- ------------------------------------------------------------
- --------------------
S E M I - A N N U A L R E P O R T
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[ARTWORK OF SMITH BARNEY MUNI FUNDS APPEARS HERE]
Smith Barney
Muni Funds
National
Portfolio
- ------------------------
September 30, 1995
[LOGO OF SMITH BARNEY Smith Barney Mutual Funds
MUTUAL FUNDS APPEARS HERE] Investing for your future.
Every day.
- ----------------------
National Portfolio
- ----------------------
Dear Shareholder:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds - National
Portfolio. This report covers the six months ended September
30, 1995. For your
convenience, we have summarized this period's prevailing
economic and market
conditions below and outlined our portfolio strategy during
this time. A more
detailed summary of performance and current holdings can be
found in the
Historical Performance and Schedule of Investments sections
that follow.
The National Portfolio posted a one-year total return of
10.74% (Class A shares)
for the period ended September 30, 1995. This return
compares favorably with a
9.84% average total return for all general municipal bond
funds for the same
period, according to Lipper Analytical Services. Over the
five years ended
September 30, 1995, the Portfolio posted a cumulative total
return of 56.21%
versus a Lipper peer group average of 49.63%. This strong
performance was once
again sustained with only minimal capital gains
distributions, thus maximizing
favorable tax status for Portfolio distributions.
Market & Economic Overview
Over the past six months, the fixed income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 30-year Treasuries
from 7.43% on March 31, 1995 to 6.50% on September 30, 1995
a drop of nearly 100
basis points. Long-term municipal bond yields, however,
barely budged over the
time period, starting out on March 30, 1995 at 6.29% as
represented by the Bond
Buyer's 25-year Revenue Bond Index and finishing at 6.27% on
September 28, 1995.
This is due primarily to tax reform concerns.
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5.75%, a move
that reflected its confidence in the current rate of
economic growth. However,
while the economy did pick up steam, compared to the
sluggish first quarter of
1995, conflicting indicators all point to continued economic
uncertainty going
into to 1996. Consumer spending is rising at an annual pace
of 2.5% to 3%, a
relatively neutral rate further tempered by recent
indications that consumer
households are growing more cautious. A number of other
economic indicators
edged up over the past six months compared to early 1995,
including car buying,
housing starts and industrial production before
1
slowing again in September. The most recent Index of Leading
Indicators--used by
the U.S. Government to forecast economic conditions--eased
downward slightly in
September, fueled by cheaper commodity prices. This index
measures eleven
different indicators, ranging from unemployment benefit
claims to building
permits. While a majority of these indicators showed a
slight uptick in
September, others dipped. The overall result was
confirmation of our
expectations for slow economic growth and steady, or even
lower, interest rates
by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, D.C., contains a capital gains cut but does
not address broader
tax reform. Flat tax proposals are still being discussed,
but a number of
alternate reform measures are on the table as well. We
expect this issue to
emerge as the centerpiece of the 1996 Presidential
elections.
In short, until a more definite consensus emerges from
Washington, D.C., we can
not be certain of the impact on municipal bonds and are
holding fast on our
relatively cautious investment approach. Looking forward--
and absent radical tax
reform--we expect municipal bonds to perform well relative
to taxable
investments, due primarily to diminishing supply. There
continues to be little
refinancing or new issue activity. New issue activity is
increasing toward
year-end but remains well below the levels seen in previous
years. The Public
Securities Association now predicts approximately $140
billion in new issues by
the end of 1995, less than half the record amount that came
to market in 1993.
This reduction in supply has helped to support underlying
values. If the supply
situation continues into 1996 as we expect, stronger
appreciation opportunities
could develop, particularly for bonds with long maturities
and good call
protection.
Portfolio Strategy & Outlook
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of the Portfolio by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structure. We intend to
retain most of our
substantial commitment to higher coupon issues trading at a
premium and callable
prior to maturity for the high income they are providing and
the measure of
protection they afford in the event interest rates should
rise.
2
However, we are increasing our focus on issues with
comparable maturities but
greater call protection in anticipation of a possible
further downturn in rates
at the end of this year or early 1996.
We were saddened by the loss of an outstanding business
leader and Trustee of
the Portfolio: Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
At this time, we would like to thank you for your continued
participation in the
Portfolio and for your ongoing confidence in our management
approach.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
November 8, 1995
3
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A 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>
9/30/95 $13.32 $13.61 $0.41
$0.00 5.29%+
- ------------------------------------------------------------
- -------------------
3/31/95 13.35 13.32 0.84
0.00 6.38
- ------------------------------------------------------------
- -------------------
3/31/94 13.81 13.35 0.86
0.06 3.17
- ------------------------------------------------------------
- -------------------
3/31/93 12.95 13.81 0.89
0.00 13.96
- ------------------------------------------------------------
- -------------------
3/31/92 12.49 12.95 0.90
0.00 11.21
- ------------------------------------------------------------
- -------------------
3/31/91 12.24 12.49 0.83
0.00 9.13
- ------------------------------------------------------------
- -------------------
3/31/90 12.11 12.24 0.98
0.00 9.60
- ------------------------------------------------------------
- -------------------
3/31/89 11.82 12.11 0.96
0.00 10.93
- ------------------------------------------------------------
- -------------------
3/31/88 12.95 11.82 0.94
0.20 (0.92)
- ------------------------------------------------------------
- -------------------
Inception*- 3/31/87 12.50 12.95 0.50
0.00 7.07+
============================================================
===================
Total $ 8.11 $
0.26
============================================================
===================
</TABLE>
- ------------------------------------------------------------
- -------------------
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>
9/30/95 $13.33 $13.62 $0.37
$0.00 5.05%+
- ------------------------------------------------------------
- -------------------
Inception*- 3/31/95 12.41 13.33 0.32
0.00 10.11+
============================================================
===================
Total $ 0.69
$0.00
============================================================
===================
</TABLE>
- ------------------------------------------------------------
- -------------------
Historical Performance -- Class C 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>
9/30/95 $13.32 $13.61 $0.37
$0.00 5.03%+
- ------------------------------------------------------------
- --------------------
3/31/95 13.33 13.32 0.74
0.00 5.80
- ------------------------------------------------------------
- --------------------
3/31/94 13.80 13.33 0.77
0.06 2.40
- ------------------------------------------------------------
- --------------------
Inception*- 3/31/93 13.47 13.80 0.20
0.00 3.98+
============================================================
====================
Total $2.08
$0.06
============================================================
====================
</TABLE>
It is the Fund's policy to distribute dividends monthly
and capital gains, if any, annually.
4
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Without Sales
Charge(1)
------------------------
- -------
Class A Class B
Class C
============================================================
==============
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 5.29% 5.05%
5.03%
- ------------------------------------------------------------
- --------------
Year Ended 9/30/95 10.74 N/A
10.19
- ------------------------------------------------------------
- --------------
Five Years Ended 9/30/95 9.31 N/A
N/A
- ------------------------------------------------------------
- --------------
Inception* through 9/30/95 8.26 15.67
6.34
- ------------------------------------------------------------
- --------------
<CAPTION>
With Sales
Charge(2)
------------------------
- -------
Class A Class B
Class C
============================================================
==============
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 1.04% 0.55%
4.03%
- ------------------------------------------------------------
- --------------
Year Ended 9/30/95 6.31 N/A
9.19
- ------------------------------------------------------------
- --------------
Five Years Ended 9/30/95 8.42 N/A
N/A
- ------------------------------------------------------------
- --------------
Inception* through 9/30/95 7.77 11.17
6.34
- ------------------------------------------------------------
- --------------
</TABLE>
- ------------------------------------------------------------
- --------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Without Sales
Charge(1)
============================================================
==============
<S> <C>
Class A (Inception* through 9/30/95) 106.11%
- ------------------------------------------------------------
- --------------
Class B (Inception* through 9/30/95) 15.67
- ------------------------------------------------------------
- --------------
Class C (Inception* through 9/30/95) 18.31
- ------------------------------------------------------------
- --------------
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and Class C
shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 4.00% and Class B shares
reflect the
deduction of a 4.50% CDSC, which applies if shares are
redeemed less than
one year from initial purchase. This CDSC declines by
0.50% the first year
after purchase and thereafter by 1.00% per year until no
CDSC is incurred.
Class C shares reflect the deduction of a 1.00% CDSC, if
shares are redeemed
within the first year of purchase.
* Inception dates for Class A, B and C shares are August
20, 1986, November
7, 1994 and January 5, 1993, respectively.
+ Total return is not annualized, as it may not be
representative of the total
return for the year.
5
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A Shares
of
the National Portfolio vs.
Lehman Muni Bond Fund Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
August 1986 - September 1995
[GRAPH APPEARS HERE]
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on August 20, 1986, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends
(after deduction of
applicable sales charges through November 6, 1994,
afterwards at net asset
value) and capital gains (at net asset value) through
September 30, 1995. The
Lehman Muni Bond Fund Index is a broad based, total
return index, comprised
of 8,000 actual bonds which are all investment grade,
fixed rate, long term
maturities (greater than two years) and are selected from
issues larger than
$50 million dated since January 1984. The index is
unmanaged and is not
subject to the same management and trading expenses of a
mutual fund. The
performance of the Portfolio'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.
6
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 5.1%
<S> <C> <C>
<C>
$5,000,000 AAA Chicago, IL Board of Education Lease
Certificates,
Series A Refunding, 6.000% due 1/1/20
$5,075,000
2,000,000 A1* Louisiana Public Facilities Authority,
8.200% due 5/15/18
2,220,000
2,000,000 Aa* Nebraska Higher Education Loan Program
Inc.
Revenue, Sub-Series A-5A, 6.200% due
6/1/13(a) 2,000,000
1,500,000 BBB+ New York State Dormitory Authority
Revenue,
State University Educational
Facilities,
Series B, 7.500% due 5/15/11
1,726,875
2,625,000 Aa* North Texas Higher Education Authority
Inc.,
Student Loan Revenue, Series C,
6.100% due 4/1/08(a)
2,605,312
2,585,000 AAA Socorro ISD, El Paso County, Texas
Unlimited
Tax Refunding Bonds, Series 1994,
PSFG-Insured, zero coupon due 9/1/11
1,021,075
1,500,000 A* South Carolina Education Facilities
Authority
Revenue, Series 1995, 5.875% due
6/1/15 1,451,250
2,790,000 A Texas State Higher Education Coordinating
Board,
College Student Loan Revenue,
7.450% due 10/1/06(a)
3,013,200
395,000 A* Texas State Higher Education Coordinating
Board,
College Student Loan Revenue,
7.700% due 10/1/25(a)
1,000,000 AAA Utah Student Loan Revenue, Series 1991F,
419,688
AMBAC-Insured, 7.450% due 11/1/08(a)
1,075,000
- ------------------------------------------------------------
- --------------------
20,607,400
- ------------------------------------------------------------
- --------------------
<CAPTION>
Escrowed to Maturity (b) -- 10.7%
<S> <C> <C>
<C>
5,000,000 AAA Arapahoe County, CO Single-Family
Mortgage
Revenue, 1984 Series A, zero coupon
due 9/1/10 2,012,500
1,060,000 AAA Boston, MA Water and Sewer Revenue,
Series A, 10.875% due 1/1/09
1,514,475
1,170,000 AAA Douglas County, NE Hospital Authority No.
2,
Bergan Mercy, 9.500% due 7/1/10
1,576,575
25,400,000 AAA Illinois Development Finance Authority,
Retirement
Housing Revenue, Regency Park, Series
B,
(Escrowed to Maturity With Refco
Strips),
zero coupon due 7/15/25
3,270,250
5,000,000 AAA Indiana Bond Bank, AMBAC-Insured,
9.750% due 8/1/09
6,700,000
</TABLE>
See Notes to Financial Statements.
7
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Escrowed to Maturity (b) -- 10.7% (continued)
<S> <C> <C>
<C>
$5,000,000 AAA Kansas City, KS Single-Family Mortgage
Revenue Bonds, Series 1993 A, FHLMC-
Collateralized, (Escrowed to Maturity
with
Refco Strips), zero coupon due 12/1/14
$1,525,000
7,750,000 AAA Labette County, KS Single-Family Mortgage
Revenue, Series A, zero coupon due
12/1/14 2,383,125
5,000,000 AAA Maricopa County, AZ IDA Single-Family
Mortgage Revenue, Series 1983A,
(Escrowed to
Maturity with Refco Strips), zero
coupon due
12/31/14
1,531,250
3,735,000 AAA Mississippi Housing Finance, Single-
Family
Mortgage, zero coupon due 9/15/16
1,027,125
1,350,000 AAA New Jersey Turnpike Authority, 10.375%
1,631,813
due 1/1/03
1,500,000 AAA Ohio State Water Development Authority
Revenue,
Safe Water, Series 2, 9.375% due
12/1/10 1,936,875
7,000,000 AAA Perris County, CA Single-Family Housing
Mortgage,
GNMA-Collateralized, 8.300% due
6/1/13(a) 8,898,750
3,000,000 AAA Richmond County, GA Development
Authority,
Sub-Series C, zero coupon due 12/1/21
495,000
1,000,000 AAA Rogers County, OK HFA Multi-Family
Revenue,
Series A, FNMA-Collateralized,
7.750% due 8/1/23
1,235,000
2,235,000 AAA St. Louis County, MO Mortgage Revenue,
Series H,
5.400% due 1/1/16(a)
2,117,662
9,000,000 AAA Saline County, KS Single-Family Mortgage,
zero coupon due 12/1/15
2,576,250
11,000,000 AAA Washington, GA Wilkes Payroll Development
Authority, zero coupon due 12/1/21
1,815,000
910,000 AAA Weber County, UT Hospital Revenue, St.
Benedict's
Hospital, 10.000% due 3/1/10
1,210,300
- ------------------------------------------------------------
- --------------------
43,456,950
- ------------------------------------------------------------
- --------------------
<CAPTION>
Finance -- 0.8%
<S> <C> <C>
<C>
3,000,000 AAA Pennsylvania Finance Authority, Beaver
County
Revenue Refunding, 6.600% due 11/1/09
3,206,250
- ------------------------------------------------------------
- --------------------
<CAPTION>
General Obligation -- 2.0%
<S> <C> <C>
<C>
2,000,000 AAA Berks County, PA GO MVRICS, FGIC-Insured,
8.470% due 11/15/20(c)
2,312,500
1,000,000 AAA Carrolton, TX GO ISD, 5.000% due 2/15/16
910,000
2,000,000 A- New York City GO, Series D, 7.500% due
2/1/16 2,167,500
2,700,000 A Northlake IL, GO, 5.600% due 12/1/14
2,581,875
- ------------------------------------------------------------
- --------------------
7,971,875
- ------------------------------------------------------------
- --------------------
</TABLE>
See Notes to Financial Statements.
8
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Hospital -- 12.9%
<S> <C> <C>
<C>
$1,000,000 AAA* Alton IL, Health Facilities, 7.200% due
2/15/01 $1,137,500
Colorado Health Facilities Authority,
Hospital
Revenue Bonds, Rocky Mountain Adventist
Health:
2,000,000 BBB Rocky Mountain Adventist Health,
Series
1993, 6.625% due 2/1/13
1,967,500
1,000,000 BBB Vail Valley Medical Center, 7.000%
due 1/15/12 1,010,000
3,500,000 A1* Elkhart County, IN Hospital Authority
Revenue,
Elkhart General Hospital Insured,
7.000% due 7/1/12
3,710,000
2,000,000 Aa3* Fairfax County VA IDA Hospital Revenue,
RIBS, 9.527% due 8/29/23(c)
2,530,000
Harris County, TX Health Facilities
Development
Corporation:
2,000,000 A* Memorial Hospital Systems Project,
7.125% due 6/1/15
2,115,000
2,000,000 AA Sisters of Charity of the Incarnate
Word,
7.100% due 7/1/21
2,137,500
Illinois Health Facilities Authority
Hospital
Revenues:
937,000 AAA Community Provider Pooled Loan Program,
CGIC-Insured, 7.350% due 8/15/10
1,037,728
3,500,000 A- Mercy Hospital and Medical Center,
7.000% due 1/1/07
3,731,875
1,000,000 AAA Methodist Health System, Series B,
AMBAC-
Insured, RIBS, 9.578% due 5/1/21(c)
1,136,250
4,000,000 AAA Rush-Presbyterian St. Luke's Medical
Center
INFLOS, MBIA-Insured, 9.544% due
10/1/24(c) 4,515,000
500,000 NR United Medical Center, 8.375% due
7/1/12 611,250
900,000 BBB+ Klamath Falls, OR Inter-Community
Hospital
Merle West, 7.100% due 9/1/24
948,375
4,510,000 BBB Louisiana Public Facilities Authority,
Hospital
Revenue Refunding, Touro Infirmary
Project,
Series B, 6.125% due 8/15/23
3,884,238
Massachusetts State Health and
Education
Facilities Authority Revenue:
1,000,000 AAA St. Elizabeth Hospital, FSA-Insured,
9.380% due 8/15/21(c)
1,098,750
1,470,000 AAA Valley Regional Health, Series A,
CONNIE LEE-Insured, 7.000% due
7/1/07 1,675,800
</TABLE>
See Notes to Financial Statements.
9
<TABLE>
<CAPTION>
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
Hospital -- 12.9% (continued)
<S> <C> <C>
<C>
$4,835,000 AA Missouri State Health & Educational
Facilities
Authority, (BJC Health Systems),
6.750% due 5/15/13
$5,294,325
1,635,000 BBB+ New York State Medical Care Facilities
Financing
Agency, (Long Term Health Care),
Medical Health
Services, Series 91B, 7.400% due
2/15/18 1,794,413
1,000,000 A- Philadelphia, PA Hospital and Higher
Education
Facilities Authority, Presbyterian
Medical
Center, 6.650% due 12/1/19
1,102,500
1,000,000 BBB+ Rhode Island State Health & Education
Building
Corporation Revenue, Westerly Hospital,
6.000% due 7/1/24
898,750
1,250,000 AAA Richland County, SC Hospital Revenue
Bonds,
Community Provider Pooled Loan, CGIC-
Insured,
7.125% due 7/1/17
1,360,935
2,375,000 AA+ Vermont Educational & Health Building
Finance
Agency, H. Porter, FHA-Insured, 7.100%
due 2/1/31
2,478,905
1,300,000 AAA Washington State Health, Sisters of
Providence,
FGIC-Insured, 6.375% due 10/1/09
1,386,125
1,500,000 A Washington Health Care Facilities
Authority
Refunding 1990, (Our Lady of Lourdes
Health
Center, Pasco), LOC Banque Paribas,
7.875%
due 12/1/09(d)
1,616,250
1,000,000 AAA West Virginia St. Hospital Finance
Authority
Revenue, 5.750% due 9/1/13
972,500
2,420,000 AAA Wisconsin Health & Educational Facilities
Authority,
Wheaton Franciscan Services, Inc.,
System Revenue
Bonds, Series 1992, MBIA-Insured,
6.100% due 8/15/09
2,541,000
- ------------------------------------------------------------
- --------------------
52,692,469
- ------------------------------------------------------------
- --------------------
<CAPTION>
Housing: Multi-Family -- 5.9%
<S> <C> <C>
<C>
1,165,000 BBB+ Chicago, IL Multi-Family Housing Revenue,
FHA-Insured Mortgage Loan, Jeffrey
Apartments, 8.125% due 8/1/30(a)
1,207,231
1,500,000 A+ Illinois Housing Development Authority
Refunding, Multi-Family Housing, Series
91A,
8.125% due 7/1/10
1,599,375
1,500,000 AA- Indiana State HFA, Multi-Family Housing
Mortgage
Revenue, Hunters Run, FHA-Insured,
7.250% due 5/1/18(a)
1,582,500
5,000,000 Aa* Iowa Finance Authority, Prestwick
Apartments,
FHA-Insured, 7.500% due 12/1/36(a)
5,400,000
</TABLE>
See Notes to Financial Statements.
10
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Multi-Family -- 5.9% (continued)
<S> <C> <C>
<C>
$1,000,000 A King County, WA Housing Authority
Revenue,
Series A, 6.800% due 3/1/26
$1,008,750
Massachusetts State HFA, Multi-Family
Residential Housing, Series A, FHA-
Insured:
1,995,000 A+ 8.800% due 8/1/21(a)
2,074,800
2,000,000 A+ 7.800% due 8/1/22(a)
2,082,500
1,985,000 AAA Mohave County, AZ Industrial Development
Agency,
Multi-Family Housing Copper Ridge
Apartments,
FHA-Insured, 7.375% due 4/1/32
2,114,025
1,500,000 AAA Monroe County, MI PCR, (Detroit Edison
Co.
Project), FGIC-Insured, 7.650% due
9/1/22(a) 1,663,125
850,000 A1* Portland, OR Multi-Family Housing
Revenue,
6.250% due 5/1/12
853,188
1,000,000 A Roanoke, VA Redevelopment and Housing
Authority, Multi-Family Housing Revenue
Refunding, United Dominion-Laurel
Ridge,
6.625% due 5/1/23(a)
1,012,500
1,000,000 A Salt Lake City, UT Housing Authority,
Multi-Family
Revenue, 6.130% due 4/1/30
966,250
2,352,000 AAA Seattle Housing Authority, Low Income
Housing
Revenue, 7.400% due 11/20/36
2,510,760
- ------------------------------------------------------------
- --------------------
24,075,004
- ------------------------------------------------------------
- --------------------
<CAPTION>
Housing: Single-Family -- 13.0%
<S> <C> <C>
<C>
170,000 AAA Adams County, CO Multi-County Single-
Family
Mortgage Revenue, GNMA-Collateralized,
9.250% due 11/1/17(a)
176,375
690,000 AAA Alaska State Housing Finance Corporation,
Home
Mortgage, Single-Family Revenue,
GNMA/FNMA-Collateralized, 8.750% due
12/1/16 719,325
775,000 AAA Arkansas Housing Development, Single-
Family
Mortgage Revenue, Series A, GNMA-
Collateralized,
7.400% due 9/1/23(a)
814,719
5,000,000 AAA Aurora Kane & Dupage, IL Single-Family
Mortgage
Revenue, Series A, 7.950% due
10/1/25(a) 5,512,500
1,265,000 Aa* Colorado HFA, Single-Family Program
Refunding,
Senior Bonds, 1994 Series D-1, 8.000%
due 12/1/24 1,404,150
1,500,000 Aa* Colorado HFA, Single-Family Housing
Revenue,
Series B-1, 7.900%, due 12/1/25
1,653,750
5,675,000 AAA Cowley & Shawnee Counties Mortgage
Revenue,
Series B, AMBAC-Insured, GNMA-
Collateralized,
zero coupon due 6/1/22(a)
723,563
</TABLE>
See Notes to Financial Statements.
11
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Single-Family -- 13.0% (continued)
<S> <C> <C>
<C>
$ 770,000 AAA District of Columbia HFA Collateralized
Revenue,
Single-Family, GNMA & FHLMC, FNMA
Mortgage
Backed, 8.100% due 12/1/23(a)
$ 814,275
1,421,000 AAA Fort Worth, TX Housing Finance Corp.,
Single-Family Mortgage Revenue,
GNMA-Collateralized,
Series A, zero coupon due 6/1/21(a)
186,506
500,000 AAA Fulton County, GA Housing Authority,
Single-Family
Mortgage Revenue, Series A, 6.600% due
3/1/28(a) 506,875
1,700,000 Aa* Idaho Housing Agency, Single-Family
Mortgage,
Series C-2, 7.900% due 1/1/22(a)
1,795,625
1,440,000 Aa* Illinois Housing Development Authority,
Residential Mortgage Revenue, Series
89A,
7.400% due 2/1/20(a)
1,486,800
1,010,000 A* Labette County, KS Single-Family Mortgage
Revenue
Refunding, Series A, 8.400% due 12/1/11
1,085,750
Maryland State Community Development
Administration:
2,000,000 Aa* Housing & Community Development, Single-
Family
Mortgage Revenue, 7.450% due
4/1/32(a) 2,087,500
125,000 A* Single-Family Mortgage Revenue, 9.500%
due 6/1/07 127,656
2,000,000 BBB Michigan State Hospital Finance
Authority,
6.000% due 2/1/24
1,722,500
670,000 Aaa* Missouri Housing Development Commission
Mortgage
Purchase Refunding Bonds, GNMA-
Collateralized,
zero coupon due 7/1/23
92,963
3,980,043 AAA Montgomery County, TX Housing Finance
Corporation
Single-Family Mortgage Revenue, MBIA-
Insured,
zero coupon due 9/1/15
452,730
Nebraska Investments Finance Authority:
800,000 AAA GNMA-Collateralized, RIBS Variable
Rate,
9.781% due 9/15/23(a)(c)
871,000
600,000 AAA Single-Family Mortgage Revenue, (GNMA
Mortgage
Backed Securities Program), 1990
Series 3, RIBS,
11.253% due 9/10/30(a)(c)
685,500
4,677,755 AA Nevada Housing Development Single-Family
Mortgage
Revenue, Series 1983 B, FHA-Insured,
zero coupon due 4/1/15
660,733
1,975,000 Aa* New Hampshire State HFA, Single-Family
Residential
Mortgage, 7.250% due 7/1/15(a)
2,054,000
Oregon State Housing & Community Services
Department Mortgage Revenue, Single-
Family
Mortgage Program:
850,000 Aa* Series B, 6.875% due 7/1/28
892,500
</TABLE>
See Notes to Financial Statements.
12
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Single-Family -- 13.0% (continued)
<S> <C> <C>
<C>
$ 500,000 Aa* Series D, 6.500% due 7/1/24
$ 516,250
295,000 BBB- Panhandle, TX Regional Housing Finance
Corporation, Single-Family Mortgage
Revenue,
10.375% due 3/1/09
305,325
Pennsylvania HFA, Single-Family Mortgage
Revenue:
1,000,000 AA Series 39B, 6.875% due 10/1/24(a)
1,036,250
2,225,000 AA Series 1990-27, 8.150% due
10/1/21(a)(d) 2,344,594
240,000 AA Series X, 8.150% due 4/1/24(a)
247,800
965,000 AAA Prince Georges County, MD Housing
Authority,
Single-Family Mortgage Revenue
Refunding,
Series A, GNMA-Collateralized, 8.000%
due 1/1/17 1,015,663
6,425,000 A* Reno County, KS Single-Family Mortgage
Revenue,
Series A, zero coupon due 12/1/14
762,969
Rhode Island Housing & Mortgage Financing
Corporation:
1,440,000 AA+ Home Ownership I-D, 7.875% due
10/1/21(a) 1,490,400
1,500,000 AA+ Home Ownership Opportunity Bonds,
Series 8,
INFLOS, 9.972% due 4/1/24(a)(c)
1,618,125
3,985,000 AAA Riverside County, CA Single-Family
Revenue,
GNMA-Backed Securities, Series A,
7.800% due 5/1/21
4,796,944
745,730 A1* St. Bernard Parish, LA Home Mortgage
Authority,
Single-Family Mortgage Revenue
Refunding,
Series A, 8.000% due 3/25/12
805,389
2,500,000 Aa1* South Dakota Housing Development
Authority,
Home Ownership Mortgage Board,
Series C, 7.300% due 5/1/24(a)
2,603,125
1,535,000 Aa* Tennessee Housing Development Authority,
Home Ownership Bonds, Series H,
7.825% due 7/1/15(a)
1,598,318
1,000,000 AAA Travis County, TX Housing Finance
Corporation,
Single-Family Mortgage Revenue, Series
B,
GNMA/FNMA-Collateralized, 7.100% due
10/1/27(a) 1,045,000
Utah HFA Single-Family Mortgage Revenue:
1,205,000 AA 7.300% due 7/1/16
1,248,680
940,000 AA 9.000% due 1/1/19(a)(d)
968,200
3,000,000 Aa1* Virginia State Housing Development
Authority,
Commonwealth Mortgage, Series A,
7.150% due 1/1/33
3,138,750
915,000 AA Wyoming Community Development Authority,
8.125% due 6/1/21(a)
966,469
- ------------------------------------------------------------
- --------------------
53,035,546
- ------------------------------------------------------------
- --------------------
</TABLE>
See Notes to Financial Statements.
13
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Industrial Development -- 4.7%
<S> <C> <C>
<C>
$1,000,000 A- Bradford, PA IDA, Solid Waste,
International Paper
Company Projects, 6.600% due 3/1/19(a)
$1,013,750
2,750,000 BBB Columbus, MS IDR Refunding Bonds, Series
1994,
Beloit Corporation Project,
Harnischfeger
Industries, 5.900% due 12/1/11
2,729,375
3,355,000 AA- Fairfax, VA IDA INOVA Health System
Project,
5.000% due 8/15/23
2,876,913
2,500,000 A+ Greenville County, SC Industrial Revenue,
(Lockheed Aeromod Center Inc. Project),
7.100% due 11/1/11(a)
2,671,875
850,000 AA Hempstead, NY IDA & IDR Bonds, (1990
Nassau
District Energy Corporation Project),
LOC
Toronto Dominion, 7.750% due 9/15/15(a)
892,500
2,650,000 A+ Iowa Finance Authority, (Governor Square
Project),
7.250% due 4/1/14
2,865,312
1,500,000 Baa3* New York City IDA Special Facilities
Revenue,
(American Airlines Project), 7.750% due
7/1/19(a) 1,591,875
1,000,000 A Rensselear County, NY IDA Albany
International
Corporation-Insured, 7.550% due
6/1/07(a) 1,096,250
1,000,000 A+ Tucson Airport Authority, Inc., Special
Facilities
Revenue Bonds, (Lockheed Aeromod
Center, Inc.),
Series 1990, 8.700% due 9/1/19(a)
1,151,250
2,000,000 A West Chicago IDR, (Leggett & Platt Inc.
Project),
6.900% due 9/1/24(a)
2,070,000
- ------------------------------------------------------------
- --------------------
18,959,100
- ------------------------------------------------------------
- --------------------
<CAPTION>
Lease Backed -- 1.9%
<S> <C> <C>
<C>
4,000,000 BBB- Clarksville National Gas Acquisition
Corporation,
7.500% due 11/1/04
4,190,000
3,500,000 A Pendleton County, KY Multi-County Lease
Revenue,
(KY Association of Counties), Series
93A,
6.500% due 3/1/19
3,565,625
- ------------------------------------------------------------
- --------------------
7,755,625
- ------------------------------------------------------------
- --------------------
<CAPTION>
Life Care -- 0.6%
<S> <C> <C>
<C>
2,500,000 BBB Illinois Development Finance Authority,
Health
Facilities, Community Living, 7.125%
due 3/1/10 2,578,125
- ------------------------------------------------------------
- --------------------
<CAPTION>
Miscellaneous -- 3.8%
<S> <C> <C>
<C>
2,280,000 AAA Chicago, IL Motor Fuel Tax Revenue
Refunding,
AMBAC-Insured, 5.375% due 1/1/14
2,148,900
</TABLE>
See Notes to Financial Statements.
14
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
==========================
Miscellaneous -- 3.8% (continued)
<S> <C> <C>
<C>
$1,000,000 Baa* Delaware County, PA Authority Revenue,
(Elwyn Inc. Project), 8.350% due 6/1/15
$ 1,090,000
Illinois Development Finance Authority
Revenue
Refunding:
2,000,000 A- City of East St. Louis, 7.250% due
11/15/09 2,162,500
1,000,000 A1* Marriott Retirement Communities Inc.,
Church
Creek Project, LOC Allied Irish
Bank,
7.750% due 8/1/10, (Mandatory Put
8/1/03) 1,071,250
2,000,000 AAA Illinois State Sales Tax Revenue, Series
P,
6.500% due 6/15/13
2,172,500
1,500,000 A Indiana Bond Bank Guaranty State
Revolving Fund,
Series B, 6.875% due 2/1/12
1,638,750
1,000,000 Baa1* Indianapolis, IN Economic Development
Revenue
Refunding & Improvement, National
Benevolent,
7.625% due 10/1/22
1,045,000
400,000 A Oregon State Bond Bank, Economic
Development
Department, Series 1, 6.700% due 1/1/15
421,500
2,500,000 A- Summit County, CO Sports Facilities
Refunding Revenue,
(Keystone Resorts Management Inc.
Project), Ralston
Purina Company Guaranteed, 7.750% due
9/1/06 2,871,875
895,000 A Texas National Research Lab Community,
Financing
Corporation Lease Revenue, Series 91,
7.100% due 12/1/21
1,027,013
- ------------------------------------------------------------
- --------------------------
15,649,288
- ------------------------------------------------------------
- --------------------------
<CAPTION>
Pollution Control -- 7.0%
<S> <C> <C>
<C>
1,500,000 BBB Brazos River Authority, TX (Texas Utility
Electric),
8.250% due 1/1/19(a)
1,642,500
5,000,000 Aa3* Brazos River, TX Navigation District PCR,
BASF,
6.750% due 2/1/10
5,575,000
1,500,000 BBB+ Lancaster, PA Solid Waste Resource
Recovery,
Series A, 8.500% due 12/15/10(a)
1,601,250
2,000,000 AAA Matagorda County, TX Navigational
District
No. 2, PCR, (Houston Power & Light),
Series D,
FGIC-Insured, 7.600% due 10/1/19(a)(d)
2,222,500
2,000,000 AA Mount Vernon, IN PCR, (Southern Indiana
Gas),
7.250% due 3/1/14
2,192,500
2,000,000 A* Nebraska Solid Waste, Montgomery Co.
Resource
Revenue, 6.000% due 7/1/07
2,050,000
1,500,000 AAA Ohio State Water Development Authority,
Pollution
Control Facilities Revenue, Cleveland
Electric,
Secondary, FGIC-Insured, 8.000% due
10/1/23(a) 1,676,250
</TABLE>
See Notes to Financial Statements.
15
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Pollution Control -- 7.0% (continued)
<S> <C> <C>
<C>
$3,200,000 Aa2* Petersburg, IN PCR Refunding,
Indianapolis
Power & Light, 5.400% due 8/1/17
$3,012,000
3,440,000 BBB- Port of Corpus Christi, TX Industrial
Development
Corporation Revenue, (Valero Refining &
Marketing Co.), Series A, 10.250% due
6/1/17 3,805,500
1,945,000 BBB St. Charles Parish, LA PCR, Union
Carbide,
7.350% due 11/1/22(a)
2,059,268
2,550,000 BBB+ Trumbull County, OH Sewer Disposal
Revenue,
(General Motors Corporation Project),
6.750% due 7/1/14(a)
2,789,063
- ------------------------------------------------------------
- --------------------
28,625,831
- ------------------------------------------------------------
- --------------------
<CAPTION>
Power -- 3.3%
<S> <C> <C>
<C>
3,880,000 AAA Clark County, NE IDR, (Nevada Power Co.
Project),
Series 1990, FGIC-Insured, 7.800% due
6/1/20(a) 4,398,950
Georgia Municipal Electric Authority
Power Revenue:
1,500,000 AAA Series EE, AMBAC-Insured, 7.250% due
1/1/24 1,790,625
2,500,000 A+ Special Obligation Fourth Crossover,
Series Project 1, 6.500% due 1/1/12
2,640,625
4,250,000 AA Washington Public Power Supply System,
(Nuclear Power Project No. 2),
Refunding Bonds,
Series 1990 B, 7.000% due 7/1/12
4,483,750
- ------------------------------------------------------------
- --------------------
13,313,950
- ------------------------------------------------------------
- --------------------
<CAPTION>
Pre-Refunded (e) -- 7.3%
<S> <C> <C>
<C>
1,500,000 AAA Boston, MS Boston City Hospital,
(Escrowed with
U.S. Government Securities to 8/15/00
Call @ 102), 7.630% due 2/15/21(c)
1,726,875
1,500,000 AAA Chattanooga-Hamilton County, TN Hospital
Authority
Revenue, (Escrowed with U.S. Government
Securities to 2/25/00 Call @ 104),
9.720%
due 5/25/21(c)
1,888,125
1,500,000 AAA Franklin County, OH Hospital Facilities
Refunding &
Improvement Revenue, Series 1990B,
(Riverside
United Methodist Hospital), (Escrowed
with U.S.
Government Securities to 5/15/00 Call @
102),
7.600% due 5/15/20
1,719,375
4,120,000 AAA Georgia Municipal Electric Authority
Power Revenue,
Series P, (Escrowed with U.S.
Government
Securities to 1/1/98 Call @ 102),
8.125%
due 1/1/20
4,532,000
1,000,000 AAA Harris County, TX Toll Road Senior Lien
Revenue,
(Escrowed with U.S. Government
Securities
to 8/1/98 Call @ 102), 8.125% due
8/1/15 1,117,500
</TABLE>
See Notes to Financial Statements.
16
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Pre-Refunded (e) -- 7.3% (continued)
<S> <C> <C>
<C>
$4,000,000 AAA Indiana Health Facilities Financing
Authority,
Hospital Revenue, (Bartholomew County
Hospital
Project), CGIC-Insured, (Escrowed with
U.S.
Government Securities to 8/15/00 Call @
102),
7.750% due 8/15/20
$4,625,000
1,000,000 AAA Michigan State Hospital Finance Authority
Revenue,
Sisters of Mercy, (Escrowed with U.S.
Government
Securities to 2/15/01 Call @ 102),
7.500% due 2/15/18
1,152,500
1,000,000 AAA New York State Dormitory Authority
Revenue, State
University Educational Facilities,
(Escrowed with
U.S. Government Securities to 5/15/00
Call @ 102),
7.700% due 5/15/12
1,152,500
2,000,000 AAA New York State Local Government
Assistance
Corporation, (Escrowed with U.S.
Government
Securities to 4/1/01 Call @ 102),
7.500% due 4/1/20
2,320,000
North Carolina Eastern Municipal Power
Agency,
Power System Revenue Refunding:
1,000,000 AAA Escrowed with U.S. Government
Securities
to 1/1/97 Call @ 100, 4.500% due
1/1/24 826,250
1,310,000 AAA Escrowed with U.S. Government
Securities
to 1/1/22 Call @ 100, 6.000% due
1/1/26 1,336,200
2,965,000 AAA Utah Associated Municipal Power System
Revenue,
(Central St. George Transmission
Project),
AMBAC-Insured, (Escrowed with U.S.
Government
Securities to 12/1/99 Call @ 101),
7.375% due 12/1/09(a)
3,302,269
2,850,000 AAA Washington County, PA Hospital Authority
Revenue,
(Washington Hospital Project),
(Escrowed with U.S.
Government Securities to 7/1/97 Call @
101),
9.500% due 7/1/17(d)
3,127,875
1,000,000 AAA West Virginia State Water Development
Authority,
Water Development Revenue, CGIC-
Insured,
(Escrowed with U.S. Government
Securities to
11/1/96 Call @ 102), 8.125% due 11/1/16
1,062,500
- ------------------------------------------------------------
- --------------------
29,888,969
- ------------------------------------------------------------
- --------------------
<CAPTION>
Public Facilities -- 5.2%
<S> <C> <C>
<C>
2,500,000 A- Dekalb County, IN Redevelopment Mini-Mill
Local
Public Improvement Project, 6.500% due
1/15/14 2,553,125
</TABLE>
See Notes to Financial Statements.
17
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Public Facilities -- 5.2% (continued)
<S> <C> <C>
<C>
$3,750,000 A+ George L. Smith II Georgia World Congress
Authority, Revenue Bonds, (Domed
Stadium
Project), Series 1990, LOC Industrial
Bank of
Japan, 7.875% due 7/1/20(a)
$4,125,000
Indianapolis, IN Local Public Improvement
Bond Bank:
3,000,000 AA+ Series B, 6.000% due 1/1/13
3,060,000
3,685,000 A+ Series 1992 D, 6.750% due 2/1/14
3,979,800
1,095,000 BBB- Portland, TX Community Center Sales Tax
Gross Revenue, 7.000% due 2/15/25
1,093,631
2,000,000 Baa1* Triborough Bridge & Tunnel Authority, NY,
(Convention Center Project), Series E,
7.250% due 1/1/10
2,212,500
3,960,000 A Tulsa, OK Public Facilities Authority,
Lease
Payment Revenue Refunding-Assembly
Center,
6.600% due 7/1/14
4,301,550
- ------------------------------------------------------------
- --------------------
21,325,606
- ------------------------------------------------------------
- --------------------
<CAPTION>
Short-Term (b) -- 0.1%
<S> <C> <C>
<C>
300,000 VMIG 1* Brazos River, TX PCR Utilities Electric,
4.600% due 6/1/30
300,000
300,000 VMIG 1* New York City GO, 4.750% due 8/1/22
300,000
- ------------------------------------------------------------
- --------------------
600,000
- ------------------------------------------------------------
- --------------------
<CAPTION>
Solid Waste -- 2.0%
<S> <C> <C>
<C>
1,000,000 A Lancaster County, PA Solid Waste
Management
Authority, Resource Recovery System
Revenue
Landfill, 7.875% due 12/15/09
1,048,750
400,000 A New Morgan, PA IDA, Solid Waste Disposal,
(New Morgan Landfill Company Inc.
Project),
Browning Ferris, 6.500% due 4/1/19(a)
410,000
1,850,000 A1* Richland County, SC Solid Waste Disposal
Facilities
Revenue, (Union Camp Corporation
Project),
Series B, 7.125% due 9/1/21(a)
1,979,500
1,130,000 A- Southwestern, Illinois Development
Authority,
Solid Waste Disposal Revenue, (Laclede
Steel
Company Project), 8.500% due 8/1/20(a)
1,254,300
3,200,000 BBB Sweetwater County, WY Solid Waste
Disposal
Revenue Bonds, (FMC Corporation
Project),
Series 1994 A, 7.000% due 6/1/24(a)
3,308,000
- ------------------------------------------------------------
- --------------------
8,000,550
- ------------------------------------------------------------
- --------------------
</TABLE>
See Notes to Financial Statements.
18
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Tax Allocation -- 0.3%
<S> <C> <C>
<C>
$1,000,000 AAA La Quinta, CA Redevelopment Agency, MBIA-
Insured,
7.300% due 9/1/12
$ 1,173,750
- ------------------------------------------------------------
- --------------------
<CAPTION>
Transportation -- 7.0%
<S> <C> <C>
<C>
3,000,000 Baa2* Alliance Airport Authority Incorporated,
TX Special
Facilities Revenue, (American Airlines
Incorporated Project), 7.500% due
12/1/29 (a) 3,172,500
1,680,000 Baa1* Arapahoe, CO Capital Improvement Highway
Revenue, 6.950% due 8/31/20
1,740,900
2,000,000 Baa2* Chicago, IL O'Hare International Airport,
Special
Facility Revenue, International
Terminal,
Series 1985A, (American Airlines
Project),
7.875% due 11/1/25(a)
2,170,000
2,010,000 NR Connecticut Development Authority,
Airport
Facilities Revenue, 6.630% due 12/1/14
1,957,238
City and County of Denver, CO Airport
Systems
Revenue:
1,000,000 Baa* Series A, FGIC-Insured, 8.500% due
11/15/23(a) 1,123,750
3,500,000 Baa* Series 1992B, 7.250% due 11/15/07(a)
3,780,000
New Hampshire State Turnpike Systems
Revenue Refunding:
2,500,000 AAA FGIC-Insured, 6.750% due 11/1/11
2,740,625
1,000,000 AAA Series C, 9.500% due 11/1/17
1,188,750
3,000,000 AAA Port Everglades, FL Port Improvement
Authority,
7.125% due 11/1/16
3,581,250
Regional Transit Authority, Illinois:
2,000,000 AAA Series A, AMBAC-Insured, 6.400% due
6/1/12 2,137,500
1,045,000 AAA Series C, FGIC-Insured, 7.750% due
6/1/20 1,302,331
3,240,000 AAA Rhode Island Port Authority & Economic
Development, Shepard Building, 6.750%
due 6/1/25
3,450,600
- ------------------------------------------------------------
- --------------------
28,345,444
- ------------------------------------------------------------
- --------------------
<CAPTION>
Utilities -- 4.0%
<S> <C> <C>
<C>
3,000,000 AAA Brownsville, TX Utility System Revenue
Priority
Refunding, MBIA-Insured, 6.250% due
9/1/14 3,183,750
825,000 Aa* Hogansville, GA Combined Public Utility
Systems,
Asset Guaranty, 5.850% due 10/1/15
794,063
2,300,000 AAA Nebraska Public Power District, 5.250%
due 1/1/22 2,093,000
1,000,000 Aa3* New York State Energy Research &
Development,
(Con Edison Project A), 7.125% due
12/1/29(a) 1,093,750
5,000,000 A North Carolina Eastern Muni Power Agency
System
Revenue, Series B, 6.000% due 1/1/22
4,743,750
</TABLE>
See Notes to Financial Statements.
19
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)(continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Utilities -- 4.0% (continued)
<S> <C> <C>
<C>
$3,000,000 AA Oklahoma City Industrial and Cultural
Facility Trust, District Heating and
Cooling
Revenue Bonds, Series 92, Trigen-
Oklahoma
District Energy Corporation, LOC
Societe
Generale, 6.750% due 9/15/17(a)
$ 3,018,750
1,235,000 AAA Piedmont Municipal Power Agency, Electric
Revenue Refunding, 6.750% due 6/1/25
1,375,481
- ------------------------------------------------------------
- --------------------
16,302,544
- ------------------------------------------------------------
- --------------------
<CAPTION>
Water & Sewer -- 2.4%
<S> <C> <C>
<C>
2,400,000 A Dauphin County, PA IDA, General Water
Works
Corporation-Insured, 6.900% due
6/1/24(a) 2,658,000
2,000,000 A- Idaho State Water Resources Board, Water
Revenue
Resource Development, Borse Water
Corporation,
7.250% due 12/1/21(a)
2,140,000
1,000,000 A New Jersey State EDA Sewer Facility,
Atlantic
City Sewer, 7.250% due 12/1/11
1,093,750
3,400,000 Aa1* Port of Umatilla Water Project Revenue,
Series 1994, (LOC ABN AMRO Bank),
6.650% due 8/1/22(a)
3,553,000
350,000 A+ Portland, OR Sewer System Revenue Bonds,
Series 1994 A, 6.250% due 6/1/15
364,438
- ------------------------------------------------------------
- --------------------
9,809,188
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $380,894,035)(f)
$407,373,464
============================================================
====================
</TABLE>
(a) Income from these issues is considered a preference item
for purposes of
calculating the alternative minimum tax.
(b) Variable rate obligation payable at par on demand at any
time on no more
than seven days notice.
(c) Residual interest bonds-coupon varies inversely with
level of short-term
tax-exempt interest rates.
(d) Securities segregated by Custodian for open purchase
commitment.
(e) Pre-refunded bonds escrowed by U.S. Government
Securities and bonds escrowed
to maturity by U.S. Government Securities are considered
by manager to be
triple-A rated even if issuer has not applied for new
ratings.
(f) Aggregate cost for Federal income tax purposes is
substantially the same.
See pages 21 and 22 for definitions of ratings and
certain security
descriptions.
See Notes to Financial Statements.
20
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Bond Ratings
- ------------------------------------------------------------
- --------------------
All ratings are by Standard & Poor's Corporation, except
those identified by an
asterisk (*) are rated by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Rating from "AA" to "BBB" may be
modified by the addition
of a plus (+) or minus (-) sign to show relative standings
within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating
assigned by Standard &
Poor's. Capacity to pay interest and repay
principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to
pay interest and
repay principal and differs from the highest
rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay
interest and repay
principal although it is somewhat more
susceptible to the adverse
effects of changes in circumstances and economic
conditions than debt
in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an
adequate capacity to pay
interest and repay principal. Whereas they
normally exhibit adequate
protection parameters, adverse economic
conditions or changing
circumstances are more likely to lead to a
weakened capacity to pay
interest and repay principal for bonds in this
category than in
higher rated categories.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to
each generic rating
from "Aa" to "Baa", where 1 is the highest and 3
the lowest ranking
within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of
the best quality. They
carry the smallest degree of investment risk and
are generally
referred to as "gilt edge". Interest payments are
protected by a
large or by an exceptionally stable margin and
principal is secure.
While the various protective elements are likely
to change, such
changes as can be visualized are most unlikely to
impair the
fundamentally strong position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of
high quality by all
standards. Together with the "Aaa" group they
comprise what are
generally known as high grade bonds. They are
rated lower than the
best bonds because margins of protection may not
be as large in Aaa
securities or fluctuation of protective elements
may be of greater
amplitude or there may be other elements present
which make the
long-term risks appear somewhat larger than in
Aaa securities.
A -- Bonds that are rated "A" possess many favorable
investment attributes
and are to be considered as upper medium grade
obligations. Factors
giving security to principal and interest are
considered adequate but
elements may be present which suggest a
susceptibility to impairment
some time in the future.
Baa -- Bonds that are rated "Baa" are considered as
medium grade
obligations, i.e., they are neither highly
protected nor poorly
secured. Interest payments and principal security
appear adequate for
the present but certain protective elements may
be lacking or may be
characteristically unreliable over any great
length of time. Such
bonds lack outstanding investment characteristics
and in fact have
speculative characteristics as well.
NR -- Indicates that the bond is not rated by Standard
& Poor's Corporation
or Moody's Investors Services.
21
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Short-Term Securities Ratings
- ------------------------------------------------------------
- --------------------
SP-1 -- Standard & Poor's highest rate rating indicating
very strong or
strong capacity to pay principal and interest;
those issues
determined to possess overwhelming safety
characteristics are denoted
with a plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and
variable-rate demand
obligation (VRDO) rating indicating that the
degree of safety
regarding timely payment is either overwhelming
or very strong; those
issues determined to possess overwhelming safety
characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand
feature -- (VRDO).
P-1 -- Moody's highest rating for commercial paper and
for VRDO prior to the
advent of the VMIG 1 rating.
- ------------------------------------------------------------
- --------------------
Security Descriptions
- ------------------------------------------------------------
- --------------------
ABA -- Association of Bay Area Governors
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CHFCLI -- California Health Facility Construction Loan
Insurance
COP -- Certificate of Participation
EDA -- Economic Development Authority
ETM -- Escrowed To Maturity
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FRTC -- Floating Rate Trust Certificates
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
PSF -- Permanent School Fund
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
SYCC -- Structured Yield Curve Certificate
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
22
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Statement of Assets and Liabilities (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<S>
<C>
ASSETS:
Investments, at value (Cost -- $380,894,035)
$407,373,464
Cash
15,114
Receivable for securities sold
1,105,303
Receivable for Fund shares sold
87,739
Interest receivable
7,080,796
Other assets
3,221
- ------------------------------------------------------------
- -------------------
Total Assets
415,665,637
- ------------------------------------------------------------
- -------------------
LIABILITIES:
Dividends payable
2,030,015
Payable for Fund shares purchased
1,891,757
Management fees payable
305,022
Distribution fees payable
33,148
Accrued expenses and other liabilities
24,871
- ------------------------------------------------------------
- -------------------
Total Liabilities
4,284,813
- ------------------------------------------------------------
- -------------------
Total Net Assets
$411,380,824
============================================================
===================
NET ASSETS:
Par value of shares of beneficial interest
$ 30,214
Capital paid in excess of par value
390,181,585
Undistributed net investment income
76,211
Accumulated net realized loss on security transactions
(5,386,615)
Net unrealized appreciation of investments
26,479,429
- ------------------------------------------------------------
- -------------------
Total Net Assets
$411,380,824
============================================================
===================
Shares Outstanding:
Class A
28,354,283
----------------------------------------------------------
- -------------------
Class B
590,716
----------------------------------------------------------
- -------------------
Class C
1,268,717
----------------------------------------------------------
- -------------------
Net Asset Value:
Class A (and redemption price)
$13.61
----------------------------------------------------------
- -------------------
Class B*
$13.62
----------------------------------------------------------
- -------------------
Class C**
$13.61
----------------------------------------------------------
- -------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value per share)
$14.18
============================================================
===================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if
shares are redeemed less than one year from initial
purchase (See Note 3).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
23
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Statement of Operations (unaudited)
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995
<TABLE>
<S>
<C>
INVESTMENT INCOME:
Interest
$14,068,450
- ------------------------------------------------------------
- --------------------
EXPENSES:
Management fees (Note 3)
947,394
Distribution fees (Note 3)
384,053
Shareholder and system servicing fees
54,752
Audit and legal
50,325
Registration fees
35,136
Shareholder communications
23,973
Custody
19,856
Trustees' fees
7,137
Pricing service fees
5,490
Other
6,039
- ------------------------------------------------------------
- --------------------
Total Expenses
1,534,155
- ------------------------------------------------------------
- --------------------
Net Investment Income
12,534,295
- ------------------------------------------------------------
- --------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 4):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales
83,453,966
Cost of securities sold
82,929,410
- ------------------------------------------------------------
- --------------------
Net Realized Gain
524,556
- ------------------------------------------------------------
- --------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period
17,638,553
End of period
26,479,429
- ------------------------------------------------------------
- --------------------
Increase in Net Unrealized Appreciation
8,840,876
- ------------------------------------------------------------
- --------------------
Net Gain on Investments
9,365,432
- ------------------------------------------------------------
- --------------------
Increase in Net Assets From Operations
$21,899,727
============================================================
====================
</TABLE>
See Notes to Financial Statements.
24
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Statement of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
<TABLE>
<CAPTION>
September
30 March 31
<S> <C>
<C>
============================================================
===================
OPERATIONS:
Net investment income $
12,534,295 $ 26,832,159
Net realized gain (loss)
524,556 (5,093,818)
Increase in net unrealized appreciation
8,840,876 4,640,521
- ------------------------------------------------------------
- -------------------
Increase in Net Assets From Operations
21,899,727 26,378,862
- ------------------------------------------------------------
- -------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income
(12,458,084) (27,215,082)
Net realized gains
- -- (52,488)
- ------------------------------------------------------------
- -------------------
Decrease in Net Assets From
Distributions To Shareholders
(12,458,084) (27,267,570)
- ------------------------------------------------------------
- -------------------
FUND SHARE TRANSACTIONS (Note 6):
Net proceeds from sale of shares
24,482,814 110,670,640
Net asset value of shares issued for
reinvestment of dividends
5,163,171 13,437,809
Cost of shares reacquired
(54,574,413) (136,182,090)
- ------------------------------------------------------------
- -------------------
Decrease in Net Assets From
Fund Share Transactions
(24,928,428) (12,073,641)
- ------------------------------------------------------------
- -------------------
Decrease in Net Assets
(15,486,785) (12,962,349)
NET ASSETS:
Beginning of period
426,867,609 439,829,958
- ------------------------------------------------------------
- -------------------
End of period*
$411,380,824 $ 426,867,609
============================================================
===================
*Includes undistributed net investment income of:
$76,211 --
============================================================
===================
</TABLE>
See Notes to Financial Statements.
25
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- --------------------
1. Significant Accounting Policies
The National Portfolio ("Portfolio") is a separate
investment portfolio of
the Smith Barney Muni Funds ("Fund"). The Fund is a
Massachusetts business trust
registered under the Investment Company Act of 1940, as
amended, as a
non-diversified, open-end management investment company and
consists of this
Portfolio and eleven other separate investment portfolios:
California, Florida,
Georgia, Limited Term, New Jersey, New York, Ohio,
Pennsylvania, Florida Limited
Term, California Money Market and New York Money Market
Portfolios. The
financial statements and financial highlights for the other
portfolios are
presented in separate semi-annual reports.
