SMITH BARNEY INCOME FUNDS
SMITH BARNEY EQUITY FUNDS
Supplement dated June 12, 1998
to the Prospectuses+
The following information supplements, and to the extent inconsistent
therewith, replaces the information contained in the Prospectuses.
Effective immediately, Class C shares will be renamed Class L shares.
Effective June 15, 1998, Class L shares will be sold at net asset
value per share plus a maximum initial sales charge of 1.00% (except for
the Smith Barney Exchange Reserve Fund which will continue to have no
initial sales charge).
Class L Share Expenses:
The following expense table lists the costs and expenses an investor
will incur either directly or indirectly as a Class L shareholder
of the Funds shown below, based on the maximum sales charge and maximum
CDSC that may be incurred at the time of purchase or redemption and,
unless otherwise noted, each Fund's operating expenses for its
most recent fiscal year:
Diversified
Strategic
Income
Fund
High
Income
Fund
Total
Return
Bond
Fund**
Municipal
High
Income
Fund
Exchange
Reserve
Fund
Concert
Social
Awareness
Fund
Shareholder Transaction Expenses
Maximum sales charge imposed
on purchases (as a percentage
of offering price)
1.00%
1.00%
1.00%
1.00%
None
1.00%
Maximum CDSC
(as a percentage of original
cost or
redemption proceeds, whichever
is lower)
1.00%
1.00%
1.00%
1.00%
None
1.00%
Annual Fund Operating Expenses
(as a percentage of average net
assets)
Management fees
0.65%
0.70%
0.65%
0.60%
0.50%
0.75%
12b-1 fees *
0.70
0.70
0.70
0.70
0.50
1.00
Other expenses
0.11
0.08
0.12
0.10
0.16
0.18
TOTAL FUND OPERATING EXPENSES
1.46%
1.48%
1.47%
1.40%
1.16%
1.93%
EXAMPLE
The following example is intended to assist an investor in understanding
the various costs that an investor in Class L shares of the Funds
shown below will bear directly or indirectly. The example assumes
payment by each Fund of operating expenses at the levels set forth
in the preceding table. See "Purchase of Shares," "Redemption of
Shares" and "Management of the Fund" in the accompanying Prospectus for
more information.
Diversified
Strategic
Income
Fund
High
Income
Fund
Total
Return
Bond Fund
Municipal
High
Income
Fund
Exchange
Reserve
Fund
Concert
Social
Awareness
Fund
An investor would pay the
following expenses
on a $1,000 investment, assuming
(1) 5.00% annual return and (2)
redemption at the end of
each time period:
1 year
$35
$35
$35
$34
$32
$39
3 years
56
56
56
54
46
70
5 years
89
90
89
86
73
113
10 years
183
185
184
176
149
233
An investor would pay the
following expenses
on the same investment, assuming
the same
annual return and no redemption:
1 year
$25
$25
$25
$24
$22
$29
3 years
56
56
56
54
46
70
5 years
89
90
89
86
73
113
10 years
183
185
184
176
149
233
The example also provides a means for the investor to compare expense
levels of funds with different fee structures over varying
investment periods. To facilitate such comparison, all funds are
required to utilize a 5.00% annual return assumption. However,
each Fund's actual return will vary and may be greater or less
than 5.00%. This example should not be considered a representation
of past or future expenses and actual expenses may be greater or less
than those shown.
Purchase of Shares:
Until June 25, 1999 purchases of Class L shares by investors who were
holders of Class C shares of any Smith Barney Mutual Fund
on June 12,1998 will not be subject to the 1% front-end sales charge.
+Prospectuses Dated:
Concert Social Awareness Fund May 29, 1998
Smith Barney Diversified Strategic Income Fund November 28, 1997
Smith Barney High Income Fund November 28, 1997
Smith Barney Total Return Bond Fund January 21, 1998
Smith Barney Municipal High Income Fund November 28, 1997
Smith Barney Exchange Reserve Fund November 28, 1997
*Class L shares do not have a conversion feature and, therefore, are
subject to an ongoing distribution fee. As a result, long term
shareholders of Class L shares may pay more than the economic
equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers, Inc.
** Other expenses have been estimated because no Class C shares
were outstanding during the Fund's fiscal year ended July 31, 1997.
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