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PROSPECTUS
Concert
Social Awareness
Fund
Class A, B, L and Y Shares
-------------------------------------------------------
May 31, 1999
The Securities and Exchange Commission has not approved or disapproved
these securities or determined whether this prospectus is accurate or
complete. Any statement to the contrary is a crime.
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Concert Social Awareness Fund
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Contents
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Investments, risks and performance ........................................ 2
More on the fund's investments ............................................ 6
More on the fund's social awareness criteria .............................. 7
Management ................................................................ 8
Choosing a class of shares to buy ......................................... 9
Comparing the fund's classes .............................................. 10
Sales charge .............................................................. 11
More about deferred sales charges ......................................... 13
Buying shares ............................................................. 14
Exchanging shares ......................................................... 15
Redeeming shares .......................................................... 17
Other things to know about share
transactions .............................................................. 19
Smith Barney 401(k) and ExecChoice (TM)
programs .................................................................. 21
Dividends, distributions and taxes ........................................ 22
Share price ............................................................... 23
Financial highlights ...................................................... 23
You should know: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.
Smith Barney Mutual Funds 1
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Investments, risks and performance
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Investment objective
The fund seeks high total return consisting of capital appreciation and current
income.
Principal investment strategies
Key investments The fund invests primarily in common stocks and other equity
securities of U.S. companies. Equity securities include exchange traded and
over-the-counter common stocks and preferred shares, debt securities convertible
into equity securities, and warrants and rights relating to equity securities.
The fund also normally invests between 15% and 35% of its assets in fixed income
securities. The fixed income securities in which the fund invests are primarily
investment grade, and may be of any maturity. The fund also may invest a portion
of its assets in equity and debt securities of foreign issuers. As described
below, the fund emphasizes companies that both offer attractive investment
opportunities and demonstrate a positive awareness of their impact on the
society in which they operate, relative to other companies in their industry.
Selection process Equity Securities. The fund invests in a broad range of
companies, industries and sectors, without regard to market capitalization. The
manager uses a "value" approach to selecting equity securities. In selecting
individual equity securities, the manager looks for companies it believes are
undervalued. Specifically, the manager looks for:
o Attractive risk-adjusted price/earnings ratio, relative to growth
o Positive earnings trends
o Favorable financial condition
Fixed Income Securities. In selecting fixed income investments, the manager:
o Determines sector and maturity weightings based on intermediate and
long-term assessments of the economic environment and interest rate
outlook
o Uses fundamental credit analysis to determine the relative value of bond
issues
o Identifies undervalued bonds and attempts to avoid bonds that may be
subject to credit downgrades
Social Awareness Criteria. As a component of the selection process, the manager
considers whether, relative to other companies in an industry, a company that
meets these investment criteria also is sensitive to social issues related to
its products, services, or methods of doing business.
2 Concert Social Awareness Fund
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Social factors considered include:
o Fairness of employment policies and labor relations
o Involvement in community causes
o Efforts and strategies to minimize the negative impact of business
activities and products and to embrace alternatives to unsafe polluting
and wasteful activities or products
o Responsibility and fairness of advertising and marketing practices
In addition, the fund seeks to avoid investing in a company if the manager has
significant reason to believe it is engaged in:
o Tobacco production
o Production of weapons
o Ownership or design of nuclear facilities
Principal risks of investing in the fund
Investors could lose money on their investment in the fund, or the fund may not
perform as well as other investments, if:
o Stock prices decline generally
o Socially aware companies fall out of favor with investors or fail to
perform as well as companies that do not fit the fund's social criteria
o Interest rates rise, causing the value of fixed income securities in the
fund's portfolio to decline
o The issuer of a fixed income security owned by the fund defaults on its
obligation to pay principal and/or interest or the security's credit
rating is downgraded
o The manager's judgment about the attractiveness, value or appreciation of
a particular security, or the creditworthiness of a company in which the
fund invests, proves to be incorrect
Because the manager uses social awareness criteria as a component of its
selection process, the fund's universe of investments may be smaller than that
of other funds. In some circumstances, this could cause the fund's return to be
lower than that of a fund that may invest in other issuers with strong earnings
and growth potential, but that do not meet the fund's social awareness criteria.
Who may want to invest The fund may be an appropriate investment if you:
o Are seeking to invest in a portfolio with a socially aware component
o Are seeking a combination of capital appreciation and current income
o Are willing to accept the risks of the stock and bond markets
Smith Barney Mutual Funds 3
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Risk return bar chart
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not
necessarily indicate how the fund will perform in the future.
