SMITH BARNEY INCOME FUNDS
Smith Barney Diversified Strategic Income Fund
Smith Barney High Income Fund
Supplement dated July 8, 1998 to
Prospectuses dated November 28, 1997
The following information supplements the information in the
Prospectus under "Investment Objectives and Management Policies."
Real Estate Investment Trusts. The Fund may purchase Real
Estate Investment Trusts ("REITs"). REITs are investment
vehicles that invest primarily in either real estate or real
estate loans. The value of a REIT is affected by changes in the
value of the properties owned by the REIT or securing mortgage
loans held by the REIT. REITs are dependent upon cash flow from
their investments to repay financing costs and the ability of the
REIT's manager. REITs are also subject to risks generally
associated with investments in real estate.
Asset-Backed Securities. The Fund may invest in Asset
Backed Securities ("ABSs"). An ABS security represents an
interest in a pool of assets such as receivables from credit card
loans, automobile loans and other trade receivables. Changes in
the market's perception of the asset backing the security, the
creditworthiness of the servicing agent for the loan pool, the
originator of the loans, or the financial institution providing
any credit enhancement will all affect the value of the ABS, as
will the exhaustion of any credit enhancement. The risks of
investing in ABSs ultimately will depend upon the payment of the
consumer loans by the individual borrowers. In its capacity as
purchaser of the ABS, the Fund will generally have no recourse to
the entity that originated the loans in the event of default by
the borrower. In addition, the loans underlying the ABSs are
subject to prepayments, which may shorten the weighted average
life of such securities and may lower their return.
FD 01513
SMITH BARNEY INCOME FUNDS
Smith Barney Convertible Fund
Supplement dated July 8, 1998 to
Prospectus dated November 28, 1997
The following information supplements the information in the
Prospectus under "Investment Objectives and Management Policies."
Real Estate Investment Trusts. The Fund may purchase Real
Estate Investment Trusts ("REITs"). REITs are investment
vehicles that invest primarily in either real estate or real
estate loans. The value of a REIT is affected by changes in the
value of the properties owned by the REIT or securing mortgage
loans held by the REIT. REITs are dependent upon cash flow from
their investments to repay financing costs and the ability of the
REIT's manager. REITs are also subject to risks generally
associated with investments in real estate.
FD 01514
SMITH BARNEY INCOME FUNDS
Smith Barney Total Return Bond Fund
Supplement dated July 8, 1998 to
Prospectus dated January 21, 1998
The following information supplements the information in the
Prospectus under "Investment Objectives and Management Policies."
Yankee Bonds. The Fund may invest in Yankee Bonds.
Yankee Bonds are dollar denominated obligations issued by foreign
issuers. They are subject to certain sovereign risks including
the possibility that a foreign government might prevent dollar
denominated funds flowing across its borders. Other risks
include, adverse political and economic developments in the
foreign country, the extent and quality of government regulation
of financial markets and institutions, the imposition of foreign
withholding taxes and expropriation or nationalization of foreign
issuers.
FD 01515