The significant accounting policies consistently
followed by the Fund are:
(a) security transactions are accounted for on the trade
date; (b) securities
are valued at the mean between the bid and asked prices
provided by an
independent pricing service that are based on transactions
in municipal
obligations, quotations from municipal bond dealers, market
transactions in
comparable securities and various relationships between
securities;
(c) short-term securities maturing within 60 days are valued
at cost plus
(minus) accreted discount (amortized premium), if any, which
approximates value;
(d) gains or losses on the sale of securities are calculated
by using the
specific identification method; (e) interest income,
adjusted for amortization
of premiums and accretion of original issue discount, is
recorded on the accrual
basis; market discount is recognized upon the disposition of
the security; (f)
direct expenses are charged to each portfolio and each
class; management fees
and general fund expenses are allocated on the basis of
relative net assets; (g)
the Portfolio 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; and (h)
during 1995, the Fund
adopted Statement of Position 93-2 Determination,
Disclosure, and Financial
----------------------------------------------------
- ---------------
Statement Presentation of Income, Capital Gain, and Return
of Capital
- ------------------------------------------------------------
- ---------
Distributions by Investment Companies. Accordingly, the
overdistributed net
- --------------------------------------
investment income of $12,549 at March 31, 1995 has been
reclassified to paid-in
capital. Net investment income, net realized gains, and net
assets were not
affected by this change.
2. Exempt-Interest Dividends and Other Distributions
The Portfolio intends to satisfy conditions that will
enable interest from
municipal securities, which is exempt from Federal income
tax and from
designated state income taxes, to retain such tax-exempt
status when distributed
to the shareholders of the Portfolio.
26
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Capital gains distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
3. Management Agreements and Transactions with
Affiliated Persons
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
National Portfolio pays SBMFM a management fee calculated at
the annual rate of
0.45% of the average daily net assets. This fee is
calculated daily and paid
monthly.
Smith Barney Inc. ("SB"), another subsidiary of SBH,
acts as distributor of
Fund shares. For the six months ended September 30, 1995, SB
received sales
charges of approximately $161,000 on purchases of the
Portfolio's Class A
shares.
There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B
shares if redemption occurs less than one year from initial
purchase. This CDSC
declines by 0.50% the first year after purchase and
thereafter by 1.00% per year
until no CDSC is incurred. Class C shares have a 1.00% CDSC
if redemption occurs
within the first year from the date such investment was
made. For the six months
ended September 30, 1995, CDSCs of approximately $16,000
were paid to SB.
Pursuant to the Distribution Plan, the Portfolio pays a
service fee with
respect to Class A, B and C shares calculated at the annual
rate of 0.15% of the
average daily net assets of each class. In addition, the
Portfolio pays a
distribution fee with respect to Class B and C shares
calculated at the annual
rates of 0.50% and 0.55%, respectively, of the average daily
net assets of each
class.
All officers and two Trustees of the Fund are employees
of SB.
4. Investments
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding
short-term securities) of investments were as follows:
<TABLE>
<S>
<C>
============================================================
====================
Purchases
$56,129,878
- ------------------------------------------------------------
- --------------------
Sales
83,453,966
============================================================
====================
</TABLE>
27
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
At September 30, 1995, the gross unrealized
appreciation and depreciation
of investments for Federal income tax purposes were as
follows:
============================================================
===================
Gross unrealized appreciation
$27,636,423
Gross unrealized depreciation
(1,156,994)
- ------------------------------------------------------------
- -------------------
Net unrealized appreciation
$26,479,429
============================================================
===================
5. Capital Loss Carryforward
At March 31, 1995, the Portfolio had for Federal tax
purposes approximately
$5,911,171 of unused loss carryforwards available to offset
future capital gains
expiring March 31, 2003. To the extent that these
carryforward losses are used
to offset capital gains, it is probable that the gains so
offset will not be
distributed.
6. Shares of Beneficial Interest
At September 30, 1995, there were an unlimited amount
of shares of
beneficial interest of $0.001 par value authorized. The
Portfolio has the
ability to issue multiple classes of shares. Each share of a
class represents an
identical interest in the Portfolio and has the same rights,
except that each
class bears certain expenses specifically related to the
distribution of its
shares. Effective November 7, 1994, the Portfolio adopted a
new class structure,
renaming Class B shares as Class C shares, and exchanging
the former Class C
shares into Class A shares. At September 30, 1995, total
paid-in capital
amounted to the following for each class:
<TABLE>
<CAPTION>
Class A
Class B Class C
============================================================
====================
<S> <C> <C>
<C>
Total Paid-in Capital $364,852,170
$7,444,768 $17,914,861
============================================================
====================
</TABLE>
28
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended
Year Ended
September 30, 1995
March 31, 1995*
------------------------
- ----------------------------
Shares Amount
Shares Amount
============================================================
=================================
<S> <C> <C>
<C> <C>
Class A+
Shares sold 1,607,845 $ 21,723,083
7,504,759 $ 97,563,455
Shares issued on reinvestment 354,134 4,764,647
966,818 12,589,740
Shares redeemed (3,737,416)
(50,659,677) (9,937,436) (129,217,695)
- ------------------------------------------------------------
- ---------------------------------
Net Decrease (1,775,437)
$(24,171,947) (1,465,859) $ (19,064,500)
============================================================
=================================
Class B
Shares sold 118,453 $ 1,604,932
529,056 $ 6,600,141
Shares issued on reinvestment 9,373 126,209
7,222 93,836
Shares redeemed (54,940)
(748,086) (18,448) (237,885)
- ------------------------------------------------------------
- ---------------------------------
Net Increase 72,886 $ 983,055
517,830 $ 6,456,092
============================================================
=================================
Class C++
Shares sold 85,602 $ 1,154,799
497,598 $ 6,507,044
Shares issued on reinvestment 20,249 272,315
57,948 754,233
Shares redeemed (233,655)
(3,166,650) (522,970) (6,726,510)
============================================================
=================================
Net Increase (Decrease) (127,804) $
(1,739,536) 32,576 $ 534,767
============================================================
=================================
</TABLE>
+ On October 10, 1994, the former Class C shares were
exchanged into Class A
shares; therefore Class C share activity for the period
from April 1, 1994 to
October 9, 1994 is included with Class A share activity.
* For Class B shares, transactions are for the period from
November 7, 1994
(inception date) to March 31, 1995.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
29
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class A Shares (a) 1995(b) 1995
1994 1993 1992 1991
============================================================
===================================================
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of Period $13.32 $13.35
$13.81 $12.95 $12.49 $12.24
- ------------------------------------------------------------
- ---------------------------------------------------
Income From Operations:
Net investment income 0.41 0.82
0.85 0.88 0.90 0.91
Net realized and unrealized
gain (loss) 0.29 (0.01)
(0.39) 0.87 0.46 0.17
- ------------------------------------------------------------
- ---------------------------------------------------
Total Income From Operations 0.70 0.81
0.46 1.75 1.36 1.08
- ------------------------------------------------------------
- ---------------------------------------------------
Less Distributions From:
Net investment income (0.41) (0.84)
(0.86) (0.89) (0.90) (0.83)
Net realized gains -- --
(0.06) -- -- --
- ------------------------------------------------------------
- ---------------------------------------------------
Total Distributions (0.41) (0.84)
(0.92) (0.89) (0.90) (0.83)
- ------------------------------------------------------------
- ---------------------------------------------------
Net Asset Value, End of Period $13.61 $13.32
$13.35 $13.81 $12.95 $12.49
- ------------------------------------------------------------
- ---------------------------------------------------
Total Return 5.29%++ 6.38%
3.17% 13.96% 11.21% 9.13%
- ------------------------------------------------------------
- ---------------------------------------------------
Net Assets, End of Period (000s) $386,068 $401,364
$412,681 $382,875 $260,718 $199,672
- ------------------------------------------------------------
- ---------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.69%+ 0.60%
0.52% 0.53% 0.50% 0.39%
Net investment income 6.01+ 6.30
6.05 6.58 6.88 7.40
- ------------------------------------------------------------
- ---------------------------------------------------
Portfolio Turnover Rate 19.26% 54.16%
42.33% 52.73% 95.29% 102.96%
============================================================
===================================================
</TABLE>
(a) On October 10, 1994, the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995 (unaudited).
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
30
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class B Shares
1995(a) 1995(b)
============================================================
====================
<S>
<C> <C>
Net Asset Value, Beginning of Period
$13.33 $12.41
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income
0.37 0.33
Net realized and unrealized gain
0.29 0.91
- ------------------------------------------------------------
- --------------------
Total Income From Operations
0.66 1.24
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income
(0.37) (0.32)
- ------------------------------------------------------------
- --------------------
Total Distributions
(0.37) (0.32)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Period
$13.62 $13.33
- ------------------------------------------------------------
- --------------------
Total Return++
5.05% 10.11%
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s)
$8,049 $6,905
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets+:
Expenses
1.18% 1.19%
Net investment income
5.44 5.75
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate
19.26% 54.16%
============================================================
====================
</TABLE>
(a) For the six months ended September 30, 1995 (unaudited).
(b) For the period from November 7, 1994 (inception date) to
March 31, 1995.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
31
Smith Barney Muni Funds
National Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class C Shares(a) 1995(b)
1995 1994 1993(c)
============================================================
==================================
<S> <C>
<C> <C> <C>
Net Asset Value, Beginning of Period $13.32
$13.33 $13.80 $13.47
- ------------------------------------------------------------
- ----------------------------------
Income From Operations:
Net investment income 0.37
0.74 0.76 0.22
Net realized and unrealized
gain (loss) 0.29
(0.01) (0.40) 0.31
- ------------------------------------------------------------
- ----------------------------------
Total Income From Operations 0.66
0.73 0.36 0.53
- ------------------------------------------------------------
- ----------------------------------
Less Distributions From:
Net investment income (0.37)
(0.74) (0.77) (0.20)
- ------------------------------------------------------------
- ----------------------------------
Total Distributions (0.37)
(0.74) (0.77) (0.20)
- ------------------------------------------------------------
- ----------------------------------
Net Asset Value, End of Period $13.61
$13.32 $13.33 $13.80
- ------------------------------------------------------------
- ----------------------------------
Total Return 5.03%++
5.80% 2.40% 3.98%++
- ------------------------------------------------------------
- ----------------------------------
Net Assets, End of Period (000s) $17,264
$18,599 $18,185 $5,738
- ------------------------------------------------------------
- ----------------------------------
Ratios to Average Net Assets:
Expenses 1.27%+
1.23% 1.22% 1.20%+
Net investment income 5.46+
5.69 5.29 5.68+
- ------------------------------------------------------------
- ----------------------------------
Portfolio Turnover Rate 19.26%
54.16% 42.33% 52.73%
============================================================
==================================
</TABLE>
(a) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(b) For the six months ended September 30, 1995 (unaudited).
(c) For the period from January 5, 1993 (inception date) to
March 31, 1993.
32
Smith Barney
Muni Funds
Trustees
Jessica M. Bibliowicz
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P. Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President
Karen L. Mahoney-Malcomson
Vice President
Lawrence T. McDermott
Vice President
Irving P. David
Controller
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
- ------------
A Member of TravelersGroup
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank
Shareholder
Servicing Agent
The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the
shareholders of
Smith Barney Muni Funds--California Money Market and
California Portfolios. It
is not authorized for distribution to prospective investors
unless accompanied
or preceded by a current Prospectus for the Portfolio, which
contains
information concerning the Portfolio's investment policies
and expenses as well
as other pertinent information.
Smith Barney Muni Funds
388 Greenwich Street
New York, New York 10013
FD0805 11/95 82110
- ------------------------------------------------------------
- --------------------
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
<PAGE>
S E M I - A N N U A L R E P O R T
[GRAPHIC APPEARS HERE]
Smith Barney
Muni Funds
Limited Term
Portfolio
September 30, 1995
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
LIMITED TERM PORTFOLIO
DEAR SHAREHOLDER:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds - Limited Term
Portfolio. This report covers the six months ended on
September 30, 1995. For
your convenience, we have summarized this period's
prevailing economic and
market conditions below and outlined our portfolio strategy
during this time. A
more detailed summary of performance and current holdings
can be found in the
Historical Performance and Schedule of Investment sections
that follow.
The Limited Term Portfolio posted a one-year total return of
8.02% (Class A
Shares) for the period ended on September 30, 1995. This
return compares with a
8.68% average total return for all intermediate-term
municipal bond funds over
the same period, according to Lipper Analytical Services.
For the five years
ended on September 30, 1995, the Portfolio posted a
cumulative total return of
42.37% versus a peer group average of 43.76%.
MARKET & ECONOMIC OVERVIEW
Over the past six months, the fixed income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 10-Year Treasuries
from 7.20% on March 31, 1995 to 6.18% on September 30, 1995,
a drop of more than
100 basis points. Comparable maturity municipal bond yields
declined less
dramatically over this period, dropping about 50 basis
points over the previous
6 months to a level of 4.81% as measured by Moody's 10-Year
AA Muni Bond Index.
By this measure, intermediate municipal yields averaged
about 78% of the yield
on 10-year Treasuries during the period. The failure of
municipals to fully
participate in a declining interest environment can be
attributed primarily to
uncertainty about the direction that tax reform will take.
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5 3/4%, a
move that reflected its confidence in the current rate of
economic growth.
However, while the economy did pick up steam compared to the
sluggish first
quarter of 1995, it has yet to make up its mind for the year
and conflicting
indicators all point to continued uncertainty going into
1996. Consumer spending
is rising at an annual pace of 2.5% to 3%, a relatively
neutral rate
1
<PAGE>
further tempered by recent indications that consumer
households are growing more
cautious. A number of other economic indicators edged up
over the past six
months compared to early 1995, including car buying, housing
starts and
industrial production, before slowing again in September.
The most recent Index
of Leading Indicators -- used by the U.S. government to
forecast economic
conditions -- eased downward slightly in September, fueled
by cheaper commodity
prices. This index measures eleven different indicators,
ranging from
unemployment benefit claims to building permits. While a
majority of these
indicators showed a slight uptick in September, others
dipped. The overall
result was confirmation of our expectations for slow
economic growth and steady,
or even lower, interest rates by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, contains a capital gains cut but does not
address broader tax
reform. Flat tax proposals are still being discussed, but a
number of alternate
reform measures are on the table as well. We expect this
issue to emerge as the
centerpiece of the 1996 Presidential elections.
In short, until a more definite consensus emerges from
Washington, we can not be
certain of the impact on municipal bonds and are holding
fast on our relatively
cautious investment approach. Looking forward -- and absent
radical tax reform -
- - we expect municipal bonds to perform well relative to
taxable investments, due
primarily to diminishing supply. There continues to be
little refinancing or new
issue activity. New issue activity is increasing toward year-
end but remains
well below the levels seen in previous years. The Public
Securities Association
now predicts approximately $140 billion in new issues by the
end of 1995, less
than half the record amount that came to market in 1993.
This reduction in
supply has helped to support underlying values. If the
supply situation
continues into 1996 as we expect, the Portfolio's
commitments at current market
levels should prove to be excellent values.
PORTFOLIO STRATEGY & OUTLOOK
The events of the past six months have done little to change
our overall
strategy. While our longer-term outlook for the economy and
interest rates is
positive and we do not expect radical tax reform, we want to
err on the side of
caution in structuring the Portfolio's risk profile.
Intermediate- and shorter-
maturity municipals are currently providing only 70% to 80%
of the yield
available on comparable maturity Treasuries. This makes
their relative trading
value somewhat vulnerable to reductions in the top marginal
income tax brackets,
a scenario we deem more likely than adoption of any of the
more far-reaching tax
reform proposals that could completely eliminate the tax-
free income advantage
of municipal bonds.
2
<PAGE>
The Portfolio continues to be positioned at its normal
average maturity point in
the shorter end of the 5- to 10-year intermediate range in
order to provide
relative stability of principal. We also continue to
emphasize higher coupon
issues trading at a premium, including a substantial
commitment in bonds priced
to a call date earlier than maturity and bonds with
extraordinary call features
such as sinking funds designed to retire a portion of debt
early and housing
bonds subject to early call because of mortgage prepayments.
Such bonds will
tend to decline less in price compared to current coupon or
discounted bonds
should interest rates rise in response to a pick-up in
economic activity or in
the event of unfavorable changes in the tax code. And
because many of these
holdings feature effective maturities that are shorter than
their stated
maturity date, they further reduce the Portfolio's overall
market sensitivity
while providing relatively high income.
It is with deep regret that we announce the passing of Ralph
D. Creasman, a
Trustee of the Fund and a valued colleague. His wisdom and
insights were
valuable and will be missed.
At this time, we would like to thank you for your continued
participation in the
Portfolio and for your on-going confidence in our management
approach.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
November 8, 1995
3
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Historical Performance -- Class A 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>
9/30/95 $6.54
$6.64 $0.18 $0.00 4.33%+
3/31/95 6.55
6.54 0.37 0.00 5.69
3/31/94 6.68
6.55 0.37 0.00 3.65
3/31/93 6.45
6.68 0.39 0.00 9.82
3/31/92 6.38
6.45 0.42 0.00 7.99
3/31/91 6.28
6.38 0.40 0.00 8.23
3/31/90 6.20
6.28 0.46 0.00 9.07
Inception* - 3/31/89 6.25
6.20 0.13 0.00 1.09
- ----- -----
Total
$2.72 $0.00
====== =====
Historical Performance -- Class C Shares
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>
9/30/95 $6.54
$6.64 $0.17 $0.00 4.24%+
3/31/95 6.54
6.54 0.35 0.00 5.51
3/31/94 6.68
6.54 0.35 0.00 3.15
Inception* - 3/31/93 6.62
6.68 0.09 0.00 2.28
-
- ---- -----
Total
$0.96 $0.00
====== =====
Historical Performance -- Class Y Shares
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>
Inception* - 9/30/95 $6.56
$6.65 $0.18 $0.00 4.24%+
</TABLE>
It is the Fund's policy to distribute dividends monthly
and capital gains, if any, annually.
4
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Average Annual Total Return
<TABLE>
<CAPTION>
Without
Sales Charge(1)
-----------
- ----------------
Class A
Class C Class Y
------- -
- ------ -------
<S> <C>
<C> <C>
Six Months Ended 9/30/95+ 4.33%
4.24% N/A
Year Ended 9/30/95 8.01
7.92 N/A
Five Years Ended 9/30/95 7.31
N/A N/A
Inception* through 9/30/95 7.28
5.59 4.24%
With
Sales Charge(2)
-----------
- ----------------
Class A
Class C Class Y
------- -
- ------ -------
<S> <C>
<C> <C>
Six Months Ended 9/30/95+ 2.30%
3.24% N/A
Year Ended 9/30/95 5.85
6.92 N/A
Five Years Ended 9/30/95 6.88
N/A N/A
Inception* through 9/30/95 6.97
5.59 4.24%
Cumulative Total Return
Without
Sales Charge(1)
---------
- --------------
Class A (Inception* through 9/30/95)
61.80%
Class C (Inception* through 9/30/95)
16.04
Class Y (Inception* through 9/30/95)
4.24
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 2.00% and Class C shares
reflect the
deduction of a 1.00% CDSC, which applies if shares are
redeemed less than
one year from initial purchase.
* Inception dates for Class A, C and Y shares are November
28, 1988, January
5, 1993 and April 4, 1995, respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
5
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Historical Performance
GROWTH OF $10,000 INVESTED IN CLASS A SHARES
OF
THE LIMITED TERM PORTFOLIO VS.
LEHMAN MUNI 5 YEAR BOND INDEX AND LEHMAN MUNI BOND
FUND INDEX+
(UNAUDITED)
- ------------------------------------------------------------
- --------------------
November 1988 - September 1995
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG __________, __________ INDEX AND __________
INDEX
<CAPTION>
Lehman Lehman
Measurement period Muni/Bond Muni/5 yr.
Limited Term
(Fiscal year Covered) Index Index
Portfolio
- --------------------- --------- --------- ----
- -----
<S> <C> <C> <C>
Measurement PT -
11/28/88 $ 10,000 $ 10,000 $
9,796
03/89 $ 10,100 $ 10,024 $
9,900
03/90 $ 11,200 $ 10,994 $
10,781
03/91 $ 12,071 $ 12,022 $
11,654
03/92 $ 13,440 $ 13,046 $
12,568
03/93 $ 15,402 $ 14,395 $
13,786
03/94 $ 15,574 $ 14,821 $
14,273
03/95 $ 16,980 $ 15,667 $
15,076
09/95 $ 17,940 $ 16,469 $
15,729
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on November 28, 1988, assuming deduction of the maximum
2.00% sales charge at
the time of investment and reinvestment of dividends
(after deduction of
applicable sales charge through November 6, 1994,
afterwards at net asset
value) and capital gains at net asset value through
September 30, 1995. The
Lehman Muni 5 Year Bond Index ("Index") is a broad based
total return index
comprised of all investment grade, fixed rate, long term
maturities of 4-6
years and are selected from issues larger than $50
million dated since
January, 1984. The Lehman Muni Bond Fund Index ("Index")
is a broad based
total return index, comprised of all investment grade,
fixed rate, long term
maturities (greater than two years) and are selected from
issues larger than
$50 million dated since January, 1984. The Indexes are
unmanaged and are not
subject to the same management and trading expenses of a
mutual fund. The
performance of the Portfolio'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.
6
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Education -- 13.2%
<S> <C> <C>
<C>
$1,500,000 AAA Adams County, CO School District
Number 12,
Series B, MBIA-Insured, 6.250% due
12/15/06 $1,648,125
2,825,000 A* Arizona Education Loan Marketing
Corp., Education
Loan Revenue Bonds, 7.000% due
3/1/02(a) 3,022,750
3,000,000 A* Arkansas State Student Loan
Authority Revenue,
Sub-Series A-2, 6.125% due
12/1/00(a) 3,060,000
1,000,000 Aa* Brazos, TX Higher Education
Authority, Series C-1,
6.000% due 11/1/99(a)
1,043,750
Colorado Student Obligation Board
Authority,
Student Loan Revenue:
330,000 A* Series A, 6.625% due 6/1/99
344,438
1,350,000 A* Series A-1, 6.600% due 9/1/98
1,400,625
Idaho Student Loan Fund Marketing
Association Inc.,
Student Loan Revenue Refunding:
1,000,000 Aaa* 6.400% due 4/1/99
1,003,750
955,000 Aaa* 6.000% due 4/1/00(a)
939,481
1,000,000 A+ Illinois Student Assistance
Commission, Student Loan
Revenue, Series H, 6.100% due
3/1/01(a) 1,030,000
1,000,000 A* Kentucky Higher Education Student
Loan Corp.,
Insured Student Loan Revenue,
Series 91B,
6.500% due 12/1/00(a)
1,053,750
230,000 AAA Louisiana Public Facilities
Authority, Revenue
Supplemental Student Loan, Series
B, AMBAC-Insured,
8.125% due 12/1/99
251,275
Montana State Higher Education
Student Assistance
Corp., Student Loan Revenue, Series
92B:
1,330,000 A* 5.800% due 12/1/95(a)
1,333,325
1,445,000 A 7.050% due 6/1/04(a)
1,547,956
2,500,000 A1* New England Education Loan
Marketing Corp.,
Massachusetts Student Loan Revenue
Refunding,
Series F, 5.650% due 7/1/04(a)
2,543,750
1,475,000 AAA North Texas Higher Education
Authority Inc.,
Student Loan Revenue, AMBAC-
Insured,
7.000% due 4/1/01(a)
1,548,750
2,000,000 AAA Pennsylvania State Higher Education
Assistance
Agency, Student Loan Revenue
Refunding,
Series A, FGIC-Insured, 6.800% due
12/1/00 2,145,000
1,500,000 A* Rhode Island Student Loan Authority
Revenue
Refunding, Series 92B, 6.750% due
12/1/01(a) 1,590,000
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Education -- 13.2% (continued)
<S> <C> <C>
<C>
$1,500,000 AAA Schuylkill, PA Redevelopment
Authority Revenue,
Commonwealth Lease Revenue Bonds,
Series A, FGIC-Insured, 6.850% due
6/1/03 $1,659,375
625,000 A South Dakota Student Loan
Assistance Corp.,
Student Loan Revenue, 7.350% due
8/1/98(a) 653,125
1,000,000 AA State of Texas College Student Loan
Bonds,
Series 1991, zero coupon due
2/1/01(a) 776,250
785,000 A* Texas State Higher Education
Coordinating Board,
College Student Loan Revenue,
6.800% due 4/1/98(a) 814,438
Utah State School District Co-op
Revenue
Financing Pool, LOC Swiss Bank:
875,000 AAA 8.300% due 2/15/98
947,187
945,000 AAA 8.300% due 2/15/00
1,064,306
2,220,000 AAA 8.375% due 2/15/10
2,392,050
- ----------
33,813,456
- ----------
Escrowed to
Maturity(b)
-- 9.0%
280,000 AAA Austin, TX Independent School
District,
9.000% due 7/1/00
332,850
70,000 AAA Austin, TX Water, Sewer & Electric
Revenue, 14.000% due 11/15/01
94,850
2,525,000 AAA Boston, MA Water & Sewer Community
Revenue,
Series A, 10.650% due 1/1/99
2,824,844
170,000 AAA Enid, OK Hospital Authority
Revenue,
St. Mary's Hospital Crossover
Refunding,
8.000% due 7/1/98
178,075
1,255,000 AAA Erie County, OH Hospital
Improvement,
Sandusky Memorial Hospital, 8.750%
due 1/1/06 1,545,219
1,995,000 AAA Galveston, TX Sewer System Revenue
Refunding,
Series B, 7.800% due 5/1/99
2,149,612
1,050,000 AAA Illinois Educational Facilities
Authority Revenue,
Chicago Osteopathic Medical, Series
A,
8.750% due 7/1/05
1,282,313
1,210,000 AAA Kalamazoo, MI Hospital Finance
Authority,
6.750% due 4/1/03
1,300,750
40,000 AAA Kenton County, KY Airport Board
Revenue,
Greater Cincinnati International
Airport,
MBIA-Insured, 7.200% due
3/1/96(a)(c) 40,500
830,000 AAA Michigan State Hospital Finance
Authority Revenue,
St. Joseph's Mercy Hospital, Series
A,
9.250% due 7/1/03
1,011,562
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Escrowed to Maturity(b) -- 9.0% (continued)
<S> <C> <C>
<C>
$1,645,000 AAA New Jersey Educational Facilities
Authority,
Fairleigh Dickinson University,
Series C,
7.750% due 7/1/01
$ 1,809,500
2,140,000 AAA New Jersey State Turnpike Authority
Revenue
Refunding, 10.375% due 1/1/03
2,586,725
30,000 AAA New York City GO, Series F, 8.100%
due 11/15/99 34,162
1,110,000 AAA Ohio State Water Development
Authority Revenue,
Safe Water, Series A, 9.375% due
12/1/10 1,433,288
2,335,000 AAA Owensboro, KY Electric, Light &
Power,
10.500% due 1/1/04
2,895,400
855,000 AAA San Francisco, CA Airport
Improvement Corp. Lease
Revenue, United Airlines, 7.875%
due 7/1/99 930,881
1,265,000 AAA Sullivan County, TN Health &
Educational Facilities,
Holston Valley Community Hospital,
7.000% due 9/1/99
1,374,106
1,000,000 AAA Tom Green County, TX Hospital
Authority,
7.875% due 2/1/06
1,142,500
- -------------
22,967,137
- -------------
Finance
-- 0.4%
40,000 A- Concord Santa Cruz Southgate, CA
COP,
ABAG Finance Corp., 7.100% due
6/1/99 40,050
1,000,000 A New York State Local Government
Assistance Corp.,
6.600% due 4/1/98
1,056,250
- -------------
1,096,300
- -------------
General
Obligation
-- 8.4%
175,000 A Boston, MA GO, 7.750% due 10/1/95
175,033
2,000,000 AAA District of Columbia GO, Series A,
MBIA-Insured,
6.700% due 6/1/04
2,167,500
1,525,000 AAA Harris County, TX Capital
Appreciation Refunding,
MBIA-Insured, zero coupon due
10/1/00 1,206,656
2,000,000 AAA Highlands Rancho Metro District #2,
Douglas County,
CO GO, Refunding, Series 1991, LOC
Swiss Bank,
6.700% due 6/15/01
2,127,500
500,000 AA+ Kings County, WA Unlimited Tax
Obligation,
9.000% due 12/1/98
571,250
1,500,000 A+ Massachusetts Dedicated Income Tax
Bonds,
Fiscal Recovery Loan Act of 1990,
Series A,
7.250% due 6/1/96
1,532,490
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
General Obligation -- 8.4% (continued)
<S> <C> <C>
<C>
$2,000,000 BBB New Haven, CT GO, Series B, 9.000%
due 12/1/01 $2,392,500
New York City, NY GO:
1,500,000 A- Series D, 7.200% due 2/1/00
1,616,250
970,000 A- Series F, 8.100% due 11/15/99
1,085,188
North Slope Borough, AK GO:
6,000,000 AAA MBIA-Insured, zero coupon due
1/1/01 4,642,500
900,000 AAA Unlimited Tax Obligation Refunding,
Series G,
AMBAC-Insured, 7.500% due
6/30/97(c) 949,500
750,000 AA+ Port of Houston Authority, Harris
County, TX Port
Improvement Unlimited Tax
Obligation,
8.500% due 11/1/98(a)
839,063
2,000,000 AA Washington State GO, Motor Vehicle
Fuel Tax,
Series 1995D, 6.500% due 9/1/04
2,247,500
- -----------
21,552,930
- -----------
Hospitals
-- 11.4%
675,000 A ABAG Finance Authority, Nonprofit
Corps,
California Mortgage Insured, COP,
Rehabilitation Mental
Health Services Inc. Project,
6.100% due 6/1/02(c) 707,906
1,915,000 BBB+ Alachua County, FL Health
Facilities Authority Revenue,
Santa Fe Healthcare Facilities
Project,
6.875% due 11/15/02
2,070,594
600,000 AA- Bexar County, TX Health Facilities
Development Corp.,
Health Facilities Revenue
Refunding,
Independence Hill Project, LOC
Banque Paribas,
7.500% mandatory tender 12/1/98(d)
651,750
1,000,000 AAA Calcasieu Parish, LA Memorial
Hospital Services
District Revenue, Lake Charles
Memorial Hospital,
Series A, CONNIE LEE-Insured,
7.500% due 12/1/05 1,168,750
3,500,000 BBB Colorado Health Facilities
Authority Hospital
Revenue Bonds, Series 1993, Rocky
Mountain
Adventist Health Guaranteed, 6.250%
due 2/1/04 3,578,750
500,000 A Garfield Heights, OH Hospital
Revenue, Marymont
Hospital Project, Series B, 6.100%
due 11/15/02 525,000
2,135,000 A* Harris County, TX Health Facilities
Development Corp.,
Memorial Health System Guaranteed,
7.125% due 6/1/05
2,340,494
1,000,000 Baa1* Illinois Health Facilities
Authority Revenue Refunding,
Trinity Medical Center, 6.500% due
7/1/00 1,030,000
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Hospitals -- 11.4% (continued)
<S> <C> <C>
<C>
$1,425,000 Ba1* Langhorne Manor Higher Education &
Health Authority,
Bucks County, (Lower Bucks
Hospital),
6.375% due 7/1/99
$1,414,313
1,000,000 Baa* Massachusetts Health & Education
Facilities Authority
Revenue, Massachusetts Eye & Ear
Infirmary,
Series A, 7.000% due 7/1/98
1,008,750
1,000,000 AAA Mississippi Equipment & Facilities
Authority,
Mississippi Baptist Medical Center,
MBIA-Insured,
7.300% due 5/1/01
1,132,500
New Jersey Healthcare Facilities
Financing Authority:
1,000,000 Baa1* Elizabeth General Medical Center,
Series C,
7.100% due 7/1/99
1,048,750
1,030,000 A- Pascack Valley Hospital, Series 91,
6.500% due 7/1/01
1,090,513
1,045,000 BBB+ New York Medical Care Facilities
Finance Agency
Revenue, Mental Health Facilities,
7.100% due 2/15/99
1,119,456
320,000 A- Ouachita Parish, LA Hospital
Services District #1,
Hospital Revenue Bonds, Glenwood
Regional
Medical Center, Series 1991, 7.250%
due 7/1/00 343,200
2,170,000 A- Palm Beach County, FL Health
Facilities Authority
Revenue, Good Samaritan Health
System Guaranteed,
6.150% due 10/1/06
2,254,088
325,000 Aa* Philadelphia, PA Hospitals & Higher
Education Facilities
Authority Revenue, St. Agnes
Medical Center,
FHA-Insured, 6.750% due 8/15/01
346,125
1,000,000 AAA Rio Grande Valley, TX Health
Facilities, Valley Baptist
Medical Center Series, Short RITES,
MBIA-Insured,
Coupon varies weekly till 8/1/02
then converts to
6.250%, 7.220% due 8/1/06(d)
1,101,250
1,750,000 A+ Riverside, CA Asset Leasing Corp.
Leasehold Revenue
Bonds, 1993 Series A, Riverside
Hospital Project,
6.000% due 6/1/04
1,795,937
3,000,000 BBB++ Scranton-Lackawanna, PA Health &
Welfare Authority
Revenue, Allied Services
Rehabilitation Hospitals,
7.125% due 7/15/05
3,041,250
1,300,000 BBB++ Valley Health System, CA COP
Refunding Project,
6.250% due 5/15/99
1,309,750
- -----------
29,079,126
- -----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Housing: Multi-Family -- 10.1%
<S> <C> <C>
<C>
$3,000,000 A Aurora, IL Multi-Family Revenue
Refunding Housing,
(Fox Village Unit 18D Project), LOC
Banque Paribas,
7.750% due 9/1/98
$3,116,250
1,215,000 AA- Broward County, FL HFA Multi-Family
Housing
Revenue, Surety Bond-Continental
Casualty,
(Waters Edge Apartments Project),
9.700%
mandatory tender 11/1/95
1,219,556
2,930,000 A+ City of Burnsville, MN Multi-Family
Housing Revenue
Refunding Bonds, (The Atrium
Project), Policy of
Indemnity Commercial Union
Insurance Co. PLC
Reinsured by Trygg-Hansa Ins. Co.
of Sweden,
7.200% mandatory tender 5/1/02
3,054,525
2,250,000 AAA Dekalb County, GA HFA, Multi-Family
Housing Revenue,
(Chimney Trace Project), FNMA-
Collateralized,
5.625% due 5/1/25
2,280,937
500,000 AAA Fairfax County, VA Redevelopment &
Housing
Authority, Multi-Family Refunding,
Kingsley, Series 91A,
6.500% due 11/1/01
520,000
2,850,000 Aa3* Gary, IN Economic Development
Revenue, Miller
Partnership, Limited Partnership,
Series A, LOC Royal
Bank of Scotland, 7.400% mandatory
tender 4/1/01(a) 2,885,625
2,995,000 AA- Lombard, IL Multi-Family Housing,
Clover Creek
Apartments, Surety Bond-Continental
Casualty Co.,
6.500% due 12/15/96
3,032,438
1,800,000 AA Louisiana Public Facilities
Authority Revenue
Multi-Family Housing, Oakleigh
Apartments,
Series A, 5.950% due 3/15/19
1,865,250
1,000,000 AA- Maine State Housing Authority,
Series A-3,
6.900% due 11/15/98
1,046,250
500,000 AAA Nashville & Davidson County, TN
Metropolitan
Government IDB Revenue, FNMA-
Collateralized,
Club Bellevue, 8.500% mandatory
tender 5/1/97 508,750
565,000 A* Odessa, TX Housing Development
Corp. #2,
Multi-Family Revenue Refunding,
Chaparral Village, Series A, 6.375%
due 12/1/03 570,650
2,135,000 AAA Onterie Center Housing Finance
Corp., IL Mortgage
Revenue Refunding, (Onterie Center
Project),
Series A, MBIA-Insured, 6.500% due
7/1/02 2,241,750
See Notes to Financial Statements.
</TABLE>
12
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Housing: Multi-Family -- 10.1% (continued)
<S> <C> <C>
<C>
$2,500,000 AAA Prince Georges County, MD Housing
Authority,
Mortgage Revenue Refunding,
Cambridge Crossing
Apartments, Series A, LOC Federal
Home Loan Bank
Atlanta, 5.900% mandatory tender
2/1/04 $2,534,375
970,000 AAA Ridgeland, MS Multi-Family Housing
Revenue,
Series 1985, Sun Chase Apartments,
FNMA-Collateralized, 6.500%
mandatory tender 10/1/97 973,637
- ----------
25,849,993
- ----------
Housing:
Single-Family
-- 2.6%
40,000 AA Alaska State Housing Finance
Corp., State Guaranteed
Veterans Mortgage Program, Third
Series 83,
9.100% due 12/1/97(c)
40,900
2,500,000 Aa* California State Department of
Veterans Affairs, Home
Purchase Revenue, Series A, 7.500%
due 8/1/98(a) 2,565,625
75,000 Aaa* Louisiana Housing Finance Agency
Mortgage Revenue,
GNMA-Collateralized Single-Family,
7.600% due
11/1/97(a)
76,781
Missouri State Housing Development
Commission,
Single-Family Insured Mortgage
Revenue Loans:
5,000 Aaa* FHA-VA, 9.600% due 8/1/96
5,081
5,000 AAA 10.000% due 8/1/98
5,225
1,181,308 AAA Monroe-West Monroe, Ouachita
Parish, LA Public
Trust Financing Authority, FHLMC-
Guaranteed,
8.500% due 5/20/02
1,231,514
85,000 A* Quincy, IL Single-Family Mortgage
Revenue Refunding,
Series 1994, 4.250% due 9/1/99
84,787
285,000 AAA St. Louis County, MO Single-Family
Mortgage Revenue,
MBIA-Insured, 9.750% due 4/1/03
287,494
1,000,000 AAA Texas Department of Housing &
Community Affairs,
GNMA & FNMA-Collateralized, Home
Mortgage
Revenue Bonds, Series B, RIBS
Variable Rate,
9.551% due 6/18/23(a)(d)
1,067,500
Texas State Housing Agency
Mortgage Revenue,
Single-Family:
665,000 Aa* Series 85A, 9.100% due 9/1/00
682,456
175,000 Aa* Series 1987D, 7.750% due 7/1/99
181,344
410,000 AA Wyoming Community Development
Authority,
Single-Family Mortgage, Series
1988C,
7.800% due 6/1/99(a)
423,837
- ----------
6,652,544
- ----------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Industrial Development -- 12.3%
<S> <C> <C>
<C>
$1,500,000 A Bel Air, MD Revenue Refunding, (May
Department
Stores Co. Project), 6.375% due
10/1/99 $1,584,375
1,000,000 A Belmont County, OH IDR Refunding,
(May Department
Stores Project), Series 91, 6.500%
due 1/1/00 1,062,500
395,000 NR Carroll County, TN Industrial
Development Board, IDR,
(Henry I. Siegel Co. Project),
7.000% due 4/1/01 400,431
3,000,000 Ba1* Griffin-Spalding County, GA
Development Authority
Revenue Refunding, (Borden Inc.
Project),
Borden Inc. Guaranteed, 7.200% due
6/1/00 3,093,750
2,000,000 A+ Iowa Finance Authority, (Governors
Square Project),
Policy of Indemnity Commercial
Union Assurance Co.
PLC Reinsured by Trygg-Hansa
Insurance Co. of
Sweden, 7.250% mandatory tender
4/1/02 2,162,500
2,500,000 A Kanawha, WV Commercial Development
Revenue, May
Department Stores Guaranteed,
5.700% due 6/1/97 2,556,250
3,000,000 A Marion, IA Commercial Development
Revenue,
(Collins Road Project), Commercial
Union-Insured/
Reinsured by Trygg-Hansa Insurance
Co. of Sweden,
7.250% mandatory tender 7/1/02
3,153,750
3,500,000 BBB+ Metropolitan Government Nashville &
Davidson County,
TN Industrial Development Board
Revenue Refunding
& Improvement, Osco Treatment Inc.
Guaranteed,
6.000% due 5/1/03(a)
3,504,375
2,390,000 Aa3* New Jersey EDA, Growth Bonds, LOC
Banque Nationale
de Paris, 6.200% due 12/1/02(a)
2,497,550
New York City IDA:
1,510,000 Aa1* Keystone Electric, LOC ABN Ambro
Bank,
7.500% due 3/1/98(a)
1,519,437
485,000 Aa1* SuperFlex Ltd. Project, Composite
Offering
XVIII 1989, Series A, LOC Algemene
Bank Netherlands
NV, 7.750% optional tender
11/1/99(a) 490,456
735,000 Aa1* IDR Oakdale Knitting Mills Inc.,
Composite Offering
1990, Series G, LOC Algemene Bank
Netherlands NV,
7.700% mandatory tender 11/1/00(a)
750,619
Ohio State Economic Development
Revenue,
Ohio Enterprise Bond Fund:
250,000 A- Superior Forge & Steel Corp.
Project,
6.750% due 6/1/96(a)
252,813
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Industrial Development -- 12.3% (continued)
<S> <C> <C>
<C>
$ 300,000 A- Series 1989-5B, Sponge Inc.
Project,
7.750% due 6/1/99(a)
$ 310,125
90,000 Baa3* Pocahontas, IA IDR International
Harvester Co.,
10.250% due 10/1/00
91,912
3,040,000 AA+ Seaford, DE Economic Development
Revenue Refunding,
(Seaford Association Project),
6.375% due 1/1/04 3,154,000
2,205,000 AA- Simi Valley, CA Community
Development Agency COP,
Simi Valley Business Center,
6.050% due 10/1/18 2,268,394
2,350,000 AAA Sioux City, IA IDR, (Terra Centre
Project),
6.800% due 5/1/07
2,496,875
- ----------
31,350,112
- ----------
Lifecare
-- 0.6%
1,355,000 BBB Illinois Development Finance
Authority Health Facilities
Revenue, Community Living Options,
6.375% due 3/1/00
1,380,406
Miscellaneous
-- 4.4%
2,595,000 BBB Clarksville, TN Natural Gas
Acquisition Corporation, Gas
Revenue, Series A, 6.500% due
11/1/00 2,663,119
1,000,000 Baa* Delaware County, PA Authority
Revenue, (Elwyn Inc.
Project), 7.750% due 6/1/00
1,060,000
2,500,000 A* Hoffman Estate, IL Tax Increment
Junior Lien, Hoffman
Estate Development, Series 91,
6.500% due 5/15/01 2,668,750
2,700,000 A- Illinois Development Finance
Authority Revenue, Debt
Restructure-East St. Louis, 6.875%
due 11/15/05 2,858,625
810,000 NR Lehigh County, PA General Purpose
Authority, Wiley
House Revenue, Series 1991, 8.500%
due 11/1/96 822,150
1,050,000 BBB Tampa, FL Capital Improvement
Program Revenue,
Series 88B, 7.400% due 10/1/97
1,094,625
- ----------
11,167,269
- ----------
Pollution
Control
-- 1.4%
1,200,000 AAA Burke County, GA Development
Authority PCR,
Refunding, Ogelthorpe Power Co.,
7.500% due 1/1/03
1,336,500
1,500,000 AAA Montgomery, AL Industrial
Development Board PCR,
(General Electric Co. Project),
7.000% due 9/15/00(a) 1,648,125
600,000 BB Ohio State Water Development
Authority, Pollution
Control Facilities Revenue,
Cleveland Electric
Illuminating Co., 9.750% due
11/1/97(a) 638,250
- ----------
3,622,875
- ----------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
Power -- 1.2%
$2,000,000 AAA Clarion County, PA IDA Energy
Development Revenue,
(Piney Creek Project), LOC
Swiss Bank,
7.250% mandatory tender
11/1/00(a) $2,135,000
1,000,000 BB Sam Rayburn, TX Municipal Power
Supply System
Revenue Refunding, Series A,
6.200% due 10/1/01 951,250
- ----------
3,086,250
- ----------
Pre-Refunded(b)
-- 6.5%
1,500,000 AAA Berks County, PA Municipal
Authority, Lutheran Home
at Topton, Series B, LOC
Meridian Bank,
(Escrowed with U.S. Government
Securities to
4/1/98 Call @ 100), 7.250% due
4/1/01 1,603,125
1,000,000 AAA Dade County, FL Health
Facilities Authority Baptist
Hospital Miami, MBIA-Insured,
(Escrowed with
U.S. Government Securities to
5/1/97 Call @ 102),
6.900% due 5/1/99
1,061,250
2,000,000 AAA District of Columbia GO, Series
C, (Escrowed with
U.S. Government Securities to
6/1/96 Call @ 102),
8.000% due 6/1/99
2,087,500
4,000,000 AAA Gila County, AZ IDA PCR,
(Escrowed with
U.S. Government Securities to
2/15/01 Call @ 101),
11.250% due 4/1/01
4,470,000
Illinois Health Facilities
Authority Revenue:
1,000,000 AAA Lutheran Social Services, LOC
Industrial Bank of
Japan, (Escrowed with U.S.
Government
Securities to 8/1/00 Call @
102),
7.650% mandatory tender 8/1/02
1,148,750
750,000 AAA Servantcor Hospital, Series B,
(Escrowed with
U.S. Government Securities to
8/15/99
Call @ 102), 7.500% due 8/15/01
842,813
1,000,000 AAA Las Vegas Valley, NV Water
District, MBIA-Insured,
(Escrowed with U.S. Government
Securities to
11/1/97 Call @ 102), 7.625% due
5/1/01 1,086,250
555,000 AAA New York Medical Care
Facilities Finance Agency
Revenue, Hospital & Nursing
Home Mortgage,
FHA-Insured, (Escrowed with
U.S. Government
Securities to 2/15/97 Call @
102),
7.750% due 2/15/02
604,950
335,000 AAA Ohio State Building Authority,
Toledo Government
Office Building, Series A,
(Escrowed with
U.S. Government Securities to
4/1/03 Call @ 100),
10.125% due 10/1/06
424,613
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Pre-Refunded(b) -- 6.5% (continued)
<S> <C> <C>
<C>
$3,000,000 AAA Texas National Research Lab.
Finance Corp., Lease
Revenue, (Superconducting
Supercollider Project),
(Escrowed with U.S. Government
Securities to
12/1/01 Call @ 102), 6.550% due
12/1/02 $3,356,250
- ----------
16,685,501
- ----------
Public
Facilities
- -- 3.6%
1,710,000 AAA Iowa State COP, Series A, AMBAC-
Insured,
5.750% due 7/1/98
1,771,988
4,000,000 Aa* Mt. Stearling, KY Lease
Revenue, Kentucky League
of Cities, Series A,
Transamerica Life Guaranteed,
5.625% due 3/1/03
4,080,000
155,000 AAA Pittsburgh, PA Stadium
Authority Guaranty Revenue,
FGIC-Insured, 7.000% due
10/15/95 155,194
1,060,000 AAA South Dakota State Lease
Revenue Certificates,
Series A, CGIC-Insured, 8.200%
due 9/1/02 1,257,425
1,315,000 AAA Texas State Refunding, Texas
Parks & Wildlife,
AMBAC-Insured, zero coupon due
10/1/02 936,937
1,000,000 AA Tuscon, AZ COP, Asset Guaranty,
6.000% due 7/1/04 1,057,500
- ----------
9,259,044
- ----------
Solid Waste
-- 3.3%
Detroit, MI Economic
Development Corp., Facilities
Recovery Revenue, FSA-Insured:
3,000,000 AAA Series A, 7.00% due 5/1/01
3,352,500
1,000,000 AAA Series 91A, 6.60% due 5/1/02(a)
1,097,500
1,500,000 AA- Illinois Development Financing
Authority, Solid Waste
Disposal Revenue Bonds, Waste
Management Inc.
Project, Series 1990, 7.125%
due 1/1/01 1,648,125
2,000,000 Baa* Onondaga County, NY Resource
Recovery Agency
Project Revenue Bonds, Series
1992,
6.625% due 5/1/00(a)
2,057,500
250,000 AA Regional Waste Systems Inc.,
Maine Solid Waste
Resource Recovery System,
7.550% due 7/1/98(a)(c) 269,063
- ----------
8,424,688
- ----------
Transportation
-- 5.5%
1,000,000 AAA Clark County, NV Airport
Improvement Revenue,
BIG-Insured, 7.900% due
7/1/00(a) 1,095,000
Denver, CO City & County
Airport Revenue:
1,590,000 Baa* Series 1992B, 7.000% due
11/15/01(a) 1,711,238
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Transportation -- 5.5% (continued)
<S> <C> <C>
<C>
$1,000,000 Baa* Series 1992B, 7.000% due
11/15/02(a) $1,077,500
1,000,000 Baa* Series 1994A, 7.200% due
11/15/02(a) 1,088,750
2,445,000 AAA Hawaii Airport System Revenue, MBIA-
Insured,
Second Series of 91, 6.100% due
7/1/99(a) 2,585,588
1,250,000 A Indiana Transportation Finance
Authority, Airport
Facilities Lease Revenue, Series A,
United Air,
6.125% due 11/1/02
1,329,687
210,000 AAA Kenton County, KY Airport Board
Revenue,
Greater Cincinnati International
Airport, MBIA-Insured,
7.200% due 3/1/96(a)(c)
212,625
Massachusetts Port Authority
Revenue:
500,000 Aa* Series 1990A, 7.000% due 7/1/96(a)
510,625
1,000,000 AAA Series A, FGIC-Insured, 7.200% due
7/1/03(a) 1,110,000
3,000,000 AA- Ocean Highway and Port Authority,
Nassau County, FL
Adjustable Demand Revenue Bonds,
Series 1990,
LOC ABN Ambro Bank NV, 6.250% due
12/1/02(a) 3,243,750
- -----------
13,964,763
- -----------
Utilities
-- 2.5%
1,500,000 A+ Chelan County, WA Public Utility
District Number 001,
Chelan Hydro Consolidated System
Revenue Bonds,
7.000% due 7/1/25(a)
1,655,625
600,000 A- Georgia Muni Gas Authority Revenue,
(Southern
Storage Gas Project), 6.300% due
7/1/09 616,500
3,000,000 AAA Mohave, AZ IDA, IDR Bonds,
(Citizens Utilities Co. Project
1988B),
6.875% due 9/1/03(a)
3,165,000
770,000 Baa1* Philadelphia, PA Gas Works Revenue
Bonds,
13th Series, 7.400% due 6/15/00
851,812
- -----------
6,288,937
- -----------
Water and
Sewer
-- 3.6%
4,085,000 A Austin, TX Water, Sewer and
Electric,
14.000% due 11/15/01
5,560,706
1,000,000 AAA Centennial Water and Sanitation
District Douglas
County, CO GO, Water & Sewer
Refunding Bonds,
LOC Swiss Bank Corp., 6.625% due
6/15/98 1,026,250
1,500,000 NR New Jersey EDA Water Facilities
Revenue, Series 1991,
(New Jersey American Water Co. Inc.
Project),
Private Placement, 7.400% due
5/1/01(a) 1,620,000
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Schedule of Investments (unaudited)(continued)
September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
Water and Sewer -- 3.6% (continued)
<S> <C> <C>
<C>
$ 985,000 A Texas Water Resource Finance
Authority Revenue,
Series 89, 7.400% due 8/15/00
$1,077,344
- ----------
9,284,300
- ----------
TOTAL INVESTMENT -- 100%
(Cost -- $246,309,935)(e)
$255,525,631
============
</TABLE>
(a) Income from these issues is considered a preference
item for purposes of
calculating the alternative minimum tax.
(b) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds
escrowed to maturity by U.S. Government Securities are
considered by
manager to be triple-A rated even if issuer has not
applied for new
ratings.
(c) Security segregated by Custodian.
(d) Residual interest bonbds - coupon varies inversely with
level of short-term
tax-exempt interest rates.
(e) Aggregate cost for Federal income tax purposes is
substantially the same.
+ Duff & Phelps Credit Rating Co.
++ Fitch Investors Services, Inc.
See pages 20 and 21 for definition of ratings and certain
security descriptions.
See Notes to Financial Statements.
19
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Bond Ratings
All ratings are by Standard & Poor's Corporation, except
those identified by an
asterisk (*) are rated by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Ratings from "AA" to "BB" may be
modified by the addition
of a plus (+) or minus (-) sign to show relative standings
within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by
Standard & Poor's.
Capacity to pay interest and repay principal is
extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay
interest and repay
principal and differ from the highest rated issue
only in a small degree.
A -- Bonds rated "A" have a strong capacity to pay
interest and repay
principal although they are somewhat more susceptible
to the adverse
effects of changes in circumstances and economic
conditions than bonds in
higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate
capacity to pay
interest and repay principal. Whereas they normally
exhibit adequate
protection parameters, adverse economic conditions or
changing
circumstances are more likely to lead to a weakened
capacity to pay
interest and repay principal for bonds in this
category than in higher
rated categories.
BB -- Bonds rated "BB" have less near-term vulnerability to
default than other
speculative issues. However, they face major ongoing
uncertainties or
exposure to adverse business, financial, or economic
conditions which
could lead to inadequate capacity to meet timely
interest and principal
payments.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to
each generic rating
from "Aa" to "Baa", where 1 is the highest and 3
the lowest ranking
within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the
best quality. They
carry the smallest degree of investment risk and are
generally referred
to as "gilt edge". Interest payments are protected by
a large or by an
exceptionally stable margin and principal is secure.
While the various
protective elements are likely to change, such
changes as can be
visualized are most unlikely to impair the
fundamentally strong position
of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high
quality by all
standards. Together with the Aaa group they comprise
what are generally
known as high grade bonds. They are rated lower than
the best bonds
because margins of protection may not be as large in
Aaa securities or
fluctuation of protective elements may be of greater
amplitude or there
may be other elements present which make the long-
term risks appear
somewhat larger than in Aaa securities.
A -- Bonds that are rated "A" possess many favorable
investment attributes and
are to be considered as upper medium grade
obligations. Factors giving
security to principal and interest are considered
adequate but elements
may be present which suggest a susceptibility to
impairment some time in
the future.
Baa -- Bonds that are rated "Baa" are considered as medium
grade obligations,
i.e., they are neither highly protected nor poorly
secured. Interest
payments and principal security appear adequate for
the present but
certain protective elements may be lacking or may be
characteristically
unreliable over any great length of time. Such bonds
lack outstanding
investment characteristics and in fact have
speculative characteristics
as well.
20
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Bond Ratings (continued)
Ba -- Bonds which are rated "Ba" are judged to have
speculative elements; their
future cannot be considered as well-assured. Often
the protection of
interest and principal payments may be very moderate,
and therefore not
well safeguarded during both good and bad times over
the future.
Uncertainty of position characterizes bonds in this
class.
NR -- Indicates that the bond is not rated by Standard &
Poor's Corporation or
Moody's Investors Services.
Short-Term Securities Rating
SP-1-- Standard & Poor's highest rate rating indicating very
strong or strong
capacity to pay principal and interest; those issues
determined to
possess overwhelming safety characteristics are
denoted with a plus (+)
sign.
A-1 -- Standard & Poor's highest commercial paper and
variable rate demand
obligation (VRDO) rating indicating that the degree
of safety regarding
timely payment is either overwhelming or very strong;
those issues
determined to possess overwhelming safety
characteristics are denoted
with a plus (+) sign.
P-1 -- Moody's highest rating for commercial paper and for
VRDO prior to the
advent of the VMIG 1 rating.
VMIG 1 -- Moody's highest rating for issues having a demand
feature -- VRDO.
MIG 1 -- Moody's highest rating for short-term municipal
obligations.