The bar chart shows the performance of the fund's Class B shares for each of the
past 10 calendar years. Class A, L and Y shares would have different performance
because of their different expenses. The performance information in the chart
does not reflect sales charges, which would reduce your return.
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Total Return for Class B Shares
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
21.16% -2.19% 26.45% 6.59% 14.66% -1.75% 24.01% 11.42% 20.38% 26.63%
Calendar years ended December 31
Quarterly returns: Highest: 19.07% in 4th quarter 1998; Lowest: (11.69)% in 3rd
quarter 1990
Risk return table
This table indicates the risks of investing in the fund by comparing the average
annual total return of each class for the periods shown with that of the
Standard & Poor's 500 ("S&P 500") Index, an unmanaged index of widely held
common stocks and the Lehman Government/Corporate Bond ("Lehman Gov/Corp")
Index, an unmanaged combination of government and bond indexes, including U.S.
treasury and agency securities and yankee bonds. This table assumes imposition
of the maximum sales charge applicable to the class, redemption of shares at the
end of the period, and reinvestment of distributions and dividends.
4 Concert Social Awareness Fund
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Average Annual Total Returns
Calendar Years Ended December 31, 1998
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Since Inception
Class 1 year 5 years 10 years Inception Date
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A 21.15% 15.32% n/a 15.67% 11/06/92
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B 21.63% 15.54% 14.25% 12.66% 02/02/87
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L 24.32% 15.47% n/a 14.99% 05/05/93
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Y* n/a n/a n/a n/a 03/28/96
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S&P 500 28.60 24.05% 19.19% 16.37% **
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Lehman Gov/
Corp Index 9.47% 7.30% 9.33% 8.52% **
* There were no Class Y shares outstanding for the calendar year ended
December 31, 1998.
** Index comparison begins on February 28, 1987
Fee table
This table sets forth the fees and expenses you will pay if you invest in fund
shares.
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Shareholder fees
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(fees paid directly from your investment) Class A Class B Class L Class Y
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Maximum sales charge (load) imposed
on purchases
(as a % of offering price) 5.00% None 1.00% None
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Maximum deferred sales charge (load)
(as a % of the lower of net
asset value at purchase or redemption) None* 5.00% 1.00% None
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Annual fund operating expenses
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(expenses deducted from fund assets) Class A Class B Class L Class Y**
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Management fee 0.75% 0.75% 0.75% 0.75%
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Distribution and service (12b-1) fees 0.25 1.00 1.00 None
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Other expenses 0.19 0.19 0.19 0.09
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Total annual fund operating expenses 1.19% 1.94% 1.92% 0.84%
* You may buy Class A shares in amounts of $500,000 or more at net asset value
(without an initial charge) but if you redeem those shares within 12 months of
their purchase, you will pay a deferred sales charge of 1.00%.
** For Class Y shares, "Other Expenses" have estimated because no Class Y
shares were outstanding for the fiscal year ended January 31, 1999.
Smith Barney Mutual Funds 5
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Example
This example helps you compare the costs of investing in the fund with the costs
of investing in other mutual funds. Your actual costs may be higher or lower.
The example assumes:
o You invest $10,000 in the fund for the period shown
o Your investment has a 5% return each year
o You reinvest all distributions and dividends without a sales charge
o The fund's operating expenses remain the same
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Number of years you own your shares
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1 year 3 years 5 years 10 years
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Class A (with or without redemption) $615 $859 $1,122 $1,871
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Class B (redemption at end of period) $697 $909 $1,147 $2,070
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Class B (no redemption) $197 $609 $1,047 $2,070
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Class L (redemption at end of period) $393 $697 $1,126 $2,321
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Class L (no redemption) $293 $697 $1,126 $2,321
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Class Y (with or without redemption) $86 $268 $466 $1,037
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More on the fund's investments
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Derivative contracts The fund may, but need not, use derivative contracts, such
as futures and options on securities or securities indices, options on these
futures, and interest rate futures, for any of the following purposes:
o To hedge against the economic impact of adverse changes in the market
value of portfolio securities, because of changes in interest rates or
stock prices
o As a substitute for buying or selling securities
A derivative contract will obligate or entitle a fund to deliver or receive an
asset or cash payment based on the change in value of one or more securities or
indices. Even a small investment in derivative contracts can have a big impact
on a fund's interest rate or stock market exposure. Therefore, using derivatives
can disproportionately increase losses and reduce opportunities for gains. The
fund may not fully benefit from or may lose money on derivatives if changes in
their value do not correspond accurately to changes in the value of the fund's
holdings. The other parties to certain derivative contracts present the same
types of default risk as issuers of fixed income securities. Derivatives can
also make a fund less liquid and harder to value, especially in declining
markets.
