SMITH BARNEY INCOME FUNDS (the "Trust")
on behalf of the
Smith Barney Premium Total Return Fund (the "Fund")
Supplement dated July 1, 1999
to Prospectus dated April 30, 1999
On June 30, 1999, the shareholders of the Fund approved a new
Sub-Investment Advisory Agreement ("Agreement"), with Salomon
Brothers Asset Management Inc. ("SBAM"). The Agreement will be in
effect for an initial two-year period ending on June 30, 2001,
and may continue thereafter from year to year only if
specifically approved at least annually by the Board of Trustees
or by the vote of a majority of the outstanding voting securities
of the Fund, and in either event, the vote of a majority of the
non-interested Trustees.
As sub-adviser, SBAM will assist SSBC Fund Management Inc. the
Fund's investment adviser, in managing the Fund's portfolio in
accordance with the Fund's investment objective and policies,
subject to the supervision and direction of the Board of Trustees
Also, the Board of Trustees of the Trust at a meeting held on
April 15, 1999 approved certain changes to the Fund's non-
fundamental policies to take effect upon shareholder approval of
the Agreement. These include the (i) elimination of any limit on
the amount of Fund assets that may be invested in fixed income or
equity securities, (ii) elimination of the amount of call or put
options on securities or indices that the Fund may purchase or
sell; and (iii) ability to engage in swap transactions relating
to indices, currencies, interest rates, equity and debt
interests.
The above information supplements and to the extent inconsistent
therewith replaces the information set forth in the Prospectus.
FD 01669
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