Security Descriptions
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance
Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CONNIE
LEE -- College Construction Loan Insurance
Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
FLAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCFA -- Pollution Control Financing Authority
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
VA -- Veterans Administration
VRDD -- Variable Rate Demand Note
VRWE -- Variable Rate Wednesday Demand
21
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
<TABLE>
<CAPTION>
Statement of Assets and Liabilities (unaudited)
September 30, 1995
<S>
<C>
ASSETS:
Investments, at value (Cost -- $246,309,935)
$255,525,631
Receivable for securities sold
60,000
Receivable for Fund shares sold
829,843
Interest receivable
5,042,271
Other assets
6,301
- ------------
Total Assets
261,464,046
- ------------
LIABILITIES:
Dividends payable
1,167,136
Payable for securities purchased
894,520
Management fees payable
197,003
Distribution fees payable
19,391
Accrued expenses
35,991
Other liabilities
102,800
- ------------
Total Liabilities
2,416,841
- ------------
Total Net Assets
$259,047,205
============
NET ASSETS:
Par value of shares of beneficial interest
$ 39,005
Capital paid in excess of par value
255,187,197
Undistributed net investment income
155,883
Accumulated net realized loss on security transactions
(5,550,576)
Net unrealized appreciation of investments
9,215,696
- ------------
Total Net Assets
$259,047,205
============
Shares Outstanding:
Class A
35,110,563
Class C
3,862,946
Class Y
31,255
Net Asset Value:
Class A (and redemption price)
$6.64
Class C *
$6.64
Class Y (and redemption price)
$6.65
Class A Maximum Public Offering Price Per Share
(net asset value plus 2.04% of net asset value per share)
$6.78
=====
</TABLE>
* Redemption price is NAV of Class C share reduced by a
1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
22
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended September 30, 1995
<S> <C>
INVESTMENT INCOME:
Interest $
8,302,052
---
- --------
EXPENSES:
Management fees (Note 3)
600,229
Distribution fees (Note 3)
226,117
Registration fees
62,769
Shareholder and system servicing fees
33,748
Shareholder communications
20,130
Pricing service fees
17,550
Custody
15,189
Audit and legal
6,954
Trustees' fees
5,014
Other
4,575
---
- --------
Total Expenses
992,275
---
- --------
Net Investment Income
7,309,777
---
- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 4):
Realized Gain (Loss) From Security Transactions
(excluding short-term securities):
Proceeds from sales
38,501,949
Cost of securities sold
38,921,458
---
- --------
Net Realized Loss
(419,509)
---
- --------
Change in Net Unrealized Appreciation of Investments:
Beginning of period
4,703,905
End of period
9,215,696
---
- --------
Increase in Net Unrealized Appreciation
4,511,791
---
- --------
Net Gain on Investments
4,092,282
---
- --------
Increase in Net Assets From Operations
$11,402,059
===========
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Statements of Changes in Net Assets
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
<TABLE>
<CAPTION>
September 30 March 31
------
- ------ --------
<S> <C>
<C>
OPERATIONS:
Net investment income $
7,309,777 $ 16,768,280
Net realized loss
(419,509) (3,741,476)
Increase in net unrealized appreciation
4,511,791 2,606,136
-------
- ----- ------------
Increase in Net Assets From Operations
11,402,059 15,632,940
-------
- ----- ------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income
(7,191,756) (17,091,230)
-------
- ----- ------------
Decrease in Net Assets From
Distributions to Shareholders
(7,191,756) (17,091,230)
-------
- ----- ------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares
11,748,014 48,752,624
Net asset value of shares issued
for reinvestment of dividends
3,240,312 9,178,863
Cost of shares reacquired
(31,592,083) (113,025,019)
-------
- ----- ------------
Decrease in Net Assets From
Fund Share Transactions
(16,603,757) (55,093,532)
-------
- ----- ------------
Decrease in Net Assets
(12,393,454) (56,551,822)
NET ASSETS:
Beginning of period
271,440,659 327,992,481
-------
- ----- ------------
End of period*
$259,047,205 $271,440,659
============ ============
* Includes undistributed net investment income of:
$155,883 $37,862
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
The Limited Term Portfolio ("Portfolio") is a separate
investment portfolio of
the Smith Barney Muni Funds ("Fund"). The Fund, a
Massachusetts business trust,
is registered under the Investment Company Act of 1940, as
amended, as a non-
diversified, open-end management investment company and
consists of this
Portfolio and eleven other separate investment portfolios:
California, Florida,
Georgia, New Jersey, New York, Ohio, Pennsylvania, National,
Florida Limited
Term, California Money Market and New York Money Market
portfolios. The
financial statements and financial highlights for the other
portfolios are
presented in separate semi-annual reports.
The significant accounting policies consistently followed
by the Fund are: (a)
security transactions are accounted for on the trade date;
(b) securities are
valued at the mean between the quoted bid and asked prices
provided by an
independent pricing service that are based on transactions
in municipal
obligations, quotations from municipal bond dealers, market
transactions in
comparable securities and various relationships between
securities; (c) short-
term securities maturing within 60 days are valued at cost
plus (minus) accreted
discount (amortized premium), which approximates value; (d)
gains or losses on
the sale of securities are calculated by using the specific
identification
method; (e) interest income, adjusted for amortization of
premiums and accretion
of original issue discount, is recorded on the accrual
basis; market discount is
recognized upon the disposition of the security; (f) direct
expenses are charged
to the Portfolio and each class; management fees and general
fund expenses are
allocated on the basis of relative net assets; and (g) the
Portfolio 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.
2. Exempt-Interest Dividends and Other Distributions
The Portfolio intends to satisfy conditions that will
enable interest from
municipal securities, which is exempt from Federal income
tax and from
designated state income taxes, to retain such tax-exempt
status when distributed
to the shareholders of the Portfolio.
25
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Notes to Financial Statements (unaudited) (continued)
Capital gain distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
3. Management Agreement and Transactions with
Affiliated Persons
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
Portfolio pays SBMFM a management fee calculated at the
annual rate of 0.45% of
its average daily net assets. This fee is calculated daily
and paid monthly.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts
as distributor of
Fund shares. For the six months ended September 30, 1995, SB
received sales
charges of approximately $145,000 on purchases of the
Portfolio's Class A
shares.
There is a contingent deferred sales charge ("CDSC") of
1.00% on Class C
shares of the Portfolio if redemption occurs less than one
year from initial
purchase. For the six months ended September 30, 1995, CDSCs
of approximately
$2,000 were paid to SB.
Pursuant to a Distribution Plan, the Portfolio pays a
service fee with respect
to Class A and C shares calculated at the annual rate of
0.15% of the average
daily net assets of each class. In addition, the Portfolio
pays a distribution
fee with respect to Class C shares calculated at the annual
rate of 0.20% of the
average daily net assets.
All officers and two Trustees of the Fund are employees of
SB.
4. Investments
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding short-
term securities) of investments were as follows:
Purchases $27,979,221
-----------
Sales 38,501,949
===========
26
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Notes to Financial Statements (unaudited) (continued)
At September 30, 1995, the gross unrealized appreciation and
depreciation of
investments for Federal income tax purposes were as follows:
Gross unrealized appreciation $9,700,571
Gross unrealized depreciation
(484,875)
----------
Net unrealized appreciation $9,215,696
==========
5. Capital Loss Carryforward
At March 31, 1995, the Portfolio had for Federal tax
purposes approximately
$5,131,067 of unused loss carryforwards available to offset
future capital
gains. To the extent that these carryforward losses are used
to offset capital
gains, it is possible that the gains so offset will not be
distributed. The
amount and expiration of the carryovers are indicated below.
Expiration occurs
on March 31, of the year indicated:
2001 2002 2003
-------- -------- ----------
Carryforward Amount $450,254 $195,915 $4,484,898
======== ======== ==========
6. Shares of Beneficial Interest
At September 30, 1995, there were an unlimited amount of
shares of beneficial
interest of $0.001 par value authorized. The Portfolio has
the ability to issue
multiple classes of shares. Each share of a class represents
an identical
interest in the Portfolio and has the same rights, except
that each class bears
certain expenses specifically related to the distribution of
its shares.
Effective November 7, 1994, the Fund adopted a new class
structure, renaming
Class B shares as Class C shares and exchanging the former
Class C shares into
Class A shares. At September 30, 1995, total paid-in capital
amounted to the
following for each class:
Class A Class C
Class Y
------------ -----------
- --------
Total Paid-In Capital $228,860,310 $26,161,145
$204,747
============ ===========
========
27
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Notes to Financial Statements (unaudited) (continued)
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended
Year Ended
September 30, 1995*
March 31, 1995
-----------------------
- -- ---------------------------
Shares Amount
Shares Amount
---------- ----------
- -- ----------- -------------
<S> <C> <C>
<C> <C>
Class A+
Shares sold 1,477,193 $
9,775,121 6,753,825 $ 43,787,327
Shares issued on reinvestment 433,069
2,851,061 1,257,227 8,139,136
Shares redeemed (4,243,081)
(28,049,156) (16,560,560) (106,844,106)
---------- ----------
- -- ----------- -------------
Net Decrease (2,332,819)
$(15,422,974) (8,549,508) $ (54,917,643)
==========
============ =========== =============
Class C++
Shares sold 268,347 $
1,772,893 763,796 $ 4,965,297
Shares issued on reinvestment 58,428
384,504 160,710 1,039,727
Shares redeemed (536,634)
(3,542,927) (958,968) (6,180,913)
---------- ----------
- -- ----------- -------------
Net Decrease (209,859) $
(1,385,530) (34,462) $ (175,889)
==========
============ =========== =============
Class Y
Shares sold 30,534 $
200,000 -- --
Shares issued on reinvestment 721
4,747 -- --
Shares redeemed --
- -- -- --
---------- ----------
- -- ----------- -------------
Net Increase 31,255 $
204,747 -- --
==========
============ =========== =============
</TABLE>
* For Class Y shares, transactions are for the period from
April 4, 1995
(inception date) to September 30, 1995.+
+ On October 10, 1994, the former Class C shares were
exchanged into Class A
shares; therefore the Class C share activity for the
period from April 1,
1994 to October 9, 1994 is included with the Class A
share activity.++
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
28
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Financial Highlights
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class A Shares(a) 1995(b) 1995
1994 1993 1992 1991
-------- --------
- -------- -------- -------- -------
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 6.54 $ 6.55
$ 6.68 $ 6.45 $ 6.38 $ 6.28
Income From Operations:
Net investment income 0.18 0.36
0.37 0.39 0.42 0.43
Net realized and unrealized
gain (loss) 0.10 --
(0.13) 0.23 0.07 0.07
Total Income From Operations 0.28 0.36
0.24 0.62 0.49 0.50
Less Distributions From:
Net investment income (0.18) (0.37)
(0.37) (0.39) (0.42) (0.40)
Total Distributions (0.18) (0.37)
(0.37) (0.39) (0.42) (0.40)
Net Asset Value, End of Period $ 6.64 $ 6.54
$ 6.55 $ 6.68 $ 6.45 $ 6.38
Total Return 4.33%++ 5.69%
3.65% 9.82% 7.99% 8.23%
Net Assets, End of Period (000s) $233,194 $244,818
$281,771 $242,491 $157,426 $64,660
Ratios to Average Net Assets:
Expenses 0.73%+ 0.61%
0.53% 0.55% 0.49% 0.33%
Net investment income 5.51+ 5.61
5.53 5.90 6.42 6.77
Portfolio Turnover Rate 12.65% 21.80%
24.72% 24.53% 26.27% 14.92%
</TABLE>
(a) On October 10, 1994, the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995
(unaudited).
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
29
<PAGE>
Smith Barney Muni Funds
Limited Term Portfolio
Financial Highlights (continued)
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class C Shares(a) 1995(b)
1995 1994 1993(c)
-------- ----
- --- ------- --------
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 6.54 $
6.54 $ 6.68 $ 6.62
Income From Operations:
Net investment income 0.17
0.35 0.35 0.10
Net realized and unrealized gain (loss) 0.10
- -- (0.14) 0.05
Total Income From Operations 0.27
0.35 0.21 0.15
Less Distributions From:
Net investment income (0.17)
(0.35) (0.35) (0.09)
Total Distributions (0.17)
(0.35) (0.35) (0.09)
Net Asset Value, End of Period $ 6.64 $
6.54 $ 6.54 $ 6.68
Total Return 4.24%++
5.51% 3.15% 2.28%++
Net Assets, End of Period (000s) $ 25,646
$26,622 $26,869 $ 5,738
Ratios to Average Net Assets:
Expenses 0.94%+
0.89% 0.88% 0.88%+
Net investment income 5.29+
5.34 5.10 5.35+
Portfolio Turnover Rate 12.65%
21.80% 24.72% 24.53%
</TABLE>
(a) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(b) For the six months ended September 30, 1995
(unaudited).
(c) For the period from January 5, 1993 (inception date) to
March 31, 1993.
++ Total return is not annualized, as the result may not
be representative of
the total return for the year.
+ Annualized.
30
<PAGE>
SMITH BARNEY MUNI FUNDS
LIMITED TERM PORTFOLIO
Financial Highlights (continued)
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class Y Shares 1995(a)
--------
<S> <C>
Net Asset Value, Beginning of Period $ 6.56
Income From Operations:
Net investment income 0.18
Net realized and unrealized gain 0.09
Total Income From Operations 0.27
Less Distributions From:
Net investment income (0.18)
Total Distributions (0.18)
Net Asset Value, End of Period $ 6.65
Total Return 4.24%+
Net Assets, End of Period (000s) $207
Ratios to Average Net Assets:
Expenses 0.55%+
Net investment income 5.59+
Portfolio Turnover Rate 12.65%
</TABLE>
(a) For the period from April 4, 1995 (inception date) to
September 30, 1995
(unaudited).
++ Total return is not annualized, as the result may not
be representative of
the total return for the year.
+ Annualized.
30
<PAGE>
SMITH BARNEY
MUNI FUNDS
TRUSTEES
Jessica M. Bibliowicz
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P. Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
OFFICERS
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
------------
A Member of TravelersGroup[ART]
INVESTMENT MANAGER
Smith Barney Mutual Funds
Management Inc.
DISTRIBUTOR
Smith Barney Inc.
CUSTODIAN
PNC Bank
SHAREHOLDER
SERVICING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the
shareholders of
Smith Barney Muni Funds-Limited Term Portfolio. It is not
authorized for
distribution to prospective investors unless accompanied by
a current Prospectus
for the Portfolio, which contains information concerning the
Portfolio's
investment policies and expenses as well as other pertinent
information.
SMITH BARNEY MUNI FUNDS
388 Greenwich Street
New York, New York 10013
FD0804 11/95 82106
<PAGE>
S E M I - A N N U A L R E P O R T
[PHOTO APPEARS HERE]
Smith Barney
Muni Funds
New Jersey
Portfolio
- ------------------------------------------------------------
- --------------------
September 30, 1995
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
- ------------------------------------------------------------
- --------------------
New Jersey Portfolio
- ------------------------------------------------------------
- --------------------
Dear Shareholder:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds - New Jersey
Portfolio. This report covers the six months ended on
September 30, 1995. For
your convenience, we have summarized this period's
prevailing economic and
market conditions below and outlined our portfolio strategy
during this time. A
more detailed summary of performance and current holdings
can be found in the
Historical Performance and Schedule of Investments sections
that follow.
The New Jersey Portfolio posted a total return of 10.14%
(Class A
Shares) for the year ended September 30, 1995. This return
compares favorably
well above the 9.61% average for New Jersey municipal funds
as reported by
Lipper Analytical Services. For the three years ended
September 30, 1995, the
Portfolio posted a cumulative total return of 21.78% versus
a 20.24% average for
its peer group.
New Jersey Economic Highlights
New Jersey's general obligation debt is maintaining its AA+
ranking from
Standard & Poor's and holds a "stable" outlook thanks to the
state's success in
balancing its financial operations despite an environment of
slowed revenue
growth. The economic base continues to improve following the
recent recession,
with per capita income ranking second in the nation.
Spending growth has been
successfully curtailed in line with recent tax cuts and the
state's debt burden,
while increasing, is considered well-managed. As New
Jersey's diverse economy
continues to improve, growth is likely to remain modest but
steady thanks to the
state's popularity as a center for commerce and industry as
well as its strong
transportation infrastructure and thriving university
communities.
Market & Economic Overview
Over the past six months, the fixed income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 30-Year Treasuries
from 7.43% on March 31, 1995 to 6.50% on September 30, 1995
a drop of nearly 100
basis points. Long-term municipal bond yields, however,
barely budged over the
time period, starting out on March 30, 1995 at 6.29% as
represented by the Bond
Buyer's 25-Year Revenue Bond Index and finishing at 6.27% on
September 28, 1995.
This is due primarily to tax reform concerns.
1
<PAGE>
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5.75%, a move
that reflected its confidence in the current rate of
economic growth. However,
while the economy did pick up steam compared to the sluggish
first quarter of
1995, conflicting indicators all point to continued economic
uncertainty going
into 1996. Consumer spending is rising at an annual pace of
2.5% to 3%, a
relatively neutral rate further tempered by recent
indications that consumer
households are growing more cautious.
A number of other economic indicators edged up over the past
six months compared
to early 1995, including car buying, housing starts and
industrial production
before slowing again in September. The most recent Index of
Leading Indicators--
used by the government to forecast economic conditions--
eased downward slightly
in September, fueled by cheaper commodity prices. This index
measures eleven
different indicators, ranging from unemployment benefit
claims to building
permits. While a majority of these indicators showed a
slight uptick in
September, others dipped. The overall result was
confirmation of our
expectations for slow economic growth and steady, or even
lower, interest rates
by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, contains a capital gains cut but does not
address broader tax
reform. Flat tax proposals are still being discussed, but a
number of alternate
reform measures are on the table as well. We expect this
issue to emerge as the
centerpiece of the 1996 Presidential elections.
In short, until a more definite consensus emerges from
Washington, we can not be
certain of the impact on municipal bonds and are holding
fast on our relatively
cautious investment approach. Looking forward--and absent
radical tax reform--we
expect municipal bonds to perform well relative to taxable
investments, due
primarily to diminishing supply. There continues to be
little refinancing or new
issue activity. New issue activity is increasing toward year-
end but remains
well below the levels seen in previous years. The Public
Securities Association
now predicts approximately $140 billion in new issues by the
end of 1995, less
than half the record amount that came to market in 1993.
This reduction in
supply has helped to support underlying values. If the
supply situation
continues into 1996 as we expect, stronger appreciation
opportunities could
develop, particularly for bonds with long maturities and
good call protection.
2
<PAGE>
Portfolio Strategy & Outlook
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of the Portfolio by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structure. We intend to
retain most of our
substantial commitment to higher coupon issues trading at a
premium and callable
prior to maturity for the high income they are providing and
the measure of
protection they afford in the event interest rates should
rise. However, we are
increasing our focus on issues with comparable maturities
but greater call
protection in anticipation of a possible further downturn in
rates at the end of
this year or early 1996.
We were saddened by the loss of an outstanding business
leader and Trustee of
the Portfolio: Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
At this time, we would like to thank you for your continued
participation in
the Portfolio and for your ongoing confidence in our
management approach.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
November 8, 1995
3
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A 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>
9/30/95 $13.29 $13.53 $0.38
$0.00 4.75%+
3/31/95 13.23 13.29 0.78
0.00 6.64
3/31/94 13.71 13.23 0.80
0.00 2.17
3/31/93 12.90 13.71 0.82
0.06 13.55
3/31/92 12.52 12.90 0.85
0.08 10.73
Inception* - 3/31/91 12.00 12.52 0.33
0.00 7.12+
-------
- ---------
Total $3.96
$0.14
=======
=========
</TABLE>
- ------------------------------------------------------------
- --------------------
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>
9/30/95 $13.28 $13.53 $0.35
$0.00 4.60%+
Inception* - 3/31/95 12.26 13.28 0.29
0.00 10.86+
-------
- --------
Total $0.64
$0.00
=======
========
</TABLE>
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C 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>
9/30/95 $13.28 $13.52 $0.35
$0.00 4.50%+
3/31/95 13.22 13.28 0.69
0.00 5.91
3/31/94 13.71 13.22 0.71
0.00 1.40
Inception* - 3/31/93 13.36 13.71 0.19
0.00 4.04+
-----
- -----
Total $1.94
$0.00
=====
=====
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS MONTHLY AND
CAPITAL GAINS, IF
ANY, ANNUALLY.
4
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
Without Sales
Charge/(1)/
---------------------
- --------
Class A Class B
Class C
------- -------
- -------
Six Months Ended 9/30/95+ 4.75% 4.60%
4.50%
Year Ended 9/30/95 10.13 N/A
9.42
Inception* through 9/30/95 9.03 16.53
5.63
With Sales
Charge/(2)/
---------------------
- --------
Class A Class B
Class C
------- -------
- -------
Six Months Ended 9/30/95+ 0.59% 0.10%
3.50%
YearEnded 9/30/95 5.72 N/A
8.42
Inception* through 9/30/95 8.14 12.03
5.63
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without Sales
Charge/(1)/
-----------------
- --------
Class A (Inception* through 9/30/95) 53.72%
Class B (Inception* through 9/30/95) 16.53
Class C (Inception* through 9/30/95) 16.17
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and Class C
shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 4.00% and Class B shares
reflect the
deduction of a 4.50% CDSC, which applies if shares are
redeemed less than
one year from initial purchase. This CDSC declines by
0.50% the first year
after purchase and thereafter by 1.00% per year until no
CDSC is incurred.
Class C shares 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 and C shares are October
11, 1990, November
16, 1994 and January 5, 1993, respectively.
+ Total return is not annualized, as the result may not be
representative of
the total return for the year.
5
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
GROWTH OF $10,000 INVESTED IN CLASS A SHARES
OF
THE NEW JERSEY PORTFOLIO vs. LEHMAN MUNI BOND
FUND INDEX+
(UNAUDITED)
-------------------------------------------------
- --------
October 1990 - September 1995
<TABLE>
<CAPTION>
New Jersey Portfolio Lehman
Long Bond Index
-------------------- --------
- --------------
<S> <C> <C>
10/11/90 9600
10000
03/91 10273
10758
9/91 10994
11529
3/92 11345
11983
9/92 12063
12852
3/93 12851
13736
9/93 13766
14875
3/94 13100
13893
9/94 13272
14098
3/95 13950
15148
9/95 14607
15845
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on October 11,1990, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends
(after deduction of
applicable sales charges through November 6, 1994,
afterwards at net asset
value) and capital gains at net asset value through
September 30, 1995. The
Lehman Muni Bond Fund Index is a broad based, total return
index, comprised of
8,000 bonds which are all investment grade, fixed rate,
long term maturities
(greater that two years) and are selected from issues
larger than $50 million
dated since January, 1984. The index is unmanaged and is
not subject to the
same management and trading expenses of a mutual fund. The
performance of the
Portfolio'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.
6
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
EDUCATION--8.3%
<S> <C> <C>
<C>
$ 750,000 AAA Hamilton Township Board of
Education, FSA-Insured
7.000% due 12/15/15
$ 810,000
650,000 AAA Lakewood Township School
District, AMBAC-Insured,
Bank Qualified, Series 92,
6.250% due 2/15/11 694,688
1,000,000 AAA New Jersey Economic
Development Authority Revenue,
Educational Testing
Service, MBIA-Insured, Series E,
6.000%, due 5/15/25
988,750
600,000 AA Rutgers State University
Refunding, State University of
New Jersey, Series 92A,
6.400% due 5/1/13
654,000
1,000,000 Baa1* Shrewsbury Board of Education
COP,
6.600% due 8/15/15
1,036,250
1,000,000 AAA South Brunswick Township,
Board of Education,
FGIC-Insured 6.400% due
8/1/21 1
048,750
- ---------
5,232,438
=========
ESCROWED TO MATURITY(a)--8.1%
700,000 AAA Atlantic County Improvement
Luxury Tax Revenue,
Convention Center, MBIA-
Insured,
7.400% due 7/1/16
839,125
1,OOO,OOO AAA New Jersey State Educational
Facility Authority,
Fairleigh Dickinson
University, Series C,
7.750% due 7/1/01
1,100,000
2,470,000 AAA New Jersey State Turnpike
Authority Revenue
Refunding, 10.375% due
1/1/03
2,985,613
125,000 AAA Virgin Islands Public
Financing Authority Revenue,
Series A, 7.300% due
10/1/18
149,531
- ---------
5,074,269
=========
FINANCE--2.0%
1,155,000 Aaa* New Jersey EDA, Economic
Development
Revenue, Series L, 7.100%
due 12/1/11 (b)
1,245,956
- ---------
GENERAL OBLIGATION--2.1%
500,000 AAA The City of Jersey City
(Hudson County), Fiscal
Year Adjustment Bonds,
Series 1991B, FSA-Insured,
8.400% due 5/15/06
624,375
800,000 BBB Guam Government GO, Series A,
5.375% due 11/15/13 710,000
- ---------
1,334,375
=========
GOVERNMENT FACILITY--1.7%
1,000,000 AAA Puerto Rico Public Building
Authority Revenue,
AMBAC-Insured, Series A,
6.250% due 7/1/14
1,072,500
- ---------
</TABLE>
See Notes To Financial Statements.
7
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<C> <C> <S>
<C>
HOSPITAL--17.4%
New Jersey Health Care
Facilities Financing
Authority Revenue:
$2,000,000 A* Atlantic City Medical
Center, 6.800% due 7/1/11 $
2,122,500
1,985,000 Aa* Cathedral Health Services
Inc., FHA-Insured,
7.250% due 2/15/21
2,133,875
1,300,000 Baal* Deborah Heart & Lung Center,
6.300% due 7/1/23 1,301 625
750,000 A- East Orange General
Hospital, Series B,
7.750% due 7/1/20 (c)
794,063
1,500,000 AAA Irvington General Hospital,
FHA-Insured,
6.375% due 8/1/15
1,571,250
1,000,000 A- Pascack Valley Hospital,
Series 91, 6.700% due 7/1/11 1,015,000
1,000,000 Baa* St. Mary's Hospital,
Franciscan Sisters Health Systems,
5.875% due 7/1/12
940,000
1,150,000 AAA Somerset Medical Center,
Series A, FGIC-Insured,
5.200% due 7/1/24
1,032,125
- -----------
10,910,438
===========
HOUSING: MULTI-FAMILY--3.3%
1,000,000 AAA New Jersey Housing & Mortgage
Finance Agency,
Housing Revenue Refunding
Bonds, Presidential Plaza,
FHA-Insured, 7.000% due 5/1/30
1,043,750
1,000,000 A+ New Jersey State HFA Mortgage
Revenue, Series A,
Sec. 236, 8.250% due 11/1/20
1,000,000
- ---------
2,043,750
=========
HOUSING: SINGLE-FAMILY-6.2%
New Jersey State Housing &
Mortgage Finance Agency
Revenue, MBIA-Insured, Home
Mortgage:
100,000 AAA Series A, 7.875% due
10/1/17
105,250
420,000 AAA Series C, 8.000% due 4/1/12
445,725
1,000,000 AAA Series N, 5.900% due
10/1/12
998,750
1,000,000 BBB Puerto Rico Housing Bank &
Finance Agency,
Single-Family Mortgage, 7.500%
due 12/1/06 1,101,250
225,000 AAA Puerto Rico Housing Finance
Corporation,
Single-Family Mortgage, Series
A, GNMA-Collateralized,
7.800% due 10/15/21
235,406
1,000,000 AAA Virgin Islands HFA, Single-
Family Mortgage,
GNMA-Collateralized, 6.500%
due 3/1/25 (b) 1,006,250
- ---------
3,892,631
=========
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<C> <C> <S>
<C>
Industrial Development--5.1%
New Jersey EDA, Economic
Development Revenue:
$1,000,000 Aa1 * Economic Growth Bonds, LOC
Banque Nationale
De Paris, 6.550% due 12/1/07
(b) $ 1,045,000
1,370,000 AA- Economic Growth Bonds, Series E,
LOC National
Westminster USA, 5.400% due
10/1/13 (b) 1,311,775
2,000,000 A+ State Contract Economic
Recovery, zero coupon
due 9/15/10
855,000
- -----------
3,211,775
===========
Miscellaneous--0.7%
1,000,000 Aa* New Jersey Building Authority,
State Building Revenue,
Garden State Parkway Savings
Bonds, Series 91A,
zero coupon due 6/15/11
420,000
- -----------
Nursing Home--1.8%
1,000,000 Aaa* New Jersey EDA, Economic
Development Bonds,
(Eagle Rock Convalescent, Inc.
1990),
GNMA-Collateralized,7.375% due
12/20/06 1,110,000
- -----------
Pollution Control--1.6%
1,000,000 AA Salem County Pollution Control
Financing Authority,
Waste Disposal Revenue, (E.I.
du Pont De Nemours
& Co.), 6.125% due 7/15/22 (b)
1,007,500
- -----------
Pre-Refunded(a)--8.7%
500,000 AAA Hoboken, Union City, Weehawken
Sewer Authority,
Sewer Revenue, MBIA-Insured,
(Escrowed with
U.S. Government Securities to
8/1/99 Call @ 102),
7.250% due 8/1/19
558,750
500,000 AAA New Jersey Economic Development
Revenue Bonds,
New Jersey Performing Arts
Center Site, (Escrowed with
U.S. Government Securities to
6/15/01 Call @ 102),
6.750% due 6/15/12
530,000
750,000 AAA New Jersey Highway Authority,
Garden State Parkway
Revenue, (Escrowed with U.S.
Government Securities
to 1/1/99 Call @ 102), 7.250%
due 1/1/16 827,813
500,000 AAA New Jersey State GO, (Escrowed
with U.S. Government
Securities to 9/15/01 Call @
101.5), 6.800% due 9/15/11 562,500
1,000,000 AAA Puerto Rico Commonwealth Highway
Revenue, (Escrowed
with U.S. Government
Securities to 7/1/00 Call @ 102),
7.750% due 7/1/10
1,160,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
PRE-REFUNDED(A) -- 8.7% (CONTINUED)
<C> <C> <S>
<C>
$ 790,000 AAA Puerto Rico Electric Power
Authority, (Escrowed with
U.S. Government Securities to
7/1/99 Call @ 101.5),
7.125% due 7/1/14
$ 877,888
875,000 AAA Virgin Islands Public Financing
Authority Revenue,
Series A, (Escrowed with U.S.
Government Securities
to 10/1/01 Call @ 101), 7.300%
due 10/1/18 996,405
- ----------
5,513,356
==========
PUBLIC FACILITIES -- 3.8%
615,000 A- City of Atlantic City COP,
Series 1991 (Public Facilities
Lease Agreements Atlantic City
Project),
8.875% due 1/15/13
801,806
1,000,000 NR New Jersey Sports & Exposition
Authority Revenue,
Monmouth Park, Series A,
8.000% due 1/1/25 1,091,250
500,000 A+ North Jersey District Water
Supply Revenue,
Wanaque South Project, Series
A, 7.375% due 7/1/16 522,500
- ---------
2,415,556
=========
SHORT-TERM(D) -- 0.8%
500,000 A-1+ Port Authority New York & New
Jersey, 5.000% due 5/1/19 500,000
- ----------
SOLID WASTE -- 5.1%
2,000,000 A- Union County Utility Authority,
Solid Waste Revenue,
Series A, 7.150% due 6/15/09
(b) 2,107,500
1,035,000 A- Union County, Solid Waste
Revenue, Series A,
7.200% due 6/15/14 (b)
1,086,750
- ---------
3,194,250
=========
TAX ALLOCATION -- 1.7%
1,000,000 AAA Mercer County Improvement
Revenue,
Reference-Insured, Series
A,6.700% due 4/1/13 1,035,000
- ----------
TRANSPORTATION -- 9.7%
800,000 A1* Essex County Improvement
Authority, Airport Project
Revenue, Series 92, 6.800% due
11/1/21 (b) 840,000
1,000,000 Baa2* New Jersey EDA Revenue,
(American Airlines Inc. Project),
7.100% due 11/1/31 (b)
1,041,250
1,000,000 AAA New Jersey State Transportation
Authority, Series A,
MBIA-Insured, 5.500% due
6/15/13 975,000
1,500,000 AA- Port Authority New York & New
Jersey, 67th Series,
6.875% due 1/1/25
1,578,750
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (audited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING
SECURITY VALUE
- ------ ------ -
- ------- -----
TRANSPORTATION--9.7% (CONTINUED)
<S> <C> <C>
<C>
$1,750,000 A Puerto Rico Commonwealth Highway
& Transportation
Authority Highway Revenue,
Series W, 5.500%
due 7/1/15
$ 1,664,688
- -----------
6,099,688
===========
UTILITIES--4.3%
1,000,000 AAA Middlesex County Utility
Authority Sewer Revenue
Refunding, Series A, MBIA-
Insured, (Inverse Floating
Rate Security convertible to
6.250% on 8/15/97),
6.775% variable due 8/15/10
(e) 1,091,250
1,000,000 AAA New Jersey EDA, Natural Gas
Facilities Revenue, Series A,
AMBAC-Insured, 6.250% due
8/1/24 (b) 1,030,000
1,500,000 AAA West New York Municipal Utility
Authority, Sewer
Revenue Refunding, FGIC-
Insured, zero coupon
due 12/15/12
577,500
- ------------
2,698,750
============
Water and Sewer--7.6%
240,000 A+ The Hudson County Improvement
Authority, (Essential
Purpose Pooled Governmental
Loan Project),
Series 1986, 7.600% due 8/1/25
262,800
250,000 AAA Long Branch Sewer Authority
Revenue, FGIC-Insured,
7.150% due 6/01/10
282,187
New Jersey EDA:
1,000,000 A Sewer Facility, (Atlantic Sewer
Co.),
7.250% due 12/1/11
1,093,750
1,000,000 AAA Water Facilities Revenue
Refunding, (New Jersey
American Water Company
Project), Series A,
FGIC-Insured, 5.350% due
6/1/23 918,750
1,000,000 NR Water Facilities Revenue,
Series 1991, (New Jersey
American Water Company Inc.
Project),
7.400% due 11/1/01 (b)
1,080,000
345,000 A* Pennsville Authority Sewer
Revenue,7.100% due 11/1/20 373,894
700,000 AAA Willingboro Municipal Utilities
Authority, Water &
Sewer Revenue, Series C, MBIA-
Insured,
7.000% due 1/1/11
779,625
- -----------
4,791,006
- -----------
TOTAL INVESTMENTS -- 100%
(Cost -- $59,866,528)(f)
$62,803,238
===========
</TABLE>
See next page for explanation of footnotes.
See Notes to Financial Statements.
11
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
(a) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds
escrowed to maturity by U.S. Government Securities are
considered by
manager to be triple-A rated even if issuer has not
applied for new
ratings.
(b) Income from these issues is considered a preference
item for purposes of
calculating the alternative minimum tax.
(c) Securities segregated by custodian.
(d) Variable rate obligation payable at par on demand at
any time on no more
than seven days notice.
(e) Residual interest bonds - coupon varies inversely with
level of short-term
tax-exempt interest rates.
(f) Aggregate cost for Federal income tax purposes is
substantially the same.
See pages 13 and 14 for definitions of ratings and
certain security
descriptions.
See Notes to Financial Statements.
12
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Bond Ratings
- ------------------------------------------------------------
- --------------------
All ratings are by Standard & Poor's Corporation, except
those identified by an
asterisk (*) are rated by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be
modified by the addition
of a plus (+) or minus (-) sign to show relative standings
within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating
assigned by Standard &
Poor's. Capacity to pay interest and repay
principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to
pay interest and
repay principal and differ from the highest
rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay
interest and
repay principal although it is somewhat more
susceptible to the
adverse effects of changes in circumstances and
economic conditions
than debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an
adequate capacity to
pay interest and repay principal. Whereas they
normally exhibit
adequate protection parameters, adverse economic
conditions or
changing circumstances are more likely to lead
to a weakened
capacity to pay interest and repay principal for
debt in this
category than in higher rated categories.
Moody's -- Numerical modifiers 1,2 and 3 may be applied to
each generic
rating from "Aa" to "Baa", where 1 is the
highest and 3 the
lowest ranking within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of
the best quality.
They carry the smallest degree of investment
risk and are generally
referred to as "gilt edge". Interest payments
are protected by a
large or by an exceptionally stable margin and
principal is secure.
While the various protective elements are likely
to change, such
changes as can be visualized are most unlikely
to impair the
fundamentally strong position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of
high quality by
all standards. Together with the Aaa group they
comprise what are
generally known as high grade bonds. They are
rated lower than the
best bonds because margins of protection may not
be as large in Aaa
securities or fluctuation of protective elements
may be of greater
amplitude or there may be other elements present
which make the
long-term risks appear somewhat larger than in
Aaa securities.
A -- Bonds that are rated "A" possess many favorable
investment
attributes and are to be considered as upper
medium grade
obligations. Factors giving security to
principal and interest are
considered adequate but elements may be present
which suggest a
susceptibility to impairment some time in the
future.
Baa -- Bonds that are rated "Baa" are considered as
medium grade
obligations, i.e., they are neither highly
protected nor poorly
secured. Interest payments and principal
security appear adequate
for the present but certain protective elements
may be lacking or
may be characteristically unreliable over any
great length of time.
Such bonds lack outstanding investment
characteristics and in fact
have speculative characteristics as well.
NR -- Indicates that the bond is not rated by Standard
& Poor's
Corporation or Moody's Investors Services.
13
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Short-Term Securities Ratings
- ------------------------------------------------------------
- --------------------
SP-1 -- Standard & Poor's highest rate rating indicating
very strong or
strong capacity to pay principal and interest;
those issues
determined to possess overwhelming safety
characteristics are
denoted with a plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and
variable-rate demand
obligation (VRDO) rating indicating that the
degree of safety
regarding timely payments is either overwhelming
or very strong;
those issues determined to possess overwhelming
safety
characteristics are denoted with a plus (+)
sign.
VMIG 1 -- Moody's highest rating for issues having a
demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and
for VRDO prior to
the advent of the VMIG 1 rating.
- ------------------------------------------------------------
- --------------------
Security Descriptions
- ------------------------------------------------------------
- --------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
EDA -- Economic Development Authority
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
14
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Schedule of Assets and Liabilities (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost-$59,866,528)
$62,803,238
Cash
92,207
Receivable for securities sold
95,000
Interest receivable
1,102,233
Other receivables
370
----
- -------
Total Assets
64,093,048
----
- -------
LIABILITIES:
Payable for securities purchased
1,108,130
Dividends payable
293,902
Management fees payable
47,518
Distribution fees payable
5,436
Accrued expenses
15,493
----
- -------
Total Liabilities
1,470,479
----
- -------
Total Net Assets
$62,622,569
===========
NET ASSETS:
Par value of shares of beneficial interest $
4,627
Capital paid in excess of par value
60,518,460
Overdistributed net investment income
(11,668)
Accmulated net realized loss on security
transactions
(825,560)
Net unrealized appreciation on investments
2,936,710
----
- -------
Total Net Assets
$62,622,569
===========
Shares Outstanding:
Class A
4,214,864
Class B
156,831
Class C
255,362
Net Asset Value:
Class A (and redemption price)
$13.53
Class B*
$13.53
Class C**
$13.52
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value per
share)
$14.09
======
</TABLE>
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if shares
are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC which
applies if shares are redeemed within the first year of
purchase.
See Notes to Financial Statements.
15
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Statement of Operations (unaudited)
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995
<TABLE>
<S>
<C>
INVESTMENT INCOME:
Interest
$2,018,842
- ----------
EXPENSES:
Management fees (Note 4)
143,583
Distribution fees (Note 4)
61,956
Shareholder and system servicing fees
13,462
Shareholder communications
7,933
Pricing service fees
7,018
Audit and legal
6,131
Registration fees
4,575
Custody
4,026
Trustees' fees
3,020
Other
3,005
- ----------
Total Expenses
254,709
- ----------
Net Investment Income
1,764,133
- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 5):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales
6,949,731
Cost of securities sold
6,775,982
- ----------
Net Realized Gain
173,749
Change in Net Unrealized Appreciation of Investments:
Beginning of period
1,924,307
End of period
2,936,710
- ----------
Increase in Net Unrealized Appreciation
1,012,403
- ----------
Net Gain on Investments
1,186,152
- ----------
Increase in Net Assets From Operations
$2,950,285
==========
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
<TABLE>
<CAPTION>
September
30 March 31
- ------------------------------------------------------------
- ------------------
<S> <C>
<C>
OPERATIONS:
Net investment income $
1,764,133 $ 3,953,002
Net realized gain (loss)
173,749 (893,607)
Increase in net unrealized appreciation
1,012,403 902,353
--------
- --- -----------
Increase in Net Assets From Operations
2,950,285 3,961,748
--------
- --- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 3):
Net investment income
(1,798,941) (3,976,821)
Net realized gains
- - (8,752)
--------
- --- -----------
Decrease in Net Assets From
Distributions to Shareholders
(1,798,941) (3,985,573)
--------
- --- -----------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares
2,852,499 11,016,066
Net asset value of shares issued for
reinvestment of dividends
829,222 2,086,806
Cost of shares reacquired
(4,861,647) (22,333,035)
--------
- --- -----------
Decrease in Net Assets From
Fund Share Transactions
(1,179,926) (9,230,163)
--------
- --- -----------
Decrease in Net Assets
(28,582) (9,253,988)
NET ASSETS
Beginning of period
62,651,151 71,905,139
--------
- --- -----------
End of period*
$62,622,569 $62,651,151
=========== ===========
* Includes undistributed (overdistributed) net
investment income of:
$(11,668) $23,140
======== =======
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- --------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The New Jersey Portfolio ("Portfolio") is a separate
investment portfolio
of the Smith Barney Muni Funds ("Fund"). The Fund, a
Massachusetts business
trust, is registered under the Investment Company Act of
1940, as amended, as a
non-diversified, open-end management investment company and
consists of this
Portfolio and eleven other separate investment portfolios:
California, Florida,
Georgia, Limited Term, New York, National, Ohio,
Pennsylvania, Florida Limited
Term, California Money Market and New York Money Market
Portfolios. The
financial statements and financial highlights for the other
portfolios are
presented in separate semi-annual reports.
The significant accounting policies consistently
followed by the Fund are:
(a) security transactions are accounted for on the trade
date; (b) securities
are valued at bid prices provided by an independent pricing
service that are
based on transactions in municipal obligations, quotations
from municipal bond
dealers, market transactions in comparable securities and
various relationships
between securities; (c) short-term securities and securities
maturing within 60
days are valued at cost plus (minus) accreted discount
(amortized premium),
which approximates value; (d) gains or losses on the sale of
securities are
calculated by using the specific identification method; (e)
interest income,
adjusted for amortization of premiums and accretion of
original issue discount,
is recorded on the accrual basis; market discount is
recognized upon the
disposition of the applicable provisions security; (f)
direct expenses are
charged to the Portfolio and each class; management fees and
general fund
expenses are allocated on the basis of relative net assets;
and (g) the
Portfolio intends to comply with the requirements 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.
2. PORTFOLIO CONCENTRATION
Since the Portfolio invests primarily in obligations of
issues within New
Jersey, it is subject to possible concentration risks
associated with economic,
political, or legal developments or individual or regional
matters specifically
affecting New Jersey.
3. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Portfolio intends to satisfy conditions that will
enable interest from
municipal securities, which is exempt from Federal income
tax and
18
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
from designated state income taxes, to retain such tax-
exempt status when
distributed to the shareholders of the Portfolio.
Capital gain distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
4. MANAGEMENT AGREEMENTS AND TRANSACTIONS WITH
AFFILIATED PERSONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
Portfolio pays SBMFM a management fee calculated at the
annual rate of 0.45% of
the Portfolio's average daily net assets. This fee is
calculated daily and paid
monthly.
Smith Barney Inc. ("SB"), another subsidiary of SBH,
acts as distributor of
Fund shares. For the six months ended September 30,1995, SB
received sales
charges of approximately $31,000 on purchases of the
Portfolio's Class A shares.
There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B
shares if redemption occurs less than one year from initial
purchase. This CDSC
declines by 0.50% the first year after purchase and
thereafter by 1.00% per year
until no CDSC is incurred. Class C shares have a 1.00% CDSC
if redemption occurs
within the first year from the date such investment was
made. For the six months
ended September 30, 1995, CDSCs of approximately $1,000 were
paid to SB.
Pursuant to the Distribution Plan, the Portfolio pays a
service fee with
respect to its Class A, B and C shares calculated at the
annual rate of
0.15% of the average daily net assets of each class. In
addition, the
Portfolio pays a distribution fee with respect to its Class
B and C shares
calculated at the annual rates of 0.50% and 0.55%,
respectively, of the
average daily net assets of each class.
All officers and two Trustees of the Fund are employees
of SB.
19
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
5. INVESTMENTS
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding
short-term securities) of investments were as follows:
<TABLE>
<S>
<C>
Purchases
$6,489,019
- ----------
Sales
6,949,731
- ----------
</TABLE>
At September 30, 1995, the gross unrealized appreciation
and depreciation
of investments for Federal income tax purposes were as
follows:
<TABLE>
<S>
<C>
Gross unrealized appreciation
$3,293,412
Gross unrealized depreciation
(356,702)
- ----------
Net unrealized appreciation
$2,936,710
==========
</TABLE>
6. CAPITAL LOSS CARRYFORWARD
At March 31, 1995, the Portfolio had for Federal tax
purposes approximately
$999,309 of unused loss carryforwards available to offset
future capital gains
expiring March 31, 2003. To the extent that these
carryforward losses are used
to offset capital gains, it is probable that the gains so
offset will not be
distributed.
7. SHARES OF BENEFICIAL INTEREST
At September 30, 1995, there were an unlimited amount of
shares of
beneficial interest of $0.001 par value authorized. The
Portfolio has the
ability to issue multiple classes of shares. Each share of a
class represents
an identical interest in the Portfolio and has the same
rights, except that
each class bears certain expenses specifically related to
the distribution of
its shares. Effective November 7, 1994, the Portfolio
adopted a new class
structure, renaming Class B shares as Class C shares and
exchanging the
former Class C shares into Class A shares. At September 30,
1995, total
paid-in capital amounted to the following for each class:
<TABLE>
<CAPTION>
Class A Class B
Class C
----------- ----------
- ----------
<S> . <C> <C>
<C>
Total Paid-In Capital $54,906,811 $2,061,431
$3,554,845
</TABLE>
20
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)(continued)
- ------------------------------------------------------------
- --------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended
Year Ended
September 30, 1995
March 31, 1995*
----------------------- ---
- ----------------------
Shares Amount
Shares Amount
--------- ---------- ---
- ------ ----------
<S> <C> <C>
<C> <C>
Class A+
Shares sold 111,432 $ 1,503,827
720,829 $ 9,328,289
Shares issued on reinvestment 55,766 747,120
149,704 1,955,106
Shares redeemed (324,319) (4,368,861)
(1,696,457) (21,851,611)
-------- ----------- ---
- ------ ------------
Net Decrease (157,121) $(2,117,914)
(825,924) $(10,568,216)
======== ===========
========= ============
Class B
Shares sold 75,421 $ 1,019,056
81,393 $ 1,042,288
Shares issued on reinvestment 2,267 30,370
667 8,718
Shares redeemed (2,131) (28,638)
(786) (10,363)
-------- ----------- ---
- ------ ------------
Net Increase 75,557 $ 1,020,788
81,274 $ 1,040,643
======== ===========
========= ============
Class C++
Shares sold 24,473 $ 329,616
49,774 $ 645,489
Shares issued on reinvestment 3,864 51,732
9,488 122,982
Shares redeemed (34,043) (464,148)
(37,013) (471,061)
-------- ----------- ---
- ------ ------------
Net Increase (Decrease) (5,706) $ (82,800)
22,249 $ 297,410
======== ===========
========= ============
</TABLE>
* For Class B shares, transactions are for the period from
November 16, 1994
(inception date) to March 31, 1995.
+ On October 10, 1994, the former Class C shares were
exchanged into Class A
shares; therefore Class C share activity for the period
from April 1,1994
to October 9, 1994 is included with Class A share
activity.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
21
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout
each period:
<TABLE>
<CAPTION>
Class A Shares (a) 1995(b) 1995
1994 1993 1992 1991(c)
- ------------------------------------------------------------
- ----------------------------------------
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 13.29 $ 13.23
$ 13.71 $ 12.90 $ 12.52 $ 12.00
------- -------
- ------- ------- ------- -------
Income From Operations:
Net investment income (1) 0.38 0.77
0.79 0.82 0.86 0.34
Net realized and unrealized
gain (loss) 0.24 0.07#
(0.47) 0.87 0.45 0.51
------- -------
- ------- ------- ------- -------
Total Income From Operations 0.62 0.84
0.32 1.69 1.31 0.85
------- -------
- ------- ------- ------- -------
Less Distributions From:
Net investment income (0.38) (0.78)
(0.80) (0.82) (0.85) (0.33)
------- -------
- ------- ------- ------- -------
Net realized gains - -
- - (0.06) (0.08) -
------- -------
- ------- ------- ------- -------
Total Distributions (0.38) (0.78)
(0.80) (0.88) (0.93) (0.33)
------- -------
- ------- ------- ------- -------
Net Asset Value, End of Period $ 13.53 $ 13.29
$ 13.23 $ 13.71 $ 12.90 $ 12.52
Total Return 4.75%++ 6.64%
2.17% 13.55% 10.73% 7.12%++
Net Assets, End of Period (000s) $57,048 $58,103
$66,459 $55,137 $35,969 $23,484
Ratios to Average Net Assets:
Expenses (1) 0.75%+ 0.63%
0.44% 0.38% 0.31% 0.30%+
Net investment income 5.57+ 5.94
5.63 6.15 6.63 7.15+
Portfolio Turnover Rate 9.18% 27.76%
11.02% 26.04% 55.13% 19.61%
</TABLE>
(a) On October 10, 1994 the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995 (unaudited).
(c) For the period from October 11, 1990 (inception date) to
March 31,1991.
(1) The manager has waived all or a part of its fees in each
year in the three-
year period ended March 31, 1994. If such fees were not
waived, the per
share decreases in net investment income and the ratios
of expenses to
average net assets would be as follows:
<TABLE>
<CAPTION>
Per Share Decreases
Expense Ratios
in Net Investment Income
Without Fee Waivers*
-------------------------- ------
- -------------------
1994 1993 1992 1994
1993 1992
------ ------ ------ -----
- - ------ ------
<S> <C> <C> <C> <C>
<C> <C>
Class A $0.014 $0.023 $0.031 0.54%
0.55% 0.54%
</TABLE>
# Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the net asset value at the beginning of the period.
* As a result of voluntary expense limitations the ratios
of expenses to
average net assets will not exceed 0.80% for Class A
shares.
++ Total return is not annualized, as the result may not be
representative of
the total return for the year.
+ Annualized.
22
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout
each period:
<TABLE>
<S>
<C> <C>
Class B Shares
1995(a) 1995(b)
- ------- -------
Net Asset Value, Beginning of Period
$ 13.28 $ 12.26
- ------- -------
Income From Operations:
Net investment income
0.34 0.31
Net realized and unrealized gain (1)
0.26 1.00#
- ------- -------
Total Income From Operations
0.60 1.31
======= =======
Less Distributions From:
Net investment income
(0.35) (0.29)
Net realized gains
- -- --
Total Distributions
(0.35) (0.29)
- ------- -------
Net Asset Value, End of Period
$ 13.53 $ 13.28
- ------- -------
Total Return++
4.60% 10.86%
Net Assets, End of Period (000s)
$ 2,121 $ 1,080
Ratios to Average Net Assets+:
Expenses (2)
1.24% 1.23%
Net investment income
5.09 5.24
Portfolio Turnover Rate
9.18% 27.76%
======== =======
</TABLE>
(a) For the six months ended September 30, 1995 (unaudited).
(b) For the Period from November 16,1994 (inception date) to
March 31,1995.
(1) Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the net asset value at the beginning of the period.
# As a result of voluntary expense limitations, the ratios
of expenses to
average net assets will not exceed 1.30% for Class B
shares.
++ Total return is not annualized, as the result may not be
representative of
the total return for the year.
+ Annualized.
23
<PAGE>
SMITH BARNEY MUNI FUNDS
NEW JERSEY PORTFOLIO
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class C Shares (a) 1995(b) 1995
1994 1993(c)
- ------------------------------------------------------------
- ----------------
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $13.28 $13.22
$13.71 $13.36
------ ------
- ------ ------
Income From Operations:
Net investment income (1) 0.34 0.69
0.70 0.21
Net realized and unrealized
gain (loss) 0.25 0.06#
(0.48) 0.33
------ ------
- ------ ------
Total Income From Operations 0.59 0.75
0.22 0.54
------ ------
- ------ ------
Less Distributions From:
Net investment income (0.35) (0.69)
(0.71) (0.19)
Net realized gains - -
- - -
------ ------
- ------ ------
Total Distributions (0.35) (0.69)
(0.71) (0.19)
------ ------
- ------ ------
Net Asset Value, End of Period $13.52 $13.28
$13.22 $13.71
------ ------
- ------ ------
Total Return 4.50%++ 5.91%
1.40% 4.04%++
Net Assets, End of Period (000s) $3,454 $3,468
$3,156 $786
Ratios to Average Net Assets:
Expenses (1) 1.32%+ 1.27%
1.17% 1.08%+
Net investment income 5.01+ 5.28
4.85 5.28+
Portfolio Turnover Rate 9.18% 27.76%
11.02% 26.04%
</TABLE>
(a) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(b) For the six months ended September 30, 1995 (unaudited).
(c) For the period from January 5, 1993 (inception date) to
March 31, 1993.
(1) The manager has waived all or a part of its fees in each
year in the two-
year period ended March 31, 1994. If such fees were not
waived, the per
share decreases in net investment income and the ratios
of expenses to
average net assets would be as follows:
<TABLE>
<CAPTION>
Per Share Decreases Expense
Ratios
in Net Investment Income Without
Fee Waivers*
------------------------ ----------
- ----------
1994 1993(c) 1994
1993(c)
------ ------- ------
- -------
<S> <C> <C> <C>
<C>
Class C $0.012 $0.007 1.25%
1.23%+
</TABLE>
# Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the net asset value at the beginning of the period.
* As a result of voluntary expense limitations, the ratios
of expenses to
average net assets will not exceed 1.35% for Class C
shares.
++ Total return is not annualized, as the result may not be
representative of
the total return for the year.
+ Annualized.
24
<PAGE>
SMITH BARNEY
MUNI FUNDS
TRUSTEES
Jessica M. Bibliowicz
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P. Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
OFFICERS
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
- ------------
A member of Travelers Group [LOGO]
INVESTMENT MANAGER
Smith Barney Mutual
Funds Management Inc.
DISTRIBUTOR
Smith Barney Inc.
CUSTODIAN
PNC Bank
SHAREHOLDER
SERVICING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the
shareholders of
Smith Barney Muni Funds New Jersey Portfolio. It is not
authorized for distribu-
tion to prospective investors unless accompanied or preceded
by a current
Prospectus for the Portfolio, which contains information
concerning the
Portfolio's investment policies and expenses as well as
other pertinent
information.
SMITH BARNEY MUNI FUNDS
388 Greenwich Street
New York, New York 10013
FD0808 11/95
82108
------------------
SEMI-ANNUAL REPORT
------------------
Smith Barney
Muni Funds
Georgia
Portfolio
Ohio Portfolio
Pennsylvania
Portfolio
--------------
- ---------
September 30,
1995
[LOGO] Smith Barney
Mutual Funds
Investing for
your future.
Every day.
<PAGE>
----------------------------------------
- -
Georgia, Ohio and Pennsylvania
Portfolios
----------------------------------------
- -
Dear Shareholder:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds -- Georgia, Ohio
and Pennsylvania Portfolios. This report covers the six
months ended September
30, 1995. For your convenience, we have summarized this
period's prevailing
economic and market conditions below and outlined our
portfolio strategy during
this time. A more detailed summary of performance and
current holdings can be
found in the Historical Performance and Schedule of
Investments sections that
follow.