6 Concert Social Awareness Fund
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Foreign securities The fund may invest a portion of its assets, generally under
15% (but not more than 25%), in securities of foreign issuers. These securities
generally include American Depositary Receipts (ADRs), Yankee Bonds and other
securities quoted in U.S. dollars, but may also include non-U.S. dollar
denominated securities. Because the fund may invest in securities of foreign
issuers, the fund carries additional risks. The value of your investment may
decline if the U.S. and/or foreign stock markets decline, currency rates
adversely affect the value of foreign currencies relative to the U.S. dollar, or
an adverse event, such as an unfavorable earnings report, depresses the value of
a particular company's stock. Prices of foreign securities may go down because
of foreign government actions, political instability or the more limited
availability of accurate information about foreign companies. These risks are
greater for issuers in emerging markets.
Defensive investing The fund may depart from its principal investment strategies
in response to adverse market, economic or political conditions by taking
temporary defensive positions in all types of money market and short-term debt
securities. If the fund takes a temporary defensive position, it may be unable
to achieve its investment goal.
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More on the fund's social awareness criteria
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The manager believes that there is a direct correlation between companies that
demonstrate an acute awareness of their impact on the society within which they
operate and companies which offer attractive long-term investment potential. The
manager believes that addressing social issues in a positive manner can
translate into sound business. For example, by ensuring a product or service
does not negatively impact the environment, a company can avoid costly
litigation and clean-up costs; and by maintaining positive standards for the
workplace and a diverse employee population, a company can better ensure access
to quality management talent and improved productivity; or by becoming more
involved in the community, a company can enhance its consumer franchise. The
manager also believes that top quality management teams who successfully balance
their companies' business interest with their social influences can gain
significant competitive advantages over the long run, which may result in
increased shareholder values and, therefore, make the company's shares a better
investment. The fund is designed to combine both financial and social criteria
in all of its investment decisions.
The manager will use its best efforts to assess a company's social performance.
This analysis will be based on present activities, and will not preclude
securities solely because of past activities. The manager will monitor the
social progress or deterioration of each company in which the fund invests.
Smith Barney Mutual Funds 7
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Management
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Manager The fund's investment manager is SSBC Fund Management Inc., an affiliate
of Salomon Smith Barney Inc. The manager's address is 388 Greenwich Street, New
York, New York 10013. The manager selects the fund's investments and oversees
its operations. The manager and Salomon Smith Barney are subsidiaries of
Citigroup Inc. Citigroup businesses produce a broad range of financial services
- -- asset management, banking and consumer finance, credit and charge cards,
insurance, investments, investment banking and trading -- and use diverse
channels to make them available to consumer and corporate customers around the
world.
Robert J. Brady and Ellen S. Cammer, each an investment officer of the manager
and a managing director of Salomon Smith Barney, have been responsible for the
day-to-day management of the fund's portfolio since 1995.
Management fee For its services, the manager received a fee during the fund's
last fiscal year equal to 0.55% of the fund's average daily net assets. In
addition, the manager received a fee for its administrative services to the fund
equal to 0.20% of the fund's average daily net assets.
Distributor The fund has entered into an agreement with CFBDS, Inc. to
distribute the fund's shares. A selling group consisting of Salomon Smith Barney
and other broker-dealers sells fund shares to the public.
Distribution plans The fund has adopted Rule 12b-1 distribution plans for its
Class A, B and L shares. Under each plan, the fund pays distribution and service
fees. These fees are an ongoing expense and, over time, may cost you more than
other types of sales charges.
Year 2000 issue Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the fund. The cost of addressing the Year 2000 issue, if
substantial, could adversely affect companies and governments that issue
securities held by the fund. The manager and Salomon Smith Barney are addressing
the Year 2000 issue for their systems. The fund has been informed by other
service providers that they are taking similar measures. Although the fund does
not expect the Year 2000 issue to adversely affect it, the fund cannot guarantee
the efforts of the fund, which are limited to requesting and receiving reports
from its service providers, or the efforts of its service providers to correct
the problem will be successful.
