% 47.94% (8.16)%
---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $1,485,305 $ 470,141 $ 185,808 $ 197,559 $ 136,322
---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.94% 2.00% 2.02% 2.01% 2.07%
Net investment loss (1.47) (1.70) (1.78) (1.73) (1.75)
---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
===========================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
23 Smith Barney Aggressive Growth Fund | 2000 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)/ 1999/(1)/ 1998/(2)/ 1997 1996
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 63.99 $ 32.19 $ 40.22 $ 27.91 $ 32.84
---------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (1.24) (0.84) (0.68) (0.59) (0.53)
Net realized and unrealized gain (loss) 41.51 33.52 (5.39) 13.71 (2.03)
---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 40.27 32.68 (6.07) 13.12 (2.56)
---------------------------------------------------------------------------------------------------------------------------
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 Year $ 103.54 $ 63.99 $ 32.19 $ 40.22 $ 27.91
---------------------------------------------------------------------------------------------------------------------------
Total Return 63.62% 102.87% (15.80)% 47.97% (8.12)%
---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $695,844 $161,784 $ 65,312 $ 77,297 $ 63,786
---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.94% 1.94% 1.97% 1.97% 2.06%
Net investment loss (1.46) (1.64) (1.73) (1.68) (1.75)
---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
===========================================================================================================================
<CAPTION>
Class Y Shares 2000/(1)/ 1999/(1)/ 1998 1997 1996/(3)/
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 68.69 $ 34.13 $ 42.07 $ 28.84 $ 31.86
---------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.30) (0.29) (0.25) (0.16) (0.12)
Net realized and unrealized gain (loss) 44.79 35.73 (5.73) 14.20 (0.53)
---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 44.49 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 Year $ 112.46 $ 68.69 $ 34.13 $ 42.07 $ 28.84
---------------------------------------------------------------------------------------------------------------------------
Total Return 65.42% 105.15% (14.86)% 49.64% (10.13)%*++
---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $219,074 $172,385 $ 89,675 $158,146 $ 58,641
---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.82% 0.82% 0.85% 0.84% 0.84%+
Net investment loss (0.34) (0.53) (0.62) (0.56) (0.49)+
---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
===========================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) 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.
24 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Financial Highlights (continued)
For a share of each class of capital stock outstanding throughout each year
ended August 31, except where noted:
<TABLE>
<CAPTION>
Class Z Shares 2000(1) 1999(1) 1998 1997 1996
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $69.63 $34.58 $42.60 $29.20 $33.88
-----------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.32) (0.30) (0.28) (0.20) (0.20)
Net realized and unrealized gain (loss) 45.42 36.23 (5.78) 14.41 (2.11)
-----------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 45.10 35.93 (6.06) 14.21 (2.31)
-----------------------------------------------------------------------------------------------------------------------------
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 Year $114.01 $69.63 $34.58 $42.60 $29.20
-----------------------------------------------------------------------------------------------------------------------------
Total Return 65.42% 105.20% (14.86)% 49.61% (7.07)%
-----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $463,032 $169,905 $42,155 $43,553 $30,837
-----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.83% 0.82% 0.85% 0.85% 0.93%
Net investment loss (0.35) (0.51) (0.62) (0.57) (0.61)
-----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 8% 7% 6% 13%
=============================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
25 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Independent Auditors' Report
The Shareholders and Board of Directors of
Smith Barney Aggressive Growth Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Smith Barney Aggressive Growth Fund Inc. as of
August 31, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the two-
year period then ended, and the financial highlights for each of the years in
the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2000, by correspondence with the custodian. As
to securities purchased and sold but not yet received or delivered, we performed
other appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Smith
Barney Aggressive Growth Fund Inc. as of August 31, 2000, and the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
New York, New York
October 15, 2000
26 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<PAGE>
Tax Information (unaudited)
For Federal tax purposes the Fund hereby designates for the fiscal year ended
August 31, 2000:
. Total long-term capital gain distributions paid of $19,299,649
27 Smith Barney Aggressive Growth Fund | 2000 Annual Report to Shareholders
<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
Salomon Smith Barney Inc.
CUSTODIAN
PFPC Trust Company
TRANSFER AGENT
Citi Fiduciary Trust Company
125 Broad Street, 11th Floor
New York, New York 10004
SUB-TRANSFER AGENT
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island
02940-9699
<PAGE>
Smith Barney Aggressive Growth Fund Inc.
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 November 30, 2000, this report must be accompanied
by performance information for the most recently completed calendar quarter.
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
For complete information on any of the above Smith Barney Mutual Funds,
including management fees and expenses, call or write for a free prospectus.
Read it carefully before you invest or send money.
www.smithbarney.com/mutualfunds
[SALOMON SMITH BARNEY LOGO]
A member of citigroup
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
FD0433 10/00