Market & Economic Overview
Over the past six months, the fixed income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 30-Year Treasuries
from 7.43% on March 31, 1995 to 6.50% on September 30, 1995,
a drop of nearly
100 basis points. Long-term municipal bond yields, however,
barely budged over
the time period, starting out on March 30, 1995 at 6.29% as
represented by the
Bond Buyer's 25-Year Revenue Bond Index and finishing at
6.27% on September 28,
1995. This is due primarily to tax reform concerns.
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5.75%, a move
that reflected its confidence in the current rate of
economic growth. However,
while the economy did pick up steam compared to the sluggish
first quarter of
1995, conflicting indicators all point to continued economic
uncertainty going
into 1996. Consumer spending is rising at an annual pace of
2.5% to 3%, a
relatively neutral rate further tempered by recent
indications that consumer
households are growing more cautious.
A number of other economic indicators edged up over the past
six months compared
to early 1995, including car buying, housing starts and
industrial production
before slowing again in September. The most recent Index of
Leading Indicators
- -- used by the U.S. Government to forecast economic
conditions -- eased downward
slightly in September, fueled by cheaper commodity prices.
This index measures
eleven different indicators, ranging from unemployment
benefit claims to
building permits. While a majority of these indicators
showed a slight uptick in
September, others dipped. The overall result was
confirmation of our
expectations for slow economic growth and steady, or even
lower, interest rates
by year end.
1
<PAGE>
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, D.C., contains a capital gains cut but does
not address broader
tax reform. Flat tax proposals are still being discussed,
but a number of
alternate reform measures are on the table as well. We
expect this issue to
emerge as the centerpiece of the 1996 Presidential
elections.
In short, until a more definite consensus emerges from
Washington, D.C., we can
not be certain of the impact on municipal bonds and are
holding fast on our
relatively cautious investment approach. Looking forward --
and absent radical
tax reform -- we expect municipal bonds to perform well
relative to taxable
investments, due primarily to diminishing supply. There
continues to be little
refinancing or new issue activity. New issue activity is
increasing toward
year-end but remains well below the levels seen in previous
years. The Public
Securities Association now predicts approximately $140
billion in new issues by
the end of 1995, less than half the record amount that came
to market in 1993.
This reduction in supply has helped to support underlying
values. If the supply
situation continues into 1996 as we expect, stronger
appreciation opportunities
could develop, particularly for bonds with long maturities
and good call
protection.
Georgia Economic Highlights
Georgia's general obligation debt is currently rated "AAA"
by Fitch, "Aaa" by
Moody's and "AA+" by Standard and Poor's, and enjoys a
"stable" outlook for the
future from these agencies. Georgia's continuing superior
credit standing is due
to the state's excellent debt policies, sound financial
operations, past
sustained growth and the potential for further development
in the future,
particularly from the upcoming Summer Olympics. The state
appears to have
rebounded quickly from the recent national economic
downturn. Georgia's 1995-96
budget is balanced, revenues are steady and employment
continues to rise, as
does construction, services, trade, manufacturing and
government activity.
Georgia Portfolio Performance
The Georgia Portfolio posted a total return of 11.60% (Class
A shares) for the
year ended September 30, 1995. This return compares
favorable with the 10.10%
average total return for all Georgia municipal funds tracked
by Lipper
Analytical Services for this same time period.
Pennsylvania Economic Highlights
Pennsylvania's general obligation debt has a "AA-" rating
from Fitch, along with
a "stable" outlook for the future. Economic recovery within
the state is slow
but steady and overall financial health is being brightened
by a balanced
1995-1996 budget and current government emphasis on budget
controls and
2
<PAGE>
corporate tax cuts. The state's strong cash management
abilities remain evident
and are a integral component of its superior rating.
Pennsylvania Portfolio Performance
The Pennsylvania Portfolio posted a total return of 11.47%
(Class A shares) for
the year ended September 30, 1995. This return compared
favorably with the 9.90%
average total return for all Pennsylvania municipal funds
tracked by Lipper
Analytical Services for this same time period.
Georgia & Pennsylvania Portfolio Strategy
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of these Portfolios by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structures. We intend to
retain most of our
substantial commitment to higher coupon issues trading at a
premium and callable
prior to maturity for the high income they are providing and
the measure of
protection they afford in the event interest rates should
rise. However, we are
increasing our focus on issues with comparable maturities
but greater call
protection in anticipation of a possible further downturn in
rates at the end of
this year or early 1996.
Ohio Economic Highlights
The economic outlook for Ohio and its localities has
improved from the dark days
of the mid-1980s. With state government taking an aggressive
approach to job
growth and economic development, Ohio has become a more
attractive place for
both taxpayers and businesses. State officials have
accomplished this primarily
by controlling spending, reducing state government, and
offering small
businesses and state farmers reduced loan programs. In
addition, Ohio has worked
hard to keep its major sports franchises, although it
appears that, as of this
writing, the NFL Cleveland Browns will soon be calling
Baltimore, Maryland their
new home. Complementing this new pro-business and taxpayer
environment in Ohio,
voters overwhelmingly approved a $1.2 billion bond issue to
improve the state's
infrastructure, a notable development since voters have
traditionally rejected
initiatives that might raise their taxes.
Another recent newsworthy event in Ohio has been the
remarkable turnaround of
Cuyahoga county since its financial problems regarding the
SAFE Investment pool
of 1994. Local school districts were, more or less, expected
to invest their
short-term cash into this investment pool. As a result of
aggressive investment
strategies, the pool lost approximately $114 million dollars
which
3
<PAGE>
led to a downgrading of the county's debt to "A-1" by
Moody's Investors Service.
Unlike Orange County in California, Cuyahoga accepted full
responsibility when
it came to making the pool participants whole. By utilizing
effective cash
management strategies and cutting its budget, the county has
turned things
around, and, in the process, had their rating restored to
"AA." Ohio Portfolio
Performance
The Ohio Long-Term Portfolio posted a total return of 11.45%
(Class A shares)
for the year ended September 30, 1995. This return compares
favorably with the
9.93% average total return for all Ohio municipal bond funds
tracked by Lipper
Analytical Services during the same time period. With
respect to the Ohio
Portfolio's investment strategy, we have maintained a high-
quality portfolio
with 94% in investment-grade securities.
We were saddened by the loss of an outstanding business
leader and Trustee
of the Portfolios: Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
At this time, we would like to thank you for your continued
participation in our
Smith Barney municipal portfolios and for your ongoing
confidence in our
investment management approach.
Sincerely,
/S/ HEATH B. MCLENDON /S/ PETER M. COFFEY
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
Georgia and
Pennsylvania Portfolios
/S/ LAWRENCE T.
MCDERMOTT
Lawrence T.
McDermott
Vice President and
Investment Officer
Ohio Portfolio
November 8, 1995
4
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.10 $12.43 $0.36
$0.00 5.73%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.00 12.10 0.62
0.00 6.29+
============================================================
====================
Total $0.98
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class B Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.11 $12.43 $0.33
$0.00 5.41%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.00 12.11 0.49
0.00 2.88+
============================================================
====================
Total $0.82
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.09 $12.42 $0.32
$0.00 5.48%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.06 12.09 0.56
0.00 5.11+
============================================================
====================
Total $0.88
$0.00
============================================================
====================
It is the Fund's policy to distribute dividends monthly and
capital gains, if
any, annually.
5
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
-----------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 5.73%
5.41% 5.48%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 11.57
10.99 11.05
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 8.15
6.47 7.30
- ------------------------------------------------------------
- --------------------
With
Sales Charge (2)
-----------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 1.54%
0.91% 4.48%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 7.12
6.50 10.05
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 5.24
3.43 7.30
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
-----------------
- --------------------
Class A (Inception* through 9/30/95)
12.40%
- ------------------------------------------------------------
- --------------------
Class B (Inception* through 9/30/95)
8.45
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
10.87
- ------------------------------------------------------------
- --------------------
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum sales charge of 4.00% and Class B shares
reflect the deduction of a
4.50% CDSC, which applies if shares are redeemed less
than one year from
initial purchase. This CDSC declines by 0.50% the first
year after purchase
and thereafter by 1.00% per year until no CDSC is
incurred. Class C shares
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 and C shares are April
4, 1994, June 15,
1994 and April 14, 1994, respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
6
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A
Shares of
the Georgia Portfolio vs. Lehman Muni Bond Fund
Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
April 1994 -- September 1995
[The following table was represented by a chart in the
printed material.]
Georgia
Lehman Muni
Date Portfolio Bond
Fund Index
---- --------- ------
- ---------
4/4/94 9600
10000
6/94 9588
9919
9/94 9662
10147
12/94 9393
9916
3/95 10193
10903
6/95 10515
11102
9/95 10778
11405
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on April 4, 1994, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends and
capital gains at
net asset value through September 30, 1995. The Lehman
Muni Bond Fund Index
is a broad based, total return index, composed of 8,000
actual bonds which
are all investment grade, fixed rate, long term
maturities (greater than two
years) and are selected from issues larger than $50
million dated since
January, 1984. The index is unmanaged and is not subject
to the same
management and trading expenses of a mutual fund. The
performance of the
Portfolio'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.
7
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $11.97 $12.21 $0.33
$0.00 4.88%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.00 11.97 0.48
0.00 4.04+
============================================================
====================
Total $0.81
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class B Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $11.96 $12.20 $0.31
$0.00 4.65%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.02 11.96 0.43
0.00 3.31+
============================================================
====================
Total $0.74
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $11.96 $12.21 $0.31
$0.00 4.72%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.02 11.96 0.43
0.00 3.28+
============================================================
====================
Total $0.74
$0.00
============================================================
====================
It is the Fund's policy to distribute dividends monthly and
capital gains, if
any, annually.
8
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
-------------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 4.88%
4.65% 4.72%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 11.48
10.92 9.96
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 6.95
6.21 6.23
- ------------------------------------------------------------
- --------------------
With
Sales Charge (2)
-------------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 0.68%
0.15% 3.72%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 7.02
6.42 9.96
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 3.64
3.16 6.23
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
---------------
- --------------------
Class A (Inception* through 9/30/95)
9.12%
- ------------------------------------------------------------
- --------------------
Class B (Inception* through 9/30/95)
8.12
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
8.15
- ------------------------------------------------------------
- --------------------
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum sales charge of 4.00% and Class B shares reflect
the deduction of a
4.50% CDSC, which applies if shares are redeemed less
than one year from
initial purchase. This CDSC declines by 0.50% the first
year after purchase
and thereafter by 1.00% per year until no CDSC is
incurred. Class C shares
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 and C shares are June 13,
1994, June 14, 1994
and June 14, 1994, respectively.
+ Total return is not annualized, as it may not be
representative of the total
return for the year.
9
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A
Shares of
the Ohio Portfolio vs. Lehman Muni Bond Fund
Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
June 1994 -- September 1995
[The following table was represented by a chart in the
printed material.]
Ohio Lehman Muni
Date Portfolio Bond Index
----- ---------- -----------
4/4/94 9600 10000
6/94 9392 9880
9/94 9392 10108
12/94 9140 9877
3/95 9981 10860
6/95 10154 11059
9/95 10468 11360
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on June 13, 1994, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends and
capital gains at
net asset value through September 30, 1995. The Lehman
Muni Bond Fund Index
is a broad based, total return index, composed of 8,000
actual bonds which
are all investment grade, fixed rate, long term
maturities (greater than two
years) and are selected from issues larger than $50
million dated since
January, 1984. The index is unmanaged and is not subject
to the same
management and trading expenses of a mutual fund. The
performance of the
Portfolio'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.
10
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.40 $12.66 $0.36
$0.00 5.06%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.00 12.40 0.62
0.00 8.82+
============================================================
====================
Total $0.98
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class B Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.39 $12.65 $0.32
$0.00 4.77%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.35 12.39 0.48
0.00 4.43+
============================================================
====================
Total $0.80
$0.00
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.39 $12.65 $0.33
$0.00 4.81%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 12.00 12.39 0.56
0.00 8.14+
============================================================
====================
Total $0.89
$0.00
============================================================
====================
It is the Fund's policy to distribute dividends monthly and
capital gains, if
any, annually.
11
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
------------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 5.06%
4.77% 4.81%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 11.46
10.86 10.93
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 9.40
7.28 8.76
- ------------------------------------------------------------
- --------------------
With
Sales Charge (2)
------------------
- --------------------
Class A
Class B Class C
============================================================
====================
Six Months Ended 9/30/95+ 0.84%
0.27% 3.81%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 7.01
6.37 9.93
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 6.45
4.22 8.78
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge (1)
----------------
- --------------------
Class A (Inception* through 9/30/95)
14.33%
- ------------------------------------------------------------
- --------------------
Class B (Inception* through 9/30/95)
9.43
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
13.34
- ------------------------------------------------------------
- --------------------
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum sales charge of 4.00% and Class B shares reflect
the deduction of a
4.50% CDSC, which applies if shares are redeemed less
than one year from
initial purchase. This CDSC declines by 0.50% the first
year after purchase
and thereafter by 1.00% per year until no CDSC is
incurred. Class C shares
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 and C shares are April 4,
1994, June 20, 1994
and April 5, 1994, respectively.
+ Total return is not annualized, as it may not be
representative of the total
return for the year.
12
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A
Shares of
the Pennsylvania Portfolio vs. Lehman Muni Bond
Fund Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
April 1994 -- September 1995
[The following table was represented by a chart in the
printed material.]
Pennsylvania Lehman Muni
Date Portfolio Bond Fund
Index
---- --------- ------------
- ---
4/4/94 9600 10000
6/94 9781 9919
9/94 9839 10147
12/94 9659 9916
3/95 10436 10903
6/95 10672 11102
9/95 10964 11405
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on April 4, 1994, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends and
capital gains at
net asset value through September 30, 1995. The Lehman
Muni Bond Fund Index
is a broad based, total return index, composed of 8,000
actual bonds which
are all investment grade, fixed rate, long term
maturities (greater than two
years) and are selected from issues larger than $50
million dated since
January, 1984. The index is unmanaged and is not subject
to the same
management and trading expenses of a mutual fund. The
performance of the
Portfolio'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.
13
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
GEORGIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 7.6%
$ 250,000 AAA Cherokee County School, AMBAC-Insured,
5.875%
due 2/1/09
$ 262,812
600,000 AAA Marietta Development Authority Revenue,
First
Mortgage, (Life College), Series B,
5.750%
due 9/1/14
586,500
250,000 AAA Ware County School District, MBIA-
Insured,
5.850% due 2/1/15
251,250
- ------------------------------------------------------------
- --------------------
1,100,562
- ------------------------------------------------------------
- --------------------
Escrowed to Maturity(a) -- 5.6%
1,875,000 Aaa* Colquitt County Development Authority
Revenue,
Sub-Series C, zero coupon due 12/1/21
309,375
1,025,000 Aaa* Richmond County Development Authority,
Sub-Series C, zero coupon due 12/1/21
169,125
2,000,000 Aaa* Washington, Georgia Wilkes Payroll
Development
Authority, zero coupon due 12/1/21
330,000
- ------------------------------------------------------------
- --------------------
808,500
- ------------------------------------------------------------
- --------------------
General Obligation -- 4.8%
220,000 Aaa* Georgia State GO, 6.800% due 3/1/11
252,175
500,000 BBB Guam Government GO, Series A, 5.375%
due 11/15/13
443,750
- ------------------------------------------------------------
- --------------------
695,925
- ------------------------------------------------------------
- --------------------
Hospitals -- 18.7%
270,000 AAA Cobb County Kennestone Hospital
Authority
Revenue, MBIA-Insured, 7.750% due
2/1/07 312,863
500,000 Baa1* Fulco County Hospital Authority Revenue
Anticipation Certificates, Georgia
Baptist
Healthcare, Series A, 6.250% due
9/1/13 475,000
500,000 AAA Gordan County Adventist Health System,
MBIA-Insured, 5.500% due 7/1/06
473,125
500,000 BBB Puerto Rico Industrial Tourist
Educational,
Medical & Environmental Control
Facility
Finance Authority, (Ryder Memorial
Hospital
Project), Series A, 6.700% due 5/1/24
505,000
500,000 BBB+ Savannah Hospital Authority, Candler
Hospital,
7.000% due 1/1/11
508,125
300,000 AAA Tri City Hospital Authority, Hospital
Revenue,
FGIC-Insured, 10.250% due 7/1/06
418,875
- ------------------------------------------------------------
- --------------------
2,692,988
- ------------------------------------------------------------
- --------------------
Housing: Multi-Family -- 4.0%
250,000 AAA Atlanta Urban Residential Finance
Authority,
Multi-Family Housing Revenue, (Cascade
Pines
Housing Project), 6.250% due 9/1/10
248,750
300,000 AAA De Kalb County Housing Authority Revenue
Refunding, MBIA-Insured, 7.750% due
1/1/26 321,375
- ------------------------------------------------------------
- --------------------
570,125
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
14
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
GEORGIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Single-Family -- 14.2%
$ 250,000 A* Cobb County Housing Authority Refunding,
(Signature Place Project), Series A,
6.875% due 10/1/17
$ 255,937
500,000 AAA Fulton County Housing Authority Single-
Family
Management Revenue, Series A,
GNMA-Collateralized, 6.600% due
3/1/28(b) 506,875
350,000 AA+ Georgia State Housing Finance Authority
Revenue,
Single-Family Mortgage, Series A,
FHA-Insured, 6.600% due 12/1/23(b)
357,000
345,000 AA+ Georgia State Residential Finance
Authority,
Home Ownership Mortgage, Series A, FHA-
Insured,
7.250% due 12/1/21(b)
364,838
550,000 AAA Virgin Islands Housing Finance
Authority,
Single-Family Mortgage, Series A, GNMA-
Insured,
6.450% due 3/1/16(b)
553,437
- ------------------------------------------------------------
- --------------------
2,038,087
- ------------------------------------------------------------
- --------------------
Industrial Development -- 6.8%
500,000 A* Coweta Development Authority, IDR,
(Sivaco
National Wire Co.), 5.400% due
2/1/09(b) 468,125
500,000 A1* Savannah Economic Development Authority,
IDR,
6.150% due 3/1/17
510,000
- ------------------------------------------------------------
- --------------------
978,125
- ------------------------------------------------------------
- --------------------
Pollution Control -- 3.1%
400,000 AAA Burke County Pollution Control,
(Ogelthorpe
Power Co. Vogtle Project), MBIA-
Insured,
7.500% due 1/1/03
445,500
- ------------------------------------------------------------
- --------------------
Pre-Refunded(a) -- 1.8%
1,000,000 AAA Atlanta Urban Residential Finance
Authority,
Single-Family Management Revenue,
(Escrowed
with U.S. Government Securities to
4/1/15
Call @ 85), zero coupon due 10/1/16
265,000
- ------------------------------------------------------------
- --------------------
Power -- 5.9%
500,000 AAA Georgia Municipal Electric Authority
Power
Revenue, Series EE, AMBAC-Insured,
7.250%
due 1/1/24
596,875
300,000 BBB Guam Government Power Authority Revenue,
Series A, 5.250% due 10/1/23
258,375
- ------------------------------------------------------------
- --------------------
855,250
- ------------------------------------------------------------
- --------------------
Public Facilities -- 1.9%
250,000 AAA Butts County COP, MBIA-Insured, 6.750%
due 12/1/14
268,750
- ------------------------------------------------------------
- --------------------
Short-Term(c) -- 4.2%
200,000 A-1 Burke County Pollution Control
Authority,
5th Series, 5.100% due 7/1/24
200,000
400,000 A-1 Monroe County Development Authority,
Pollution
Control Gulf Power Company, 5.000% due
9/1/24 400,000
- ------------------------------------------------------------
- --------------------
600,000
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
15
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
GEORGIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Transportation -- 1.9%
$ 250,000 AAA Metro Atlanta Rapid Transit Authority
Revenue
Refunding, Series P, AMBAC-Insured,
6.250% due 7/1/20
$ 266,250
- ------------------------------------------------------------
- --------------------
Utilities -- 12.5%
500,000 A- Georgia Muni Gas Authority Revenue,
(Southern
Storage Gas Project), 6.300% due
7/1/09 513,750
640,000 AA Hogansville Combined Public UtiIity
System,
Asset Guaranty, 5.850% due 10/1/15
616,000
485,000 AAA Puerto Rico Commonwealth Aqueduct &
Sewer
Authority, 10.250% due 7/1/09
670,513
- ------------------------------------------------------------
- --------------------
1,800,263
- ------------------------------------------------------------
- --------------------
Water and Sewer -- 7.0%
300,000 AAA Fulton County Water & Sewer Revenue,
FGIC-Insured, 6.375% due 1/1/14
324,375
850,000 AA+ Gwinnett County Water & Sewer Revenue,
zero coupon due 8/1/09
404,812
300,000 AAA Henry County Water & Sewer Authority
Revenue,
Series A, AMBAC-Insured, 5.125% due
2/1/13 276,750
- ------------------------------------------------------------
- --------------------
1,005,937
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100% (Cost --
$13,859,519)(d) $14,391,262
============================================================
====================
See Notes to Financial Statements.
16
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
OHIO PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 11.8%
$ 100,000 AAA Dublin County City School Districts,
AMBAC-Insured, 6.200% due 12/1/19
$ 102,750
200,000 AAA Lakeview Local School District, AMBAC-
Insured,
6.900% due 12/1/14
218,500
100,000 AAA North Royalton City School, MBIA-
Insured,
6.100% due 12/1/1
102,625
Ohio State Higher Education Facilities
Revenue:
100,000 AAA Case Western University, 6.000% due
10/1/22 101,500
180,000 AAA University of Dayton, FGIC-Insured,
5.800%
due 12/1/19
179,100
100,000 AAA Strongville City Schools Improvement,
AMBAC-Insured, 6.000% due 12/1/14
102,000
100,000 AAA Woodbridge Local School District, AMBAC-
Insured,
6.000% due 12/1/19
101,875
- ------------------------------------------------------------
- --------------------
908,350
- ------------------------------------------------------------
- --------------------
General Obligation -- 25.0%
150,000 A1* Avon Lake City School District GO,
6.250%
due 12/1/19
153,938
250,000 AA Columbiana County GO, Asset Guaranty,
6.600%
due 12/1/17
261,563
105,000 AA+ Columbus Sewer Improvement #28, 6.000%
due 5/1/12
108,281
300,000 AAA Defiance Water Works System GO, MBIA-
Insured,
6.200% due 12/1/20
308,625
250,000 AA Ohio State GO, 6.20% due 8/1/14
267,187
300,000 AAA Summit County Addiction & Mental Health,
AMBAC-Insured, 6.400% due 12/1/14
319,500
500,000 AAA Toledo GO, AMBAC-Insured, 5.875% due
12/1/15 508,125
- ------------------------------------------------------------
- --------------------
1,927,219
- ------------------------------------------------------------
- --------------------
Hospital -- 5.8%
100,000 Aa* Franklin County Hospital Revenue
Refunding,
Riverside United Methodist, Series A,
5.750% due 5/15/12
97,375
350,000 BBB- Green Springs Health Care Facilities
Revenue,
(St. Francis Health Care Center
Project),
Series A, 7.125% due 5/15/25
350,437
- ------------------------------------------------------------
- --------------------
447,812
- ------------------------------------------------------------
- --------------------
Housing: Multi-Family -- 7.3%
250,000 Aaa* Cuyahoga County Multi-Family Housing-
Dalebridge
Apartments, 6.500% due 10/20/20
251,250
300,000 AAA Kent Multi-Family Housing, GNMA-
Collateralized,
FHA Supported, 7.150% due 12/20/26
313,125
- ------------------------------------------------------------
- --------------------
564,375
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
17
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
OHIO PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Single-Family -- 9.8%
Ohio Housing Finance Agency Residential
Mortgage, GNMA:
$ 250,000 AAA Series A-1, 6.100% due 9/1/14(b)
$ 251,875
250,000 AAA Series A-2, 6.125% due 9/1/24(b)
245,937
250,000 AAA Series A-2, 6.625% due 3/1/26(b)
252,500
- ------------------------------------------------------------
- --------------------
750,312
- ------------------------------------------------------------
- --------------------
Industrial Development -- 2.0%
150,000 Aa3* Toledo-Lucas County Port Authority
Revenue
Refunding, (Cargill Inc. Project),
5.900%
due 12/1/15
149,625
- ------------------------------------------------------------
- --------------------
Miscellaneous -- 6.2%
100,000 AAA Franklin County Convention Facilities
Authority Revenue Refunding, MBIA-
Insured,
5.850% due 12/1/19
100,500
200,000 AAA Ohio State Building Authority, Juvenile
Correction
Facility, Series A, AMBAC-Insured,
6.600%
due 10/1/14
214,000
150,000 AAA Puerto Rico Public Buildings Authority
Revenue,
AMBAC-Insured, 6.250% due 7/1/15
161,250
- ------------------------------------------------------------
- --------------------
475,750
- ------------------------------------------------------------
- --------------------
Pollution Control -- 5.3%
250,000 AAA Ohio State Air Quality Development
Authority
Revenue Refunding, Pennsylvania Power
Company,
AMBAC-Insured, 6.150% due 8/1/23
255,000
150,000 AAA Ohio State Water Development Authority
PCR,
MBIA-Insured, 5.700% due 12/1/11
152,625
- ------------------------------------------------------------
- --------------------
407,625
- ------------------------------------------------------------
- --------------------
Utilities -- 12.3%
Cleveland Public Power System, MBIA-
Insured,
First Mortgage:
200,000 AAA Series A, 7.000% due 11/15/24
219,250
195,000 AAA Series B, 7.000% due 11/15/17
213,769
100,000 AAA Hamilton City Electric System Mortgage
Revenue Refunding, Series A, FGIC-
Insured,
6.000% due 10/15/23
100,750
400,000 BB Ohio Air Quality, Cleveland Electric,
7.700%
due 8/1/25
414,500
- ------------------------------------------------------------
- --------------------
948,269
- ------------------------------------------------------------
- --------------------
Water and Sewer -- 14.5%
100,000 AAA Cleveland Water Works Revenue, First
Mortgage,
Series 92B, AMBAC-Insured, 6.250% due
1/1/16 103,375
300,000 AAA Northeast Ohio Regional Sewers District,
AMBAC-Insured, 5.600% due 11/15/16
291,000
400,000 A Ohio Water Development Authority,
(Broken Hill
Project), 6.450% due 9/1/20
404,000
See Notes to Financial Statements.
18
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
OHIO PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Water and Sewer -- 14.5% (continued)
$ 200,000 BBB+ Trumbull County Sewer Disposal Revenue,
(General Motors Corp. Project), 6.750%
due 7/1/14(b)
$ 218,750
100,000 AAA Warren County Water Works Revenue, MBIA-
Insured,
6.000% due 12/1/19
101,250
- ------------------------------------------------------------
- --------------------
1,118,375
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $7,431,794)(d)
$7,697,712
============================================================
====================
See Notes to Financial Statements.
19
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 6.7%
$ 500,000 AAA Crawford Central School District, FGIC-
Insured,
5.800% due 2/15/13
$ 501,875
1,000,000 AAA Pennsylvania State Higher Educational
Facilities Authority College &
University
Revenue, (St. Joseph's), CONNIE LEE-
Insured,
5.875% due 7/15/25
970,000
- ------------------------------------------------------------
- --------------------
1,471,875
- ------------------------------------------------------------
- --------------------
Escrowed to Maturity(a) -- 10.7%
555,000 Aaa* Blair County Hospital Authority Revenue,
Altoona Hospital, 6.900% due 7/1/08
623,681
560,000 AAA Cambria County Hospital Development
Authority,
Conemaugh Valley Memorial Hospital,
7.625% due 9/1/11
651,700
435,000 AAA Lewisburg Area School District Building,
AMBAC-Insured, 9.750% due 2/15/04
551,906
325,000 AAA Southeastern Greene School District,
9.375%
due 7/1/03
387,969
120,000 AAA York County Refunding, AMBAC-Insured,
8.875%
due 6/1/06
148,200
- ------------------------------------------------------------
- --------------------
2,363,456
- ------------------------------------------------------------
- --------------------
Finance -- 2.4%
500,000 A Pennsylvania State Finance Authority
Revenue
Refunding, (Municipal Capital Input
Project),
Societe Generale, 6.600% due 11/1/09
534,375
- ------------------------------------------------------------
- --------------------
General Obligation -- 10.2%
1,000,000 BBB Guam Government GO, Series A, 5.375% due
11/15/13 887,500
1,255,000 AAA Hazleton Area School District GO, Series
B,
FGIC-Insured, zero coupon due 3/1/25
218,056
2,500,000 AAA Westmoreland County Refunding, Series G,
FGIC-Insured, zero coupon due 12/1/13
853,125
1,175,000 AAA Westmoreland County Municipal Authority
Service
Revenue, FGIC-Insured, zero coupon due
8/15/20 264,375
- ------------------------------------------------------------
- --------------------
2,223,056
- ------------------------------------------------------------
- --------------------
Hospital -- 21.5%
500,000 AAA Allegheny County Hospital Development
Authority Revenue, (Allegheny General
Hospital Project), Series A, MBIA-
Insured,
6.250% due 9/1/20
510,625
500,000 BBB Allentown Area Sacred Heart Hospital,
6.750%
due 11/15/14
493,125
500,000 AA- Chester County Health & Education
Facilities
Authority, Main Line Health Systems,
Series A, 5.500% due 5/15/15
472,500
500,000 AAA Lehigh County General Purpose Authority
Revenue,
Series A, MBIA-Insured, 5.875% due
7/1/15 493,125
500,000 AAA Philadelphia Hospital & Higher Education
Facilities Authority, Frankford
Hospital,
CONNIE LEE-Insured, 5.750% due 1/1/19
476,250
See Notes to Finanical Statements.
20
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Hospital -- 21.5% (continued)
$ 500,000 BBB Puerto Rico Industrial Tourist
Educational,
Medical & Environmental Control
Facilities
Finance Authority, Series A, 6.700%
due 5/1/24
$ 505,000
225,000 Baa* Ridley Park Hospital Authority, Taylor
Hospital, Series A-Refunding, 6.000%
due 12/1/13
197,719
Scranton Lackawanna Health & Welfare
Authority Revenue:
500,000 NR Allied Services Rehabilitation Hospitals
Project-A, 7.600% due 7/15/20
508,125
500,000 AAA University of Scranton Project, AMBAC-
Insured,
6.800% due 3/1/14
530,625
500,000 AAA Wayne County Hospital & Health
Facilities
Authority, County Guaranteed Hospital
Revenue, (Wayne Memorial Hospital
Project),
MBIA-Insured, 6.250% due 7/1/14
513,750
- ------------------------------------------------------------
- --------------------
4,700,844
- ------------------------------------------------------------
- --------------------
Housing: Single Family -- 6.8%
1,000,000 Aaa* Allegheny County Residential Mortgage
Refunding, Single-Family, FHA-Insured,
6.875% due 5/1/26
1,035,000
2,000,000 Aaa* Allegheny County Residential Mortgage
Refunding, Single-Family, FHA-Insured,
zero coupon due 5/1/27(b)
197,500
250,000 A1* Pittsburgh Urban Redevelopment
Authority,
Mortgage Revenue, Series B, 6.950%
due 10/1/10
252,500
- ------------------------------------------------------------
- --------------------
1,485,000
- ------------------------------------------------------------
- --------------------
Industrial Development -- 12.2%
1,000,000 Baa3* Allegheny County IDR Refunding,
Environmental
Improvement, USX Corporation, 6.700%
due 12/1/20
1,020,000
1,000,000 A- Erie County IDA, Environmental
Improvement
Revenue, (International Paper Co.
Project),
Series A, 7.625% due 11/1/18
1,127,500
500,000 BBB- Pennsylvania Economic Development
Financing
Authority Recovery Revenue, (Culver
Project),
Series D, 7.150% due 12/1/18
521,250
- ------------------------------------------------------------
- --------------------
2,668,750
- ------------------------------------------------------------
- --------------------
Nursing Home -- 2.1%
500,000 AAA Allegheny County IDA, Nursing Home
Revenue
Refunding South Hills, FHA-Insured,
5.700% due 9/1/30
466,250
- ------------------------------------------------------------
- --------------------
Pollution Control -- 4.6%
1,000,000 AAA Northhampton County Industrial
Metropolitan
Edison, Series A, MBIA-Insured, 6.100%
due 7/15/21
1,013,750
- ------------------------------------------------------------
- --------------------
Pre-Refunded(a) -- 5.8%
945,000 Aaa* Philadelphia Hospital Revenue United
Hospital Inc., (Escrowed with U.S.
Government
Securities to 7/1/05 Call @ 100),
10.875%
due 7/1/08
1,272,206
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
21
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Solid Waste -- 5.9%
$ 250,000 A1* Lancaster County Solid Waste Management
Authority, Resource Recovery Systems
Revenue
Landfill, 7.875% due 12/15/09
$ 262,188
1,000,000 A New Morgan Industrial Development
Authority,
Solid Waste Disposal, (New Morgan
Landfill Co. Inc. Project), Browning
Ferris,
6.500% due 4/1/19(b)
1,025,000
- ------------------------------------------------------------
- --------------------
1,287,188
- ------------------------------------------------------------
- --------------------
Transportation -- 4.3%
1,000,000 AAA Allegheny County Airport Revenue,
Pittsburgh
International Airport, Series C, FSA-
Insured,
5.625% due 1/1/23
935,000
- ------------------------------------------------------------
- --------------------
Utilities -- 1.9%
400,000 BBB Guam Power Authority Revenue, Series A,
6.750% due 10/1/24
410,500
- ------------------------------------------------------------
- --------------------
Water and Sewer -- 4.9%
1,000,000 AAA Philadelphia Water & Sewer Revenue, MBIA-
Insured,
6.250% due 8/1/12
1,072,500
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $21,293,633)(d)
$21,904,750
============================================================
====================
(a) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds escrowed
to maturity with U.S. Government Securities are
considered by the manager to
be triple-A rated even if issuer has not applied for new
ratings.
(b) Income from these issues is considered a preference item
for purposes of
calculating the alternative minimum tax.
(c) Variable rate obligation payable at par on demand at any
time on no more
than seven days notice.
(d) The aggregate cost for Federal income tax purposes is
substantially the
same.
See pages 23 and 24 for definitions of ratings and
certain security
descriptions.
See Notes to Financial Statements.
22
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Bond Ratings
- ------------------------------------------------------------
- --------------------
All ratings are by Standard & Poor's Corporation, except
that those identified
by an asterisk (*) are rated by Moody's Investors Services.
The definitions of
the applicable rating symbols are set forth below:
Standard & Poor's-- Ratings from "AA" to "BBB" may be
modified by the addition
of a plus (+) or a minus (-) sign to show relative
standings within the major
rating categories.
AAA -- Bonds rated "AAA"' have the highest rating
assigned by Standard &
Poor's. Capacity to pay interest and repay
principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity
to pay interest and
repay principal and differ from the highest rated
issue only in a small
degree.
A -- Bonds rated "A" have a strong capacity to pay
interest and repay
principal although they are somewhat more
susceptible to the adverse
effects of changes in circumstances and economic
conditions than bonds
in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an
adequate capacity to pay
interest and repay principal. Whereas they
normally exhibit adequate
protection parameters, adverse economic
conditions or changing
circumstances are more likely to lead to a
weakened capacity to pay
interest and repay principal for bonds in this
category than in higher
rated categories.
BB -- Bonds rated "BB" have less near-term
vulnerability to default than
other speculative issues. However, they face major
ongoing uncertainties
of exposure to adverse business, financial, or
economic conditions which
could lead to inadequate capacity to meet timely
interest and principal
payments.
Moody's--Numerical modifiers 1, 2, and 3 may be applied to
each generic rating
from "Aa" to "Baa", where 1 is the highest and
3 the lowest rating
within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of
the best quality. They
carry the smallest degree of investment risk and are
generally referred
to as "gilt edge." Interest payments are protected
by a large or by an
exceptionally stable margin and principal is
secure. While the various
protective elements are likely to change, such
changes as can be
visualized are most unlikely to impair the
fundamentally strong position
of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of
high quality by all
standards. Together with the Aaa group they
comprise what are generally
known as high grade bonds. They are rated lower
than the best bonds
because margins of protection may not be as large
as in Aaa securities
or fluctuation of protective elements may be of
greater amplitude or
there may be other elements present which make
the long-term risks
appear somewhat larger than in Aaa securities.
A -- Bonds that are rated "A" possess many favorable
investment attributes
and are to be considered as upper medium grade
obligations. Factors
giving security to principal and interest are
considered adequate but
elements may be present which suggest a
susceptibility to impairment
some time in the future.
Baa -- Bonds that are rated "Baa" are considered
as medium grade
obligations, i.e., they are neither highly protected
nor poorly secured.
Interest payments and principal security appear
adequate for the present
but certain protective elements may be
lacking or may be
characteristically unreliable over any great length
of time. Such bonds
lack outstanding investment characteristics and in
fact have speculative
characteristics as well.
NR -- Indicates that the bond is not rated by Standard
& Poor's Corporation
or Moody's Investor's Services.
23
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Short-Term Security Ratings
- ------------------------------------------------------------
- --------------------
SP-1 --Standard & Poor's highest rate rating
indicating very strong or
strong capacity to pay principal and interest;
those issues determined
to possess overwhelming safety characteristics are
denoted with a plus
(+) sign.
A-1 --Standard & Poor's highest commercial paper and
variable-rate demand
obligation (VRDO) rating indicating that the degree
of safety regarding
timely payment is either overwhelming or very
strong; those issues
determined to possess overwhelming safety
characteristics are denoted
with a plus (+) sign.
P-1 --Moody's highest rating for commercial paper and for
VRDO prior to the
advent of the VMIG 1 rating.
VMIG 1 --Moody's highest rating for issues having a demand
feature -- (VRDO).
MIG 1 --Moody's highest rating for short-term municipal
obligations.
- ------------------------------------------------------------
- --------------------
Security Descriptions
- ------------------------------------------------------------
- --------------------
ABAG -- Association of Bay Area Governors
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CHFCLI -- California Health Facility Construction Loan
Insurance
CONNIE LEE -- College Construction Loan Insurance
Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FRTC -- Floating Rate Trust Certificates
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Agency
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
SYCC -- Structured Yield Curve Certificate
TAN -- Tax Anticipation Notes
TECP -- Tax-Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
VA -- Veterans Administration
VRWE -- Variable Rate Wednesday Demand
24
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Assets and Liabilities (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Georgia Ohio Pennsylvania
Portfolio Portfolio Portfolio
============================================================
===========================================
<S>
<C> <C> <C>
ASSETS:
Investments, at value (Cost -- $13,859,519,
$7,431,794 and $21,293,633, respectively) $
14,391,262 $ 7,697,712 $ 21,904,750
Receivable for Fund shares sold
95,687 26,449 66,551
Interest receivable
199,330 124,781 401,193
Receivable from manager (Note 4)
3,867 -- --
- ------------------------------------------------------------
- -------------------------------------------
Total Assets
14,690,146 7,848,942 22,372,494
- ------------------------------------------------------------
- -------------------------------------------
LIABILITIES:
Payable for securities purchased
842,530 -- --
Dividends payable
62,046 31,721 100,376
Distribution fees payable
2,277 499 4,209
Accrued expenses
4,950 -- 11,836
Other liabilities
- -- 602,814 284,419
- ------------------------------------------------------------
- -------------------------------------------
Total Liabilities
911,803 635,034 400,840
- ------------------------------------------------------------
- -------------------------------------------
Total Net Assets $
13,778,343 $ 7,213,908 $ 21,971,654
============================================================
===========================================
NET ASSETS:
Par value of shares of beneficial interest $
1,108 $ 591 $ 1,736
Capital paid in excess of par value
13,193,385 6,950,280 21,257,149
Undistributed (overdistributed) net
investment income
(4,711) 14,440 14,653
Accumulated net realized gain (loss)
on security transactions
56,818 (17,321) 86,999
Net unrealized appreciation of investments
531,743 265,918 611,117
- ------------------------------------------------------------
- -------------------------------------------
Total Net Assets $
13,778,343 $ 7,213,908 $ 21,971,654
============================================================
===========================================
Shares Outstanding:
Class A
607,791 260,439 738,851
---------------------------------------------------------
- -------------------------------------------
Class B
325,441 254,061 704,297
---------------------------------------------------------
- -------------------------------------------
Class C
175,071 76,263 292,599
---------------------------------------------------------
- -------------------------------------------
Net Asset Value:
Class A (and redemption price)
$12.43 $12.21 $12.66
---------------------------------------------------------
- -------------------------------------------
Class B*
$12.43 $12.20 $12.65
---------------------------------------------------------
- -------------------------------------------
Class C**
$12.42 $12.21 $12.65
---------------------------------------------------------
- -------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value)
$12.95 $12.73 $13.19
============================================================
===========================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if shares
are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
25
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Operations (unaudited)
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995
<TABLE>
<CAPTION>
Georgia
Ohio Pennsylvania
Portfolio
Portfolio Portfolio
============================================================
======================
<S> <C>
<C> <C>
INVESTMENT INCOME:
Interest $379,738
$190,204 $588,092
- ------------------------------------------------------------
- ----------------------
EXPENSES:
Management fees (Note 4) 28,026
14,190 44,132
Distribution fees (Note 4) 22,094
13,328 42,335
Shareholder and system servicing fees 6,446
5,949 7,343
Audit and legal 4,400
3,500 4,400
Shareholder communications 4,000
4,000 4,000
Registration fees 3,000
1,200 3,000
Trustees' fees 2,000
2,000 2,000
Pricing fees 2,000
1,500 3,000
Custody 1,000
500 1,000
Other 2,000
2,000 2,000
- ------------------------------------------------------------
- ----------------------
Total Expenses 74,966
48,167 113,210
Less: Expense reimbursement and
management fee waiver 37,813
29,612 47,746
- ------------------------------------------------------------
- ----------------------
Net Expenses 37,153
18,555 65,464
- ------------------------------------------------------------
- ----------------------
Net Investment Income 342,585
171,649 522,628
- ------------------------------------------------------------
- ----------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 5):
Realized Gain from Security Transactions
(excluding short-term securities):
Proceeds from sales 2,872,090
406,439 7,496,961
Cost of securities sold 2,779,093
394,947 7,295,267
- ------------------------------------------------------------
- ----------------------
Net Realized Gain 92,997
11,492 201,694
- ------------------------------------------------------------
- ----------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period 274,742
158,585 425,686
End of period 531,743
265,918 611,117
- ------------------------------------------------------------
- ----------------------
Increase in Net Unrealized Appreciation 257,001
107,333 185,431
- ------------------------------------------------------------
- ----------------------
Net Gain on Investments 349,998
118,825 387,125
- ------------------------------------------------------------
- ----------------------
Increase in Net Assets From Operations $692,583
$290,474 $909,753
============================================================
======================
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995
(unaudited) and the Period Ended March 31, 1995
<TABLE>
<CAPTION>
September 30 March 31(a)
============================================================
=========================
<S> <C>
<C>
OPERATIONS:
Net investment income $
342,585 $ 475,775
Net realized gain (loss)
92,997 (36,179)
Increase in net unrealized appreciation
257,001 274,742
- ------------------------------------------------------------
- -------------------------
Increase in Net Assets From Operations
692,583 714,338
- ------------------------------------------------------------
- -------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income
(347,296) (476,952)
Net realized gains
- -- --
- ------------------------------------------------------------
- -------------------------
Decrease in Net Assets From
Distributions to Shareholders
(347,296) (476,952)
- ------------------------------------------------------------
- -------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares
4,067,140 13,961,785
Net asset value of shares issued
for reinvestment of dividends
186,129 371,720
Cost of shares reacquired
(3,186,321) (2,204,783)
- ------------------------------------------------------------
- -------------------------
Increase in Net Assets From
Fund Share Transactions
1,066,948 12,128,722
- ------------------------------------------------------------
- -------------------------
Increase in Net Assets
1,412,235 12,366,108
NET ASSETS:
Beginning of period
12,366,108 --
- ------------------------------------------------------------
- -------------------------
End of period* $
13,778,343 $ 12,366,108
============================================================
=========================
* Includes overdistributed net investment income of:
$(4,711) --
============================================================
=========================
</TABLE>
(a) For the period from April 4, 1994 (commencement of
operations) to March 31,
1995.
See Notes to Financial Statements.
27
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Period Ended March 31, 1995
<TABLE>
<CAPTION>
September 30 March 31(a)
============================================================
========================
<S> <C>
<C>
OPERATIONS:
Net investment income $
171,649 $ 179,307
Net realized gain (loss)
11,492 (28,813)
Increase in net unrealized appreciation
107,333 158,585
- ------------------------------------------------------------
- ------------------------
Increase in Net Assets From Operations
290,474 309,079
- ------------------------------------------------------------
- ------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income
(169,702) (166,814)
Net realized gains
- -- --
- ------------------------------------------------------------
- ------------------------
Decrease in Net Assets From
Distributions to Shareholders
(169,702) (166,814)
- ------------------------------------------------------------
- ------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares
2,129,687 5,899,431
Net asset value of shares issued
for reinvestment of dividends
102,766 121,117
Cost of shares reacquired
(527,913) (774,217)
- ------------------------------------------------------------
- ------------------------
Increase in Net Assets From
Fund Share Transactions
1,704,540 5,246,331
- ------------------------------------------------------------
- ------------------------
Increase in Net Assets
1,825,312 5,388,596
NET ASSETS:
Beginning of period
5,388,596 --
- ------------------------------------------------------------
- ------------------------
End of period*
$7,213,908 $5,388,596
============================================================
========================
* Includes undistributed net investment income of:
$14,440 $12,493
============================================================
========================
</TABLE>
(a) For the period from June 13, 1994 (commencement of
operations) to March 31,
1995.
See Notes to Financial Statements.
28
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Period Ended March 31, 1995
<TABLE>
<CAPTION>
September 30 March 31(a)
============================================================
=======================
<S> <C>
<C>
OPERATIONS:
Net investment income $
522,628 $ 681,466
Net realized gain (loss)
201,694 (114,695)
Increase in net unrealized appreciation
185,431 425,686
- ------------------------------------------------------------
- -----------------------
Increase in Net Assets From Operations
909,753 992,457
- ------------------------------------------------------------
- -----------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income
(547,686) (641,755)
Net realized gains
- -- --
- ------------------------------------------------------------
- -----------------------
Decrease in Net Assets From
Distributions to Shareholders
(547,686) (641,755)
- ------------------------------------------------------------
- -----------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares
6,615,819 24,437,918
Net asset value of shares issued
for reinvestment of dividends
307,154 475,982
Cost of shares reacquired
(1,474,305) (9,103,683)
- ------------------------------------------------------------
- -----------------------
Increase in Net Assets From
Fund Share Transactions
5,448,668 15,810,217
- ------------------------------------------------------------
- -----------------------
Increase in Net Assets
5,810,735 16,160,919
NET ASSETS:
Beginning of period
16,160,919 --
- ------------------------------------------------------------
- -----------------------
End of period*
$21,971,654 $16,160,919
============================================================
=======================
* Includes undistributed net investment income of:
$14,653 $39,711
============================================================
=======================
</TABLE>
(a) For the period from April 4, 1994 (commencement of
operations) to March 31,
1995.
See Notes to Financial Statements.
29
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- --------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Georgia, Ohio and Pennsylvania Portfolios
("Portfolios") are separate
investment portfolios of the Smith Barney Muni Funds
("Fund"). The Fund is a
Massachusetts business trust registered under the Investment
Company Act of
1940, as amended, as a non-diversified, open-end management
investment company
and consists of these Portfolios and nine other separate
investment portfolios:
California, Florida, New Jersey, New York, National, Limited
Term, Florida
Limited Term, California Money Market and New York Money
Market portfolios. The
financial statements and financial highlights for the other
portfolios are
presented in separate semi-annual reports.
The significant accounting policies consistently
followed by the Fund
are:(a) security transactions are accounted for on the trade
date;(b) securities
are valued at the mean between the bid and asked prices
provided by an
independent pricing service that are based on transactions
in municipal
obligations, quotations from municipal bond dealers, market
transactions in
comparable securities and various relationships between
securities; short-term
securities and securities maturing within 60 days are valued
at cost plus
(minus) accreted discount (amortized premium), which
approximates value; (c)
gains or losses on the sale of securities are calculated by
using the specific
identification method; (d) interest income, adjusted for
amortization of
premiums and original issue discount, is recorded on the
accrual basis; market
discount is recognized upon the disposition of the security;
(e) direct expenses
are charged to each portfolio and each class; management
fees and general fund
expenses are allocated on the basis of relative net assets;
(f) the Portfolios
intend 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; and (g) during 1995, the
Fund adopted Statement
of Position 93-2 Determination, Disclosure, and Financial
Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions
by Investment
Companies. Accordingly, the overdistributed net investment
income of $1,177 for
the Georgia Portfolio at March 31, 1995 has been
reclassified to paid-in
capital. Net investment income, net realized gains, and net
assets were not
affected by this change.
2. PORTFOLIO CONCENTRATION
Since each Portfolio invests primarily in obligations
of issuers within
either Georgia, Ohio or Pennsylvania, each Portfolio is
subject to possible
concentration risks associated with economic, political, or
legal developments
or industrial or regional matters specifically affecting the
respective state in
which it invests.
30
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
3. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Portfolios intend to satisfy conditions that will
enable interest from
municipal securities, which is exempt from Federal income
tax and from
designated state income taxes, to retain such tax-exempt
status when distributed
to the shareholders of the Portfolio.
Capital gain distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
4. MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
Portfolios pay SBMFM a management fee calculated at the
annual rate of 0.45% of
their respective average daily net assets. This fee is
calculated daily and paid
monthly. SBMFM waived all of its management fees for each of
the Portfolios, for
the six months ended September 30, 1995. SBMFM also has
agreed to reimburse the
Portfolios for certain expenses of totalling $9,787, $15,422
and $3,614 for the
Georgia, Ohio and Pennsylvania portfolios, respectively.
Smith Barney Inc. ("SB"), another subsidiary of SBH,
acts as distributor of
Fund shares. For the six months ended September 30, 1995, SB
received sales
charges of approximately $74,000 on purchases of the
Portfolios' Class A shares.
There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B
shares if redemption occurs less than one year from initial
purchase. This CDSC
declines by 0.50% the first year after purchase and
thereafter by 1.00% per year
until no CDSC is incurred. Class C shares have a 1.00% CDSC
if redemption occurs
within the first year from the date such investment was
made. For the six months
ended September 30, 1995, CDSCs of approximately $16,000
were paid to SB.
Pursuant to a Distribution Plan, the Portfolios pay a
service fee with
respect to Class A, B and C shares calculated at the annual
rate of 0.15% of the
average daily net assets of each class. In addition, the
Portfolios pay a
distribution fee with respect to Class B and C shares
calculated at the annual
rates of 0.50% and 0.55%, respectively, of the average daily
net assets of each
class.
All officers and two Trustees of the Fund are employees
of SB.
5. INVESTMENTS
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding
short-term securities) of investments were as follows:
31
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Georgia Ohio
Pennsylvania
Portfolio Portfolio
Portfolio
============================================================
====================
Purchases $3,943,953 $2,748,442
$13,983,260
- ------------------------------------------------------------
- --------------------
Sales 2,872,090 406,439
7,496,961
============================================================
====================
At September 30, 1995, the gross unrealized
appreciation and depreciation
of investments for Federal income tax purposes were as
follows:
Georgia Ohio
Pennsylvania
Portfolio Portfolio
Portfolio
============================================================
====================
Gross unrealized appreciation $541,559 $269,803
$641,538
Gross unrealized depreciation (9,816) (3,885)
(30,421)
- ------------------------------------------------------------
- --------------------
Net unrealized appreciation $531,743 $265,918
$611,117
============================================================
====================
6. CAPITAL LOSS CARRYFORWARD
At March 31, 1995, the Georgia, Ohio and Pennsylvania
portfolios had for
Federal tax purposes $36,179, $28,813 and $114,695,
respectively, of unused
capital loss carryforwards available to offset future
capital gains through
2003. To the extent that these carryforward losses are used
to offset capital
gains, it is probable that the gains so offset will not be
distributed.
7. SHARES OF BENEFICIAL INTEREST
At September 30, 1995, there were an unlimited amount
of shares of
beneficial interest of $0.001 par value authorized. The
Portfolios have the
ability to establish multiple classes of shares. Each share
of a class
represents an identical interest in its respective portfolio
and has the same
rights, except that each class bears certain expenses
specifically related to
the distribution of its shares. Effective November 7, 1994,
the Portfolios
adopted a new class structure, renaming Class B shares as
Class C shares, Class
E shares as Class B shares and exchanging the former Class C
shares into Class A
shares. At September 30, 1995, total paid-in capital
amounted to the following
for each class and respective Portfolio:
Portfolio Class A Class B
Class C
============================================================
====================
Georgia $7,187,071 $3,893,469
$2,113,953
Ohio 3,036,733 3,004,912
909,226
Pennsylvania 9,059,768 8,652,162
3,546,955
============================================================
====================
32
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended
Period Ended
September 30, 1995
March 31, 1995*
------------------------
- - ------------------------
Georgia Portfolio Shares Amount
Shares Amount
============================================================
================================
<S> <C> <C>
<C> <C>
Class A
Shares sold 142,396 $ 1,756,907
845,310 $ 10,050,182
Shares issued on reinvestment 9,336 114,330
25,159 294,082
Shares redeemed (247,944)
(3,055,675) (166,466) (1,972,238)
- ------------------------------------------------------------
- --------------------------------
Net Increase (Decrease) (96,212)
$(1,184,438) 704,003 $ 8,372,026
============================================================
================================
Class B+
Shares sold 117,398 $ 1,447,961
225,294 $ 2,642,378
Shares issued on reinvestment 3,475 42,645
3,501 40,774
Shares redeemed (6,152)
(76,345) (18,075) (203,875)
- ------------------------------------------------------------
- --------------------------------
Net Increase 114,721 $ 1,414,261
210,720 $ 2,479,277
============================================================
================================
Class C++
Shares sold 70,029 $ 862,272
106,527 $ 1,269,225
Shares issued on reinvestment 2,378 29,154
3,151 36,864
Shares redeemed (4,440)
(54,301) (2,574) (28,670)
- ------------------------------------------------------------
- --------------------------------
Net Increase 67,967 $ 837,125
107,104 $ 1,277,419
============================================================
================================
Ohio Portfolio
============================================================
================================
Class A
Shares sold 42,437 $ 517,107
258,461 $ 3,004,398
Shares issued on reinvestment 4,039 48,547
6,332 72,536
Shares redeemed (17,177)
(207,758) (33,653) (398,097)
- ------------------------------------------------------------
- --------------------------------
Net Increase 29,299 $ 357,896
231,140 $ 2,678,837
============================================================
================================
Class B+
Shares sold 100,344 $ 1,217,200
199,988 $ 2,331,711
Shares issued on reinvestment 3,628 43,581
3,274 37,556
Shares redeemed (20,601)
(249,016) (132,572) (376,120)
- ------------------------------------------------------------
- --------------------------------
Net Increase 83,371 $ 1,011,765
170,690 $ 1,993,147
============================================================
================================
Class C++
Shares sold 32,658 $ 395,380
47,644 $ 563,322
Shares issued on reinvestment 886 10,638
963 11,025
Shares redeemed (5,888)
(71,139) -- --
- ------------------------------------------------------------
- --------------------------------
Net Increase 27,656 $ 334,879
48,607 $ 574,347
============================================================
================================
</TABLE>
* For the Georgia Portfolio, transactions for Class A, B
and C shares are for
the period from April 4, 1994, June 15, 1994 and April
14, 1994 (inception
dates) to March 31, 1995, respectively. For the Ohio
Portfolio, transactions
for Class A, B and C shares are for the period from June
13, 1994, June 14,
1994 and June 14, 1994 (inception dates) to March 31,
1995, respectively.
+ On November 7, 1994, the former Class E shares were
renamed Class B shares.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
33
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Six Months Ended
Period Ended
September 30, 1995
March 31, 1995*
---------------------
- ---------------------
Pennsylvania Portfolio Shares Amount
Shares Amount
============================================================
=================================
<S> <C> <C>
<C> <C>
Class A+
Shares sold 150,074 $ 1,887,983
1,367,202 $ 16,434,416
Shares issued on reinvestment 12,909 161,449
27,911 333,727
Shares redeemed (67,299)
(849,090) (751,946) (8,908,717)
- ------------------------------------------------------------
- ---------------------------------
Net Increase 95,684 $ 1,200,342
643,167 $ 7,859,426
============================================================
=================================
Class B+++
Shares sold 338,215 $ 4,269,935
399,935 $ 4,803,754
Shares issued on reinvestment 7,392 92,381
5,025 60,078
Shares redeemed (32,614)
(409,419) (13,656) (164,567)
- ------------------------------------------------------------
- ---------------------------------
Net Increase 312,993 $ 3,952,897
391,304 $ 4,699,265
============================================================
=================================
Class C++
Shares sold 36,330 $ 457,901
265,002 $ 3,199,748
Shares issued on reinvestment 4,266 53,324
6,866 82,177
Shares redeemed (17,273)
(215,796) (2,592) (30,399)
- ------------------------------------------------------------
- ---------------------------------
Net Increase 23,323 $ 295,429
269,276 $ 3,251,526
============================================================
=================================
</TABLE>
* For Class A, B and C shares, transactions are for the
period from April 4,
1994, June 20, 1994 and April 5, 1994 (inception dates)
to March 31, 1995,
respectively.
+ On October 10, 1994, the former Class C shares of the
Pennsylvania Portfolio
were exchanged into Class A shares; therefore Class C
share activity for the
period from April 4, 1994 to October 9, 1994 is included
with Class A share
activity.
+++ On November 7, 1994, the former Class E shares were
renamed Class B shares.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
34
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class
A Shares Class B Shares(1)
----------
- ----------- ---------------------
1995(2)
1995(3) 1995(2) 1995(4)
============================================================
=======================================
<S> <C>
<C> <C> <C>
Net Asset Value, Beginning of Period $12.10
$12.00 $12.11 $12.27
- ------------------------------------------------------------
- ---------------------------------------
Income From Operations:
Net investment income (5) 0.36
0.62 0.32 0.49
Net realized and unrealized gain (loss) 0.33
0.10* 0.33 (0.16)*
- ------------------------------------------------------------
- ---------------------------------------
Total Income From Operations 0.69
0.72 0.65 0.33
- ------------------------------------------------------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.36)
(0.62) (0.33) (0.49)
Net realized gains --
- -- -- --
- ------------------------------------------------------------
- ---------------------------------------
Total Distributions (0.36)
(0.62) (0.33) (0.49)
- ------------------------------------------------------------
- ---------------------------------------
Net Asset Value, End of Period $12.43
$12.10 $12.43 $12.11
- ------------------------------------------------------------
- ---------------------------------------
Total Return++ 5.73%
6.29% 5.41% 2.88%
- ------------------------------------------------------------
- ---------------------------------------
Net Assets, End of Period (000s) $7,557
$8,520 $4,047 $2,551
- ------------------------------------------------------------
- ---------------------------------------
Ratios to Average Net Assets+:
Expenses (5) 0.39%
0.28% 0.89% 0.85%
Net investment income 5.70
5.43 5.20 5.37
- ------------------------------------------------------------
- ---------------------------------------
Portfolio Turnover Rate 22.63%
34.05% 22.63% 34.05%
============================================================
=======================================
</TABLE>
(1) On November 7, 1994, the former Class E shares were
renamed Class B shares.
(2) For the six months ended September 30, 1995 (unaudited).
(3) For the period from April 4, 1994 (inception date) to
March 31, 1995.
(4) For the period from June 15, 1994 (inception date) to
March 31, 1995.
(5) The manager has waived all of its fees and reimbursed
expenses of $9,787 and
$42,317 for the six months ended September 30, 1995 and
the period ended
March 31, 1995, respectively. If such fees were not
waived and expenses not
reimbursed, the per share decreases in net investment
income and the ratios
of expenses to average net assets would have been as
follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------ ----
- ----------------
1995(2) 1995**
1995(2) 1995**
------- ----- ----
- -- -----
Class A $0.08 $0.12
1.00%+ 1.20%+
Class B 0.08 0.11
1.50+ 1.82+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 0.80% and 1.30% for Class A and B shares,
respectively.
** For Class A and B shares, transactions are for the
periods from April 4,
1994 and from June 15, 1994 (inception dates) to March
31, 1995,
respectively.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
35
<PAGE>
Smith Barney Muni Funds
Georgia Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
Class C Shares(1)
-------
- --------------------
1995(2)
1995(3)
============================================================
====================
Net Asset Value, Beginning of Period $12.09
$12.06
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (4) 0.32
0.55
Net realized and unrealized gain 0.33
0.04*
- ------------------------------------------------------------
- --------------------
Total Income From Operations 0.65
0.59
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income (0.32)
(0.56)
Net realized gains --
- --
- ------------------------------------------------------------
- --------------------
Total Distributions (0.32)
(0.56)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Period $12.42
$12.09
- ------------------------------------------------------------
- --------------------
Total Return++ 5.48%
5.11%
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s) $2,174
$1,295
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets+:
Expenses (4) 0.95%
0.90%
Net investment income 5.15
5.22
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 23.63%
34.05%
============================================================
====================
(1) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(2) For the six months ended September 30, 1995 (unaudited).
(3) For the period from April 14, 1994 (inception date) to
March 31, 1995.
(4) The manager has waived all of its fees and reimbursed
expenses of $9,787 and
$42,317 for the six months ended September 30, 1995 and
for the period ended
March 31, 1995, respectively. If such fees were not
waived and expenses not
reimbursed, the per share decreases in net investment
income and the ratios
of expenses to average net assets would have been as
follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------
- --------------------
1995(2) 1995(3)
1995(2) 1995(3)
----- -----
- ----- -----
Class C $0.07 $0.12
1.56%+ 1.85%+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 1.35% for Class C shares.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
36
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class A Shares
Class B Shares
--------------
- --------------
1995(2)
1995(3) 1995(2) 1995(4)
============================================================
=======================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $11.97
$12.00 $11.96 $12.02
- ------------------------------------------------------------
- -----------------------
Income From Operations:
Net investment income (5) 0.34
0.52 0.30 0.47
Net realized and unrealized gain (loss) 0.23
(0.07)* 0.25 (0.10)*
- ------------------------------------------------------------
- -----------------------
Total Income From Operations 0.57
0.45 0.55 0.37
- ------------------------------------------------------------
- -----------------------
Less Distributions From:
Net investment income (0.33)
(0.48) (0.31) (0.43)
Net realized gains -- --
- -- --
- ------------------------------------------------------------
- -----------------------
Total Distributions (0.33)
(0.48) (0.31) (0.43)
- ------------------------------------------------------------
- -----------------------
Net Asset Value, End of Period $12.21
$11.97 $12.20 $11.96
- ------------------------------------------------------------
- -----------------------
Total Return++ 4.88%
4.04% 4.65% 3.31%
- ------------------------------------------------------------
- -----------------------
Net Assets, End of Period (000s) $3,182
$2,766 $3,101 $2,041
- ------------------------------------------------------------
- -----------------------
Ratios to Average Net Assets+:
Expenses (5) 0.30%
0.20% 0.82% 0.72%
Net investment income 5.65
5.75 5.19 5.10
- ------------------------------------------------------------
- -----------------------
Portfolio Turnover Rate 9.00%
43.84% 9.00% 43.84%
============================================================
=======================
</TABLE>
(1) On November 7, 1994, the former Class E shares were
renamed Class B shares.
(2) For the six months ended September 30, 1995 (unaudited).
(3) For the period from June 13, 1994 (inception date) to
March 31, 1995.
(4) For the period from June 14, 1994 (inception date) to
March 31, 1995.
(5) The manager has waived all of its fees and reimbursed
expenses of $15,422
and $41,401 for the six months ended September 30, 1995
and for the period
ended March 31, 1995, respectively. If such fees were
not waived and
expenses not reimbursed, the per share decreases in net
investment income
and the ratios of expenses to average net assets would
have been as follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------ -----
- ---------------
1995(2) 1995**
1995(2) 1995**
------- ------ -----
- -- ------
Class A $0.15 $0.21
1.24%+ 1.91%+
Class B 0.15 0.25
1.75+ 2.43+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 0.80% and 1.30% for Class A and B shares,
respectively.
** For Class A and B shares, transactions are for the
periods from June 13,
1994 and from June 14, 1994 (inception dates) to March
31, 1995,
respectively.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
37
<PAGE>
Smith Barney Muni Funds
Ohio Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
Class C Shares(1)
- ------------------
1995(2) 1995(3)
============================================================
====================
Net Asset Value, Beginning of Period
$11.96 $12.02
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (4)
0.30 0.46
Net realized and unrealized gain (loss)
0.26 (0.09)*
- ------------------------------------------------------------
- --------------------
Total Income From Operations
0.56 0.37
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income
(0.31) (0.43)
Net realized gains
- -- --
- ------------------------------------------------------------
- --------------------
Total Distributions
(0.31) (0.43)
- ------------------------------------------------------------
- -------------------
Net Asset Value, End of Period
$12.21 $11.96
- ------------------------------------------------------------
- --------------------
Total Return++
4.72% 3.28%
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s)
$931 $582
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets+:
Expenses (4)
0.89% 0.77%
Net investment income
5.22 5.09
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate
9.00% 43.84%
============================================================
====================
(1) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(2) For the six months ended September 30, 1995 (unaudited).
(3) For the period from June 14, 1994 (inception date) to
March 31, 1995.
(4) The manager has waived all of its fees and reimbursed
expenses of $15,422
and $41,401 for the six months ended September 30, 1995
and for period ended
March 31, 1995, respectively. If such fees were not
waived and expenses not
reimbursed, the per share decreases in net investment
income and the ratios
of expenses to average net assets would have been as
follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------ --
- ------------------
1995(2) 1995(3)
1995(2) 1995(3)
------- ------- -
- ------ -------
Class C $0.15 $0.25
1.82%+ 2.48%+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 1.35% for Class C shares.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
38
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class A
Shares(1) Class B Shares(2)
-------------
- ---- -----------------
1995(3)
1995(4) 1995(3) 1995(5)
============================================================
==========================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $12.40
$12.00 $12.39 $12.35
============================================================
==========================
Income From Operations:
Net investment income (6) 0.34
0.67 0.29 0.51
Net realized and unrealized gain 0.28
0.35* 0.29 0.01*
- ------------------------------------------------------------
- --------------------------
Total Income From Operations 0.62
1.02 0.58 0.52
- ------------------------------------------------------------
- --------------------------
Less Distributions From:
Net investment income (0.36)
(0.62) (0.32) (0.48)
Net realized gains --
- -- -- --
- ------------------------------------------------------------
- --------------------------
Total Distributions (0.36)
(0.62) (0.32) (0.48)
- ------------------------------------------------------------
- --------------------------
Net Asset Value, End of Period $12.66
$12.40 $12.65 $12.39
- ------------------------------------------------------------
- --------------------------
Total Return++ 5.06%
8.82% 4.77% 4.43%
- ------------------------------------------------------------
- --------------------------
Net Assets, End of Period (000s) $9,357
$7,974 $8,913 $4,850
- ------------------------------------------------------------
- --------------------------
Ratios to Average Net Assets+:
Expenses (6) 0.38%
0.29% 0.88% 0.82%
Net investment income 5.55
5.75 5.13 5.31
- ------------------------------------------------------------
- --------------------------
Portfolio Turnover Rate 39.27%
37.60% 39.27% 37.60%
============================================================
==========================
</TABLE>
(1) On October 10, 1994, the former Class C shares were
exchanged into Class A
shares.
(2) On November 7, 1994, the former Class E shares were
renamed Class B shares.
(3) For the six months ended September 30, 1995 (unaudited).
(4) For the period from April 4, 1994 (inception date) to
March 31, 1995.
(5) For the period from June 20, 1994 (inception date) to
March 31, 1995.
(6) The manager has waived all of its fees and reimbursed
expenses of $3,614 and
$32,063 for the six months ended September 30, 1995 and
for period ended
March 31, 1995, respectively. If such fees were not
waived and expenses not
reimbursed, the per share decreases in net investment
income and the ratios
of expenses to average net assets would have been as
follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------ --
- ------------------
1995(3) 1995**
1995(3) 1995**
------- ------ --
- ----- ------
Class A $0.07 $0.09
0.87%+ 1.03%+
Class B 0.06 0.08
1.37+ 1.58+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 0.80% and 1.30% for Class A and B shares,
respectively.
** For Class A and B shares, transactions are for the
periods from April 4,
1994 and from June 20, 1994 (inception dates) to March
31, 1995,
respectively.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annualized.
39
<PAGE>
Smith Barney Muni Funds
Pennsylvania Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
Class C Shares(1)
---
- --------------------
1995(2) 1995(3)
============================================================
====================
Net Asset Value, Beginning of Period
$12.39 $12.00
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (4)
0.32 0.59
Net realized and unrealized gain
0.27 0.36*
- ------------------------------------------------------------
- --------------------
Total Income From Operations
0.59 0.95
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income
(0.33) (0.56)
Net realized gains
- -- --
- ------------------------------------------------------------
- --------------------
Total Distributions
(0.33) (0.56)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Period
$12.65 $12.39
- ------------------------------------------------------------
- --------------------
Total Return++
4.81% 8.14%
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s)
$3,702 $3,337
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets+:
Expenses (4)
0.94% 0.86%
Net investment income
5.03 5.04
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate
39.27% 37.60%
============================================================
====================
(1) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(2) For the six months ended September 30, 1995 (unaudited).
(3) For the period from April 5, 1994 (inception date) to
March 31, 1995.
(4) The manager has waived all of its fees and reimbursed
expenses of $3,614 and
$36,063 for the six months ended September 30, 1995 and
for period ended
March 31, 1995, respectively. If such fees were not
waived and expenses not
reimbursed, the per share decreases in net investment
income and the ratios
of expenses to average net assets would have been as
follows:
Per Share Decreases
Expense Ratios
In Net Investment Income
Without Fee Waivers#
------------------------ -
- -------------------
1995(2) 1995(3)
1995(2) 1995(3)
------- ------- -
- ------ -------
Class C $0.08 $0.09
1.43%+ 1.56%+
* Includes the net per share effect of shareholder sales
and redemptions
activity during the priod, most of which occurred at a
net asset value less
than the beginning of the period.
# As a result of voluntary expense limitations, expense
ratios would not
exceed 1.35% for Clas C shares.
++ Total return is not annualized, as it may not be
representative of the total
return for the year.
+ Annalized.
40
<PAGE>
Smith Barney
SMITH BARNEY
Muni Funds
- ------------
A Member of
Travelers Group [LOGO}
Trustees
Jessica M. Bibliowicz
Joseph H. Fleiss Investment
Manager
Donald R. Foley Smith Barney
Mutual Funds
Paul Hardin Management Inc.
Francis P. Martin, M.D.
Heath B. McLendon, Chairman Distributor
Roderick C. Rasmussen Smith Barney
Inc.
John P. Toolan
C. Richard Youngdahl Custodian
PNC Bank
Officers
Heath B. McLendon Shareholder
Chief Executive Officer Servicing Agent
The Shareholder
Services Group, Inc.
Jessica M. Bibliowicz P.O. Box 9134
President Boston, MA 02205-
9134
Lewis E. Daidone This report is
submitted for
Senior Vice President the general
information of the
and Treasurer shareholders of
Smith Barney
Muni Funds --
Georgia, Ohio
Peter M. Coffey and Pennsylvania
Portfolios.
Vice President It is not
authorized for
and Investment Officer distribution to
prospective
investors unless
accompanied
Larry T. McDermott or preceded by a
current
Vice President Prospectus for
the Portfolio,
and Investment Officer which contains
information
concerning the
Portfolios'
Thomas M. Reynolds investment
policies and
Controller expenses as well
as other
pertinent
information.
Christina T. Sydor
Secretary Smith Barney
Muni Funds
388 Greenwich
Street
New York, New
York 10013
FD0798 11/95
82110
<PAGE>
- ------------------------------------------------------------
- -------------------
S E M I - A N N U A L R E P O R T
- ------------------------------------------------------------
- -------------------
[ARTWORK APPEARS HERE]
Smith Barney Muni Funds
California Money Market Portfolio
California Portfolio
- ------------------------------------------------------------
- -------------------
September 30, 1995
[LOGO OF SMITH BARNEY
MUTUAL FUNDS APPEARS HERE]
<PAGE>
- -------------------------------------------------
California and California Money Market Portfolios
- -------------------------------------------------
Dear Shareholder:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds: California
Portfolio and California Money Market Portfolio. This report
covers the six
months ended September 30, 1995. For your convenience, we
have summarized this
period's prevailing economic and market conditions below and
outlined our
portfolio strategies during this time. A more detailed
summary of performance
and current holdings can be found in the Historical
Performance and Schedule of
Investments sections that follow.
California Economic Highlights
California's general obligation debt currently holds an "A"
rating from both
Fitch and Standard & Poor's as well as "stable" outlooks
from both rating
agencies. Thanks to continuing improvement in the state's
economy and better
management of its financial operations, California now
expects to end 1995 with
all general fund and temporary debt re-paid and with no new
borrowing scheduled
until spring. In general, economic conditions continue to
improve, although
growth is sluggish and unemployment remains above the
national average. Strong
service sector expansion in Southern California is helping
to brighten its
financial outlook. In addition, growth in statewide
employment levels and
personal income has been accompanied by revenue collections
that are exceeding
earlier expectations. However, California continues to
suffer from budgetary
inflexibility caused by mandated school funding levels,
mandatory sentencing
laws and limits on property taxes. The Orange County story
continues to be in
the news, but as mentioned in previous reports, the
Portfolio does not hold any
bonds issued directly by Orange County.
Market & Economic Overview
Over the past six months, the fixed income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 30-Year Treasuries
from 7.43% on March 31, 1995 to 6.50% on September 30, 1995,
a drop of nearly
100 basis points. Long-term municipal bond yields, however,
barely budged over
the time period, starting out on March 30, 1995 at 6.29% as
represented by the
Bond Buyer's 25-Year Revenue Bond Index and finishing at
6.27% on September 28,
1995. This is due primarily to tax reform concerns.
1
<PAGE>
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board (the Fed) has been successful in controlling
inflation and
encouraging a sustainable and slower rate of economic growth
this year. The Fed
declined to alter the federal funds rate in September,
leaving it unchanged at
5.75%, a move that reflected its confidence in the current
rate of economic
growth. However, while the economy did pick up steam
compared to the sluggish
first quarter of 1995, it has yet to make up its mind for
the year and
conflicting indicators all point to continued uncertainty
going into 1996.
Consumer spending is rising at an annual pace of 2.5% to 3%,
a relatively
neutral rate further tempered by recent indications that
consumer households are
growing more cautious.
A number of other economic indicators edged up over the past
six months compared
to early 1995, including car buying, housing starts and
industrial production
before slowing again in September. The most recent Index of
Leading Indicators
- -- used by the U.S. Government to forecast economic
conditions -- eased downward
slightly in September, fueled by cheaper commodity prices.
This index measures
eleven different indicators, ranging from unemployment
benefit claims to
building permits. While a majority of these indicators
showed a slight uptick in
September, others dipped. The overall result was
confirmation of our
expectations for slow economic growth and steady, or even
lower, interest rates
by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
currently in a
stalemate between the President and Congress, contains a
capital gains cut, but
does not address broader tax reform. Flat tax proposals are
still being
discussed, but a number of alternate reform measures are on
the table as well.
We expect this issue to emerge as the centerpiece of the
1996 Presidential
elections.
In short, until a more definite consensus emerges from
Washington, D.C., we can
not be certain of the impact on municipal bonds and are
holding fast to our
relatively cautious investment approach. Looking forward --
and absent radical
tax reform -- we expect municipal bonds to perform well
relative to taxable
investments, due primarily to diminishing supply. There
continues to be little
refinancing or new issue activity. New issue activity is
increasing toward
year-end but remains well below the levels seen in previous
years. The Public
Securities Association now predicts approximately $140
billion in new issues by
the end of 1995, less than half the record amount that came
to market in 1993.
This reduction in supply has helped to support underlying
values. If the supply
situation continues
2
<PAGE>
into 1996 as we expect, stronger appreciation opportunities
could develop,
particularly for bonds with long maturities and good call
protection.
California Portfolio Performance
The California Portfolio posted a one-year total return on
net asset value of
9.82% (Class A shares) for the six months ended September
30, 1995. This return
compared favorably with the 9.58% average total return for
all California
municipal funds tracked by Lipper Analytical services over
the time period. Over
the five years ended September 30, 1995, the Portfolio once
again substantially
outperformed its fund peers by posting a cumulative total
return of 52.47%
compared to the group average of 48.00%.
California Portfolio Strategy
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of the Portfolio by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structure.
We intend to retain most of our substantial commitment to
higher coupon issues
trading at a premium and callable prior to maturity for the
high income they are
providing and the measure of protection they afford in the
event interest rates
should rise. However, we are increasing our focus on issues
with comparable
maturities, but greater call protection in anticipation of a
possible further
downturn in rates at the end of this year or early 1996.
California Money Market Portfolio
As of September 30, 1995, the California Money Market
Portfolio's 7-day current
yield was 3.51%. Its effective 7-day yield -- which reflects
compounding -- was
3.57%. This means that investors in the 39.6% federal tax
bracket would have had
to earn a 5.91% taxable yield to match the tax-free income
provided by the
Portfolio. The Portfolio's annualized tax-free yield was
3.25% for the twelve
months ended September 30, 1995.
The Portfolio continues to invest only in the highest
quality short-term
securities rated within or comparable to the two top rating
categories. Its
average maturity remains in the 30- to 50-day range, which
allows us to
3
<PAGE>
immediately adjust holdings in response to changes in
interest rates. However,
please keep in mind that the California Money Market
Portfolio is neither
insured nor guaranteed by the U.S. government. There can be
no assurance that
the Portfolio will be able to maintain its stable net asset
value (NAV) of $1.00
per share.
We were saddened by the loss of an outstanding business
leader and Trustee of
the Portfolios: Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
At this time, we would like to thank you for your continued
participation in our
California portfolios and for your ongoing confidence in our
investment
management approach.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
/s/ Larry T. McDermott /s/ Karen Mahoney-Malcomson
Larry T. McDermott Karen Mahoney-Malcomson
Vice President and Vice President and
Investment Officer Investment Officer
November 15, 1995
4
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A 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>
9/30/95 $12.28
$12.49 $0.36 $0.00 4.70%+
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/95 12.27
12.28 0.75 0.00 6.47
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/94 12.78
12.27 0.77 0.03 2.15
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/93 12.05
12.78 0.78 0.00 12.93
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/92 11.62
12.05 0.80 0.00 11.11
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/91 11.47
11.62 0.84 0.00 8.90
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/90 11.17
11.47 0.85 0.00 10.44
- ------------------------------------------------------------
- --------------------------------------------------------
3/31/89 10.96
11.17 0.86 0.00 10.07
- ------------------------------------------------------------
- --------------------------------------------------------
Inception* - 3/31/88 12.50
10.96 0.88 0.00 (5.79)+
============================================================
========================================================
Total
$6.89 $0.03
============================================================
========================================================
</TABLE>
- ------------------------------------------------------------
- --------------------
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>
9/30/95 $12.29 $12.50
$0.33 $0.00 4.46%+
- ------------------------------------------------------------
- -----------------------------------------------
Inception* - 3/31/95 11.52 12.29
0.28 0.00 9.18+
============================================================
===============================================
Total
$0.61 $0.00
============================================================
===============================================
</TABLE>
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C 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>
9/30/95 $12.28 $12.49
$0.33 $0.00 4.44%+
- ------------------------------------------------------------
- ---------------------------------------------
3/31/95 12.26 12.28
0.66 0.00 5.80
- ------------------------------------------------------------
- ---------------------------------------------
3/31/94 12.77 12.26
0.68 0.03 1.45
- ------------------------------------------------------------
- ---------------------------------------------
Inception* - 3/31/93 12.46 12.77
0.18 0.00 3.95+
============================================================
=============================================
Total
$1.85 $0.03
============================================================
=============================================
</TABLE>
It is the Fund's policy to distribute dividends monthly
and capital gains, if any, annually.
5
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Without Sales
Charge(1)
-------------------------
- ----------
Class A Class B
Class C
============================================================
==========
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 4.70% 4.46%
4.44%
Year Ended 9/30/95 9.78 N/A
9.23
Five Years Ended 9/30/95 8.79 N/A
N/A
Inception* through 9/30/95 7.55 14.06
5.75
<CAPTION>
With Sales
Charge(2)
-------------------------
- ----------
Class A Class B
Class C
============================================================
==========
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 0.53% (0.04)%
3.44%
- ------------------------------------------------------------
- ----------
Year Ended 9/30/95 5.39 N/A
8.23
- ------------------------------------------------------------
- ----------
Five Years Ended 9/30/95 7.90 N/A
N/A
- ------------------------------------------------------------
- ----------
Inception* through 9/30/95 7.03 9.56
5.75
- ------------------------------------------------------------
- ----------
</TABLE>
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Without
Sales Charge(1)
============================================================
====================
<S> <C>
Class A (Inception* through 9/30/95)
8.58%
- ------------------------------------------------------------
- --------------------
Class B (Inception* through 9/30/95)
14.06
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
16.52
- ------------------------------------------------------------
- --------------------
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 4.00%; Class B shares
reflect the deduction
of a 4.50% CDSC, which applies if shares are redeemed
less than one year
from initial purchase. This CDSC declines by 0.50% the
first year after
purchase and thereafter by 1.00% per year until no CDSC
is incurred. Class
C shares 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 and C shares are April
3, 1987, November
11, 1994 and January 5, 1993, respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
6
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A Shares of the
California
Portfolio vs. Lehman Muni Bond Fund Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
April 1987 - September 1995
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement period California Lehman Muni
(Fiscal Year Covered) Portfolio Bond Fund Index
- --------------------- ---------- ---------------
<S> <C> <C>
Measurement PT -
04/03/87 $ 9,601 $10,000
FYE 03/88 $ 9,394 $10,166
FYE 03/89 $10,307 $11,126
FYE 03/90 $11,350 $12,338
FYE 03/91 $12,325 $13,298
FYE 03/92 $13,657 $14,806
FYE 03/93 $15,384 $16,968
FYE 03/94 $15,677 $17,157
FYE 03/95 $16,667 $18,706
FYE 09/95 $17,448 $19,567
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on April 3, 1987, assuming deduction of the maximum 4.00%
sales charge at the
time of investment and reinvestment of dividends (after
deduction of
applicable sales charges through November 6, 1994,
afterwards at net asset
value) and capital gains at net asset value through
September 30, 1995. The
Lehman Muni Bond Fund Index is a broad based, total
return index, comprised
of 8,000 actual bonds which are all investment grade,
fixed rate, long term
maturities (greater than two years) and are selected from
issues larger than
$50 million dated since January, 1984. The index is
unmanaged and is not
subject to the same management and trading expenses of a
mutual fund. The
performance of the Portfolio'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.
7
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) September
30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
=================================================
<S> <C> <C>
<C>
$ 2,000,000 VMIG 1* ABAG Finance Authority for
Nonprofit Corporations
COP (Lucile Salter
Packard Project) 4.050%(a) $ 2,000,000
11,750,000 VMIG 1* Anaheim COP (Police
Facility Refinancing Project)
Refunding 4.000%(a)
11,750,000
4,000,000 A-1 Anaheim Housing Authority
Multi-Family Housing
Revenue (Park Vista
Apartments-A) 4.450%(a)(b) 4,000,000
1,100,000 A-1+ Burbank Redevelopment
Agency Multi-Family
Revenue 4.200%(a)
1,100,000
6,000,000 SP-1+ Butte County (Office of
Education) BAN
5.000% due 10/27/95
6,002,782
California Alternative
Energy Source Finance Authority:
Cogeneration Revenue
Refunding Arroyo Energy:
27,500,000 A-1+ Series A 4.150%(a)(b)
27,500,000
8,000,000 A-1+ Series B 4.300%(a)(b)
8,000,000
4,900,000 VMIG 1* Hydroelectric Rock Creek
Limited 4.150%(a)(b) 4,900,000
13,500,000 A-1 Modesto Energy Project
Series A 4.600%(a) 13,500,000
45,890,000 SP-1+ California Community
College Financing Authority
TOB Muni Trust Receipts
4.590%(a) 45,890,000
California Higher
Education Loan Authority:
4,700,000 VMIG 1* Series 1987A 4.350%(a)
4,700,000
16,000,000 VMIG 1* Series 1987C
4.500%(a)(b) 16,000,000
8,700,000 VMIG 1* Series 1992E
4.500%(a)(b) 8,700,000
California Housing Finance
Agency Revenue:
12,120,000 VMIG 1* Muni Trust Receipts
4.550%(a)(b) 12,120,000
6,100,000 VMIG 1* Multi-Family Housing
Series A 4.250%(a)(b) 6,100,000
California Health Facility
Financing Authority Revenue:
1,700,000 VMIG 1* Granada Hills Community
Hospital 4.300%(a) 1,700,000
1,800,000 VMIG 1* Kaiser Permanente Series
93A 4.200%(a) 1,800,000
10,300,000 VMIG 1* Memorial Health Services
4.200%(a) 10,300,000
1,500,000 MIG 1* Orange County Childrens
Hospital 4.150%(a) 1,500,000
2,100,000 VMIG 1* Pool Program Series 90A
4.100%(a) 2,100,000
California Pollution
Control Financing Authority:
19,770,000 A-1+ PCR (Pacific Gas &
Electric) 1988A 4.200%
due 10/6/95(c)
19,770,000
300,000 A-1+ PCR (Southdown Inc.
Project) 3.850%(a) 300,000
4,900,000 A-1+ PCR (Southdown Inc.
Project) 3.850%(a) 4,900,000
1,100,000 A-1+ PCR (Southdown Inc.
Project) Series B 3.850%(a) 1,100,000
7,000,000 P-1* PCR Refunding (Sierra
Pacific Project) 4.050%(a) 7,000,000
2,000,000 VMIG 1* Resource Recovery
(Atlantic Richfield Project)
Series A 4.600%(a)(b)
2,000,000
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
===========================================
<S> <C> <C>
<C>
$ 4,250,000 Aa2* Resource Recovery (Sanger
Project) Series A
4.350%(a)(b)
$ 4,250,000
3,100,000 A-1 Resource Recovery (Wadham
Energy Project)
Series A 4.450%(a)(b)
3,100,000
1,900,000 A-1 Resource Recovery (Wadham
Energy Project)
Series B 4.450%(a)(b)
1,900,000
1,900,000 A-1 Resource Recovery (Wadham
Energy Project)
Series C 4.450%(a)(b)
1,900,000
Solid Waste Disposal
Revenue:
17,900,000 VMIG 1* Colmac Energy Project
Series A 4.350%(a)(b) 17,900,000
18,400,000 VMIG 1* Colmac Energy Project
Series B 4.350%(a)(b) 18,400,000
7,000,000 VMIG 1* Colmac Energy Project
Series C 4.350%(a)(b) 7,000,000
3,275,000 P-1* Sierra Pacific Project
4.500%(a)(b) 3,275,000
20,000,000 VMIG 1* California Public Capital
Improvement Financing
Authority Revenue Pooled
Project Series C
3.800% due 12/15/95(c)
20,000,000
6,255,000 A-1+ California State RAW Muni
Trust Receipts 4.450%(a) 6,255,000
19,000,000 VMIG 1* California State RAW Muni
Trust Receipts (PT-CAL-1)
4.500%(a)
19,000,000
12,450,000 VMIG 1* California State RAW Muni
Trust Receipts (PT-CAL-2)
4.500%(a)
12,450,000
81,165,000 MIG 1* California State RAW Series C
5.750% due 4/25/96 81,819,627
73,800,000 VMIG 1* California State RAW Muni
Trust Receipts 4.540%(a) 73,800,000
24,500,000 VMIG 1* California State GO Custody
Receipt Series 1992A
4.250% due 11/1/95(c)
24,500,000
California Statewide
Community Development
Authority Apartment
Development Revenue:
23,000,000 A-1+ Sub-series A - 4
4.150%(a) 23,000,000
7,000,000 A-1+ Sub-series A - 7
4.300%(a)(b) 7,000,000
200,000 VMIG 1* California Statewide
Community Development
Authority Certificates
Partnership
(Sutter Obligation Group)
4.300%(a) 200,000
25,000,000 VMIG 1* California Statewide
Community Development
Authority Multi-Family
Revenue
(Canyon Creek Apartments)
4.350%(a) 25,000,000
2,545,000 SP-1+ Chula Vista Industrial
Development Authority
Industrial Revenue
(Sutherland/Palumbo Project)
4.600%(a)(b)
2,545,000
26,500,000 P-1* Chula Vista IDR (San Diego
Gas & Electric Co.)
4.300%(a)(b)
26,500,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
=====================================================
<S> <C> <C>
<C>
$12,570,000 VMIG 1* Clipper California Series 94-2
4.270%(a) $ 12,570,000
3,500,000 A-1+ Concord Multi-Family Mortgage
Revenue
(Crossroads Apartments) Series
88B 4.200%(a) 3,500,000
12,000,000 VMIG 1* Contra Costa County Multi-Family
Housing Revenue
(Park Regency) Series 92A
4.300%(a)(b) 12,000,000
3,500,000 A-1 Contra Costa County Multi-Family
Housing Revenue
Refunding (Del Norte Apartments)
Series 94A
4.600%(a)(b)
3,500,000
8,000,000 SP-1+ Contra Costa County TRAN 4.500%
due 7/3/96 8,049,437
29,500,000 VMIG 1* Contra Costa County Transit
Authority Sales Tax
Revenue Series A 3.900%(a)
29,500,000
2,000,000 VMIG 1* Fairfield IDA (R. Dakin & Company
Project)
3.900%(a)
2,000,000
Fontana Multi-Family Housing
Revenue Bonds:
100,000 VMIG 1* (Citrus Avenue Apartments)
Series A 4.200%(a) 100,000
500,000 A-1+ (Springtime Apartments) Series A
4.400%(a)(b) 500,000
5,400,000 A-1 Fremont Multi-Family Housing
Revenue
(Mission Wells Project)
4.250%(a)
5,400,000
800,000 VMIG 1* Garden Grove Multi-Family Housing
(Valley View Senior Villas)
4.500%(a) 800,000
2,800,000 A-1+ Glendale Public Parking (Reliance
Development
Company) 1984A 4.050%(a)
2,800,000
1,140,000 VMIG 1* Grand Terrace Community
Redevelopment Agency
Multi-Family Revenue (Mount
Vernon Villas) 4.300%(a) 1,140,000
2,900,000 A-1 Hayward Housing Authority Multi-
Family Revenue
Refunding Mortgage (Huntwood
Terrace
Apartments) 4.400%(a)
2,900,000
1,230,000 A-1 Healdsburg Community Redevelopment
Agency
Revenue Refunding (Vineyard
Plaza Project - A
Shopping Center) 4.300%(a)
1,230,000
1,225,000 VMIG 1* Indio Housing Authority Revenue
(Smoketree
Apartments) 4.550%(a)
1,225,000
8,500,000 VMIG 1* Irvine Public Facility &
Infrastructure Authority
Lease Revenue Capital
Improvement Project
4.400%(a)
8,500,000
1,625,000 VMIG 1* Livermore COP Water Reclamation
Plant Project
4.350%(a)
1,625,000
8,000,000 P-1* Lodi IDA (Dart Container)
3.500%(a)
8,000,000
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
============================================
<S> <C> <C>
<C>
$ 9,080,000 VMIG 1* Loma Linda Hospital Revenue
(Loma Linda
University Medical Center)
4.300%(a) $ 9,080,000
9,500,000 VMIG 1* Long Beach Health Facility
Revenue (Memorial
Health Services) 1991
4.200%(a) 9,500,000
100,000 VMIG 1* Los Angeles Community
Redevelopment Agency
COP (Broadway Spring Center
Project)
4.200%(a)(b)
100,000
Los Angeles Convention &
Exhibition Center
Authority COP:
2,800,000 A-1+ Series 89B 4.400%(a)
2,800,000
25,740,000 A-1+ Series 95B 4.650%(a)
25,740,000
5,490,000 A-1+ Los Angeles Department of Water
& Power Electric
Muni Trust Receipts,
4.450%(a) 5,490,000
Los Angeles Multi-Family
Housing Revenue:
2,700,000 NR++ Beverly Park Apartments
4.050%(a)(b) 2,700,000
2,000,000 VMIG 1* Masselin Manor 4.200%(a)
2,000,000
14,100,000 A-1+ Series K 3.800%(a)
14,100,000
45,800,000 SP-1+ Los Angeles Unified School
District TRAN
4.500% due 7/3/96
46,050,589
Los Angeles County Housing
Authority Multi-Family
Housing Revenue:
13,000,000 A-1 Diamond Park Apartments
Project Series A
4.150%(a)(b)
13,000,000
5,000,000 A-1 Malibu Meadows II Project
Series B 4.250%(a) 5,000,000
7,705,000 SP-1+ Los Angeles County Local
Education Agency
Partnership Certificates
Pooled TRAN Series A
4.750% due 7/5/96
7,735,452
22,800,000 A-1+ Los Angeles County Metropolitan
Transportation
Authority Sales Tax Revenue
Refunding Series A
4.200%(a)
22,800,000
21,100,000 VMIG 1* Los Angeles County Metropolitan
Transportation
Authority (General Union
Station Gateway)
Series A 4.150%(a)
21,100,000
1,100,000 A-1 Los Angeles County Housing
Multi-Family Mortgage
Revenue (Valencia Village
Project) Series C
4.050%(a)
1,100,000
31,300,000 MIG 1* Los Angeles County TRAN 4.500%
due 7/01/96 31,456,140
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY
MARKET PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
===========================================
<S> <C> <C>
<C>
$13,120,000 A-1+ Metropolitan Water
District Southern California
Water Works Revenue
Muni Trust Receipts
4.450%(a)
$ 13,120,000
6,015,000 SP-1+ Morgan Hill Unified
School District
4.500% due 7/5/96
6,043,587
4,875,000 A-1+ Modesto Multi-Family
Housing Revenue Refunding
(Live Oak Apartments
Project) 4.300%(a)(b) 4,875,000
13,500,000 VMIG 1* Mountain View Multi-
Family Housing Revenue
(Villa Mariposa
Project) 4.350%(a) 13,500,000
5,000,000 SP-1+ New Haven Unified School
District
4.500% due 7/5/96
5,025,591
12,100,000 VMIG 1* Newport News
Redevelopment & Housing Authority
Multi-Family Housing
Revenue (Newport Oxford
Project) 4.500%(a)
12,100,000
3,519,000 MIG 1* North Monterey County
Union School District TRAN
4.500% due 7/5/96
3,535,725
2,400,000 A-1+ Oakland Revenue
(Childrens Hospital Medical Center)
4.200%(a)
2,400,000
8,000,000 SP-1+ Oakland TRAN 4.500% due
7/31/96 8,037,754
160,000 VMIG 1* Ontario Multi-Family
Revenue (Vineyard Village
Project) 4.300%(a)
160,000
Orange County Apartment
Development Revenue:
16,400,000 A-1+ Monarch Bay Apartments
4.650%(a) 16,400,000
2,700,000 A-1 The Lakes Project
Series A 4.400%(a) 2,700,000
1,700,000 VMIG 1* Wood Canyon Villas
4.600%(a)(b) 1,700,000
1,725,000 VMIG 1* Orange County Housing
Authority Apartment
Development Revenue
(The Latern Pines Project)
4.500%(a)
1,725,000
1,400,000 VMIG 1* Pasadena COP (Rose Bowl
Improvement Project)
4.350%(a)
1,400,000
8,160,000 A-1+ Pleasanton Multi-Family
Mortgage Revenue
(Valley Plaza)
4.200%(a) 8,160,000
500,000 P-1* Rancho Mirage
Redevelopment Agency COP
4.500%(a)(b)
500,000
3,940,000 A-1+ Riverside County Housing
Authority Multi-Family
Mortgage Revenue
(Woodcreek Village)
Series D 4.200%(a)
3,940,000
35,000,000 SP-1+ Riverside County TRAN
Series 1995
4.750% due 7/1/96
35,194,413
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY
MARKET PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================================================
<S> <C> <C>
<C>
$ 1,000,000 A-1+ Roseville Finance Authority
Hospital Lease Revenue
(Roseville Hospital) Series
A 4.200%(a) $ 1,000,000
500,000 VMIG 1* Sacramento County Housing
Authority Multi-Family
Housing Revenue (Grouse Run
Apartments)
4.200%(a)
500,000
Sacramento County Multi-
Family Housing Revenue:
2,200,000 VMIG 1* Series 1985A 4.350%(a)
2,200,000
200,000 VMIG 1* Series 1985B 4.350%(a)
200,000
1,200,000 VMIG 1* Series 1985C 4.350%(a)
1,200,000
5,000,000 VMIG 1* Saint Charles County IDA
Revenue (Sun River
Village Apartments Project)
4.100%(a) 5,000,000
510,000 VMIG 1* San Bernardino IDR (Gate City
Beverage
Distributor Inc.) 4.400%(a)
510,000
950,000 A-1 San Bernardino Multi-Family
Housing Revenue
(Castle Park Apartments
Project) 4.600%(a) 950,000
San Bernardino County IDA:
2,100,000 P-1* Master Halco Series 1986II
4.150%(a)(b) 2,100,000
190,000 P-1* Ring Can Co. Series 1986II
4.150%(a)(b) 190,000
1,045,000 P-1* Tower Industries Series IV
4.150%(a)(b) 1,045,000
10,000,000 MIG 1* San Diego (City of) TAN
4.250% due 7/3/96 10,059,892
1,500,000 A-1+ San Diego Multi-Family
Mortgage Revenue
(La Hoya Point) 3.850%(a)
1,500,000
100,000 VMIG 1* San Diego Multi-Family
Housing Revenue Refunding
(University Town Center
Apartments) 4.200%(a) 100,000
3,000,000 A-1 San Dimas Redevelopment
Agency (San Dimas
Community Center) 3.750%(a)
3,000,000
2,300,000 A-1 San Francisco (City & County
of) Multi-Family Housing
(Winterland Project) Series
1985C 4.300%(a) 2,300,000
8,500,000 A-1 San Francisco (City & County
of) Redevelopment
Agency Multi-Family Housing
(Fillmore Center)
Series 92A-1 4.250%(a)
8,500,000
100,000 VMIG 1* San Joaquin County
Transportation Authority Sales
Tax Revenue 4.250%(a)
100,000
300,000 VMIG 1* San Jose Mortgage Revenue
Multi-Family (Somerset
Park) Series A 3.900%(a)(b)
300,000
3,300,000 VMIG 1* San Jose Multi-Family Housing
Revenue
(Fairway Glen) Series A
4.350%(a) 3,300,000
1,125,000 A-1+ San Leandro Multi-Family
Revenue (Parkside
Commons) Series A 4.200%(a)
1,125,000
2,000,000 VMIG 1* Santa Ana IDR (Fiesta Market
Place) 4.350%(a) 2,000,000
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA MONEY MARKET
PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
===========================================
<S> <C> <C>
<C>
$ 2,100,000 A-1 Santa Clara County Multi-Family
Housing Revenue
Refunding (Grove Garden
Apartments) 4.250%(a) $ 2,100,000
5,400,000 A-1 Santa Clara County Financing
Authority Lease
Revenue (VMC Facility
Replacement Project)
Series B 4.300%(a)
5,400,000
20,029,000 SP-1+ Stanislaus County (Office of
Education) TRAN
4.500% due 7/5/96
20,124,191
1,200,000 VMIG 1* Visilia IDR (Akers West
Association) 4.500%(a)(b) 1,200,000
3,440,000 Aa2* West Covina Lease Revenue
Refunding (The Lake
Public Parking Project)
4.750%(a) 3,440,000
3,320,000 A-1+ Woodland Multi-Family Mortgage
Revenue
(Crossroads Village) Series A
4.200%(a) 3,320,000
- ------------------------------------------------------------
- -------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- 1,152,900,180)(g)
$1,152,900,180
============================================================
===========================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued) September
30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
===========================================
<S> <C> <C>
<C>
Education -- 7.3%
$ 2,000,000 AAA Adelanto School District, Series
B, FGIC-Insured,
zero coupon due 9/1/18
$ 485,000
1,000,000 Baa* California Educational Facilities
Authority Revenue,
Pooled College & University,
6.125% due 6/1/09 998,750
1,000,000 A- California State Public Works
Board High Technology
Facility Revenue, San Jose
Facility, Series A,
7.750% due 8/1/06
1,167,500
1,000,000 AAA Gilroy California Unified School
District, COP Refunding,
FSA-Insured, 6.250% due 9/1/12
1,032,500
1,020,000 AAA Pomona Unified School District,
Series B, FGIC-Insured,
6.250% due 8/1/14
1,060,800
4,000,000 AAA San Dieguito Union High School
District COP,
FSA-Insured, stepped zero
coupon to 4/1/00 then
5.950% to maturity, due 4/1/23
2,955,000
1,530,000 AAA Santa Rosa California High
School, FGIC-Insured,
5.900% due 5/1/14
1,531,913
2,500,000 Baa1* Yuba City Unified School District
COP, (Andors
Karperos School Construction
Project),
6.700% due 2/1/13
2,503,125
- ------------------------------------------------------------
- -------------------------------------------
11,734,588
- ------------------------------------------------------------
- -------------------------------------------
Escrowed to Maturity(d) -- 8.4%
270,000 AAA Contra Costa County Home
Mortgage, GNMA-
Collateralized, 7.750% due
5/1/22(b) 326,025
3,325,000 AAA Perris County California Single-
Family Mortgage
Revenue, GNMA-Backed Security,
Series A,
8.300% due 6/1/13(b)
4,226,906
6,000,000 AAA Pleasanton-Suisun City Home
Finance Authority Home
Mortgage Revenue, MBIA-Insured,
zero coupon
due 10/1/16
1,582,500
2,620,000 AAA Riverside County Single-Family
Mortgage Revenue
Series A, 8.300% due 11/1/12(b)
3,353,600
1,500,000 AAA Sacramento County Single-Family
Mortgage Revenue,
GNMA-Collateralized, Issue A,
8.125% due 7/1/16(b) 1,831,875
140,000 AAA San Francisco Airport Improvement
Lease Revenue,
8.000% due 7/1/13
169,400
4,310,000 AAA San Marcos Public Facilities
Authority, Public Facilities
Revenue, zero coupon due 1/1/19
975,138
775,000 AAA Santa Rosa Hospital Revenue,
Santa Rosa Memorial
Hospital Project, 10.300% due
3/1/01 1,065,625
- ------------------------------------------------------------
- -------------------------------------------
13,531,069
- ------------------------------------------------------------
- -------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
=============================================
<S> <C> <C>
<C>
Finance -- 2.5%
$ 500,000 A3* Association of Bay Area
Governments, Financing
Authority for Nonprofit
Corporations, Peninsula
Family YMCA, 6.800% due 10/1/91
$ 513,750
2,000,000 AAA Anaheim Public Financing
Authority, Tax Allocation
Revenue, 6.450% due 12/28/18
2,112,501
150,000 A- Concord Santa Cruz South Gate,
COP,
7.625% due 6/1/11
150,188
750,000 Baa* Public Capital Improvements
Financing Authority,
BIG-Insured, 8.500% due 3/1/18
801,562
500,000 Baa* Special District Financing
Authority, COP,
SunLife GIC, 8.500% due 7/1/18
540,000
- ------------------------------------------------------------
- ---------------------------------------------
4,118,001
- ------------------------------------------------------------
- ---------------------------------------------
General Obligation -- 1.8%
1,000,000 AAA San Diego Public Safety
Communication Project,
6.650% due 7/15/11
1,117,500
1,500,000 AAA Santa Margarita/Dana Point
Authority Revenue Bond,
MBIA-Insured, 7.250% due 8/1/14
1,749,375
- ------------------------------------------------------------
- ---------------------------------------------
2,866,875
- ------------------------------------------------------------
- ---------------------------------------------
Government Facilities -- 2.1%
2,000,000 A- State Public Works Board Lease
Revenue, (Various
California State University
Projects), Series A,
6.700% due 10/1/17
2,080,000
1,300,000 BBB Murrieta Financing Authority,
Police & Civic Center
Lease Revenue, Series A, 6.375%
due 8/1/18 1,239,875
- ------------------------------------------------------------
- ---------------------------------------------
3,319,875
- ------------------------------------------------------------
- ---------------------------------------------
Hospital -- 17.5%
1,500,000 A ABAG, Finance Authority Nonprofit
Corps,
California-Insured, COP,
(Rehabilitation Mental
Health Services Inc. Project),
6.550% due 6/1/22 1,511,250
1,670,000 AAA California Educational Facility
Authority Revenue,
College of Osteopathic, 5.750%
due 6/1/18 1,605,288
California Health Facilities
Financing Authority Revenue:
465,000 A+ Community Provider Pooled Loan
Program
Series 1990A, LOC Swiss Bank
Corporation,
7.350%, due 6/1/20
495,225
1,150,000 A Episcopal Homes Foundation
Project,
CHFCLI-Insured, 7.700% due
7/1/18 1,229,063
2,250,000 AAA Insured Mills Peninsula Series
A, 5.750% due 1/15/15 2,157,188
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
=================================
<S> <C> <C>
<C>
Hospital -- 17.5% (continued)
$ 1,450,000 A+ St. Elizabeth Hospital
Project,
6.200% due 11/15/09
$ 1,484,438
1,250,000 A South Coast Medical Center,
CHFCLI-Insured,
7.250% due 7/1/15
1,315,625
1,200,000 AAA California Statewide
Community Development
Corporation, COP,
(Villaview Hospital),
CHFCLI-Insured, 7.000% due
9/1/09 1,279,500
1,000,000 AA California Statewide
Community Development
Authority Revenue, (St.
Joseph Health System),
6.625% due 7/1/21
1,048,750
1,405,000 A+ Contra Costa County COP,
(Merrithew Memorial
Hospital), 6.500% due
11/1/06 1,496,325
2,000,000 A+ County of Riverside Asset
Leasing Corp., Leasehold
Revenue Bonds 1993A,
(Riverside Hospital
Project), 6.375% due 6/1/09
2,047,500
1,000,000 Aa* Fresno Health Facilities
Revenue, (Holy Cross
System-St. Agnes), 6.625%
due 6/1/21 1,040,000
250,000 BB+ Glendale Hospital Revenue
Refunding, (Glendale
Memorial Hospital), 9.000%
due 11/1/17 262,500
1,000,000 A+ Inglewood Insured Hospital
Revenue Bonds,
(Daniel Freeman Hospital
Inc.), Series 1991,
CHFCLI-Insured, 6.750% due
5/1/13 1,021,250
1,000,000 A Rancho Mirage Joint Powers
Financing Authority,
(Eisenhower Memorial
Hospital),
7.000% due 3/1/22
1,036,250
2,000,000 A San Bernardino Capital
Facilities Project, COP,
Series B, 6.875% due 8/1/24
2,252,500
2,750,000 A* San Joaquin County COP,
(General Hospital Project
1993), 6.250% due 9/1/13
2,701,875
1,250,000 A- Sequoia Hospital District
Revenue,
5.375% due 8/15/23
1,032,812
3,170,000 A Torrance Hospital Revenue,
(Little Co. of Mary
Hospital), 6.875% due
7/1/15 3,296,800
- ------------------------------------------------------------
- ---------------------------------
28,314,139
- ------------------------------------------------------------
- ---------------------------------
Housing: Multi-Family -- 4.0%
California HFA Revenue:
5,000 AAA Multi-Family Housing
Revenue, MBIA-Insured,
8.750% due 8/1/10(e)
5,281
1,630,000 A+ Multi-Unit Rental Housing,
Series A,
6.625% due 2/1/24
1,654,450
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
==========================================
<S> <C> <C>
<C>
Housing: Multi-Family -- 4.0% (continued)
$ 1,100,000 A California Statewide Communities
Development
Corporation (Solheim Lutheran
Home),
6.500% due 11/1/17
$ 1,080,750
2,400,000 Aaa* San Francisco City & County
Redevelopment Agency
Multi-Family Revenue Refunding,
(South Beach
Project), GNMA-Collateralized,
5.700% due 3/1/29 2,232,000
1,500,000 A1* San Jose Multi-Family Housing
Senior Revenue,
(Timberwood Apartments), Series
A, LOC Wells Fargo
Bank, 7.500% due 2/1/20
1,507,500
- ------------------------------------------------------------
- ------------------------------------------
6,479,981
- ------------------------------------------------------------
- ------------------------------------------
Housing: Single-Family -- 3.8%
California HFA Home Mortgage
Revenue:
15,000 AA 9.125% due 2/1/07
15,356
220,000 Aa* 8.250% due 8/1/08(b)
231,550
570,000 Aa* 8.600% due 8/1/19(b)
593,512
580,000 Aa* 8.300% due 8/1/19(b)
597,400
1,000,000 AA- 7.000% due 8/1/26
1,045,000
495,000 Aa* Series E, 8.350% due 8/1/19(b)
512,325
350,000 Aa* Zero coupon due 8/1/15
47,250
480,000 AAA California HFA Revenue, Housing
Series C,
MBIA-Insured, 7.000% due
8/1/23(b) 501,600
735,000 AAA Los Angeles Single-Family Home
Mortgage Revenue,
GNMA-Collateralized Mortgage
Backed Securities
Program, Issue A, 7.550% due
12/1/23(b) 765,319
295,000 Baa* Riverside County Housing
Authority, 7.900% due 8/1/18 307,906
1,000,000 AAA Riverside County Single-Family
Mortgage Revenue,
GNMA Backed Securities Series
A, 7.800% due 5/1/21 1,203,750
115,000 AAA San Francisco City & County
Single-Family Mortgage
Revenue, GNMA & FNMA Mortgage
Backed
Securities Program, Series
1990, 7.450% due 1/1/24(b) 120,462
25,000 BBB+ Sonoma County Home Mortgage
Revenue,
9.125% due 6/1/15(e)
26,000
195,000 AAA Southern California Home
Financing Authority
Single-Family Mortgage Revenue
GNMA & FNMA
Mortgage Backed Securities
Program, 1990 Issue B,
7.750% due 3/1/24(b)
206,944
- ------------------------------------------------------------
- ------------------------------------------
6,174,374
- ------------------------------------------------------------
- ------------------------------------------
Industrial Development -- 2.2%
1,000,000 A1 Los Angeles County, IDA Revenue,
(Altshule Properties
Project), LOC Security Pacific,
7.200% due 10/1/11(b) 1,036,250
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
=======================================
<S> <C> <C>
<C>
Industrial Development -- 2.2% (continued)
$ 2,440,000 AA- Simi Valley Community Development
Agency, COP,
Simi Valley Business Center,
Guaranty Agreement
with New England Mutual Life,
6.050% mandatory
put 10/1/99
$ 2,510,150
- ------------------------------------------------------------
- ---------------------------------------
3,546,400
- ------------------------------------------------------------
- ---------------------------------------
Miscellaneous -- 4.2%
1,000,000 A+ County of Los Angeles, COP 1991
Master Refunding
Project-RIBS, 8.062% due
5/1/15(f) 946,250
1,000,000 A County of Los Angeles, COP
(Multiple Capital Facilities
Projects III), 7.160% due
11/1/11(f) 1,046,250
Orange County Community
Facilities District Special Tax:
1,000,000 A- #87-5A Rancho Santa Margarita,
7.800% due 8/15/13
1,115,000
1,500,000 AAA Rancho Santa Margarita, CGIC-
Insured,
7.125% due 8/15/17
1,595,625
1,000,000 A* Orange County, (Mission Viejo),
Series A 1990,
Special Tax Bonds Community
Facilities District,
(Mello Roos), 7.800% due
8/15/15 1,163,750
1,000,000 Baa* Pleasanton Joint Powers Financing
Authority Revenue,
6.150% due 9/2/12
986,250
- ------------------------------------------------------------
- ---------------------------------------
6,853,125
- ------------------------------------------------------------
- ---------------------------------------
Pollution Control -- 3.5%
California Pollution Control
Financing Authority,
PCR (Pacific Gas & Electric
Co.):
800,000 A1* 6.350% due 6/1/09(b)
858,000
2,500,000 A1* 8.200% due 12/1/18
2,603,125
500,000 AA- Resource Recovery Revenue
Bonds, (Waste
Management Inc.), 1991
Corporate Series A,
7.150% due 2/1/11(b)
556,250
1,500,000 Aa3* San Diego Gas & Electric Co.,
Series A,
6.800% due 6/1/15(b)
1,653,750
- ------------------------------------------------------------
- ---------------------------------------
5,671,125
- ------------------------------------------------------------
- ---------------------------------------
Power -- 2.8%
Northern California Power Agency:
1,110,000 A* Geothermal Project, 5.000% due
7/1/09 997,612
2,000,000 AAA Hydroelectric Project, 5.500%
due 7/1/16 1,895,000
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
========================================================
<S> <C> <C>
<C>
Power -- 2.8% (continued)
$ 1,000,000 AAA Redding COP, Electric System
Revenue,
8.599% due 7/1/22(c)(f)
$ 1,120,000
600,000 A Southern California Public
Power Authority, Multiple
Project Revenue 1989
Series, 5.500% due 7/1/20
543,000
- ------------------------------------------------------------
- --------------------------------------------------------
4,555,612
- ------------------------------------------------------------
- --------------------------------------------------------
Pre-Refunded(d) -- 15.9%
1,500,000 AAA California COP, Lease Finance
Authority, Nevada County,
(Escrowed with U.S.
Government Securities to
10/1/98 Call @ 101), 7.600%
due 10/1/19 1,633,125
1,575,000 AAA California State Public Works
Board, Lease Revenue,
University Project A,
CONNIE LEE-Insured, (Escrowed
with U.S. Government
Securities to 6/1/03
Call @ 100), 5.000% due
6/1/23 1,340,719
1,245,000 AAA Concord Redevelopment Agency
Tax Allocation Bonds,
(Central Concord
Redevelopment Project),
BIG-Insured, (Escrowed with
U.S. Government
Securities to 7/1/98 Call @
102), 8.000% due 7/1/18 1,389,731
1,500,000 AAA Desert Hospital Corporation
Project COP, Series 1990,
(Escrowed with U.S.
Government Securities to 7/1/00
Call @ 102), 8.100% due
7/1/20 1,760,625
320,000 AAA Dublin COP, Public Facilities
Project No. 1, (Escrowed
with U.S. Government
Securities to 2/1/96 Call @ 100),
9.250% due 2/1/10
325,600
750,000 AAA El Camino Hospital Revenue
COP, (Escrowed with
U.S. Government Securities
to 9/1/97 Call @ 102),
8.500% due 9/1/17
818,437
550,000 AAA Grossmont Hospital District,
MBIA-Insured, (Escrowed
with U.S. Government
Securities to 11/15/97
Call @ 102), 8.000% due
11/15/17 603,625
1,500,000 AAA Kings River Conservation
District, Pine Flat Power
Revenue, Series C,
(Escrowed with U.S. Government
Securities to 1/1/97 Call @
102), 7.900% due 1/1/20(c) 1,601,250
640,000 AAA Loma Linda California Water
Revenue, (Escrowed with
U.S. Government Securities
to 12/1/95 Call @ 102),
9.250% due 12/1/10
658,400
500,000 AAA Los Angeles County
Transportation Commission Sales
Tax Revenue Series A,
(Escrowed with U.S.
Government Securities to
7/1/98 Call @ 102),
8.000% due 7/1/18
558,125
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
===========================================
Pre-Refunded(d) -- 15.9%
<S> <C> <C>
<C>
$ 450,000 AAA Los Angeles Convention and
Exhibition Center Authority
COP, (Escrowed with U.S.
Government Securities to
12/1/05 Call @ 100), 9.000%
due 12/1/20 $ 596,812
Los Angeles Department of Water
and Power:
1,000,000 AAA Electric Revenue, (Escrowed
with U.S. Government
Securities to 5/1/98 Call @
102),
7.900% due 5/1/28
1,107,500
1,950,000 AAA Electric Revenue, (Escrowed
with U.S. Government
Securities to 1/15/01 Call
@ 102),
7.100% due 1/15/31
2,201,062
1,550,000 AAA Water Works Revenue, (Escrowed
with U.S.
Government Securities to
2/15/99 Call @ 102),
7.200% due 2/15/19
1,716,625
1,200,000 AAA Los Angeles Waste Water System
Revenue,
(Escrowed with U.S. Government
Securities to
11/1/97 Call @ 102), 8.125%
due 11/1/17 1,317,000
425,000 AAA Norwalk Redevelopment Agency-
Area 1, (Escrowed with
U.S. Government Securities to
12/1/95 Call @ 102),
9.100% due 12/1/15
436,688
500,000 AAA Oceanside County COP, AMBAC-
Insured, (Escrowed
with U.S. Government
Securities to 8/1/02
Call @ 102), 7.300% due 8/1/21
587,500
400,000 AAA Pleasanton Capital Projects 1 &
2, (Escrowed to
Maturity with U.S. Government
Securities to 10/1/97
Call @ 102), 8.750% due
10/1/08 442,500
1,000,000 AAA Rancho Water District Finance
Authority Revenue Bonds,
Series 1991, RITES, AMBAC-
Insured, (Escrowed with
U.S. Government Securities to
8/17/01 Call @ 104),
8.874% due 8/17/21(f)(c)
1,233,750
2,500,000 AAA Riverside County Asset Leasing
Corp. Leasehold
Revenue, (Riverside County
Hospital Project),
(Escrowed with U.S. Government
Securities to 6/1/99
Call @ 102), 7.400% due 6/1/14
2,806,250
1,000,000 AAA San Bernardino County COP, (West
Valley Detention
Center Project), (Escrowed
with U.S. Government
Securities to 11/1/98 Call @
102), 7.700%
due 11/1/18
1,117,500
250,000 AAA San Diego Redevelopment Agency,
(Marina
VRedevelopment Project),
(Escrowed with U.S.
Government Securities to
12/1/97 Call @ 101.5),
8.750% due 12/1/08
277,188
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
========================================================
Pre-Refunded(d) -- 15.9% (continued)
<S> <C> <C>
<C>
$ 1,000,000 AAA State Public Works Board
Lease Revenue, Department
of Corrections, (State
Prison-Madera County),
(Escrowed with U.S.
Government Securities to 9/1/00
Call @ 102), 7.000% due
9/1/09 $ 1,132,500
- ------------------------------------------------------------
- --------------------------------------------------------
25,662,512
- ------------------------------------------------------------
- --------------------------------------------------------
Public Facilities-- 9.8%
2,000,000 AAA Anaheim COP, Convention
Center, Linked Security,
MBIA-Insured, 6.200% due
7/16/23(e) 2,052,500
1,025,000 Baa* Azusa COP, Refunding Capital
Improvement Refining
Project, 6.625% due 8/1/13
1,028,844
2,000,000 A- Burbank Redevelopment Agency
Tax Allocation Series A,
6.000% due 12/1/23
1,847,500
2,000,000 AAA California Public School
District Financing Authority
Convertible Capital
Appreciation Bonds, Palmdale
School District, FSA-
Insured, Series 1993B, stepped
zero coupon to 9/30/99 then
6.200% to maturity due
10/1/23
1,425,000
750,000 AAA California Statewide
Community Development Authority
Revenue, Gemological
Institute, 6.000% due 5/1/25 737,812
1,500,000 Baa* Corona Public Finance
Authority, 1993 Public
Improvement Refunding
Revenue Bonds,
6.000% due 7/1/14
1,393,125
2,000,000 A Mendocino County Public
Facilities Authority
Corporation COP, Series
1993, 6.000% due 8/15/23 1,880,000
1,000,000 AAA San Diego County Building
Authority, Registered Fixed
Option Certificates, 7.000%
due 11/18/19 1,030,000
2,875,000 AAA Santa Ana Financing Authority
Lease
Revenue-Police
Administration and Holding Facility,
6.250% due 7/1/24
3,036,719
1,500,000 NR Valley Health System COP
Refunding Project,
6.875% due 5/15/23
1,428,750
- ------------------------------------------------------------
- --------------------------------------------------------
15,860,250
- ------------------------------------------------------------
- --------------------------------------------------------
Solid Waste -- 1.9%
1,300,000 BBB Orange County COP, Orange
County Public Facilities
Corp. (Solid Waste
Management),
7.875% due 12/1/07
1,313,000
750,000 A- Southeast Resource Recovery
Facilities Authority,
Lease Revenue, 9.000% due
12/1/08 768,750
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
========================================================
Solid Waste -- 1.9% (continued)
<S> <C> <C>
<C>
$ 1,000,000 A- West Nevada County COP, Solid
Waste,
7.500% due 6/1/21
$ 1,005,000
- ------------------------------------------------------------
- --------------------------------------------------------
3,086,750
- ------------------------------------------------------------
- --------------------------------------------------------
Tax Allocation -- 3.4%
1,000,000 Baa* Azusa Redevelopment Agency
Tax Allocation Refunding,
(Merged Project Area),
Series A, 6.750% due 8/1/23 1,010,000
295,000 AAA Brea Public Finance Authority
Tax Allocation,
MBIA-Insured, 7.000% due
8/1/15 320,444
1,000,000 BBB Carson Redevelopment Agency
Redevelopment Project
Area No. 2, 6.000% due
10/1/13 940,000
30,000 AAA Concord Redevelopment Agency
Tax Allocation Bonds,
(Central Concord
Redevelopment Project),
BIG-Insured, 8.000% due
7/1/18 33,150
1,000,000 Baa* Pomona Public Finance
Authority Revenue Refunding
Southwest Pomona
Redevelopment,
5.500% due 2/1/08
943,750
2,000,000 AAA South Orange County Public
Financing Authority Special
Tax Revenue-Series A,
7.000% due 9/1/10 2,292,500
- ------------------------------------------------------------
- --------------------------------------------------------
5,539,844
- ------------------------------------------------------------
- --------------------------------------------------------
Transportation -- 2.7%
3,000,000 AAA San Francisco City & County
Airports Second Series
Issue 5, FGIC-Insured,
6.500% due 5/1/19(b) 3,120,000
1,250,000 A* Santa Barbara COP, (Harbor
Refunding Project),
6.750% due 10/1/27
1,276,562
- ------------------------------------------------------------
- --------------------------------------------------------
4,396,562
- ------------------------------------------------------------
- --------------------------------------------------------
Utilities -- 1.2%
1,960,000 BBB- Trinity County Public
Utilities District COP Electric
District Facilities, 6.750%
due 4/1/23(b) 1,955,100
- ------------------------------------------------------------
- --------------------------------------------------------
Water and Sewer -- 5.0%
1,200,000 A1* Bakersfield COP (Waste Water
Treatment Plant 3
Projects), 8.000% due
1/1/10 1,306,500
1,000,000 AAA Eastern Municipal Water
District, Water & Sewer
Revenue COP, FGIC-Insured,
6.750% due 7/1/12 1,107,500
Irvine Ranch Water District
Joint Powers Agency, Local
Agency Pool Revenue Bonds:
1,000,000 A+ 8.250% due 8/15/23(e)
1,075,000
1,750,000 A+ 7.875% due 2/15/23(e)
1,844,062
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
========================================================
Water and Sewer -- 5.0% (continued)
<S> <C> <C>
<C>
$ 1,000,000 AAA San Buenaventura COP, (1990
Water Enterprise
Financing), AMBAC-Insured,
7.500% due 10/1/20 $ 1,156,250
1,300,000 AAA Yolo County Flood Control &
Water Conservation
District COP, FGIC-
Insured, 7.125% due 7/15/15 1,508,000
- ------------------------------------------------------------
- --------------------------------------------------------
7,997,312
- ------------------------------------------------------------
- --------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $154,296,485)(g)
$161,663,494
============================================================
========================================================
</TABLE>
(a) Variable rate obligations payable at par on demand
at any time on no
more than seven days notice.
(b) Income from these issues is considered a preference
item for purposes of
calculating the alternative minimum tax.
(c) Variable rate obligations payable at par on demand
on the date
indicated.
(d) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds
escrowed to maturity by U.S. Government Securities
are considered by
manager to be triple-A rated even if issuer has not
applied for new
ratings.
(e) Securities segregated by Custodian.
(f) Residual interest bonds--coupon varies inversely
with level of short-
term tax-exempt interest rates.
(g) The aggregate cost for Federal income tax purposes
is substantially the
same.
++ Security has not been rated by either Moody's
Investors Services or
Standard & Poors, however, the portfolio manager has
determined the
equivalent rating to be A-1+.
See pages 25 and 26 for definition of ratings and
certain security
descriptions.
See Notes to Financial Statements.
24
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Bond Ratings
- ------------------------------------------------------------
- -------------------
All ratings are by Standard & Poor's Corporation, except
those identified by an
asterisk (*) are rated by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Rating from "AA" to "BB" may be
modified by the addition of
a plus (+) or minus (-) sign to show relative standings
within the major rating
categories.
AAA - Bonds rated "AAA" have the highest rating
assigned by Standard &
Poor's. Capacity to pay interest and repay
principal is extremely
strong.
AA - Bonds rated "AA" have a very strong capacity to
pay interest and
repay principal and differ from the highest rated
issue only in a
small degree.
A - Bonds rated "A" have a strong capacity to pay
interest and repay
principal although they are somewhat more
susceptible to the adverse
effects of changes in circumstances and economic
conditions than
bonds in higher rated categories.
BBB - Bonds rated "BBB" are regarded as having an
adequate capacity to pay
interest and repay principal. Whereas they
normally exhibits adequate
protection parameters, adverse economic
conditions or changing
circumstances are more likely to lead to a
weakened capacity to pay
interest and repay principal for bonds in this
category than in
higher rated categories.
BB - Bonds rated "BB" have less near-term
vulnerability to default than
other speculative issues. However, it faces major
ongoing
uncertainties or exposure to adverse business,
financial, or economic
conditions which could lead to inadequate
capacity to meet timely
interest and principal payments.
Moody's - Numerical modifiers 1, 2 and 3 may be applied to
each generic rating
from "Aa" to "Baa", where 1 is the highest and 3
the lowest ranking
within its generic category.
Aaa - Bonds that are rated "Aaa" are judged to be of
the best quality. They
carry the smallest degree of investment risk and
are generally
referred to as "gilt edge". Interest payments are
protected by a
large or by an exceptionally stable margin and
principal is secure.
While the various protective elements are likely
to change, such
changes as can be visualized are most unlikely to
impair the
fundamentally strong position of such issues.
Aa - Bonds that are rated "Aa" are judged to be of
high quality by all
standards. Together with the Aaa group they
comprise what are
generally known as high grade bonds. They are
rated lower than the
best bonds because margins of protection may not
be as large in Aaa
securities or fluctuation of protective elements
may be of greater
amplitude or there may be other elements present
which make the long-
term risks appear somewhat larger than in Aaa
securities.
A - Bonds that are rated "A" possess many favorable
investment attributes
and are to be considered as upper medium grade
obligations. Factors
giving security to principal and interest are
considered adequate but
elements may be present which suggest a
susceptibility to impairment
some time in the future.
Baa - Bonds that are rated "Baa" are considered as
medium grade
obligations, i.e., they are neither highly
protected nor poorly
secured. Interest payments and principal security
appear adequate for
the present but certain protective elements may
be lacking or may be
characteristically unreliable over any great
length of time. Such
bonds lack outstanding investment characteristics
and in fact have
speculative characteristics as well.
NR - Indicates that the bond is not rated by Standard
& Poor's Corporation
or Moody's Investors Services.
25
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Short-Term Security Ratings
- ------------------------------------------------------------
- -------------------
SP-1 - Standard & Poor's highest rate rating indicating
very strong or
strong capacity to pay principal and interest;
those issues
determined to possess overwhelming safety
characteristics are denoted
with a plus (+) sign.
A-1 - Standard & Poor's highest commercial paper and
variable-rate demand
obligation (VRDO) rating indicating that the
degree of safety
regarding timely payment is either overwhelming
or very strong; those
issues determined to possess overwhelming safety
characteristics are
denoted with a plus (+) sign.
P-1 - Moody's highest rating for commercial paper and
for VRDO prior to the
advent of the VMIG 1 rating.
VMIG 1 - Moody's highest rating for issues having a demand
feature -- (VRDO)
MIG 1 - Moody's highest rating for short-term municipal
obligations.
MIG 2 - Moody's second highest rating for short-term
municipal obligations
- ------------------------------------------------------------
- -------------------
Security Descriptions
- ------------------------------------------------------------
- -------------------
ABAG - Association of Bay Area Governments
AIG - American International Guaranty
AMBAC - American Municipal Bond Assurance Corporation
BAN - Bond Anticipation Notes
BIG - Bond Investors Guaranty
CGIC - Capital Guaranty Insurance Company
CHFCLI - California Health Facility Construction Loan
Insurance
CONNIE
LEE - College Construction Loan Insurance Association
COP - Certificate of Participation
EDA - Economic Development Authority
ETM - Escrowed To Maturity
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Administration
FHLMC - Federal Home Loan Mortgage Corporation
FLAIRS - Floating Adjustable Interest Rate Securities
FNMA - Federal National Mortgage Association
FRTC - Floating Rate Trust Certificates
FSA - Federal Savings Association
GIC - Guaranteed Investment Contract
GNMA - Government National Mortgage Association
GO - General Obligation
HDC - Housing Development Corporation
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDB - Industrial Development Board
IDR - Industrial Development Revenue
INFLOS - Inverse Floaters
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance Corporation
MVRICS - Municipal Variable Rate Inverse Coupon Security
PCR - Pollution Control Revenue
RAN - Revenue Anticipation Notes
RAW - Revenue Anticipation Warrants
RIBS - Residual Interest Bonds
RITES - Residual Interest Tax-Exempt Securities
TAN - Tax Anticipation Notes
TECP - Tax Exempt Commercial Paper
TOB - Tender Option Bonds
TRAN - Tax and Revenue Anticipation Notes
VA - Veterans Administration
VRWE - Variable Rate Wednesday Demand
26
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Statements of Assets and Liabilities (unaudited)
September 30, 1995
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
California
Money
Market California
Portfolio
Portfolio
============================================================
==========================
<S> <C>
<C>
ASSETS:
Investments, at value (Cost - $1,152,900,180
and $154,296,485)
$1,152,900,180 $161,663,494
Cash
- -- 44,809
Interest receivable
7,466,165 2,698,384
Receivable for securities sold
- -- 30,000
Prepaid expenses
192,977 --
Other receivables
- -- 973
- ------------------------------------------------------------
- --------------------------
Total Assets
1,160,559,322 164,437,660
- ------------------------------------------------------------
- --------------------------
LIABILITIES:
Dividends payable
2,129,545 782,987
Management fees payable
911,445 123,611
Distribution fees payable
32,301 12,598
Accrued expenses
- -- 56,674
Other liabilities
45,773 --
- ------------------------------------------------------------
- --------------------------
Total Liabilities
3,119,064 975,870
- ------------------------------------------------------------
- --------------------------
Total Net Assets
$1,157,440,258 $163,461,790
- ------------------------------------------------------------
- --------------------------
NET ASSETS:
Par value of capital shares $
1,157,806 $ 13,081
Capital paid in excess off par value
1,156,647,790 155,140,583
Undistributed net investment income
- -- 268,888
Accumulated net realized gain (loss)
on security transactions
(365,338) 672,229
Net unrealized appreciation of investments
- -- 7,367,009
- ------------------------------------------------------------
- --------------------------
Total Net Assets
$1,157,440,258 $163,461,790
============================================================
==========================
Shares Outstanding:
Class A
1,157,805,596 12,489,499
---------------------------------------------------------
- --------------------------
Class B
- -- 71,418
---------------------------------------------------------
- --------------------------
Class C
- -- 520,363
---------------------------------------------------------
- --------------------------
Net Asset Value:
Class A (and redemption price)
$1.00 $12.49
---------------------------------------------------------
- --------------------------
Class B *
- -- $12.50
---------------------------------------------------------
- --------------------------
Class C **
- -- $12.49
---------------------------------------------------------
- --------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value
per share)
- -- $13.01
============================================================
==========================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if shares
are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
27
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Statements of Operations (unaudited)
- ------------------------------------------------------------
- -------------------
For the Six Months Ended September 30, 1995
<TABLE>
<CAPTION>
California
Money Market California
Portfolio Portfolio
============================================================
=========================
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$21,256,140 $ 5,488,826
- ------------------------------------------------------------
- -------------------------
EXPENSES:
Management fees (Note 4)
2,719,023 378,015
Distribution fees (Note 4)
543,805 146,474
Shareholder and system servicing fees
122,500 23,029
Audit and legal
15,500 6,017
Registration fees
9,794 6,017
Shareholder communications
30,208 20,130
Custody
9,038 8,013
Trustees' fees
2,390 6,660
Pricing service fees
3,890 13,542
Other
4,100 272
- ------------------------------------------------------------
- -------------------------
Total Expenses
3,460,248 608,169
Less: Management fee waiver
170,872 --
- ------------------------------------------------------------
- -------------------------
Net Expenses
3,289,376 608,169
- ------------------------------------------------------------
- -------------------------
Net Investment Income
17,966,764 4,880,657
- ------------------------------------------------------------
- -------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 5):
Realized Gain (Loss) From Security Transactions
(excluding short-term securities*):
Proceeds from sales
92,463,846 25,318,331
Cost of securities sold
92,502,211 24,726,944
- ------------------------------------------------------------
- -------------------------
Net Realized Gain (Loss)
(38,365) 591,387
- ------------------------------------------------------------
- -------------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period
- -- 5,122,600
End of period
- -- 7,367,009
- ------------------------------------------------------------
- -------------------------
Increase in Net Unrealized Appreciation
- -- 2,244,409
- ------------------------------------------------------------
- -------------------------
Net Gain (Loss) on Investments
(38,365) 2,835,796
- ------------------------------------------------------------
- -------------------------
Increase in Net Assets From Operations
$17,928,399 $ 7,716,453
============================================================
=========================
</TABLE>
* Represents only short-term securities for the California
Money Market
----
Portfolio.
See Notes to Financial Statements.
28
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- -------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
<TABLE>
<CAPTION>
California
Money Market Portfolio
- --------------------------------
September 30 March 31
============================================================
================================
<S> <C>
<C>
OPERATIONS:
Net investment income $
17,966,764 $ 14,112,880
Net realized loss
(38,365) (1,435)
- ------------------------------------------------------------
- --------------------------------
Increase in Net Assets From Operations
17,928,399 14,111,445
- ------------------------------------------------------------
- --------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income
(17,966,764) (14,075,680)
Net realized gains
- -- --
- ------------------------------------------------------------
- --------------------------------
Decrease in Net Assets From Distributions
to Shareholders
(17,966,764) (14,075,680)
- ------------------------------------------------------------
- --------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
2,511,288,978 2,335,326,000
Net asset value of shares issued in connection with
the transfer of the Smith Barney Shearson
California Municipal Money Market Fund
net assets (Note 7)
- -- 830,711,463
Net asset value of shares issued for reinvestment
of dividends
17,103,241 12,583,409
Cost of shares reacquired
(2,324,233,430) (2,415,119,839)
- ------------------------------------------------------------
- --------------------------------
Increase in Net Assets from Fund Share
Transactions
204,158,789 763,501,033
- ------------------------------------------------------------
- -------------------------------
Increase in Net Assets
204,120,424 763,536,798
NET ASSETS:
Beginning of period
953,319,834 189,783,036
- ------------------------------------------------------------
- --------------------------------
End of period $
1,157,440,258 $ 953,319,834
============================================================
================================
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
<TABLE>
<CAPTION>
California Portfolio
------
- ------------------------
September 30 March 31
============================================================
=========================
<S> <C>
<C>
OPERATIONS:
Net investment income $
4,880,657 $ 10,575,801
Net realized gain
591,387 169,042
Increase (decrease) in net unrealized appreciation
2,244,409 (444,401)
- ------------------------------------------------------------
- -------------------------
Increase in Net Assets From Operations
7,716,453 10,300,442
- ------------------------------------------------------------
- -------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income
(4,809,380) (10,612,295)
Net realized gains
- -- (16,954)
- ------------------------------------------------------------
- -------------------------
Decrease in Net Assets From Distributions to
Shareholders
(4,809,380) (10,629,249)
- ------------------------------------------------------------
- -------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
4,658,538 30,935,315
Net asset value of shares issued for reinvestment
of dividends
1,422,134 3,672,477
Cost of shares reacquired
(15,013,847) (41,508,956)
- ------------------------------------------------------------
- -------------------------
Decrease in Net Assets from Fund Share
Transactions
(8,933,175) (6,901,164)
- ------------------------------------------------------------
- -------------------------
Decrease in Net Assets
(6,026,102) (7,229,971)
NET ASSETS:
Beginning of period
169,487,892 176,717,863
- ------------------------------------------------------------
- -------------------------
End of period*
$163,461,790 $169,487,892
============================================================
=========================
* Includes undistributed net investment income of: $
268,888 $ 197,611
============================================================
=========================
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- -------------------
1. Significant Accounting Policies
The California Money Market and California Portfolios
("Portfolios") are
separate investment portfolios of the Smith Barney Muni
Funds ("Fund"). The
Fund, a Massachusetts business trust, is registered under
the Investment Company
Act of 1940, as amended, as a non-diversified, open-end
management investment
company and consists of these Portfolios and ten other
separate investment
portfolios: Florida, Georgia, New Jersey, New York,
National, Ohio,
Pennsylvania, Limited Term, Florida Limited Term and New
York Money Market
Portfolios. The financial statements and financial
highlights for the other
portfolios are presented in separate semi-annual reports.
The significant accounting policies consistently followed
by the Fund are:
(a) security transactions are accounted for on the trade
date; (b) securities
are valued at bid prices provided by an independent pricing
service that are
based on transactions in municipal obligations, quotations
from municipal bond
dealers, market transactions in comparable securities and
various relationships
between securities; (c) short-term securities and securities
maturing within 60
days are valued at cost plus (minus) accreted discount
(amortized premium),
which approximates value; (d) gains or losses on the sale of
securities are
calculated by using the specific identification method; (e)
interest income,
adjusted for amortization of premiums and accretion of
original issue discount,
is recorded on the accrual basis; market discount is
recognized upon the
disposition of the security; (f) direct expenses are charged
to each portfolio
and each class; management fees and general fund expenses
are allocated on the
basis of relative net assets; and (g) the Portfolios intend
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.
2. Portfolio Concentration
Since each Portfolio invests primarily in obligations of
issuers within
California, it is subject to possible concentration risks
associated with
economic, political, or legal developments or industrial or
regional matters
specifically affecting California.
3. Exempt-Interest Dividends and Other Distributions
The California Money Market Portfolio declares and
records a dividend of
substantially all its net investment income on each business
day. Such
31
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- -------------------
dividends are paid or reinvested monthly in fund shares on
the payable date.
Furthermore, all Portfolios intend to satisfy conditions
that will enable
interest from municipal securities, which is exempt from
Federal income tax and
from designated state income taxes, to retain such tax-
exempt status when
distributed to the shareholders of the Portfolio.
Capital gain distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
4. Management Agreement and Other Transactions
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
California Money Market Portfolio pays SBMFM a management
fee calculated at an
annual rate of 0.50% of average daily net assets. The
California Portfolio pays
SBMFM a management fee calculated at an annual rate of 0.45%
of the average
daily net assets. These fees are calculated daily and paid
monthly. SBMFM waived
$170,872 of its management fees for the California Money
Market Portfolio for
the six months ended September 30, 1995.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts
as distributor of
Fund shares. For the six months ended September 30, 1995, SB
received sales
charges of approximately $70,000 on purchases of the
California Portfolio's
Class A shares.
There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B
shares of the California Portfolio if redemption occurs less
than one year from
initial purchase. This CDSC declines by 0.50% the first year
after purchase and
thereafter by 1.00% per year until no CDSC is incurred.
Class C shares of the
California Portfolio have a 1.00% CDSC if redemption occurs
within the first
year from the date such investment was made.
Pursuant to a Distribution Plan, the California Portfolio
pays a service
fee with respect to Class A, B and C shares calculated at
the annual rate of
0.15% of the average daily net assets of each class. In
addition, the California
Portfolio pays a distribution fee with respect to Class B
and C shares
calculated at the annual rates of 0.50% and 0.55%,
respectively, of the average
daily net assets of each class. The California Money Market
Portfolio pays a
distribution fee calculated at the annual rate of 0.10% of
the average daily net
assets.
32
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- -------------------
All officers and two Trustees of the Fund are employees
of SB.
5. Investments
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding short-
term securities) of investments were as follows:
<TABLE>
<CAPTION>
California
Money Market
California
Portfolio
Portfolio
============================================================
===================
<S> <C>
<C>
Purchases --
$16,000,163
- ------------------------------------------------------------
- -------------------
Sales --
25,318,331
============================================================
===================
</TABLE>
At September 30, 1995, the gross unrealized
appreciation of investments for
Federal income tax purposes were as follows:
<TABLE>
<CAPTION>
California
Money Market
California
Portfolio
Portfolio
============================================================
===================
<S> <C>
<C>
Gross unrealized appreciation --
$8,333,458
Gross unrealized depreciation --
(966,449)
- ------------------------------------------------------------
- -------------------
Net unrealized appreciation --
$7,367,009
============================================================
===================
</TABLE>
6. Capital Loss Carryforward
At March 31, 1995, the California Money Market
Portfolio had for Federal
tax purposes approximately $326,973 of unused loss
carryforwards available to
offset future capital gains. To the extent that these
carryforward losses are
used to offset capital gains, it is possible that the gains
so offset will not
be distributed. The amount and expiration of the carryovers
are indicated below.
Expiration occurs on March 31, of the year indicated:
<TABLE>
<CAPTION>
1997 1998 1999 2000
2001 2002 2003
============================================================
===================
<S> <C> <C> <C> <C> <C>
<C> <C>
California Money
Market Portfolio $93,180 $58,601 $7,368 $74,192
$10,769 $81,428 $1,435
============================================================
===================
</TABLE>
33
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- -------------------
7. Transfer of Assets
On November 18, 1994 the net assets of the Smith Barney
Shearson California
Municipal Money Market Fund ("California Municipal Money
Market") were merged
into Smith Barney California Money Market Portfolio pursuant
to an Agreement and
Plan of Reorganization dated August 2, 1994.
The transaction was structured for tax purposes to
qualify as a tax-free
reorganization under the Internal Revenue Code. The
California Municipal Money
Market Fund net assets at that date were $830,711,463.
Directly after the merger
the combined net assets were $1,034,833,204 for the Smith
Barney California
Money Market Portfolio.
8. Shares of Beneficial Interest
At September 30, 1995, there were an unlimited amount
of shares of
beneficial interest of $0.001 par value authorized. The
Portfolios have the
ability to issue multiple classes of shares. Each share of a
class represents an
identical interest in its respective Portfolio and has the
same rights, except
that each class bears certain expenses specifically related
to the distribution
of its shares. Effective November 7, 1994, the California
Portfolio adopted a
new class structure, renaming Class B shares as Class C
shares. In addition, the
former Class C shares were exchanged into Class A shares. At
September 30, 1995,
total paid-in capital amounted to the following for each
class and respective
Portfolio:
<TABLE>
<CAPTION>
Portfolio Class A Class B
Class C
============================================================
===================
<S> <C> <C>
<C>
California Money Market $1,157,805,596 --
- --
California 147,568,555 $855,173
$6,729,936
============================================================
===================
</TABLE>
34
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- -------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- -------------------
Transactions in shares of each Portfolio were as
follows:
<TABLE>
<CAPTION>
Six
Months Ended Year Ended
September
30, 1995 March 31, 1995*
California Money --------------
- ----------------- --------------------------------
Market Portfolio Shares
Amount Shares Amount
============================================================
=======================================================
<S> <C>
<C> <C> <C>
Class A
Shares sold 2,511,288,978
$ 2,511,288,978 2,335,326,000 $ 2,335,326,000
Net asset value of
shares issued in
connection with
transfer of the
California Municipal
Money Market
Fund (Note 7) --
- -- 831,064,777 831,064,777
Shares issued on
reinvestment 17,103,241
17,103,241 12,583,409 12,583,409
Shares redeemed (2,324,233,430)
(2,324,233,430) (2,415,119,839) (2,415,119,839)
- ------------------------------------------------------------
- -------------------------------------------------------
Net Increase 204,158,789
$ 204,158,789 763,854,347 $ 763,854,347
============================================================
=======================================================
California Portfolio
============================================================
=======================================================
Class A+
Shares sold 341,220
$ 4,257,596 2,324,798 $ 27,987,508
Shares issued on
reinvestment 108,079
1,336,860 287,711 3,455,371
Shares redeemed (1,149,338)
(14,301,501) (3,314,660) (39,556,136)
- ------------------------------------------------------------
- -------------------------------------------------------
Net Decrease (700,039)
$ (8,707,045) (702,151) $ (8,113,257)
============================================================
=======================================================
Class B
Shares sold 24,185
$ 303,337 84,879 $ 1,001,483
Shares issued on
reinvestment 1,035
12,810 480 5,781
Shares redeemed (3,206)
(39,529) (35,955) (428,708)
- ------------------------------------------------------------
- -------------------------------------------------------
Net Increase 22,014
$ 276,618 49,404 $ 578,556
============================================================
=======================================================
Class C++
Shares sold 7,843
$ 97,605 161,193 $ 1,946,324
Shares issued on
reinvestment 5,860
72,464 17,630 211,325
Shares redeemed (54,258)
(672,817) (129,420) (1,524,112)
- ------------------------------------------------------------
- -------------------------------------------------------
Net Increase (Decrease) (40,555)
$ (502,748) 49,403 $ 633,537
============================================================
=======================================================
</TABLE>
* For the California Portfolio, Class B shares transactions
are for the period
from November 11, 1994 (inception date) to March 31,
1995.
+ On October 10, 1994, the former Class C shares were
exchanged into Class A
shares; therefore Class C share activity for the period
from April 1, 1994 to
October 9, 1994 is included with Class A share activity.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
35
<PAGE>
Smith Barney Muni Funds
California Money Market Portfolio
- ------------------------------------------------------------
- -------------------
Financial Highlights
- ------------------------------------------------------------
- -------------------
For a share of beneficial interest outstanding throughout
each period:
<TABLE>
<CAPTION>
Class A Shares 1995(a)
1995 1994 1993 1992 1991(b)
============================================================
========================================================
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00
$1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------
- --------------------------------------------------------
Income From Operations:
Net investment income (1) 0.016
0.026 0.018 0.021 0.035 0.044
Dividends from net
investment income (0.016)
(0.026) (0.018) (0.021) (0.035) (0.044)
- ------------------------------------------------------------
- --------------------------------------------------------
Net Asset Value, End of Period $1.00
$1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------
- --------------------------------------------------------
Total Return 1.67%++
2.66% 1.84% 2.05% 3.51% 4.49%++
- ------------------------------------------------------------
- --------------------------------------------------------
Net Assets,
End of Period (000s) $1,157,440
$953,320 $189,783 $159,681 $167,172 $135,608
- ------------------------------------------------------------
- --------------------------------------------------------
Ratios to Average Net Assets:
Expenses (1) 0.61%+
0.61% 0.64% 0.67% 0.60% 0.46%+
Net investment income 3.30+
3.02 1.82 2.05 3.46 4.73+
============================================================
========================================================
</TABLE>
(a) For the six months ended September 30, 1995 (unaudited).
(b) For the period from May 10, 1990 (inception date) to
March 31, 1991.
(1) The manager waived all or part of its fees for the
period ended March 31,
1991, the year ended March 31, 1995 and the six months
ended September 30,
1995. If such fees were not waived, the per share
decreases in net
investment income and the ratios of expenses to average
net assets would
have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases Expense
Ratios
in Net Investment Income Without
Fee Waivers
------------------------- -------------
- -------------
1995(a) 1995 1991(b) 1995(a)
1995 1991(b)
------- ---- ------- ------- -
- --- -------
<S> <C> <C> <C> <C>
<C> <C>
Class A $.002 $.002 $.001 0.63%+
0.63% 0.60%+
</TABLE>
++ Total return is not annualized, as the result may not be
representative
of the total return for the year.
+ Annualized.
36
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- -------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- -------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class A Shares (a) 1995(b) 1995
1994 1993 1992 1991
============================================================
=====================================================
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.28
$12.27 $12.78 $12.05 $11.62 $11.47
- ------------------------------------------------------------
- -----------------------------------------------------
Income From Operations:
Net investment income (1) 0.36
0.74 0.76 0.78 0.81 0.84
Net realized and unrealized
gain (loss) 0.21
0.02* (0.47) 0.73 0.42 0.15
- ------------------------------------------------------------
- -----------------------------------------------------
Total Income From Operations 0.57
0.76 0.29 1.51 1.23 0.99
- ------------------------------------------------------------
- -----------------------------------------------------
Less Distributions From:
Net investment income (0.36)
(0.75) (0.77) (0.78) (0.80) (0.84)
Net realized gains -- -
- - (0.03) -- -- --
- ------------------------------------------------------------
- -----------------------------------------------------
Total Distributions (0.36)
(0.75) (0.80) (0.78) (0.80) (0.84)
- ------------------------------------------------------------
- -----------------------------------------------------
Net Asset Value, End of Period $12.49
$12.28 $12.27 $12.78 $12.05 $11.62
- ------------------------------------------------------------
- -----------------------------------------------------
Total Return 4.70%++
6.47% 2.15% 12.93% 11.11% 8.90%
- ------------------------------------------------------------
- -----------------------------------------------------
Net Assets,
End of Period (000s) $156,070
$161,993 $164,833 $159,635 $123,268 $98,740
- ------------------------------------------------------------
- -----------------------------------------------------
Ratios to Average Net Assets:
Expenses (1) 0.70%+
0.59% 0.51% 0.53% 0.38% 0.21%
Net investment income 5.84+
6.16 5.90 6.32 6.78 7.25
- ------------------------------------------------------------
- -----------------------------------------------------
Portfolio Turnover Rate 9.78%
31.65% 38.68% 24.28% 44.03% 45.37%
============================================================
=====================================================
</TABLE>
(a) On October 10, 1994 the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995 (unaudited).
(1) The manager waived all or part of its fees for each of
the periods in the
two-year period ended March 31, 1992. If such fees were
not waived, the per
share decrease of net investment income and the ratios
of expenses to
average net assets would be as follows:
<TABLE>
<CAPTION>
Per Share Decreases Expense
Ratios
in Net Investment Income Without
Fee Waivers**
------------------------ ----------
- -----------
1992 1991 1992
1991
---- ---- ----
- ----
<S> <C> <C> <C>
<C>
Class A $0.017 $0.029 0.51%
0.46%
</TABLE>
** As a result of voluntary expense limitations, the ratios
of expenses to
average net assets will not exceed 0.80%, 1.30% and 1.35%
for Class A, B and
C shares, respectively.
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
++ Total return is not annualized, as the result may not be
representative
of the total return for the year.
+ Annualized.
37
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- -------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- -------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class B Shares 1995(a)
1995(b)
============================================================
======
<S> <C> <C>
Net Asset Value, Beginning of Period $12.29
$11.52
- ------------------------------------------------------------
- ------
Income From Operations:
Net investment income 0.34
0.30
Net realized and unrealized gain 0.20
0.75*
- ------------------------------------------------------------
- ------
Total Income From Operations 0.54
1.05
- ------------------------------------------------------------
- ------
Less Distributions From:
Net investment income (0.33)
(0.28)
Net realized gains --
- --
- ------------------------------------------------------------
- ------
Total Distributions (0.33)
(0.28)
- ------------------------------------------------------------
- ------
Net Asset Value, End of Period $12.50
$12.29
- ------------------------------------------------------------
- ------
Total Return++ 4.46%
9.18%
- ------------------------------------------------------------
- ------
Net Assets, End of Period (000s) $ 893 $
607
- ------------------------------------------------------------
- ------
Ratios to Average Net Assets+:
Expenses 1.20%
1.19%
Net investment income 5.34
5.56
- ------------------------------------------------------------
- ------
Portfolio Turnover Rate 9.78%
31.65%
============================================================
======
</TABLE>
(a) For the six months ended September 30, 1995 (unaudited).
(b) For the period November 11, 1994 (inception date) to
March 31, 1995.
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
++ Total return is not annualized, as the result may not be
representative of
the total return for the year.
+ Annualized.
38
<PAGE>
Smith Barney Muni Funds
California Portfolio
- ------------------------------------------------------------
- -------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- -------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
<TABLE>
<CAPTION>
Class C Shares (a) 1995(b)
1995 1994 1993(c)
============================================================
==============================
<S> <C>
<C> <C> <C>
Net Asset Value, Beginning of Period $12.28
$12.26 $12.77 $12.46
- ------------------------------------------------------------
- ------------------------------
Income From Operations:
Net investment income 0.33
0.67 0.68 0.20
Net realized and unrealized
gain (loss) 0.21
0.01* (0.48) 0.29
- ------------------------------------------------------------
- ------------------------------
Total Income From Operations 0.54
0.68 0.20 0.49
- ------------------------------------------------------------
- ------------------------------
Less Distributions From:
Net investment income (0.33)
(0.66) (0.68) (0.18)
Net realized gains --
- -- (0.03) --
- ------------------------------------------------------------
- ------------------------------
Total Distributions (0.33)
(0.66) (0.71) (0.18)
- ------------------------------------------------------------
- ------------------------------
Net Asset Value, End of Period $12.49
$12.28 $12.26 $12.77
- ------------------------------------------------------------
- ------------------------------
Total Return 4.44%++
5.80% 1.45% 3.95%++
- ------------------------------------------------------------
- ------------------------------
Net Assets, End of Period (000s) $6,499
$6,888 $6,269 $1,784
- ------------------------------------------------------------
- ------------------------------
Ratios to Average Net Assets:
Expenses 1.26%+
1.23% 1.22% 1.20%+
Net investment income 5.28+
5.57 5.15 5.44+
- ------------------------------------------------------------
- ------------------------------
Portfolio Turnover Rate 9.78%
31.65% 38.68% 24.28%
============================================================
==============================
</TABLE>
(a) On November 7, 1994 the former Class B shares were
renamed Class C
shares.
(b) For the six months ended September 30, 1995 (unaudited).
(c) For the period from January 5, 1993 (inception date) to
March 31, 1993.
* Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value less
than the beginning of the period.
++ Total return is not annualized, as the result may not be
representative of
the total return for the year.
+ Annualized.
39
<PAGE>
[LOGO OF SMITH BARNEY MUNI FUNDS APPEARS HERE]
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank
Shareholder Servicing Agent
The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the
shareholders of
Smith Barney Muni Funds - California Money Market and
California Portfolios. It
is not authorized for distribution to prospective investors
unless accompanied
or preceded by a current Prospectus for the Portfolio, which
contains
information concerning the Portfolio's investment policies
and expenses as well
as other pertinent information.
Smith Barney Muni Funds
388 Greenwich Street
New York, New York 10013
FD0805 11/95
82110
Smith Barney
Muni Funds
Trustees
Jessica M. Bibliowicz
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P. Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President
Karen L. Mahoney-Malcomson
Vice President
Lawrence T. McDermott
Vice President
Irving P. David
Controller
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
- ------------------
SEMI-ANNUAL REPORT [PHOTO]
- ------------------
Smith Barney
Muni Funds
Florida Limited
Term Portfolio
Florida Portfolio
-------------------------
- --------------------
September 30, 1995
[LOGO] Smith Barney Mutual
Funds
Investing for your
future.
Every day.
<PAGE>
- -------------------------------------------
Florida Limited Term and Florida Portfolios
- -------------------------------------------
Dear Shareholder:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds -- Florida
Limited Term Portfolio and Florida Portfolio. This report
covers the six months
ended September 30, 1995. For your convenience, we have
summarized this period's
prevailing economic and market conditions below and outlined
our portfolio
strategy during this time. A more detailed summary of
performance and current
holdings can be found in the Historical Performance and
Schedule of Investments
sections that follow.
Florida Economic Highlights
Florida's general obligation debt holds a "AA" ranking from
both Standard &
Poor's and Fitch, and currently has a "stable" outlook
according to both
agencies. Florida's economy is continuing to diversify from
a tourism and
agriculture base into a more balanced service and trade
economy characterized by
increased insurance, banking and export activity. This has
helped to encourage
year-round growth and overall economic recovery, but is also
putting pressure on
Florida's infrastructural and educational facilities.
However, the state's debt
load remains moderate and its financial operations are well-
balanced, pointing
toward continuing economic health.
Market & Economic Overview
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5.75%, a move
that reflected its confidence in the current rate of
economic growth. However,
while the economy did pick up steam compared to the sluggish
first quarter of
1995, conflicting indicators all point to continued economic
uncertainty going
into 1996. Consumer spending is rising at an annual pace of
2.5% to 3%, a
relatively neutral rate further tempered by recent
indications that consumer
households are growing more cautious. A number of other
economic indicators
edged up over the past six months compared to early 1995,
including car buying,
housing starts and industrial production before slowing
again in September. The
most recent Index of Leading Indicators -- used by the U.S.
Government to
forecast economic conditions -- eased downward slightly in
September, fueled by
cheaper commodity prices. This index measures eleven
different indicators,
ranging from unemployment benefit claims to building
permits. While a majority
of these indicators showed a slight uptick in September,
others dipped. The
1
<PAGE>
overall result was confirmation of our expectations for slow
economic growth and
steady, or even lower, interest rates by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, contains a capital gains cut but does not
address broader tax
reform. Flat tax proposals are still being discussed, but a
number of alternate
reform measures are on the table as well. We expect this
issue to emerge as the
centerpiece of the 1996 Presidential elections.
In short, until a more definite consensus emerges from
Washington, D.C., we
cannot be certain of the impact on municipal bonds and are
holding fast on our
relatively cautious investment approach. Looking forward --
and absent radical
tax reform -- we expect municipal bonds to perform well
relative to taxable
investments, due primarily to diminishing supply. There
continues to be little
refinancing or new issue activity. New issue activity is
increasing toward
year-end but remains well below the levels seen in previous
years. The Public
Securities Association now predicts approximately $140
billion in new issues by
the end of 1995, less than half the record amount that came
to market in 1993.
This reduction in supply has helped to support underlying
values. If the supply
situation continues into 1996 as we expect, stronger
appreciation opportunities
could develop.
Florida Limited Term Portfolio Performance
The Florida Limited Term Portfolio posted a one-year total
return of 10.22%
(Class A shares) for the period ended on September 30, 1995.
This return
compares very favorably with the 8.71% average total return
for its Lipper peer
group.
Florida Limited-Term Portfolio Strategy
Over the past six months, intermediate fixed income markets
have been
characterized by generally lower interest rates, as measured
by the decline of
10-Year Treasuries from 7.20% on March 31, 1995 to 6.18% on
September 30, 1995,
a drop of more than 100 basis points. Comparable maturity
municipal bond yields
declined less dramatically over this period, dropping about
50 basis points over
the previous six months to a level of 4.81% as measured by
Moody's 10-Year AA
Muni Bond Index. By this measure, intermediate municipal
yields averaged about
78% of the yield on 10-Year Treasuries during the period.
The failure of
municipals to fully participate in a declining interest rate
environment can be
attributed primarily to uncertainty about the direction that
tax reform will
take.
These events have done little to change our overall
strategy. While our
longer-term outlook for the economy and interest rates is
positive and we do not
expect radical tax reform, we want to err on the side of
caution in structuring
2
<PAGE>
the Portfolio's risk profile. Intermediate- and shorter-
maturity municipals are
currently providing only 70% to 80% of the yield available
on comparable
maturity Treasuries. This makes their relative trading value
somewhat vulnerable
to reductions in the top marginal income tax brackets, a
scenario we deem more
likely than adoption of any of the more far-reaching tax
reform proposals that
could completely eliminate the tax-free income advantage of
municipal bonds.
The Portfolio is currently positioned in the middle of the 5-
to 10-year
intermediate maturity range in order to provide relative
stability of principal.
Nearly all of our holdings are higher-coupon issues trading
at a premium to
their face value, including a substantial commitment in
bonds priced to a call
date earlier than maturity, and bonds with extraordinary
call features such as
sinking funds designed to retire a portion of debt early and
housing bonds
subject to early call because of mortgage prepayments. Such
bonds will tend to
decline less in price compared to current coupon or
discounted bonds should
interest rates rise in response to a pick-up in economic
activity or in the
event of unfavorable changes in the tax code. And because
many of these holdings
feature effective maturities that are shorter than their
stated maturity date,
they further reduce the Portfolio's overall market
sensitivity while providing
relatively high income.
Florida Portfolio Performance
The Florida Portfolio posted a one-year total return of
10.69% (Class A shares)
for the period ended on September 30, 1995, a return that
compares with the
10.44% average for all Florida general municipal funds
tracked by Lipper
Analytical Services over the same time period. For the three
years ended on
September 30, 1995, the Portfolio posted a cumulative total
return of 23.29%
compared to an average of 21.53% for its Lipper peer group.
This performance was
achieved with only minimal capital gains distributions, thus
preserving the
favorable tax status of distributed income.
Florida Portfolio Strategy & Outlook
Over the past six months, the fixed-income markets have been
characterized by
generally lower interest rates, as measured by the decline
of 30-year Treasuries
from 7.43% on March 31, 1995 to 6.50% on September 30, 1995,
a drop of nearly
100 basis points. Long-term municipal bond yields, however,
barely budged over
the time period, starting out on March 30, 1995 at 6.29% as
represented by the
Bond Buyer's 25-Year Revenue Bond Index and finishing at
6.27% on September 28,
1995. This is due primarily to tax reform concerns.
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
3
<PAGE>
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of the Portfolio by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structure. We intend to
retain most of our
substantial commitment to higher coupon issues trading at a
premium and callable
prior to maturity for the high income they are providing and
the measure of
protection they afford in the event interest rates should
rise. However, we are
increasing our focus on issues with comparable maturities
but greater call
protection in anticipation of a possible further downturn in
rates at the end of
this year or early 1996.
We were saddened by the loss of an outstanding business
leader and Trustee of
the Portfolios:Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
At this time, we'd like to thank you for your continued
participation in our
Florida Portfolios and for your ongoing confidence in our
investment management
approach.
Sincerely,
/s/ HEATH B. MCLENDON /s/ PETER M.
COFFEY
Heath B. McLendon Peter M. Coffey
Chairman and Vice President
and
Chief Executive Officer Investment
Officer
November 8, 1995
4
<PAGE>
Smith Barney Muni Funds
Florida Limited Term Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
---------------
Beginning End of Income Capital
Gain Total
Period Ended of Period Period Dividends
Distributions Returns (1)
============================================================
====================
9/30/95 $6.56 $6.73 $0.16 $0.00
5.13%+
- ------------------------------------------------------------
- --------------------
3/31/95 6.44 6.56 0.33 0.00
7.17
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/94 6.50 6.44 0.24 0.00
2.74+
============================================================
====================
Total $0.73 $0.00
============================================================
====================
============================================================
====================
Historical Performance -- Class C Shares
============================================================
====================
Net Asset Value
---------------
Beginning End of Income Capital
Gain Total
Period Ended of Period Period Dividends
Distributions Returns (1)
============================================================
====================
9/30/95 $6.55 $6.72 $0.16 $0.00
5.04%+
- ------------------------------------------------------------
- --------------------
3/31/95 6.43 6.55 0.31 0.00
6.84
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/94 6.51 6.43 0.23 0.00
2.17+
============================================================
====================
Total $0.70 $0.00
============================================================
====================
It is the Fund's policy to distribute dividends monthly
and capital gains, if
any, annually.
5
<PAGE>
Smith Barney Muni Funds
Florida Limited Term Portfolio
- ------------------------------------------------------------
- --------------------
Average Annual Return
- ------------------------------------------------------------
- --------------------
Without Sales Charge(1)
-----
- ------------------
Class A Class C
============================================================
====================
Six Months Ended 9/30/95+
5.13% 5.04%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95
10.21 9.80
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95
6.21 5.84
- ------------------------------------------------------------
- --------------------
With
Sales Charge(2)
----
- ----------------
Class A Class C
============================================================
====================
Six Months Ended 9/30/95+
3.08% 4.04%
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95
8.00 8.80
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95
5.33 5.84
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without Sales Charge(1)
----
- -------------------
Class A (Inception* through 9/30/95)
15.75%
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
14.65
- ------------------------------------------------------------
- --------------------
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 2.00% and Class C
shares 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 and C shares are April 27,
1993 and May 4,
1993, respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
6
<PAGE>
Smith Barney Muni Funds
Florida Limited Term Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A Shares
of the
Florida Limited Term Portfolio vs.
Lehman
10 Year General Obligation Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
April 1993 -- September 1995
[The following table was represented by a chart in the
printed material.]
Florida
Lehman
Limited Term 10
Year General
Date Portfolio
Obligation Index
---- --------- ------
- ---------
4/27/93 9800
10000
9/93 10300
10700
3/94 10100
10300
9/94 10300
10450
3/95 10800
11000
9/95 11333
11722
+ Hypothetical illustration of $10,000 invested in
Class A shares at
inception on April 27, 1993, assuming deduction of the
maximum 2.00% sales
charge at the time of investment and reinvestment
of dividends (after
deduction of applicable sales charges through November
6, 1994, afterwards
at net asset value) and capital gains at net asset
value through September
30, 1995. The Lehman 10 Year General Obligation
Index is a broad based,
total return index, comprised of all investment grade
fixed rate, long term
maturities (9-12 years) and are selected from
issues larger than $50
million dated since January, 1984. The index is
unmanaged and is not
subject to the same management and trading expenses
of a mutual fund. The
performance of the Portfolio'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.
7
<PAGE>
Smith Barney Muni Funds
Florida Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class A Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
-------------------
Beginning End of Income Capital
Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.89 $13.18 $0.37
$0.00 5.20%+
- ------------------------------------------------------------
- --------------------
3/31/95 12.82 12.89 0.76
0.00 6.77
- ------------------------------------------------------------
- --------------------
3/31/94 13.21 12.82 0.77
0.00 2.75
- ------------------------------------------------------------
- --------------------
3/31/93 12.32 13.21 0.80
0.01 14.21
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/92 12.00 12.32 0.70
0.00 8.70+
============================================================
====================
Total $3.40
$0.01
============================================================
====================
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class B Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
-------------------
Beginning End of Income Capital
Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.89 $13.17 $0.34
$0.00 4.89%+
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/95 11.91 12.89 0.29 0.00
10.77+
- ------------------------------------------------------------
- --------------------
Total $0.63 $0.00
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class C Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
-------------------
Beginning End of Income Capital
Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
9/30/95 $12.89 $13.18 $0.34 $0.00
4.94%+
- ------------------------------------------------------------
- --------------------
3/31/95 12.81 12.89 0.67 0.00
6.12
- ------------------------------------------------------------
- --------------------
3/31/94 13.20 12.81 0.68 0.00
2.05
- ------------------------------------------------------------
- --------------------
Inception* - 3/31/93 12.86 13.20 0.18 0.00
4.05+
============================================================
====================
Total $1.87 $0.00
============================================================
====================
It is the Fund's policy to distribute dividends monthly
and capital gains, if
any, annually.
8
<PAGE>
Smith Barney Muni Funds
Florida Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance -- Class Y Shares
- ------------------------------------------------------------
- --------------------
Net Asset Value
-------------------
Beginning End of Income
Capital Gain Total
Period Ended of Period Period Dividends
Distributions Returns(1)
============================================================
====================
Inception* - 9/30/95 $13.28 $13.18 $0.06
$0.00 (0.27)%+
============================================================
====================
- ------------------------------------------------------------
- --------------------
Average Annual Total Return
- ------------------------------------------------------------
- --------------------
Without Sales
Charge(1)
--------------------------
- --------------------
Class A Class B
Class C Class Y
============================================================
====================
Six Months Ended 9/30/95+ 5.20% 4.89%
4.94% NA
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 10.67 NA
10.13 NA
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 8.32 16.19
6.33 (0.27)%
- ------------------------------------------------------------
- --------------------
With Sales
Charge(2)
--------------------------
- --------------------
Class A Class B
Class C Class Y
============================================================
====================
Six Months Ended 9/30/95+ 0.97% 0.39%
3.94% NA
- ------------------------------------------------------------
- --------------------
Year Ended 9/30/95 6.22 NA
9.13 NA
- ------------------------------------------------------------
- --------------------
Inception* through 9/30/95 7.34 11.69
6.33 (0.27)%
- ------------------------------------------------------------
- --------------------
- ------------------------------------------------------------
- --------------------
Cumulative Total Return
- ------------------------------------------------------------
- --------------------
Without
Sales Charge(1)
------------------------
- --------------------
Class A (Inception* through 9/30/95)
43.26%
- ------------------------------------------------------------
- --------------------
Class B (Inception* through 9/30/95)
16.19
- ------------------------------------------------------------
- --------------------
Class C (Inception* through 9/30/95)
18.26
- ------------------------------------------------------------
- --------------------
Class Y (Inception* through 9/30/95)
(0.27)
- ------------------------------------------------------------
- --------------------
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 4.00% and Class B
shares reflect the
deduction of a 4.50% CDSC, which applies if shares are
redeemed less than
one year from initial purchase. This CDSC declines by
0.50% the first year
after purchase and thereafter by 1.00% per year until
no CDSC is incurred.
Class C shares 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, C and Y shares are
April 2, 1991, November
16, 1994, January 5, 1993 and September 19, 1995,
respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
9
<PAGE>
Smith Barney Muni Funds
Florida Portfolio
- ------------------------------------------------------------
- --------------------
Historical Performance
- ------------------------------------------------------------
- --------------------
Growth of $10,000 Invested in Class A Shares
of
the Florida Portfolio vs. Lehman Muni Bond Fund
Index+
(unaudited)
- ------------------------------------------------------------
- --------------------
April 1991 -- September 1995
[The following table was represented by a chart in the
printed material.]
Florida
Lehman Muni
Date Portfolio Bond
Fund Index
---- --------- ------
- ---------
4/2/91 9800
10000
3/92 10400
11200
3/93 11800
12800
3/94 12200
12900
3/95 13000
14200
9/95 13637
14729
+ Hypothetical illustration of $10,000 invested in Class
A shares at
inception on April 2, 1991, assuming deduction of the
maximum 4.00% sales
charge at the time of investment and reinvestment of
dividends (after
deduction of applicable sales charges through November
6, 1994, afterwards
at net asset value) and capital gains at net asset
value through September
30, 1995. The Lehman Muni Bond Fund Index is a broad
based, total return
index, comprised of 8,000 actual bonds which are all
investment grade,
fixed rate, long term maturities (greater than two
years) and are selected
from issues larger than $50 million dated since
January, 1984. The index is
unmanaged and is not subject to the same management and
trading expenses of
a mutual fund. The performance of the Portfolio'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.
10
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA LIMITED TERM PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 4.4%
$600,000 AAA Hillsborough County School Board COP,
MBIA-Insured, 5.500% due 7/1/04
$ 631,500
- ------------------------------------------------------------
- --------------------
Escrowed to Maturity(a) -- 22.9%
635,000 AAA Altamonte Springs Health Facility
Authority
Hospital Revenue,Adventist Health
System,
13.000% due 10/1/01
798,513
300,000 AAA Cape Coral Health Facility Authority
Hospital
Revenue, 8.125% due 11/1/08
361,875
220,000 AAA Jacksonville Health Facilities
Authority
Revenue, (St. Vincents Medical
Center, Inc.),
9.125% due 1/1/03
257,400
140,000 AAA Loxahatchee River Environmental Control
Sewer
Revenue, 7.750% due 10/1/13
164,675
590,000 AAA Orange County Health Facility Authority
Revenue,
Southern Adventist Hospital, 8.750%
due 10/1/09 736,762
405,000 AAA Palm Beach County Health Facility
Authority
Revenue, (John F. Kennedy Memorial
Hospital,
Inc.), 9.500% due 8/1/13
546,750
410,000 AAA Virgin Islands Territory GO, 8.000% due
3/1/98 445,875
- ------------------------------------------------------------
- --------------------
3,311,850
- ------------------------------------------------------------
- --------------------
General Obligation -- 3.5%
475,000 A+ Guam Government Limited Obligation
Revenue,
Series A, LOC Fuji Bank, 7.000% due
11/15/04 504,688
- ------------------------------------------------------------
- --------------------
Hospital -- 22.5%
500,000 BBB+ Alachua County Health Facilities
Revenue
Refunding,Santa Fe Healthcare
Facility,
6.000% due 11/15/09
495,625
685,000 BAA Bay County Hospital Systems Revenue
Refunding,(Bay Medical Center
Project),
6.875% due 10/1/99
714,113
725,000 A1* Brevard County Health Facilities
Authority
Revenue, (Hospital- Holmes Regulated
Medical
Center Project), 5.400% due 10/1/03
730,437
600,000 BBB+ Collier County Health Facilities
Authority
Revenue Refunding,(The Moorings Inc.
Project),
6.125% due 12/1/06
610,500
170,000 AAA Jacksonville Health Facilities
Authority Revenue,
(Hospital-Holmes Regulated Medical
Center
Project), 9.125% due 1/1/03
198,262
500,000 A- Palm Beach County Health Facilities
Authority
Revenue, Good Samaritan Health
Systems,
5.700% due 10/1/02
512,500
- ------------------------------------------------------------
- --------------------
3,261,437
- ------------------------------------------------------------
- --------------------
Housing: Multi-Family -- 4.0%
400,000 AAA Escambia County HFA, Multi-Family
Housing
Revenue,Genesis Health, Series A,
zero
coupon due 4/15/01
279,500
See Notes to Financial Statements.
11
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA LIMITED TERM PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Multi-Family -- 4.0% (continued)
$300,000 AAA Escambia County HFA, Multi-Family
Refunding,(Meadow Run Project), LOC
Federal
Home Loan Bank of Atlanta, 5.500%
mandatory
tender 5/1/03
$ 301,875
- ------------------------------------------------------------
- --------------------
581,375
- ------------------------------------------------------------
- --------------------
Housing: Single-Family -- 5.7%
130,000 AAA Duval County HFA Single-Family Mortgage
Revenue, Mortgage Backed Securities
Program,
GNMA-Collateralized, 8.000% due
6/1/00(b) 134,387
190,000 Aaa* Escambia County HFA, Single-Family
Mortgage
Revenue, Multi County Program, Series
A,
6.150% due 4/1/00(b)
193,325
160,000 AAA Leon County HFA Single-Family Mortgage
Revenue,
(Multi-County Project 84), Series A,
MBIA-Insured,
zero coupon due 3/1/03
79,000
410,000 AAA Orange County HFA Single-Family
Mortgage Revenue,
Mortgage Backed Securities Program,
GNMA/FNMA-
Collateralized,6.100% due 10/1/05(b)
422,813
- ------------------------------------------------------------
- --------------------
829,525
- ------------------------------------------------------------
- --------------------
Industrial Development -- 3.0%
400,000 AAA Osceola County IDA, Community Provider
Pooled Loan Program, Series A, CGIC-
Insured,
7.500% due 7/1/02
433,000
- ------------------------------------------------------------
- --------------------
Nursing Home -- 2.8%
400,000 Baa1* Jacksonville Health Facilities
Authority
Development Revenue, National
Benevolent
Association Cypress Village Program,
6.000% due 12/1/04
401,500
- ------------------------------------------------------------
- --------------------
Pollution Control -- 4.1%
530,000 A Broward County Resource Recovery
Revenue,
Broward Waste Energy-LP North,
7.950% due 12/1/08
588,300
- ------------------------------------------------------------
- --------------------
Public Facilities -- 3.5%
500,000 AAA Pembroke Pines Public Improvement
Revenue,
AMBAC-Insured, 5.000% due 10/1/02
514,375
- ------------------------------------------------------------
- --------------------
Solid Waste -- 10.9%
715,000 A Brevard County Solid Waste Disposal
System
Revenue, 5.200% due 4/1/04
722,150
715,000 A Palm Beach County Solid Waste
Authority,
10.000% due 12/1/04
856,800
- ------------------------------------------------------------
- --------------------
1,578,950
- ------------------------------------------------------------
- --------------------
Tax Allocation -- 3.6%
500,000 AAA Orange County Tourist Development Tax
Revenue Refunding, Series A, MBIA-
Insured,
5.400% due 10/1/04
529,375
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
12
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA LIMITED TERM PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Transportation -- 9.1%
$320,000 AA Dade County Aviation Revenue Refunding,
Series Y, 5.125% due 10/1/03
$ 326,800
500,000 A+ Dunes Community Development District
Revenue Refunding, Intracoastal
Waterway
Bridge, 5.200% due 10/1/02
514,375
460,000 AAA Jacksonville Port Authority Airport
Revenue Refunding, AMBAC-Insured,
5.200% due 10/1/03(b)
473,800
- ------------------------------------------------------------
- --------------------
1,314,975
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $13,981,685)(f)
$14,480,850
============================================================
====================
See Notes to Financial Statements.
13
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Education -- 1.9%
$ 750,000 Baa* Palm Bay Lease Revenue, Education
and Research, Series A, 6.850% due
9/1/13 $ 765,938
1,000,000 AAA Palm Beach County School Board, Series
A,
AMBAC-Insured, 5.375% due 8/1/15
950,000
445,000 AA- Pensacola Junior College Foundation,
Education
Facility Revenue, LOC Bank of Tokyo,
7.125%
due 7/1/09
462,800
- ------------------------------------------------------------
- --------------------
2,178,738
- ------------------------------------------------------------
- --------------------
Escrowed to Maturity(a) -- 5.3%
Escambia County HFA, Multi-Family
Housing Revenue,
(Genesis Healthcare):
400,000 AAA Coupon Custodial Receipts of the
County,
zero coupon due 10/15/14
109,000
3,000,000 AAA Principal Custodial Receipts,
zero coupon due 10/15/18
615,000
1,500,000 AAA Water and Sewer District IV
Revenue,
7.300% due 1/1/08
1,715,625
425,000 AAA Florida State Community Service Suburban
Utilities,
8.125% due 10/1/98
456,344
1,500,000 AAA Gainsville Florida Utility System
Revenue,
8.125% due 10/1/14
1,929,375
510,000 AAA Jacksonville Methodist Hospital, 10.000%
due
12/1/05
553,988
665,000 AAA Palm Beach County HFA, (John F. Kennedy
Memorial
Hospital Inc. Project), Series C,
9.500%
due 8/1/13
897,750
- ------------------------------------------------------------
- --------------------
6,277,082
- ------------------------------------------------------------
- --------------------
Finance -- 0.5%
500,000 AAA Gulf Breeze Local Government Revenue,
FGIC-Insured, 7.750% due 12/1/15
565,000
- ------------------------------------------------------------
- --------------------
General Obligation -- 3.4%
485,000 AA Florida State Board of Education Capital
Outlay Refunding, Series A, 7.250%
due 6/1/23(c)
538,350
1,000,000 AA Florida State Broward County, 10.000%
due 7/1/14
1,456,250
1,000,000 BBB Guam Government GO, Series A, 5.375%
due 11/15/13
887,500
1,000,000 AAA Puerto Rico Commonwealth, MBIA-Insured,
Series A, 6.250% due 7/1/13
1,083,750
- ------------------------------------------------------------
- --------------------
3,965,850
- ------------------------------------------------------------
- --------------------
Hospital -- 21.8%
1,000,000 BBB+ Alachua County Health Facilities
Authority
Revenue Santa Fe Healthcare
Facilities
Project, 7.600% due 11/15/13
1,077,500
1,500,000 Baa* Bay County Hospital Revenue, (Bay
County
Medical Center Project), 8.000% due
10/1/12 1,644,375
See Notes to Financial Statements.
14
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Hospital -- 21.8% (continued)
$1,000,000 BBB+ Bradford County Health Facilities
Authority
Revenue, Santa Fe Healthcare
Facilities
Project, 6.000% due 11/15/09
$ 958,750
2,355,000 AAA Dade County IDR Refunding Susanna
Wesley,
FHA-Insured, 6.625% due 7/1/30
2,452,144
Escambia County Health Facilities
Authority Revenue:
1,000,000 BBB+ Baptist Hospital Inc. & Baptist Manor
Inc.
Guaranteed, 6.750% due 10/1/14
1,023,750
1,000,000 BBB+ Baptist Hospital Inc. Guaranteed,
Series A,
6.000% due 10/1/14
952,500
2,000,000 AA+ Jacksonville Health Facilities Authority
Hospital Revenue, (St. Luke's
Hospital),
FHA-Insured, 7.125% due 11/15/20
2,157,500
1,000,000 Baa1* Leesburg Hospital Revenue, Leesburg
Regional
Medical Center, 5.700% due 7/1/18
901,250
Lee County Hospital Board of Directors,
Hospital
Revenue Bonds (Lee Memorial Hospital
Project),
MBIA-Insured:
1,000,000 AAA 91 Series A, INFLOS, 8.861% due
4/1/20(d) 1,080,000
2,000,000 AAA 6.350% due 3/26/20
2,067,500
Orange County Health Facilities
Authority Hospital
Revenue Bonds:
1,500,000 AAA Adventist Health Systems, CGIC-
Insured,
FAIRS, 6.550% due 11/15/07(d)
1,584,375
2,000,000 AAA RIBS Linked, MBIA-Insured, 6.416%
due 10/29/21(d)
2,072,500
1,000,000 AAA Series 1991B, (Adventist Health
Systems/Sunbelt Inc.), CGIC-Insured,
6.750% due 11/15/21
1,082,500
799,000 AAA Osceola County IDA Revenue (Community
Provider Pooled Loan Program), CGIC-
Insured,
7.750% due 7/1/10
853,931
1,000,000 Aa* Pensacola Health Facilities Authority,
5.250% due 1/1/11
945,000
1,030,000 BBB- Pinellas County Health Facilities
Authority,
Sun Coast Health System Revenue, Sun
Coast
Hospital Guaranteed, Series A, 8.500%
due 3/1/20(c)
1,085,363
350,000 BBB+ Santa Rosa County Health Facilities
Authority Revenue Refunding, Gulf
Breeze Hospital Inc., Series A, Gulf
Breeze Hospital Guaranteed, 6.200% due
10/1/14 336,000
1,000,000 AAA South Broward Hospital District Revenue
Bonds,
RIBS, Series 1991C, AMBAC-Insured,
8.700%
due5/13/21(d)
1,091,250
2,000,000 A* Venice Health Facilities Revenue Bonds,
Series 1994, Venice Hospital Inc.
Guaranteed,
6.000% due 12/1/14
2,187,500
- ------------------------------------------------------------
- --------------------
25,553,688
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements.
15
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Multi-Family -- 4.8%
Broward County HFA Multi-Family Housing
Revenue:
$ 985,000 AA- Southern Pointe Apartments Project,
Surety Bond-Continental Casualty,
9.700%
mandatory tender 11/1/95(c)
$ 988,694
1,000,000 A+ Waterford Park Project, Series 1991,
Policy of Indemnity Commercial Union
Assurance Co. PLC, Reinsured by Trygg-
Hansa
Insurance Co. of Sweden, 7.200%
mandatory
tender 5/1/02
1,037,500
1,250,000 AA- Waters Edge Apartments Project,
Surety Bond-Continental Casualty,
9.700% mandatory tender 11/1/95(c)
1,254,688
1,355,000 A1 Broward County HFA Revenue Home
Mortgage, VEREX Mortgage
Insurance, GNMA-Collateralized,
Series A,zero coupon due 4/1/14
206,638
1,000,000 AAA Oceanside Housing Development
Corporation,
Multi-Family Housing and Funding, FHA-
Insured,
6.875% due 2/1/20
1,043,750
1,095,000 AAA Southwest Housing Development Corporation
Multi-Family Housing Revenue Refunding,
FHA-Insured, 6.875% due 2/1/20
1,131,956
- ------------------------------------------------------------
- --------------------
5,663,226
- ------------------------------------------------------------
- --------------------
Housing: Single-Family -- 8.1%
1,000,000 Aaa* Broward County HFA Revenue Home
Mortgage,
GNMA/FNMA-Collateralized, 6.650% due
8/1/21(b) 1,011,250
115,000 Aaa* Clay County HFA Single-Family Mortgage
Revenue,
Series A, Investment Agreement with
AIG,
GNMA-Collateralized, 8.000% due
12/1/12(b) 121,613
Dade County HFA Single-Family Mortgage
Revenue:
355,000 Aaa* Series B, GNMA/FNMA-Collateralized,
7.250% due 9/1/23(b)
370,087
35,000 Aaa* Series E, GNMA-Collateralized, 7.000%
due 3/1/24 36,312
1,500,000 AAA Dade County HFA Single-Family Mortgage
Revenue,
GNMA/FNMA-Collateralized, 6.700% due
4/1/28 1,543,124
445,000 AAA Duval County HFA Single-Family Mortgage
Revenue,
GNMA-Collateralized, 8.500% due
9/1/19(b) 468,363
305,000 Aaa* Escambia County HFA Single-Family
Mortgage Revenue,
GNMA-Collateralized, 7.800% due
4/1/22(b) 324,444
Florida HFA:
175,000 Aaa* Home Ownership Revenue, GNMA-
Collateralized,
7.800% due 9/1/10(b)
186,594
1,600,000 AA Residential Mortgage Series 1, GEMICO
Mortgage
Insurance, zero coupon due
11/1/12(d) 296,000
440,000 Aaa* Hillsborough County HFA Single-Family
Mortgage
Revenue, Series A5, GNMA-
Collateralized,
7.700% due 4/1/23(a)
465,850
1,000,000 AAA Leon County HFA Single-Family Mortgage
Revenue,
Series B, GNMA/FHLMC-Collateralized,
7.300% due 1/1/28
1,078,750
See Notes to Financial Statements.
16
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Housing: Single-Family -- 8.1% (continued)
$ 505,000 Aaa* Palm Beach HFA Single-Family Mortgage
Revenue
Bonds, Series 1991 A, GNMA-
Collateralized,
7.875% due 4/1/23(b)
$ 516,363
800,000 Aaa* Pinnellas County HFA Single-Family
Mortgage
Revenue, GNMA/FNMA-Collateralized,
6.550% due 8/1/24(b)
811,000
1,200,000 BBB Puerto Rico Housing Bank & Finance
Agency,
Single-Family Mortgage, 7.500% due
12/1/06 1,321,500
1,000,000 Aaa* Virgin Islands HFA Single-Family
Mortgage,
GNMA-Collateralized, 6.500% due 3/1/25
1,006,250
- ------------------------------------------------------------
- --------------------
9,557,500
- ------------------------------------------------------------
- --------------------
Industrial Development -- 5.0%
550,000 BBB Collier County, Pine Ridge Industrial
Park &
Naples Production Park Municipal
Service
Taxing & Benefit Unit, Special
Assistance Bonds,
Series 1993, 5.600% due 11/1/13
512,188
3,000,000 NR Dade County IDR, (Miami Cerebral Palsy
Services
Project), 8.000% due 6/1/22
2,996,250
1,275,000 NR Homestead IDR, Community Rehabilitation
Providers
Program, Series A, 7.950% due 11/1/18
1,270,219
1,000,000 BBB- Martin County IDA, Indiantown,
7.875% due 12/15/25
1,097,500
- ------------------------------------------------------------
- --------------------
5,876,157
- ------------------------------------------------------------
- --------------------
Miscellaneous -- 2.8%
1,200,000 AAA North Springs Improvement District, MBIA-
Insured,
7.000% due 10/1/09
1,407,000
1,745,000 BBB Tampa Capital Improvement Program,
Series B,
8.375% due 10/1/18
1,873,694
- ------------------------------------------------------------
- --------------------
3,280,694
- ------------------------------------------------------------
- --------------------
Nursing Home -- 1.5%
1,000,000 A1* Broward County Health Facilities
Authority
Revenue Refunding, County Nursing
Home, LOC
Allied Irish Banks Ltd., 7.500% due
8/15/20(c) 1,086,250
750,000 Baa1* Jacksonville Health Facilities Authority
Development Revenue, National
Benevolent
Association, Cypress Hill Village
Program,
6.400% due 12/1/16
734,062
- ------------------------------------------------------------
- --------------------
1,820,312
- ------------------------------------------------------------
- --------------------
Pollution Control -- 6.5%
2,000,000 A+ Citrus County Pollution Control
Refunding,
Florida Power Corp. Crystal River,
6.625% due 1/1/27
2,100,000
2,000,000 Baa1* Escambia County PCR, Champion
International,
6.900% due 8/1/22
2,090,000
See Notes to Financial Statements.
17
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Pollution Control -- 6.5% (continued)
$1,390,000 Baa3 Putnam County Development Authority PCR,
Georgia Pacific Corp. 1984, 7.000% due
12/1/05 $1,529,000
2,000,000 AAA Sunshine State Governmental Financing
Commission
Revenue, Series B, FGIC-Insured,
5.750% due 10/1/15
1,923,080
- ------------------------------------------------------------
- --------------------
7,642,080
- ------------------------------------------------------------
- --------------------
Power -- 2.1%
1,265,000 Aa1* Jacksonville Electric Authority Revenue
Refunding, St. John's River Power Park
Services
Refunding, 6.900% due 10/1/13
1,396,244
1,000,000 A+ Pinellas County PCR, Florida Power
Corporation,
(Anclote & Bartlow Plants Project),
7.200% due 12/1/14
1,093,750
- ------------------------------------------------------------
- --------------------
2,489,994
- ------------------------------------------------------------
- --------------------
Pre-Refunded(a) -- 12.8%
1,000,000 AAA Broward County School Board COP, Series
A,
MBIA-Insured, (Escrowed with U.S.
Government
Securities to 7/1/00 Call @ 102),
7.125% due 7/1/10
1,131,250
1,750,000 AAA Charlotte County Hospital Revenue, Bon
Secours
Health, (St. Joseph's), Series A,
(Escrowed
with U.S. Government Securities to
8/15/98
Call @ 102), 8.250% due 8/15/18
1,966,562
1,060,000 AAA Dunedin Hospital Revenue, Mease Health
Care,
MBIA-Insured, (Escrowed with U.S.
Government
Securities to 11/15/01 Call @ 102),
6.750% due 11/15/11
1,201,775
1,365,000 AAA Edgewater Water & Sewer Authority, MBIA-
Insured,
(Escrowed with U.S. Government
Securities to
10/1/01 Call @ 102), 7.000% due
10/1/21 1,562,925
1,105,000 AAA Florida State Pollution Control, Series
X,
(Escrowed with U.S. Government
Securities to
7/1/01 Call @ 101), 6.400% due 7/1/09
1,215,500
515,000 AAA Florida State Board of Education Capital
Outlay
Refunding, Series A, (Escrowed with
U.S.
Government Securities to 6/1/00 Call @
102),
7.250% due 6/1/23(c)
584,525
1,000,000 AAA Florida State Turnpike Authority
Revenue,
AMBAC-Insured, (Escrowed with U.S.
Government
Securities to 7/1/01 Call @ 102),
7.200% due 7/1/11
1,151,250
1,050,000 AAA Fort Pierce Utilities Authority Revenue
Refunding,
AMBAC-Insured, (Escrowed with U.S.
Government
Securities to 10/1/01 Call @ 102),
6.500% due 10/1/16
1,174,687
1,000,000 AAA Lee County Capital & Transportation
Facilities
Revenue Bonds, Series 1991, MBIA-
Insured,
(Escrowed with U.S. Government
Securities to
10/1/00 Call @ 102), 6.500% due
10/1/21 1,108,750
1,000,000 AAA Miami Sports & Exhibition Authority
Special
Obligation Refunding, FGIC-Insured,
(Escrowed
with U.S. Government Securities to
4/1/00
Call @ 102), 7.200% due 10/1/20
1,130,000
See Notes to Financial Statements.
18
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Pre-Refunded(a) -- 12.8% (continued)
$ 835,000 AAA Pinellas County Health Facilities
Authority,
Sun Coast Health System Revenue, Sun
Coast
Hospital Guaranteed, Series A,
(Escrowed with
U.S. Government Securities to 3/1/00
Call @ 102), 8.500% due 3/1/20(c)
$ 983,212
1,500,000 AAA Port of Orange Water & Sewer Revenue,
AMBAC-Insured, (Escrowed with U.S.
Government
Securities to 4/1/01 Call @ 24.4),
zero coupon due 10/1/21
283,125
1,000,000 AAA St. Lucie County Sales Tax Revenue, FGIC-
Insured,
(Escrowed with U.S. Government
Securities to
10/1/02 Call @ 102), 6.500% due
10/1/22 1,127,500
445,000 AAA Volusia County Airport System Revenue,
Daytona
Beach Regional Airport, MBIA-Insured,
(Escrowed
with U.S. Government Securities to
10/1/00
Call @ 102), 7.000% due 10/1/21(b)
500,068
- ------------------------------------------------------------
- --------------------
15,121,129
- ------------------------------------------------------------
- --------------------
Short-Term(e) -- 1.8%
Hillsborough County PCR, (Tampa Electric
Company Project):
200,000 VMIG 1* 4.500% due 5/15/18
200,000
600,000 VMIG 1* 4.500% due 9/1/25
600,000
1,300,000 VMIG 1*Jacksonville PCR (Florida Power and
Light Company
Project), 4.500% due 5/1/29
1,300,000
- ------------------------------------------------------------
- --------------------
2,100,000
- ------------------------------------------------------------
- --------------------
Solid Waste -- 4.2%
2,050,000 A Broward County Resource Recovery
Revenue,
(Broward Waste Energy North Project),
7.950% due 12/1/08(c)
2,275,500
1,000,000 AAA Lee County Solid Waste, MBIA-Insured,
7.000% due 10/1/11(b)
1,096,250
1,500,000 A+ St. Lucie County Solid Waste Disposal
Revenue
Bonds, Florida Power & Light Co.
Project),
7.150% due 2/1/23(b)
1,606,875
- ------------------------------------------------------------
- --------------------
4,978,625
- ------------------------------------------------------------
- --------------------
Tax Allocation -- 1.6%
2,000,000 BBB Miami Beach Redevelopment Agency Tax
Increment
Revenue, City Center Historic
Convention Village,
5.875% due 12/1/22(b)
1,860,000
- ------------------------------------------------------------
- --------------------
Transportation -- 7.7%
1,250,000 Aa* Dade County Aviation Facilities Revenue
Bonds,
Series U, 6.750% due 10/1/06(b)
1,332,812
1,000,000 AAA Dade County Seaport Refunded Revenue,
MBIA-Insured, 5.750% due 10/1/15
976,250
1,500,000 Aa1* Ocean Highway and Port Authority, Nassau
County,
Adjustable Demand Revenue Bonds,
Series 1990,
LOC ABN Ambro Bank NV, 6.250%
mandatory
tender 12/1/02(b)
1,621,875
See Notes to Financial Statements.
19
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Schedules of Investments (unaudited) (continued)
September 30, 1995
- ------------------------------------------------------------
- --------------------
FLORIDA PORTFOLIO
FACE
AMOUNT RATING SECURITY
VALUE
============================================================
====================
Transportation -- 7.7% (continued)
$1,500,000 AA- Port Everglades Authority, Port
Improvement
Revenue Refunding, FSA-Insured,
5.000% due 9/1/16
$ 1,338,750
2,000,000 AAA Port Everglades Port Improvement, 7.125%
due
11/1/16
2,387,500
1,355,000 AAA Volusia County Airport System Revenue,
Daytona Beach Regional Airport, MBIA-
Insured,
7.000% due 10/1/21(b)
1,461,706
- ------------------------------------------------------------
- --------------------
9,118,893
- ------------------------------------------------------------
- --------------------
Utilities -- 5.5%
3,000,000 AAA Escambia County Utility System Authority
Revenue Bonds, Series B, FGIC-Insured,
6.250% due 1/1/15
3,180,000
1,350,000 BBB Guam Power Authority Revenue, Series A,
6.750% due 10/1/24
1,385,437
1,000,000 Aa1* Orlando Utility Commission Water &
Electric
Revenue Refunding, 6.000% due 10/1/10
1,063,750
1,000,000 A- Puerto Rico Electric Power Authority
Revenue,
Series Z, 5.250% due 7/1/21
891,250
- ------------------------------------------------------------
- --------------------
6,520,437
- ------------------------------------------------------------
- --------------------
Water and Sewer -- 2.7%
1,000,000 AAA Coral Springs Improvement District,
Broward
County Water and Sewer Refunding,
Series 92,
MBIA-Insured, 6.000% due 6/1/10
1,066,250
2,000,000 AAA Seminole County Water & Sewer Refunding
&
Improvement, MBIA-Insured, 6.000% due
10/1/12 2,090,000
- ------------------------------------------------------------
- --------------------
3,156,250
- ------------------------------------------------------------
- --------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $111,311,629)(f)
$117,725,655
============================================================
====================
(a) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds
escrowed to maturity by U.S. Government Securities are
considered by
manager to be triple-A rated even if issuer has not
applied for new
ratings.
(b) Income from these issues is considered a preference
item for purposes of
calculating the alternative minimum tax.
(c) Securities segregated by Custodian for open purchase
commitment.
(d) Residual interest bonds -- coupon varies inversely with
level of short-term
tax-exempt interest rates.
(e) Variable rate obligation payable at par on demand at
anytime on no more
than seven days notice.
(f) Aggregate cost for Federal income tax purposes is
substantially the same.
See page 21 for definition of ratings and certain
security descriptions.
See Notes to Financial Statements.
20
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Bond Ratings
- ------------------------------------------------------------
- --------------------
All ratings are by Standard & Poor's Corporation, except
those identified by an
asterisk (*) are rated by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be
modified by the addition
of a plus (+) or a minus (-) sign to show relative
standings within the major
rating categories.
AAA -- Bonds rated "AAA"' have the highest rating
assigned by Standard &
Poor's. Capacity to pay interest and repay principal is
extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay
interest and repay
principal and differ from the highest rated issues only
in a small degree.
A -- Bonds rated "A" have a strong capacity to pay
interest and repay
principal although they are somewhat mor susceptible to
the adverse effects
of changes in circumstances and economic conditions
than bonds in higher
rated categories.
BBB -- Bonds rated "BBB" are regarded as having an
adequate capacity to pay
interest and repay principal. Whereas they
normally exhibit adequate
protection parameters, adverse economic
conditions or changing
circumstances are more likely to lead to a
weakened capacity to pay
interest and repay principal for bonds in this
category than in higher
rated categories.
Moody's -- Numerical modifiers 1, 2, and 3 may be applied to
each generic rating
from "Aa" to `Baa", where 1 is the highest and 3 the
lowest rating within
its generic category.
Aaa -- Bonds that are rated Aaa are judged to be of the
best quality. They
carry the smallest degree of investment risk and are
generally referred to
as "gilt edge." Interest payments are protected
by a large or by an
exceptionally stable margin and principal is
secure. While the various
protective elements are likely to change, such changes
as can be visualized
are most unlikely to impair the fundamentally
strong position of such
issues.
Aa -- Bonds that are rated Aa are judged to be of
high quality by all
standards. Together with the Aaa group they comprise
what are generally
known as high grade bonds. They are rated lower than
the best bonds because
margins of protection may not be as large as in
Aaa securities or
fluctuation of protective elements may be of greater
amplitude or there may
be other elements present which make the long-term
risks appear somewhat
larger than in Aaa securities.
A -- Bonds that are rated A possess many favorable
investment attributes and
are to be considered as upper medium grade
obligations. Factors giving
security to principal and interest are considered
adequate but elements may
be present which suggest a susceptibility to
impairment some time in the
future.
Baa -- Bonds that are rated Baa are considered as medium
grade obligations,
i.e., they are neither highly protected nor poorly
secured. Interest
payments and principal security appear adequate for the
present but certain
protective elements may be lacking or may be
characteristically unreliable
over any great length of time. Such bonds lack
outstanding investment
characteristics and in fact have speculative
characteristics as well.
NR -- Indicates that the bond is not rated by Standard &
Poor's Corporation or
Moody's Investor's Services.
- ------------------------------------------------------------
- --------------------
Short-Term Securities Ratings
- ------------------------------------------------------------
- --------------------
SP-1 -- Standard & Poor's highest rate rating indicating
very strong or strong
capacity to pay principal and interest; those issues
determined to possess
overwhelming safety characteristics are denoted with a
plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and
VRDO rating indicating
that the degree of safety regarding timely payment is
either overwhelming
or very strong; those issues determined to possess
overwhelming safety
characteristics are denoted with a (+) sign.
P-1 -- Moody's highest rating for commercial paper and
for VRDO prior to the
advent of the VMIG 1 rating.
VMIG 1 -- Moody's highest rating for issues having
demand feature --
variable-rate demand obligation (VRDO)
SECURITY DESCRIPTIONS
AIG -- American International Guaranty GNMA --
Government National Mortgage
AMBAC -- American Municipal Bond Assurance
Association
CGIC -- Capital Guaranty Insurance GO -- General
Obligation
Company
Company
COP -- Certificate of Participation HFA -- Housing
Finance Authority
FAIRS -- Floating Adjustable Interest Rate IDA --
Industrial Development
Securities Agency
FGIC -- Financial Guaranty Insurance IDR --
Industrial Development
Company
Revenue
FHA -- Federal Housing Administration NFLOS-- Inverse
Floaters
FHLMC -- Federal Home Loan Mortgage LOC -- Letter
of Credit
Corporation MBIA --
Municipal Bond Investors
FNMA -- Federal National Mortgage
Assurance Corporation
Association PCF --
Pollution Control Financing
FSA -- Financial Security Assurance
Authority
GEMICO-- General Electric Mortgage PCR --
Pollution Control Revenue
Insurance Company RIB -- Residual
Interest Bonds
GIC -- Guaranteed Investment Contract VRDD -- Variable
Rate Demand Note
VRWE -- Variable
Rate Wednesday
Demand
21
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Assets and Liabilities (unaudited)
September 30, 1995
- ------------------------------------------------------------
- --------------------
Florida
Limited
Term Florida
Portfolio Portfolio
============================================================
====================
ASSETS:
Investments, at value (Cost -- $13,981,685
and $111,311,629, respectively) $
14,480,850 $ 117,725,655
Cash
- -- 48,229
Receivable for securities sold
75,000 140,000
Receivable for Fund shares sold
- -- 207,987
Interest receivable
365,886 2,442,957
Other assets
- -- 88,100
- ------------------------------------------------------------
- --------------------
Total Assets
14,921,736 120,652,928
- ------------------------------------------------------------
- --------------------
LIABILITIES:
Dividends payable
59,070 553,054
Management fees payable
16,567 85,178
Distribution fees payable
1,221 8,875
Payable for securities purchased
- -- 1,929,469
Accrued expenses and other liabilities
70,602 32,476
- ------------------------------------------------------------
- --------------------
Total Liabilities
147,460 2,609,052
- ------------------------------------------------------------
- --------------------
Total Net Assets
$14,774,276 $118,043,876
============================================================
====================
NET ASSETS:
Par value of shares of beneficial interest $
2,196 $ 8,952
Capital paid in excess of par value
14,682,072 111,452,340
Undistributed net investment income
137,806 126,041
Accumulated net realized gain (loss) on
security transactions
(546,963) 42,517
Net unrealized appreciation of investments
499,165 6,414,026
- ------------------------------------------------------------
- --------------------
Total Net Assets
$14,774,276 $118,043,876
============================================================
====================
Shares Outstanding:
Class A
1,785,868 8,095,809
---------------------------------------------------------
- --------------------
Class B
- -- 303,940
---------------------------------------------------------
- --------------------
Class C
409,901 175,957
---------------------------------------------------------
- --------------------
Class Y
- -- 376,790
---------------------------------------------------------
- --------------------
Net Asset Value:
Class A (and redemption price)
$6.73 $13.18
---------------------------------------------------------
- --------------------
Class B*
- -- $13.17
---------------------------------------------------------
- --------------------
Class C**
$6.72 $13.18
---------------------------------------------------------
- --------------------
Class Y (and redemption price)
- -- $13.18
---------------------------------------------------------
- --------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 2.04% and 4.17% of
net asset value per share, respectively)
$6.87 $13.73
============================================================
====================
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if shares
are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
22
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Operations (unaudited)
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995
Florida
Limited
Term Florida
Portfolio Portfolio
============================================================
====================
INVESTMENT INCOME:
Interest
$471,864 $3,643,632
- ------------------------------------------------------------
- --------------------
EXPENSES:
Management fees (Note 4)
37,098 255,869
Distribution fees (Note 4)
15,393 98,748
Shareholder communications
7,000 8,023
Shareholder and system servicing fees
5,855 16,575
Audit and legal
4,500 4,362
Pricing service fees
3,000 7,521
Trustees' fees
1,800 1,504
Custody
1,500 6,017
Registration fees
1,000 7,020
Other
2,000 1,355
- ------------------------------------------------------------
- --------------------
Total Expenses
79,146 406,994
Less: Management fee waiver
32,514 --
- ------------------------------------------------------------
- --------------------
Net Expenses
46,632 406,994
- ------------------------------------------------------------
- --------------------
Net Investment Income
425,232 3,236,638
- ------------------------------------------------------------
- --------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE5):
Realized Gain (Loss) From Security Transactions
(excluding short-term securities):
Proceeds from sales
6,048,509 17,221,021
Cost of securities sold
6,081,145 16,864,506
- ------------------------------------------------------------
- --------------------
Net Realized Gain (Loss)
(32,636) 356,515
- ------------------------------------------------------------
- --------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period
48,785 4,266,319
End of period
499,165 6,414,026
- ------------------------------------------------------------
- --------------------
Increase in Net Unrealized Appreciation
450,380 2,147,707
- ------------------------------------------------------------
- --------------------
Net Gain on Investments
417,744 2,504,222
- ------------------------------------------------------------
- --------------------
Increase in Net Assets From Operations
$842,976 $5,740,860
============================================================
====================
See Notes to Financial Statements.
23
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------
- --------------------
For the Six Months Ended September 30, 1995 (unaudited)
and the Year Ended March 31, 1995
Florida
Limited Term
Portfolio
Florida Portfolio
============================================================
====================
September 30 March 31
September 30 March 31
- ------------------------------------------------------------
- --------------------
OPERATIONS:
Net investment income $ 425,232 $1,091,585 $
3,236,638 $ 6,428,488
Net realized gain (loss) (32,636) (511,066)
356,515 (270,642)
Increase in net
unrealized appreciation 450,380 748,302
2,147,707 1,196,626
- ------------------------------------------------------------
- --------------------
Increase in Net Assets
From Operations 842,976 1,328,821
5,740,860 7,354,472
- ------------------------------------------------------------
- --------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM
(NOTE 3):
Net investment income (394,466) (1,059,373)
(3,224,686) (6,449,732)
Net realized gains -- --
- -- (5,896)
- ------------------------------------------------------------
- --------------------
Decrease in Net Assets
From Distributions
to Shareholders (394,466) (1,059,373)
(3,224,686) (6,455,628)
- ------------------------------------------------------------
- --------------------
FUND SHARE
TRANSACTIONS (NOTE 7):
Net proceeds from sale of
shares 411,605 8,700,699
11,920,565 28,605,984
Net asset value of shares
issued for reinvestment
of dividends 180,782 509,582
884,992 2,040,050
Cost of shares reacquired (4,789,540) (14,454,248)
(9,741,895) (29,493,648)
- ------------------------------------------------------------
- --------------------
Increase (Decrease) in Net
Assets From Fund Share
Transactions (4,197,153) (5,243,967)
3,063,662 1,152,386
- ------------------------------------------------------------
- --------------------
Increase (Decrease) in
Net Assets (3,748,643) (4,974,519)
5,579,836 2,051,230
NET ASSETS:
Beginning of period 18,522,919 23,497,438
112,464,040 110,412,810
- ------------------------------------------------------------
- --------------------
End of period* $14,774,276 $18,522,919
$118,043,876 $112,464,040
============================================================
====================
* Includes undistributed net
investment income of: $137,806 $107,040
$126,041 $114,089
============================================================
====================
See Notes to Financial Statements.
24
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------
- --------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Florida Limited Term and Florida Portfolios
("Portfolios") are separate
investment portfolios of the Smith Barney Muni Funds
("Fund"). The Fund is a
Massachusetts business trust registered under the Investment
Company Act of
1940, as amended, as a non-diversified, open-end management
investment company.
The Fund consists of these two Portfolios and ten other
separate investment
portfolios: California, Georgia, Limited Term, National, New
York, New Jersey,
Ohio, Pennsylvania, New York Money Market and California
Money Market
portfolios. The financial statements and financial
highlights for the other
portfolios are presented in separate semi-annual reports.
The significant accounting policies consistently
followed by the Fund are:
(a) security transactions are accounted for on trade date;
(b) securities are
valued at the mean between the quoted bid and asked prices
provided by an
independent pricing service that are based on transactions
in municipal
obligations, quotations from municipal bond dealers, market
transactions in
comparable securities and various relationships between
securities; (c)
short-term securities and securities maturing within 60 days
are valued at cost
plus (minus) accreted discount (amortized premium), which
approximates value;
(d) gains or losses on the sale of securities are calculated
by using the
specific identification method; (e) interest income,
adjusted for amortization
of premiums and accretion of original issue discount, is
recorded on the accrual
basis; market discount is recognized upon the disposition of
the security; (f)
direct expenses are charged to each portfolio and each
class; management fees
and general fund expenses are allocated on the basis of
relative net assets; and
(g) the Portfolios intend 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.
2. PORTFOLIO CONCENTRATION
Since each Portfolio invests primarily in obligations
of issuers within
Florida, it is subject to possible concentration risks
associated with economic,
political, or legal developments or industrial or regional
matters specifically
affecting Florida.
3. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Portfolios intend to satisfy conditions that will
enable interest from
municipal securities, which is exempt from Federal income
tax and from
designated state income taxes, to retain such tax-exempt
status when distributed
to the shareholders of the respective Portfolios.
Capital gain distributions, if any, are taxable to
shareholders, and are
declared and paid at least annually.
25
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
4. MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a
subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager to
the Fund. The
Portfolios pay SBMFM a management fee calculated at the
annual rate of 0.45% of
average daily net assets. This fee is calculated daily and
paid monthly.
SBMFMwaived $32,514 of its management fees for the Florida
Limited Term
Portfolio for the six months ended September 30, 1995.
Smith Barney Inc. ("SB"), another subsidiary of SBH,
acts as distributor of
Fund shares. For the six months ended September 30, 1995, SB
received sales
charges of approximately $70,000 on purchases of the
Portfolios' Class A shares.
There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B
shares of the Florida Portfolio if redemption occurs less
than one year from
initial purchase. This CDSC declines by 0.50% the first year
after purchase and
thereafter by 1.00% per year until no CDSC is incurred. The
Portfolios' Class C
shares have a 1.00% CDSC if redemption occurs within the
first year from the
date such investment was made. For the six months ended
September 30, 1995,
CDSCs of approximately $13,000 were paid to SB.
Pursuant to a Distribution Plan, the Florida Limited
Term Portfolio pays a
service fee with respect to Class A and C shares calculated
at the annual rate
of 0.15% of the average daily net assets of each class. The
Florida Portfolio
pays a service fee with respect to Class A, B and C shares
calculated at the
annual rate of 0.15% of the average daily net assets of each
class. In addition,
the Florida Limited Term Portfolio pays a distribution fee
with respect to Class
C shares calculated at the annual rate of 0.20% of the
average daily net assets.
The Florida Portfolio pays a distribution fee with respect
to Class B and C
shares calculated at the annual rates of 0.50% and 0.55%,
respectively, of the
average daily net assets of each class.
All officers and two Trustees of the Fund are employees
of SB.
5. INVESTMENTS
During the six months ended September 30, 1995, the
aggregate cost of
purchases and proceeds from sales (including maturities, but
excluding
short-term securities) of investments were as follows:
Florida
Limited Term
Florida
Portfolio
Portfolio
============================================================
====================
Purchases $ 875,569
$19,768,278
- ------------------------------------------------------------
- --------------------
Sales 6,048,509
17,221,021
============================================================
====================
26
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
At September 30, 1995, the gross unrealized
appreciation and depreciation
of investments for Federal income tax purposes were as
follows:
Florida
Limited Term
Florida
Portfolio
Portfolio
============================================================
====================
Gross unrealized appreciation $509,137
$6,709,190
Gross unrealized depreciation (9,972)
(295,164)
- ------------------------------------------------------------
- --------------------
Net unrealized appreciation $499,165
$6,414,026
============================================================
====================
6. CAPITAL LOSS CARRYFORWARD
At March 31, 1995, the Florida Limited Term and Florida
Portfolios had for
Federal tax purposes approximately $514,327 and $313,998,
respectively, of
unused loss carryforwards available to offset future capital
gains. To the
extent that these carryforward losses are used to offset
capital gains, it is
possible that the gains so offset will not be distributed.
The amount and
expiration of the carryovers are indicated below. Expiration
occurs on March 31,
of the year indicated:
2002 2003
============================================================
====================
Florida Limited Term Portfolio
$1,644 $512,683
Florida Portfolio --
313,998
============================================================
====================
7. SHARES OF BENEFICIAL INTEREST
At September 30, 1995, there were an unlimited amount
of shares of
beneficial interest of $0.001 par value authorized. The
Portfolios have the
ability to issue multiple classes of shares. Each share of a
class represents an
identical interest in its respective Portfolio and has the
same rights, except
that each class bears expenses specifically related to the
distribution of its
shares. Effective November 7, 1994, the Portfolios adopted a
new class
structure, renaming Class B shares as Class C shares, and
exchanging the former
Class C shares into Class A shares. At September 30, 1995,
total paid-in capital
amounted to the following for each class and respective
Portfolio:
Portfolio Class A Class B Class
C Class Y
============================================================
====================
Florida Limited Term $ 11,934,582 --
$2,749,686 --
Florida 100,232,191 $3,843,868
2,385,233 $5,000,000
============================================================
====================
27
<PAGE>
Smith Barney Muni Funds
- ------------------------------------------------------------
- --------------------
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------
- --------------------
Transactions in shares of each class were as follows:
Six Months Ended
Year Ended
September 30, 1995*
March 31, 1995
-------------------- ----
- -----------------
Florida Limited Term Portfolio Shares Amount
Shares Amount
============================================================
====================
Class A+
Shares sold 40,145 $ 268,288
1,317,436 $ 8,400,374
Shares issued on reinvestment 22,860 151,573
68,245 436,507
Shares redeemed (606,830) (4,050,054)
(2,113,417) (13,459,174)
- ------------------------------------------------------------
- --------------------
Net Decrease (543,825) $(3,630,193)
(727,736) $ (4,622,293)
============================================================
====================
Class C++
Shares sold 21,323 $ 143,317
46,614 $ 300,325
Shares issued on reinvestment 4,154 29,209
11,437 73,075
Shares redeemed (110,943) (739,486)
(155,645) (995,074)
- ------------------------------------------------------------
- --------------------
Net Decrease (85,466) $ (566,960)
(97,594) $ (621,674)
============================================================
====================
Florida Portfolio
============================================================
====================
Class A+
Shares sold 357,537 $ 4,679,047
2,038,171 $25,235,982
Shares issued on reinvestment 63,388 825,383
153,840 1,937,080
Shares redeemed (679,680) (8,902,753)
(2,258,420) (28,184,592)
- ------------------------------------------------------------
- --------------------
Net Decrease (258,755) $(3,398,323)
(66,409) $ (1,011,530)
============================================================
====================
Class B
Shares sold 152,923 $ 1,997,813
177,570 $ 2,186,727
Shares issued on reinvestment 2,581 33,603
1,046 13,159
Shares redeemed (5,936) (77,915)
(24,244) (309,519)
- ------------------------------------------------------------
- --------------------
Net Increase 149,568 $ 1,953,501
154,372 $ 1,890,367
============================================================
====================
Class C++
Shares sold 18,539 $ 243,705
92,926 $ 1,183,275
Shares issued on reinvestment 1,999 26,006
7,147 89,811
Shares redeemed (57,932) (761,227)
(80,891) (999,537)
- ------------------------------------------------------------
- --------------------
Net Increase (Decrease) (37,394) $ (491,516)
19,182 $ 273,549
============================================================
====================
Class Y
Shares sold 376,790 $ 5,000,000
- -- --
Shares issued on reinvestment -- --
- -- --
Shares redeemed -- --
- -- --
- ------------------------------------------------------------
- --------------------
Net Increase 376,790 $ 5,000,000
- -- --
============================================================
====================
* For the period from September 19, 1995 (inception date)
to September 30,
1995.
+ On October 10, 1994, the former Class C shares were
exchanged into Class A
shares; therefore the Class C share activity for the
period from April 1,
1994 to October 9, 1994 is included with Class A share
activity.
++ On November 7, 1994, the former Class B shares were
renamed Class C shares.
28
<PAGE>
Smith Barney Muni Funds
Florida Limited Term Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
Class A Shares(a) 1995(b)
1995 1994(c)
============================================================
====================
Net Asset Value, Beginning of Period $6.56
$6.44 $6.50
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (1) 0.19
0.34 0.26
Net realized and unrealized gain (loss) 0.14
0.11 (0.08)
- ------------------------------------------------------------
- --------------------
Total Income From Operations 0.33
0.45 0.18
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income (0.16)
(0.33) (0.24)
- ------------------------------------------------------------
- --------------------
Total Distributions (0.16)
(0.33) (0.24)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Period $6.73
$6.56 $6.44
- ------------------------------------------------------------
- --------------------
Total Return 5.13%++
7.17% 2.74%++
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s) $12,018
$15,277 $13,147
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets:
Expenses (1) 0.53%+
0.44% 0.20%+
Net investment income 5.20+
5.37 4.90+
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 5.40%
54.65% 16.28%
============================================================
====================
(a) On October 10, 1994, the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995
(unaudited).
(c) For the period from April 27, 1993 (inception date) to
March 31, 1994.
(1) The manager has waived all or part of its fees for the
six months ended
September 30, 1995 and in each period in the two-year
period ended March
31, 1995. If such fees were not waived, the per share
decreases in net
investment income and the ratios of expenses to average
net assets would
have been as follows:
Per Share Decreases
Expense Ratios
in Net Investment Income
Without Fee Waivers*
--------------------------- ------
- --------------------
1995(b) 1995 1994(c)
1995(b) 1995 1994(c)
------- ---- ------- ------
- - ---- -------
Class A $.043 $.010 $.029 0.92%+
0.82% 0.71%+
* As a result of voluntary expense limitations, the
ratio of expenses to
average net assets will not exceed 0.80% for
Class A shares.
++ Total return is not annualized, as the result may not
be representative of
the total return for the year.
+ Annualized.
29
<PAGE>
Smith Barney Muni Funds
Florida Limited Term Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest outstanding
throughout each
period:
Class C Shares(a) 1995(b)
1995 1994(c)
============================================================
====================
Net Asset Value, Beginning of Period $6.55
$6.43 $6.51
- ------------------------------------------------------------
- --------------------
Income From Operations:
Net investment income (1) 0.17
0.32 0.24
Net realized and unrealized gain (loss) 0.16
0.11 (0.09)
- ------------------------------------------------------------
- --------------------
Total Income From Operations 0.33
0.43 0.15
- ------------------------------------------------------------
- --------------------
Less Distributions From:
Net investment income (0.16)
(0.31) (0.23)
- ------------------------------------------------------------
- --------------------
Total Distributions (0.16)
(0.31) (0.23)
- ------------------------------------------------------------
- --------------------
Net Asset Value, End of Period $6.72
$6.55 $6.43
- ------------------------------------------------------------
- --------------------
Total Return 5.04%++
6.84% 2.17%++
- ------------------------------------------------------------
- --------------------
Net Assets, End of Period (000s) $2,756
$3,246 $3,815
- ------------------------------------------------------------
- --------------------
Ratios to Average Net Assets:
Expenses (1) 0.74%+
0.70% 0.52%+
Net investment income 4.98+
4.98 4.28+
- ------------------------------------------------------------
- --------------------
Portfolio Turnover Rate 5.40%
54.65% 16.28%
============================================================
====================
(a) On November 7, 1994, the former Class B shares were
renamed Class C shares.
(b) For the six months ended September 30, 1995
(unaudited).
(c) For the period from May 4, 1993 (inception date) to
March 31, 1994.
(1) The manager has waived all or part of its fees for the
six months ended
September 30, 1995 and in each period in the two-year
period ended March
31, 1995. If such fees were not waived, the per share
decreases in net
investment income and the ratios of expenses to average
net assets would
have been as follows:
Per Share Decreases
Expense Ratios
in Net Investment Income
Without Fee Waivers*
-------------------------- -------
- --------------------
1995(b) 1995 1994(c) 1995(b)
1995 1994(c)
------- ---- ------- -------
- ---- -------
Class C $.043 $.025 $.033 1.13%+
1.09% 1.04%+
* As a result of voluntary expense limitations, the ratio
of expenses to
average net assets will not exceed 1.00% for Class C
shares.
++ Total return is not annualized, as the result may not
be representative of the
total return for the year.
+ Annualized.
30
<PAGE>
Smith Barney Muni Funds
Florida Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest
outstanding throughout each
period:
<TABLE>
<CAPTION>
Class A Shares(a) 1995(b) 1995
1994 1993 1992(c)
============================================================
=========================
<S> <C> <C>
<C> <C> <C>
Net Asset Value, Beginning of Period $12.89 $12.82
$13.21 $12.32 $12.00
- ------------------------------------------------------------
- -------------------------
Income From Operations:
Net investment income (1) 0.38 0.75
0.77 0.79 0.73
Net realized and unrealized gain
(loss) 0.28 0.08#
(0.39) 0.91 0.29
- ------------------------------------------------------------
- -------------------------
Total Income From Operations 0.66 0.83
0.38 1.70 1.02
- ------------------------------------------------------------
- -------------------------
Less Distributions From:
Net investment income (0.37) (0.76)
(0.77) (0.80) (0.70)
Net realized gains -- --
- -- (0.01) --
- ------------------------------------------------------------
- -------------------------
Total Distributions (0.37) (0.76)
(0.77) (0.81) (0.70)
- ------------------------------------------------------------
- -------------------------
Net Asset Value, End of Period $13.18 $12.89
$12.82 $13.21 $12.32
- ------------------------------------------------------------
- -------------------------
Total Return 5.20%++ 6.77%
2.75% 14.21% 8.70%++
- ------------------------------------------------------------
- -------------------------
Net Assets, End of Period (000s) $106,753 $107,724
$104,681 $102,202 $67,998
- ------------------------------------------------------------
- -------------------------
Ratios to Average Net Assets:
Expenses (1) 0.69%+ 0.61%
0.54% 0.46% 0.23%+
Net investment income 5.72+ 5.97
5.71 6.15 6.70+
- ------------------------------------------------------------
- -------------------------
Portfolio Turnover Rate 17.09% 43.23%
20.40% 25.57% 41.72%
============================================================
=========================
Class B Shares 1995(b) 1995(d)
============================================================
=========================
Net Asset Value, Beginning of Period $12.89 $11.91
- ------------------------------------------------------------
- -------------------------
Income From Operations:
Net investment income 0.33 0.30
Net realized and unrealized gain 0.29 0.97#
- ------------------------------------------------------------
- -------------------------
Total Income From Operations 0.62 1.27
- ------------------------------------------------------------
- -------------------------
Less Distributions:
Net investment income (0.34) (0.29)
Net realized gains -- --
- ------------------------------------------------------------
- -------------------------
Total Distributions (0.34) (0.29)
- ------------------------------------------------------------
- -------------------------
Net Asset Value, End of Period $13.17 $12.89
- ------------------------------------------------------------
- -------------------------
Total Return++ 4.89% 10.77%
- ------------------------------------------------------------
- -------------------------
Net Assets, End of Period (000s) $4,004 $1,990
- ------------------------------------------------------------
- -------------------------
Ratios to Average Net Assets+:
Expenses 1.20% 1.20%
Net investment income 5.22 5.57
- ------------------------------------------------------------
- -------------------------
Portfolio Turnover Rate 17.09% 43.23%
============================================================
=========================
</TABLE>
(a) On October 10, 1994, the former Class C shares were
exchanged into Class A
shares.
(b) For the six months ended September 30, 1995
(unaudited).
(c) For the period from April 2, 1991 (inception date) to
March 31, 1992.
(d) For the period from November 16, 1994 (inception date)
to March 31, 1995.
(1) See page 32 for Note 1.
# Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value
less than the beginning of the period.
++ Total return is not annualized, as the result may not
be representative of
the total return for the year.
+ Annualized.
31
<PAGE>
Smith Barney Muni Funds
Florida Portfolio
- ------------------------------------------------------------
- --------------------
Financial Highlights (continued)
- ------------------------------------------------------------
- --------------------
For a share of each class of beneficial interest
outstanding throughout each
period:
<TABLE>
<CAPTION>
Class Y
Class C
Shares(a) Shares
-----------------------
- ------------- ------
1995(b) 1995
1994 1993(c) 1995(d)
============================================================
==========================
<S> <C> <C>
<C> <C> <C>
Net Asset Value, Beginning of Period $12.89 $12.81
$13.20 $12.86 $13.28
- ------------------------------------------------------------
- --------------------------
Income From Operations:
Net investment income 0.33 0.67
0.68 0.19 0.02
Net realized and unrealized gain
(loss) 0.29 0.08#
(0.39) 0.33 (0.06)
- ------------------------------------------------------------
- --------------------------
Total Income From Operations 0.62 0.75
0.29 0.52 (0.04)
- ------------------------------------------------------------
- --------------------------
Less Distributions From:
Net investment income (0.33) (0.67)
(0.68) (0.18) (0.06)
Net realized gains -- --
- -- -- --
- ------------------------------------------------------------
- --------------------------
Total Distributions (0.33) (0.67)
(0.68) (0.18) (0.06)
- ------------------------------------------------------------
- --------------------------
Net Asset Value, End of Period $13.18 $12.89
$12.81 $13.20 $13.18
- ------------------------------------------------------------
- --------------------------
Total Return 4.94%++ 6.12%
2.05% 4.05%++ (0.27)%++
- ------------------------------------------------------------
- --------------------------
Net Assets, End of Period (000s) $2,319 $2,750
$2,487 $691 $4,968
- ------------------------------------------------------------
- --------------------------
Ratios to Average Net Assets:
Expenses (1) 1.27%+ 1.25%
1.24% 1.24%+ 0.52%+
Net investment income 5.14+ 5.40
4.95 5.21+ 5.67+
- ------------------------------------------------------------
- --------------------------
Portfolio Turnover Rate 17.09% 43.23%
20.40% 25.57% 17.09%
============================================================
==========================
</TABLE>
(a) On November 7, 1994 the former Class B shares were
renamed Class C shares.
(b) For the six months ended September 30, 1995
(unaudited).
(c) For the period from January 5, 1993 (inception date) to
March 31, 1993.
(d) For the period from September 19, 1995 (inception date)
to September 30,
1995 (unaudited).
(1) The manager waived all or part of its fees in each
period in the two-year
period ended March 31, 1993. If such fees were not
waived, the per share
decreases in net investment income and the ratios of
expenses to average
net assets would have been as follows:
Per Share Decreases
Expense Ratios
in Net Investment Income
Without Fee Waivers*
------------------------
- --------------------
1993 1992
1993 1992
---- ----
- ---- ----
Class A $.012 $.040
0.56% 0.59%+
* As a result of voluntary expense limitations, the
ratios of expenses to
average net assets will not exceed 0.80%, 1.30% and
1.35% for Class A, B
and C shares, respectively.
# Includes the net per share effect of shareholder sales
and redemptions
activity during the period, most of which occurred at a
net asset value
less than the beginning of the period.
++ Total return is not annualized, as the result may not
be representative of
the total return for the year.
+ Annualized.
32
<PAGE>
Smith Barney
SMITH BARNEY
Muni Funds ----
- --------
A Member of
Travelers Group[LOGO]
Trustees Investment Manager
Jessica M. Bibliowicz Smith Barney Mutual Funds
Management Inc.
Joseph H. Fleiss
Donald R. Foley Distributor
Paul Hardin Smith Barney Inc.
Francis P. Martin, M.D.
Heath B. McLendon, Chairman Custodian
Roderick C. Rasmussen PNC Bank
John P. Toolan
C. Richard Youngdahl Shareholder Servicing
Agent
The Shareholder Services
Officers Group, Inc.
Heath B. McLendon P.O. Box 9134
Chief Executive Officer Boston, MA 02205-9134
Jessica M. Bibliowicz This report is submitted
for
President the general information
of the
shareholders of Smith
Barney
Lewis E. Daidone Muni Funds - Florida
Limited Term and
Senior Vice President Florida Portfolios. It is
not authorized for
and Treasurer distribution to
prospective investors
unless accompanied or
preceded by a
Peter M. Coffey current Prospectus for
the Portfolio,
Vice President which contains
information concerning
the Fund's investment
policies and expenses
Thomas M. Reynolds as well as other
pertinent information.
Controller
Christina T. Sydor
Secretary Smith Barney Muni Funds
388 Greenwich Street
New York, New York 10013
FD 0804 11/95
S E M I - A N N U A L R E P O R T
[GRAPHIC APPEARS HERE]
SMITH BARNEY
MUNI FUNDS
NEW YORK MONEY
MARKET PORTFOLIO
NEW YORK PORTFOLIO
------------------------
September 30, 1995
[LOGO] Smith Barney Mutual Funds
INVESTING FOR YOUR FUTURE.
EVERY DAY.
New York Money Market and New York Portfolios
DEAR SHAREHOLDER:
We are pleased to provide you with this semi-annual report,
which includes
unaudited financial statements, for the Smith Barney Muni
Funds - New York
Portfolio and New York Money Market Portfolio. This report
covers the six
months ended September 30, 1995. For your convenience, we
have summarized this
periods prevailing economic and market conditions below and
outlined our
portfolio strategy during this time. A more detailed summary
of performance and
current holdings can be found in the Historical Performance
and Schedule of
Investments sections that follow.
NEW YORK ECONOMIC HIGHLIGHTS
New York's general obligation debt currently is maintaining
its "A-" rating from
Standard & Poor's and has a "positive" outlook from the
agency. The state
continues to recover, albeit at a modest pace, from its
recent prolonged
recession and economic distress. Growth is being fueled by
New York's
diversified economic base and above-average income levels.
The state's positive
outlook is a reflection of financial and economic
improvements as well as better
fiscal controls. However, New York is still coping with an
historically weak
financial condition and high debt levels. Any rating
improvement would depend in
part on the state's ability to balance its upcoming budgets
and reverse recent
negative revenue stream trends.
MARKET & ECONOMIC OVERVIEW
Over the past six months, the fixed income markets have
been characterized
by generally lower interest rates, as measured by the
decline of 30-year
Treasuries from 7.43% on March 31, 1995 to 6.50% on
September 30, 1995 a drop of
nearly 100 basis points. Long-term municipal bond yields,
however, barely budged
over the time period, starting out on March 30, 1995 at
6.29% as represented by
the Bond Buyer's 25-year Revenue Bond Index and finishing at
6.27% on September
28, 1995. This is due primarily to tax reform concerns.
Although some analysts have been forecasting a slight pick-
up in economic
activity during the final quarter of 1995, it now appears
that the Federal
Reserve Board has been successful in controlling inflation
and encouraging a
sustainable and slower rate of economic growth this year.
The Board declined to
alter the federal funds rate in September, leaving it
unchanged at 5.75%, a move
that reflected its confidence in the current rate of
economic growth.
1
However, while the economy did pick up steam compared to the
sluggish first
quarter of 1995, conflicting indicators all point to
continued economic
uncertainty going into 1996. Consumer spending is rising at
an annual pace of
2.5% to 3%, a relatively neutral rate, further tempered by
recent indications
that consumer households are growing more cautious. A number
of other economic
indicators edged up over the past six months compared to
early 1995, including
car buying, housing starts and industrial production before
slowing again in
September. The most recent Index of Leading Indicators -
used by the U.S.
Government to forecast economic conditions - eased downward
slightly in
September, fueled by cheaper commodity prices. This index
measures eleven
different indicators, ranging from unemployment benefit
claims to building
permits. While a majority of these indicators showed a
slight uptick in
September, others dipped. The overall result was
confirmation of our
expectations for slow economic growth and steady, or even
lower, interest rates
by year end.
In response to these conditions, the municipal bond market
continued to lag
somewhat relative to Treasuries. The big uncertainty over
the municipal market
continues to be tax reform. The current budget, which is
heading for a showdown
in Washington, D.C., contains a capital gains cut but does
not address broader
tax reform. Flat tax proposals are still being discussed,
but a number of
alternate reform measures are on the table as well. We
expect this issue to
emerge as the centerpiece of the 1996 Presidential
elections.
In short, until a more definite consensus emerges from
Washington, D.C., we
cannot be certain of the impact on municipal bonds and are
holding fast on our
relatively cautious investment approach. Looking forward -
and absent radical
tax reform - we expect municipal bonds to perform well
relative to taxable
investments, due primarily to diminishing supply. There
continues to be little
refinancing or new issue activity. New issue activity is
increasing toward year-
end but remains well below the levels seen in previous
years. The Public
Securities Association now predicts approximately $140
billion in new issues by
the end of 1995, less than half the record amount that came
to market in 1993.
This reduction in supply has helped to support underlying
values. If the supply
situation continues into 1996 as we expect, stronger
appreciation oppportunites
could develop, particularly for bonds with long maturities
and good call
protection.
NEW YORK PORTFOLIO PERFORMANCE
The New York Portfolio posted a one-year total return of
10.08% (Class A shares)
ended September 30, 1995. This return compared favorably
with the 9.32% average
total return for all New York municipal funds tracked by
Lipper Analytical
Services over this same time period. For the five years
ended on September 30,
1995, the Portfolio once again substantially
2
outperformed its peers by posting a cumulative total return
of 56.76% compared
to an average of 50.24%. In addition, this performance was
achieved with no
capital gain distributions, thus preserving the favorable
tax status of
distributed income.
NEW YORK PORTFOLIO STRATEGY
While there are certainly some near-term risks at current
market levels, our
long-term outlook for inflation and interest rates is
positive. In addition,
long-term municipals are currently offering excellent value
relative to taxable
investments. At more than 90% of the yield on 30-year
Treasuries, all but the
most radical of tax reform proposals is fully discounted in
current long-term
municipal bond prices. Accordingly, we will continue to
balance the interest
rate sensitivity of the Portfolio by investing in a
strategically diversified
combination of short- and long-term maturities, but with a
bias toward
lengthening the overall maturity structure. We intend to
retain most of our
substantial commitment to higher coupon issues trading at a
premium and callable
prior to maturity for the high income they are providing and
the measure of
protection they afford in the event interest rates should
rise. However, we are
increasing our focus on issues with comparable maturities
but greater call
protection in anticipation of a possible further downturn in
rates at the end of
this year or early 1996.
NEW YORK MONEY MARKET PORTFOLIO
As of September 30, 1995, the New York Money Market
Portfolios 7-day current
yield was 3.45%. Its effective 7-day yield - which reflects
compounding - was
3.50%. This means that investors in the 39.6% federal tax
bracket would have had
to earn a 5.79% taxable yield to match the tax-free income
provided by the
Portfolio. The Portfolio's actual tax-free return for the
twelve months ended on
September 30, 1995 was 3.12%.
The Portfolio continues to invest only in the highest
quality short-term
securities rated within or comparable to the two top rating
categories.
Currently the average maturity of the Portfolio is 40 - 60
days which allows us
to immediately adjust the Portfolio's holdings in response
to changes in
interest rates. Keep in mind, however, that the New York
Money Market Portfolio
is neither insured, nor guaranteed by the U.S. Government
and there can be no
assurance that the Portfolio will be able to maintain a
stable net asset value
of $1.00 per share.
We were saddened by the loss of an outstanding business
leader and Trustee of
the Portfolios: Ralph D. Creasman. He made significant
contributions to his
community and state. His wisdom and influence will be
missed.
3
At this time, we would like to thank you for your continued
participation in our
New York portfolios and for your on going confidence in our
management approach.
Sincerely,
/S/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman and Vice President and
Chief Executive Officer Investment Officer
/s/ Karen Mahoney-Malcomson /s/ Lawrence T.
McDermott
Karen Mahoney-Malcomson Lawrence T. McDermott
Vice President and Vice President and
Investment Officer Investment Officer
November 15, 1995
4
SMITH BARNEY MUNI FUNDS
NEW YORK PORTFOLIO
Historical Performance -- Class A 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>
9/30/95 $12.83 $13.09 $0.37
$0.00 4.98%+
3/31/95 12.83 12.83 0.77
0.00 6.32
3/31/94 13.25 12.83 0.79
0.00 2.66
3/31/93 12.33 13.25 0.81
0.00 14.48
3/31/92 11.80 12.33 0.81
0.00 11.98
3/31/91 11.67 11.80 0.85
0.00 8.74
3/31/90 11.48 11.67 0.87
0.00 9.28
3/31/89 11.25 11.48 0.86
0.00 10.03
3/31/88 12.46 11.25 0.85
0.00 (2.63)
Inception* - 3/31/87 12.50 12.46 0.13
0.00 0.52+
----- ----
- -
Total $7.11
$0.00
=====
=====
</TABLE>
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>
9/30/95 $12.84 $13.10 $0.34
$0.00 4.75%+
Inception* - 3/31/95 11.96 12.84 0.29
0.00 9.92+
----- -
- ----
Total $0.63
$0.00
=====
=====
</TABLE>
Historical Performance -- Class C 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>
9/30/95 $12.83 $13.08 $0.34
$0.00 4.65%+
3/31/95 12.82 12.83 0.68
0.00 5.66
3/31/94 13.24 12.82 0.70
0.00 1.96
Inception* - 3/31/93 12.84 13.24 0.12
0.00 4.04+
-----
- -----
Total $1.84
$0.00
=====
=====
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS MONTHLY
AND CAPITAL GAINS, IF ANY, ANNUALLY.
5
SMITH BARNEY MUNI FUNDS
NEW YORK PORTFOLIO
Average Annual Total Return
<TABLE>
<CAPTION>
Without
Sales Charge/(1)/
-------------------
- ----------------------
Class A
Class B Class C
------- --
- ----- -------
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 4.98%
4.75% 4.65%
Year Ended 9/30/95 10.08
N/A 9.45
Five Years Ended 9/30/95 9.40
N/A N/A
Inception* through 9/30/95 7.51
15.14 6.02
<CAPTION>
With
Sales Charge/(2)/
-------------------
- ----------------------
Class A
Class B Class C
------- ---
- ---- -------
<S> <C> <C>
<C>
Six Months Ended 9/30/95+ 0.82%
0.25% 3.65%
Year Ended 9/30/95 5.67
N/A 8.45
Five Years Ended 9/30/95 8.51
N/A N/A
Inception* through 9/30/95 7.01
10.64 6.02
Cumulative Total Return
Without
Sales Charge/(1)/
-----------
- -------------
<S>
<C>
Class A (Inception* through 9/30/95)
87.92%
Class B (Inception* through 9/30/95)
15.14
Class C (Inception* through 9/30/95)
17.25
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value and does not reflect deduction of the
applicable sales charge
with respect to Class A shares or the applicable
contingent deferred sales
charges (CDSC) with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions at net
asset value. In addition, Class A shares reflect the
deduction of the
maximum initial sales charge of 4.00% and Class B shares
reflect the
deduction of a 4.50% CDSC, which applies if shares are
redeemed less than
one year from initial purchase. This CDSC declines by
0.50% the first year
after purchase and thereafter by 1.00% per year until no
CDSC is incurred.
Class C shares 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 and C shares are January
16, 1987, November
11, 1994 and January 8, 1993, respectively.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
6
SMITH BARNEY MUNI FUNDS
NEW YORK PORTFOLIO
Historical Performance
GROWTH OF $10,000 INVESTED IN CLASS A SHARES
OF
THE NEW YORK PORTFOLIO VS.
LEHMAN MUNI BOND FUND INDEX+
(unaudited)
- ------------------------------------------------------------
- --------------------
January 1987 - September 1995
[GRAPH APPEARS HERE]
+ Hypothetical illustration of $10,000 invested in Class A
shares at inception
on January 16, 1987, assuming deduction of the maximum
4.00% sales charge at
the time of investment and reinvestment of dividends
(after deduction of
applicable sales charges through November 6, 1994,
afterwards at net asset
value) and capital gains at net asset value through
September 30, 1995. The
Lehman Muni Bond Fund Index is a broad based, total
return index, comprised
of 8,000 actual bonds which are all investment grade,
fixed rate, long term
maturities (greater than two years) and are selected from
issues larger than
$50 million dated since January, 1984. The index is
unmanaged and is not
subject to the same management and trading expenses of a
mutual fund. The
performance of the Portfolios 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.
7
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited)
September 30, 1995
NEW YORK MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
$2,900,000 VMIG 1* Albany-Dougherty County Hospital
Authority
Revenue 4.250%(b)
$ 2,900,000
Albany IDA IDR:
1,365,000 NR+ PBS Development Co. Project 5.000%
due 12/1/95(a)(f) 1,365,000
1,440,000 A-1 540 Project Series B-2 5.000% due
12/1/95(a)(f) 1,440,000
1,430,000 A-1 540 Project Series B-3 5.000% due
12/1/95(a)(f) 1,430,000
1,500,000 NR+ Baldwin Union Free School District TAN
4.250% due 6/28/96 1,503,218
Town of Babylon IDA IDR:
900,000 VMIG 1* J. D'Addario & Co. Inc. Project
4.200%(a)(b) 900,000
500,000 VMIG 1* Napco Security System Inc. 4.050%(b)
500,000
3,750,000 NR+ Board Cooperative Educational Services
Onodaga,
Cortland and Madison County First
Supervisory
District RAN Series A 4.250% due
6/21/96 3,759,089
4,000,000 NR+ Brockport Central School District BAN
4.250% due 6/27/96
4,012,706
6,865,000 NR+ Central Islip Union Free School
District TAN
4.375% to 4.50% due 6/28/96
6,887,557
8,500,000 NR+ Commack Union Free School District TAN
4.250% due 6/28/96
8,524,244
4,000,000 NR+ Delhi Central School District BAN
4.250% due 6/28/96 4,002,847
1,000,000 VMIG 1* Erie County IDA (Rosina Food Products,
Inc.) 4.100%(a)(b) 1,000,000
11,300,000 A-1 Franklin County IDA IDR (Kes
Chateaugay Project)
Series A 4.250%(a)(b)
11,300,000
3,200,000 A-1 Fulton County IDR (Fiber Conversion
Inc.) 4.100%(a)(b) 3,200,000
3,725,000 A-1 Geneva IDA Civic Facilities Revenue
(Colleges of the
Seneca) Series A 4.150%(b)
3,725,000
500,000 A-1 Glens Falls IDA IDR (Broad Street
Plaza Project) 4.200%(b) 500,000
2,000,000 A-1 Jefferson County IDA IDR (The Climax
Manufacturing Co.
Project) 4.100%(a)(b)
2,000,000
7,400,000 NR+ Islip GO BAN 4.250% due 7/26/96
7,420,302
6,000,000 NR+ Islip Union Free School District TAN
4.500% due 6/28/96 6,025,662
2,000,000 NR+ Levittown Union Free School District
TAN
4.500% due 6/26/96
2,007,055
4,000,000 P-1* Lewis County IDA IDR (The Climax
Manufacturing Co.
Project) 4.100%(a)(b)
4,000,000
21,000,000 NR+ Lindenhurst Union Free School District
TAN
4.250% due 6/21/96
21,036,302
6,321,000 NR+ Liverpool Central School District BAN
4.250% due 1/5/96 6,326,681
30,000,000 MIG 2* Metropolitan Transit Authority RAN
5.500% due 12/14/95 30,061,844
</TABLE>
See Notes to Financial Statements.
8
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
$27,500,000 VMIG 1* Metropolitan Transit Authority
Commuter Facilities
Revenue 4.300%(b)
$27,500,000
5,815,000 P-1* Monroe County IDA (Granite Building)
Series 1992
4.000%(b)
5,815,000
100,000 A-1 Montgomery IDA IDR (Service
Merchandise Co.) 3.850%(b) 100,000
Nassau County BAN:
33,500,000 MIG 1* Series B 5.250% to 5.500% due
11/15/95 33,552,087
5,000,000 MIG 1* Series C 5.000% due 11/15/95
5,007,565
15,000,000 MIG 1* Nassau County TAN Series A 4.500% due
3/15/96 15,040,189
14,900,000 MIG 1* New York City TAN Series A 4.500% due
2/15/96 14,935,735
15,000,000 MIG 1* New York City RAN Series A 4.500% due
4/11/96 15,049,973
7,800,000 VMIG 1* New York City Muni Trust Receipts
1995
Series C 4.400%(b)
7,800,000
15,900,000 VMIG 1* New York City Sub-Series H-4 3.900%
due 10/06/95(f) 15,900,000
12,000,000 VMIG 1* New York City Sub-Series H-6 3.900%
due 10/20/95(f) 12,000,000
New York City GO:
4,400,000 VMIG 1* Series C 4.650%(b)
4,400,000
1,500,000 VMIG 1* Sub-Series A-7 4.400%(b)
1,500,000
1,400,000 VMIG 1* Sub-Series B-4 4.400%(b)
1,400,000
15,000,000 VMIG 1* Sub-Series B-8 4.350%(b)
15,000,000
14,000,000 VMIG 1* Sub-Series B-10 4.300%(b)
14,000,000
3,000,000 VMIG 1* Sub-Series E-4 4.400%(b)
3,000,000
34,900,000 VMIG 1* Sub-Series F-6 4.450%(b)
34,900,000
New York City HDC Mortgage Revenue
Multi-Family:
5,300,000 A-1+ Columbus Apartments Project
4.100%(b) 5,300,000
5,000,000 A-1 Columbus Gardens Project 4.250%(b)
5,000,000
3,700,000 A-1 James Tower Development 4.200%(b)
3,700,000
5,010,000 VMIG 1* Parkgate Towers 4.200%(b)
5,010,000
2,000,000 VMIG 1* Queenswood Apartments 4.250%(b)
2,000,000
1,200,000 A-1+ New York City IDA Civic Facilities
Revenue (Childrens
Oncology Society) 4.100%(b)
1,200,000
New York City IDA IDR:
3,600,000 VMIG 1* Andin International Inc. Series 87A
4.350%(a)(b) 3,600,000
1,820,000 VMIG 1* Monarch Construction Corp. Project
Series 89G
4.350%(a)(b)
1,820,000
850,000 VMIG 1* Series 88D 4.350%(a)(b)
850,000
1,000,000 VMIG 1* Series 89O 4.350%(a)(b)
1,000,000
1,800,000 VMIG 1* Series 90I 4.350%(a)(b)
1,800,000
785,000 VMIG 1* Sleep Products Inc. Project Series
88E 4.350%(a)(b) 785,000
</TABLE>
See Notes to Financial Statements.
9
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
$7,255,000 A-1+ New York City Muni Water Finance
Authority Water &
Sewer System Muni Trust Receipts
AMBAC-Insured
4.400%(b)
$ 7,255,000
10,800,000 MIG 2* New York City Transit Authority
Special Obligation RAN
Series A 5.500% due 12/14/95
10,824,224
2,700,000 VMIG 1* New York City Trust for Cultural
Resources Revenue
(Museum of Broadcasting) 4.250%(b)
2,700,000
13,300,000 VMIG 1* New York City Water & Sewer
Certificate Series 1992A
MBIA-Insured Muni Trust Receipts
4.500%(b) 13,300,000
4,325,000 A-1+ New York State Dormitory Authority
Revenue Muni Trust
Receipts FGIC-Insured 4.400%(b)
4,325,000
10,500,000 VMIG 1* New York State Energy Research &
Development
Electricity Facilities Revenue (Long
Island Lighting Co.)
4.250%(a)(b)
10,500,000
New York State Energy Research &
Development
Authority:
6,000,000 P-1* Central-Hudson Gas & Electricity
Series 85B 4.100%(b) 6,000,000
1,200,000 P-1* Niagara Mohawk Power Corp. Series B
4.400%(b) 1,200,000
1,000,000 P-1* Rochester Gas & Electricity
3.700%(b) 1,000,000
17,222,500 AAA New York State Environmental
Facilities Corp. Muni Trust
Receipts PCR 4.490%(b)
17,222,500
New York State HFA Revenue Multi-
Family Housing:
35,100,000 VMIG 1* Normandie Court I Project 4.150%(b)
35,100,000
1,900,000 VMIG 1* Series 1988A AMBAC-Insured 4.300%(b)
1,900,000
New York State Local Government
Assistance Corp.:
30,900,000 VMIG 1* Series A 4.250%(b)
30,900,000
25,000,000 VMIG 1* Series C 4.200%(b)
25,000,000
New York State Mortgage Agency
Revenue:
10,715,000 VMIG 1* Muni Trust Receipts 4.550%(a)(b)
10,715,000
4,380,000 VMIG 1* Muni Trust Receipts 4.100% due
12/07/95(a)(f) 4,380,000
10,580,000 VMIG 1* Muni Trust Receipts 4.550%(b)
10,580,000
New York State Medical Care Facilities
Finance
Agency Revenue:
21,380,000 AAA Mount Sinai Hospital Series C
8.875% due 1/15/96 22,131,774
2,700,000 VMIG 1* Lenox Hill Hospital Series A
4.050%(b) 2,700,000
8,140,000 VMIG 1 Muni Trust Receipts 4.050%(b)
8,140,000
7,465,000 A-1+ Muni Trust Receipts 4.500%(b)
7,465,000
700,000 VMIG 1* Pooled Equipment Loan Program II-A
4.150%(b) 700,000
</TABLE>
See Notes to Financial Statements.
10
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
10,165,000 A-1+ New York State Throughway Authority
Muni Trust
Receipts FGIC-Insured 4.500%(b)
$10,165,000
16,335,000 A-1+ New York State Urban Development
Corp. Revenue
Variable Rate Certificates-
Correctional Facilities
Series A Muni Trust Receipts
4.550%(b) 16,335,000
12,342,000 VMIG 1* New York State Urban Development
Muni Trust Receipts
4.550%(b)
12,342,000
2,000,000 A-1 Newburgh IDA Civic Facility Revenue
(Saint Mary's
College) 4.000%(b)
2,000,000
10,300,000 P-1* Niagara County IDA (American Fuel)
4.350%(b) 10,300,000
3,500,000 P-1* Niagara County IDA IDR (General
Abrasive Tribacher)
4.350%(a)(b)
3,500,000
1,500,000 VMIG 1* North Hempstead Solid Waste
Management Authority
Solid Waste Management Revenue
Refunding
Series A 4.000%(b)
1,500,000
3,180,000 NR++ Oswego County IDA IDR (Regal Textile
Corp.) 4.812%(b) 3,180,000
1,950,000 MIG 1* Patchogue-Medford Union Free School
District TAN
4.500% due 6/27/96
1,956,909
3,000,000 NR+ Plainview-Old Bethpage Central
School District TAN
4.250% due 6/28/96
3,007,492
7,500,000 VMIG 1* Port Authority of New York & New
Jersey Special
Obligation Revenue 3rd Installment
Series 4.250%(a)(b) 7,500,000
6,000,000 NR+ Puerto Rico Industrial Medical PCR
(Abbot Laboratory)
Series 1983A 5.100% due 3/1/96(f)
6,000,000
1,430,000 NR+ Rensselear County IDA IDR (Millers
Supermarket Inc.
Project) 5.100% due 3/1/96(f)
1,430,000
11,000,000 NR+ Riverhead Central School District
TAN 4.250% due 6/28/96 11,023,577
5,690,000 AAA Rochester GO Series 94A Muni Trust
Receipts
AMBAC-Insured 4.440%(b)
5,690,000
2,000,000 P-1* Schenectady County IDA IDR Refunding
(Scotia Industrial
Park Project) Series A 4.150%(b)
2,000,000
11,000,000 NR+ South County Central School District
TAN
4.500% due 6/28/96
11,033,632
10,750,000 NR+ Three Village Central School
District TAN
4.250% due 6/28/96
10,788,319
Triborough Bridge & Tunnel Authority
Revenue:
19,800,000 A-1+ Certificates General Purpose
Series A MBIA-Insured
4.700%(b)
19,800,000
13,900,000 A-1+ Special Obligation FGIC-Insured
4.050%(b) 13,900,000
5,000,000 NR+ Utica BAN 1995 Series I 6.150% due
8/23/96 5,021,143
</TABLE>
See Notes to Financial Statements.
11
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
$2,140,000 NR+ Wantaugh Union Free School District
TAN
4.250% due 6/27/96
$ 2,143,654
575,000 NR++ Westchester County IDA (Elba
Enterprises Project)
4.200%(b)
575,000
10,500,000 VMIG 1* Yonkers IDA Civic Facility Revenue
Consumers Union
4.200%(b)
10,500,000
- -----------
TOTAL INVESTMENTS 100%
(Cost $800,523,280)(g)
$800,523,280
============
</TABLE>
12
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
EDUCATION -- 9.0%
$500,000 A Brookhaven IDA, Civic
Facilities Revenue for
St. Joseph College, LOC
Norstar Bank,
8.100% due 4/1/08
$533,125
New York State Dormitory
Authority Revenue:
1,000,000 AAA Fordham University,
5.500% due 7/1/23 940,000
2,500,000 Baa1* City University, 7.500%
due 7/1/10(d) 2,871,875
1,600,000 AA Niagara Frontier Home,
FHA-Insured,
6.200% due 2/1/15
1,652,000
1,000,000 BBB+ State University
Educational Facilities,
7.500% due 5/15/11
1,151,250
1,000,000 BBB+ State University
Educational Facilities, Series A,
5.875% due 5/15/17
971,250
1,000,000 AAA New York City IDA New
School, 5.750% due 9/1/15 976,250
- ---------
9,095,750
=========
<CAPTION>
ESCROWED TO MATURITY(e) -- 3.7%
<S> <C> <C>
<C>
3,307,000 AAA New York State Power
Authority Revenue and General
Purpose, 9.500% due
1/1/01 3,732,776
FINANCE -- 2.2%
500,000 Aa* Municipal Assistance
Corporation, New York, Series 64,
7.625% due 7/1/08
562,500
1,725,000 A New York State Local
Government Assistance Corporation,
Series 1993 B,
Refunding, 5.500% due 4/1/17 1,636,594
- ---------
2,199,094
<CAPTION>
=========
GOVERNMENT FACILITIES -- 3.4%
<S> <C> <C>
<C>
2,000,000 AA+ NYS Medical Care
Facilities Financing Authority Hospitals
and Nursing Homes,
6.100% due 8/15/15 1,995,000
1,500,000 Baa1* New York State Urban
Development Refunding,
Correctional Capital
Facilities, Series A, 5.500%
due 1/1/09
1,425,000
- ---------
3,420,000
=========
<CAPTION>
GENERAL OBLIGATION -- 4.5%
<S> <C> <C>
<C>
1,295,000 BBB Guam GO, Series A, 5.400%
due 11/15/18 1,126,650
1,000,000 AAA Nassau County GO, 5.400%
due 5/1/10 996,250
1,000,000 AAA Nassau County GO, General
Improvement,
Series 1995Q, 5.200%
due 8/1/12 952,500
</TABLE>
See Notes to Financial Statements.
13
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
GENERAL OBLIGATION -- 4.5% (continued)
<S> <C> <C>
<C>
$1,565,000 A- New York City GO, Fiscal
1993, Series E,
6.000% due 5/15/20
$ 1,480,881
- -----------
4,556,281
===========
HOSPITAL -- 13.3%
New York State Medical Care
Facilities Finance Agency:
1,570,000 BBB Secured Hospitals, Series A,
6.250% due 2/15/24 1,505,237
1,500,000 AA Hospital and Nursing Home,
(Methodist Hospital
Brooklyn), FHA-Insured,
6.700% due 8/15/23 1,575,000
1,990,000 AAA Hospital and Nursing Home,
FHA-Insured,
6.400% due 8/15/14
2,091,988
1,815,000 AAA Hospital and Nursing Home,
Series B, FHA-Insured,
5.500% due 2/15/22
1,678,875
485,000 AAA Mental Health Services
Facilities Improvement,
MBIA-Insured, 7.750% due
2/15/20 538,350
2,000,000 AAA Mental Health Services
Facilities, Series D,
FGIC-Insured, 5.250% due
8/15/23 1,797,500
Nursing Home Insured
Mortgage:
1,000,000 AA Series A, 8.000% due
2/15/25 1,105,000
1,025,000 AA Series B, 8.000% due
2/15/28 1,115,969
1,500,000 AAA St. Lukes - Roosevelt
Hospital, Series A, Refunding,
FHA-Insured, 5.625% due
8/15/18 1,423,125
550,000 BBB Onondaga County IDA, Civic
Facility Revenue Bonds,
1993 Series B, 6.625% due
1/1/18 541,750
- ----------
13,372,794
==========
<CAPTION>
HOUSING: MULTI-FAMILY -- 4.0%
<S> <C> <C>
<C>
New York State Housing
Financing Agency, Multi-Family,
Second Mortgage, PG-A:
500,000 AA 7.050% due 8/15/24(a)
528,125
500,000 AA 7.000% due 8/15/12(a)
519,375
1,000,000 A* Rensselear Multi-Family
Housing Mortgage Revenue,
Rensselear Elderly
Housing Apartments,
7.750% due 1/1/11
1,055,000
2,000,000 Aa* UFA Development Corp., New
York Mortgage Revenue,
(Loretto Utica Project),
Series 1993, FSA-Insured,
5.750% due 7/1/13
1,917,500
- ---------
4,020,000
=========
</TABLE>
See Notes to Financial Statements.
14
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
HOUSING: SINGLE-FAMILY -- 1.3%
<S> <C> <C>
<C>
State of New York Mortgage
Agency:
$ 320,000 Aa* Eighth Series E, 8.100% due
10/1/17 $ 337,200
860,000 Aa* Homeowner Mortgage Revenue,
Series SS,
7.950% due 10/1/22(a)
925,575
- ------------
1,262,775
============
<CAPTION>
INDUSTRIAL DEVELOPMENT -- 12.9%
<S> <C> <C>
<C>
355,000 NR+ Albany County IDA, (Historic
Hudson River Heritage
Office Building), 9.500% due
12/1/95 357,663
1,300,000 A1* Grand Central, District
Management Association
Refunding-Business Import
District-Capital,
5.125% due 1/1/14
1,187,875
500,000 A- Monroe County IDA, Revenue
Public Improvement,
(Canal Ponds Park), Series A,
7.000% due 6/15/13 5,000
New York City IDA:
1,000,000 AA Civic Facility Revenue, (The
Lighthouse Project),
LOC Barclays Bank, 6.375%
due 7/1/10 1,042,500
955,000 Aa1* Prime Laboratories Inc. IDR,
LOC Algamene Bank
Nederland NV, 7.700%
mandatory tender 11/1/00(a) 975,294
1,450,000 Baa3* Special Facilities Revenue,
(American Airlines Inc.
Project), 8.000% due
7/1/20(a) 1,549,688
2,000,000 A Special Facilities Revenue,
Terminal One Group
Association Project, 6.000%
due 1/1/15 1,935,000
2,000,000 AAA Onondaga County IDA, Sewer
Facilities Revenue,
(Bristol-Myers Squibb Co.
Project),
5.750% due 3/1/24(a)
2,002,500
1,410,000 A Rensselear County IDA, (Albany
International Corp.),
7.550% due 6/1/07(a)
1,545,712
750,000 AAA Syracuse, IDA, 7.000% due 8/1/25
795,937
1,000,000 AA Town of Hempstead IDA,
Industrial Development Revenue
Bonds, (1990 Nassau District
Energy Corp. Project),
LOC Toronto Dominion Bank,
7.750% due 9/15/15(a) 1,050,000
- ----------
12,987,169
==========
MISCELLANEOUS -- 0.6%
500,000 A New York State Urban
Development Corp. Revenue,
7.000% due 1/1/17
558,125
NURSING HOME -- 3.0%
990,000 AA State Medical Care Facilities
Finance Agency Hospital &
Nursing Home Insured Mortgage,
Series B, FHA-Insured,
7.000% due 8/15/32
1,051,875
</TABLE>
See Notes to Financial Statements.
15
SMITH BARNEY MUNI FUNDS
Schedule of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
<S> <C> <C>
<C>
Nursing Home -- 3.0% (continued)
$1,980,000 AA New York State Dormitory
Authority Revenue,
(James G. Johnston-Nursing
Home Facilities),
FHA-Insured, 5.750% due
8/1/23 $ 1,928,025
2,979,900
POLLUTION CONTROL -- 2.2%
1,100,000 AAA State Energy and Research PCR
(Central Hudson Gas &
Electric Corp. Project),
Series B, FGIC-Insured,
7.375% due 10/1/14(d)
1,240,250
1,000,000 AAA New York State Environmental
Facilities Corporation,
Pollution Control Revenue,
State Water-Revolution,
5.200% due 5/15/14
945,000
- ----------
2,185,250
==========
POWER -- 2.0%
New York State Energy
Research and Development Authority:
1,000,000 Aa3* (Consolidated Edison Co.
Project), 6.000%
due 3/15/28(a)
1,020,000
1,000,000 BB+ Electric Facilities Revenue,
(LILCO), 1992 Series A,
7.150% due 2/1/22(a)
973,750
- ----------
1,993,750
==========
PRE-REFUNDED(e) -- 8.7%
200,000 AAA New York City GO, (Escrowed
with U.S. Government
Securities to 11/1/97 Call
@ 101.5), 8.750% due 11/1/17 221,000
750,000 AAA New York City Municipal Water
Finance Authority, Water
& Sewer System, (Escrowed
with U.S. Government
Securities to 6/15/97 Call
@ 102), 9.000% due 6/15/17(d) 824,062
580,000 AAA New York State Housing
Finance Agency, State University
Construction, Series A,
(Escrowed with U.S. Government
Securities to 11/1/96 Call
@ 102), 8.000% due 11/1/16 605,375
800,000 AAA New York State Local
Government Assistance Corp.,
Series D, (Escrowed with
U.S. Government Securities
to 4/1/02 Call @ 102),
7.000% due 4/1/18 919,000
500,000 AAA Hospital Insured Mortgage
(Brooklyn, Caledonia and
Long Island College
Hospitals), FHA-Insured, (Escrowed
with U.S. Government
Securities to 1/15/02 Call @ 102),
8.375% due 1/15/06
516,250
</TABLE>
See Notes to Financial Statements.
16
SMITH BARNEY MUNI FUNDS
Schedules of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
- ------ ------ --------
- -----
PRE-REFUNDED(e) -- 8.7% (continued)
<S> <C> <C>
<C>
New York State Medical Care
Facilities Finance Authority:
$ 500,000 AAA St. Vincents Hospital Home
Mortgage, Series A,
(Escrowed with U.S.
Government Securities to
8/15/97 Call @ 102),
8.000% due 2/15/27 $ 541,250
1,380,000 AAA Albany Medical Center, Insured
Mortgage, Series A,
(Escrowed with U.S.
Government Securities to
8/15/98 Call @ 102), 8.000%
due 2/15/28 1,531,800
1,700,000 AAA St. Lukes Hospital, Series B,
FHA-Insured, (Escrowed
with U.S. Government
Securities to 2/15/02 Call @ 102),
7.450% due 2/15/29
1,931,625
480,000 AAA Mental Health Services
Facilities Improvement,
MBIA-Insured, (Escrowed with
U.S. Government
Securities to 2/15/00 Call @
102), 7.750% due 2/15/20 551,400
1,000,000 AAA Orangetown Housing Authority,
Rockland, (Senior Housing
Center), 1990 Series,
(Escrowed with U.S. Government
Securities to 4/1/00 Call @
102), 7.600% due 4/1/30 1,156,250
- ---------
8,798,012
=========
<CAPTION>
PUBLIC FACILITIES -- 6.6%
<S> <C> <C>
<C>
1,000,000 A Albany Parking Authority, New
York Revenue Refunding,
(Green and Hudson Street
Garage Project), LOC Key
Bank, 7.150% due 9/15/16
1,060,000
2,260,000 BBB+ New York State Dormitory
Authority, Court Facilities Lease
Revenue, Series A, 5.500%
due 5/15/23 2,014,225
2,000,000 BBB New York State Urban
Development, Youth Facilities,
6.000% due 4/1/15
1,940,000
1,500,000 Baa1* Triborough Bridge and Tunnel
Authority, Convention
Center, 7.250% due 1/1/10
1,659,375
- ---------
6,673,600
=========
<CAPTION>
Retirement Communities (Continuing Care) -- 1.9%
<S> <C> <C>
<C>
New York State Dormitory
Authority Revenue:
800,000 AAA Ideal Senior Living Center
Housing Corporation,
FHA-Insured, 7.625% due
8/1/28 876,000
990,000 AAA United Health Services Inc.,
7.350% due 8/1/29 1,066,725
- ---------
1,942,725
=========
<CAPTION>
SHORT-TERM(b) -- 1.1%
<S> <C> <C>
<C>
700,000 A-1+ New York Energy Research and
Development, Niagara
Mohawk, Series A, 4.050% due
7/1/15 700,000
200,000 A-1+ New York City GO, Sub-Series
E4, 4.750% due 8/1/22 200,000
</TABLE>
See Notes to Financial Statements.
17
SMITH BARNEY MUNI FUNDS
Schedule of Investments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY
VALUE
------ ------ --------
- -----
<S> <C> <C>
<C>
SHORT-TERM(b) -- 1.1% (continued)
$200,000 A- Port Authority of NY and NJ
Obligation Revenue,
Versatile Structure, Series
2, 4.650% due 5/1/19 $ 200,000
1,100,000
<CAPTION>
SOLID WASTE -- 2.3%
<S> <C> <C>
<C>
495,000 BBB+ Babylon IDA, Resource Recovery,
(Ogden Martin Systems),
8.500% due 1/1/19
561,206
1,000,000 AAA Dutchess County Resource
Recovery Agency, Solid Waste
Management System Revenue,
Series 1990A,
FGIC-Insured, 7.500% due
1/1/09 1,100,000
650,000 A- Town of Hempstead IDA, Resource
Recovery Revenue,
7.400% due 12/1/10
678,438
- ---------
2,339,644
=========
<CAPTION>
TRANSPORTATION -- 7.7%
<S> <C> <C>
<C>
2,300,000 Baa1* Metropolitan Transit Authority
New York, Service Contract 2,216,625
Transportation Facilities,
Series O, 5.750% due 7/1/13
1,000,000 AAA Monroe County Airport Authority
for Greater Rochester
International, MBIA-Insured,
7.250% due 1/1/19(a) 1,086,250
1,500,000 AAA New York State Thruway
Authority, Series C, FGIC-Insured,
6.000% due 1/1/25
1,501,875
1,600,000 AAA Niagara Falls Bridge Authority,
Toll Revenue, Series B,
FGIC-Insured, 5.250% due
10/1/15 1,496,000
1,000,000 Baa1* Puerto Rico Commonwealth
Highway & Transportation
Authority Revenue, Refunding,
Series W,
5.500% due 7/1/13
960,000
500,000 Aa* Triborough Bridge and Tunnel
Authority, General Purpose
Revenue, 8.125% due 1/1/12(d)
544,375
- ---------
7,805,125
=========
<CAPTION>
UTILITIES -- 5.8%
<S> <C> <C>
<C>
New York State Energy Research
and Development
Authority Facilities Revenue
Bonds:
1,500,000 A1* Brooklyn Union Gas Co. Project,
Series B, RIBS,
9.718% due 7/15/26(a)(c)
1,751,250
1,000,000 Aa3* Consolidated Edison Co.
Project, 7.125%
due 12/1/29(a)
1,093,750
1,000,000 A+ Consolidated Edison Co.
Project, 6.100%
due 8/15/09(a)(c)
995,000
1,000,000 AAA N.Y. State Electric & Gas
Project A, MBIA-Insured,
6.150% due 7/1/26(a)
1,001,250
</TABLE>
See Notes to Financial Statements.
18
SMITH BARNEY MUNI FUNDS
Schedules of Invesments (unaudited) (continued)
September 30, 1995
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING
SECURITY VALUE
- ------ ------ -------
- - -----
UTILITIES -- 5.8% (CONTINUED)
<S> <C> <C>
<C>
$1,000,000 AAA Puerto Rico Electric Power
Revenue, Linked Security,
5.929% due 7/1/23
$ 1,007,500
5,848,750
<CAPTION>
WATER AND SEWER -- 3.8%
<S> <C> <C>
<C>
2,000,000 AAA New York City Municipal
Water Finance Authority
Systems Revenue, Series
B, AMBAC-Insured,
5.375% due 6/15/19
930,000
2,000,000 AAA New York City Muni Water
Finance Authority, Water &
Sewage System Revenue,
Capital Appreciation,
Series A, zero coupon
due 6/15/11 830,000
1,240,000 AAA Clifton Park, New York
Water Authority, Water Systems
Revenue, FGIC-Insured,
5.000% due 10/1/14 1,123,750
1,000,000 AAA Suffolk County Water
Authority, Water Works Revenue,
Senior Lien, Refunding,
MBIA-Insured, 5.100% due 6/1/09 980,000
- ---------
3,863,750
- ---------
TOTAL INVESTMENTS 100%
(Cost--$95,711,929)(g)
$100,735,270
============
</TABLE>
(a) Income from these issues is considered a preference
item for purposes of
calculating the alternative minimum tax.
(b) Variable rate obligation payable at par on demand at
any time on no more
than seven days notice.
(c) Residual interest bonds--coupon varies inversely with
level of short-term
tax-exempt interest rates.
(d) Securities segregated by Custodian.
(e) Pre-Refunded bonds escrowed by U.S. Government
Securities and bonds
escrowed to maturity by U.S. Government Securities are
considered by
manager to be triple-A rated even if issuer has not
applied for new
ratings.
(f) Variable rate obligations payable at par on demand on
the date indicated.
(g) The cost for Federal income tax purposes is
substantially the same.
+ Security has not been rated by either Moody's Investors
Services or
Standard & Poors, however, the portfolio manager has
determined the
equivalent rating to be MIG 1.
++ Security has not been rated by either Moody's Investors
Services or
Standard & Poors, however, the portfolio manager has
determined the
equivalent rating to be VMIG 1.
See pages 20 and 21 for definitions of ratings and
certain security
descriptions.
See Notes to Financial Statements.
19
SMITH BARNEY MUNI FUNDS
Bond Ratings
All ratings are by Standard & Poors Corporation, except
those identified by an
asterisk (*) that are by Moody's Investors Services. The
definitions of the
applicable rating symbols are set forth below:
Standard & Poor's Rating from "AA" to "BB" may be modified
by the addition of
a plus (+) or minus (-) sign to show relative standings
within the major rating
categories.
AAA --Bonds rated "AAA" have the highest rating assigned
by Standard &
Poor's. Capacity to pay interest and repay
principal is extremely
strong.
AA --Bonds rated "AA" have a very strong capacity to pay
interest and repay
principal and differ from the highest rated issue
only in a small
degree.
A --Bonds rated "A" have a strong capacity to pay
interest and repay
principal although they are somewhat more
susceptible to the adverse
effects of changes in circumstances and economic
conditions than bonds
in higher rated categories.
BBB --Bonds rated "BBB" are regarded as having an
adequate capacity to pay
interest and repay principal. Whereas they normally
exhibit adequate
protection parameters, adverse economic conditions
or changing
circumstances are more likely to lead to a weakened
capacity to pay
interest and repay principal for bonds in this
category than in higher
rated categories.
BB --Bonds rated "BB" have less near-term vulnerability
to default than
other speculative issues. However, they face major
ongoing
uncertainties or exposure to adverse business,
financial, or economic
conditions which could lead to inadequate capacity
to meet timely
interest and principal payments.
Moody's--Numerical modifiers 1, 2 and 3 may be applied to
each generic rating
from "Aa" to "Baa", where 1 is the highest and 3
the lowest ranking
within its generic category.
Aaa --Bonds that are rated "Aaa" are judged to be of the
best quality. They
carry the smallest degree of investment risk and
are generally referred
to as "gilt edge". Interest payments are protected
by a large or by an
exceptionally stable margin and principal is
secure. While the various
protective elements are likely to change, such
changes as can be
visualized are most unlikely to impair the
fundamentally strong
position of such issues.
Aa --Bonds that are rated "Aa" are judged to be of high
quality by all
standards. Together with the "Aaa' group they
comprise what are
generally known as high grade bonds. They are rated
lower than the
best bonds because margins of protection may not be
as large as in
Aaa securities or fluctuation of protective
elements may be of
greater amplitude or there may be other elements
present which make
the long-term risks appear somewhat larger than in
Aaa securities.
A --Bonds that are rated "A" possess many favorable
investment attributes
and are to be considered as upper medium grade
obligations. Factors
giving security to principal and interest are
considered adequate but
elements may be present which suggest a
susceptibility to impairment
some time in the future.
Baa --Bonds that are rated "Baa" are considered as medium
grade obligations,
i.e., they are neither highly protected nor poorly
secured. Interest
payments and principal security appear adequate for
the present but
certain protective elements may be lacking or may
be characteristically
unreliable over any great length of time. Such
bonds lack outstanding
investment characteristics and in fact have
speculative characteristics
as well.
NR --Indicates that the bond is not rated by Standard &
Poor's Corporation
or Moody's Investors Services.
20
SMITH BARNEY MUNI FUNDS
Short-Term Security Ratings
SP-1 --Standard & Poor's highest rate rating indicating
very strong or strong
capacity to pay principal and interest; those
issues determined to
possess overwhelming safety characteristics are
denoted with a plus (+)
sign.
A-1 --Standard & Poor's highest commercial paper and
variable rate demand
obligation (VRDO) rating indicating that the degree
of safety regarding
timely payment is either overwhelming or very
strong; those issues
determined to possess overwhelming safety
characteristics are denoted
with a plus (+) sign.
P-1 --Moody's highest rating for commercial paper and for
VRDO prior to the
advent of the VMIG 1 rating.
VMIG 1 --Moody's highest rating for issues having a demand
feature -- VRDO.
MIG 1 --Moody's highest rating for short-term municipal
obligations.
MIG 2 --Moody's second highest rating for short-term
municipal obligations.
Security Descriptions
ABAG --Association of Bay Area Governments
AIG --American International Guaranty
AMBAC --American Municipal Bond Assurance Corporation
BAN --Bond Anticipation Notes
BIG --Bond Investors Guaranty
CGIC --Capital Guaranty Insurance Company
COP --Certificate of Participation
ETM --Escrowed to Maturity
FAIRS --Floating Adjustable Interest Rate Securities
FGIC --Financial Guaranty Insurance Company
FHA --Federal Housing Administration
FHLMC --Federal Home Loan Mortgage Corporation
FNMA --Federal National Mortgage Association
FRTC --Floating Rate Trust Certificates
FSA --Financial Security Assurance
GIC --Guaranteed Investment Contract
GNMA --Government National Mortgage Association
GO --General Obligation
HDC --Housing Development Corporation
HFA --Housing Finance Authority
IDA --Industrial Development Authority
IDB --Industrial Development Board
IDR --Industrial Development Revenue
INFLOS --Inverse Floaters
IRB --Industrial Revenue Bonds
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance Corporation
MVRICS --Municipal Variable Rate Inverse Coupon Security
PCFA --Pollution Control Financing Authority
PCR --Pollution Control Revenue
RAN --Revenue Anticipation Notes
RIBS --Residual Interest Bonds
TAN --Tax Anticipation Notes
TECP --Tax Exempt Commercial Paper
TOB --Tender Option Bond
TRAN --Tax and Revenue Anticipation Notes
VRDD --Variable Rate Demand Note
VRWE --Variable Rate Wednesday Demand
21
SMITH BARNEY MUNI FUNDS
Statements of Assets and Liabilities (unaudited)
September 30, 1995
<TABLE>
<CAPTION>
NEW YORK MONEY NEW YORK
MARKET PORTFOLIO PORTFOLIO
- ---------------- --------------
<S>
<C> <C>
ASSETS:
Investments, at value (Cost $--800,523,280
and $95,711,929)
$ 800,523,280 $ 100,735,270
Cash
- -- 16,116
Interest receivable
6,869,776 1,563,863
Receivable for Fund shares sold
- -- 275,824
Prepaid expenses
- -- 42,970
- ------------- -------------
TOTAL ASSETS
807,393,056 102,634,043
============= =============
LIABILITIES:
Payable for securities purchased
25,000,000 --
Dividends payable
1,420,795 475,849
Management fees payable
675,046 73,756
Distribution fees payable
22,390 10,652
Accrued expenses and other liabilities
77,635 --
TOTAL LIABILITIES
27,195,866 560,257
- ------------- --------------
TOTAL NET ASSETS
$ 780,197,190 $ 102,073,786
============= ==============
NET ASSETS:
Par value of capital shares
$ 780,497 $ 7,795
Capital paid in excess of par value
779,716,486 98,256,881
Overdistributed net investment income
- -- (29,126)
Accumulated net realized loss on
security transactions
(299,793) (1,185,105)
Net unrealized appreciation of investments
- -- 5,023,341
- ------------- --------------
TOTAL NET ASSETS
$ 780,197,190 $ 102,073,786
============= ==============
SHARES OUTSTANDING:
Class A
780,496,983 6,476,882
Class B
- -- 808,615
Class C
- -- 509,402
NET ASSET VALUE:
Class A (and redemption price)
$1.00 $13.09
Class B *
- -- $13.10
Class C **
- -- $13.08
CLASS A MAXIMUM PUBLIC OFFERING PRICE PER SHARE
(net asset value plus 4.17% of net asset value per share)
- -- $13.64
</TABLE>
* Redemption price is NAV of Class B shares reduced by a
4.50% CDSC if shares
are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a
1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
22
SMITH BARNEY MUNI FUNDS
Statements of Operations (unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
NEW YORK
MONEY NEW YORK
MARKET
PORTFOLIO PORTFOLIO
------------
- ---- ---------
INVESTMENT INCOME:
Interest $14,913,602
$3,048,029
EXPENSES:
Management fees (Note 4) 1,916,632
215,374
Distribution fees (Note 4) 383,294
103,058
Shareholder and system servicing fees 115,573
20,046
Registration fees 107,787
4,026
Shareholder communications 15,006
13,039
Audit and legal 11,529
5,062
Trustees' fees 7,503
3,001
Custody 7,383
4,758
Pricing service fees 5,038
7,521
Other