8 Concert Social Awareness Fund
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Choosing a class of shares to buy
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You can choose among four classes of shares: Classes A, B, L and Y. Each class
has different sales charges and expenses, allowing you to choose the class that
best meets your needs. Which class is more beneficial to an investor depends on
the amount and intended length of the investment.
o If you plan to invest regularly or in large amounts, buying Class A shares
may help you reduce sales charges and ongoing expenses.
o For Class B shares, all of your purchase amount and, for Class L shares,
more of your purchase amount (compared to Class A shares) will be
immediately invested. This may help offset the higher expenses of Class B
and Class L shares, but only if the fund performs well.
o Class L shares have a shorter deferred sales charge period than Class B
shares. However, because Class B shares convert to Class A shares, and
Class L shares do not, Class B shares may be more attractive to long-term
investors.
You may buy shares from:
o A Salomon Smith Barney Financial Consultant
o An investment dealer in the selling group or a broker that clears through
Salomon Smith Barney -- a dealer representative
o The fund, but only if you are investing through certain qualified plans or
certain dealer representatives
Investment minimums Minimum initial and additional investment amounts vary
depending on the class of shares you buy and the nature of your investment
account.
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Initial Additional
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Classes A, B, L Class Y All Classes
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General $1,000 $15 million $50
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IRAs, Self Employed Retirement
Plans, Uniform Gift to Minor
Accounts $250 $15 million $50
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Qualified Retirement Plans* $25 $15 million $25
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Simple IRAs $1 n/a $1
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Monthly Systematic Investment Plans $25 n/a $25
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Quarterly Systematic Investment Plans $50 n/a $50
* Qualified Retirement Plans are retirement plans qualified under Section
403(b)(7) or Section 401(a) of the Internal Revenue Code, including 401(k) plans
Smith Barney Mutual Funds 9
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Comparing the fund's classes
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Your Salomon Smith Barney Financial Consultant or dealer representative can help
you decide which class meets your goals. They may receive different compensation
depending upon which class you choose.
<TABLE>
<CAPTION>
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Class A Class B Class L Class Y
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<S> <C> <C> <C> <C>
Key features o Initial sales o No initial o Initial sales o No initial
charge sales charge charge is lower or deferred
o You may qualify o Deferred sales than Class A sales charge
for reduction or charge declines o Deferred sales o Must invest
waiver of initial over time charge for only at least
sales charge o Converts to Class 1 year $15 million
o Lower annual A after 8 years o Does not convert o Lower annual
expenses than o Higher annual to Class A expenses than
Class B and expenses than o Higher annual the other classes
Class L Class A expenses than
Class A
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Initial sales Up to 5.00%; None 1.00% None
charge reduced for
large purchases
and waived for
certain investors.
No charge for
purchases of
$500,000 or more
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Deferred 1% on purchases Up to 5.00% charged 1% if you redeem None
sales charge of $500,000 or when you redeem within 1 year of
more if you redeem shares. The purchase
within 1 year of charge is reduced
purchase over time and
there is no
deferred sales
charge after 6
years
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Annual 0.25% of average 1% of average 1% of average None
distribution daily net assets daily net assets daily net assets
and service
fees
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Exchange Class A shares of Class B shares of Class L shares of Class Y shares of
privilege* most Smith Barney most Smith Barney most Smith Barney most Smith Barney
funds funds funds funds
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</TABLE>
* Ask your Salomon Smith Barney Financial Consultant or dealer representative or
visit the web site for the Smith Barney funds available for exchange.
10 Concert Social Awareness Fund
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Sales charge
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Class A shares
You buy Class A shares at the offering price, which is the net asset value plus
a sales charge. You pay a lower sales charge as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge on
the fund's distributions or dividends you reinvest in additional Class A shares.
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Sales Charge as a % of
Offering Net amount
Amount of purchase price (%) invested (%)
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Less than $25,000 5.00 5.26
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$25,000 but less than $50,000 4.00 4.17
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$50,000 but less than $100,000 3.50 3.63
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$100,000 but less than $250,000 3.00 3.09
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$250,000 but less than $500,000 2.00 2.04
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$500,000 or more 0.00 0.00
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Investments of $500,000 or more You do not pay an initial sales charge when you
buy $500,000 or more of Class A shares. However, if you redeem these Class A
shares within one year of purchase, you will pay a deferred sales charge of 1%.
Qualifying for a reduced Class A sales charge There are several ways you can
combine multiple purchases of Class A shares of Smith Barney funds to take
advantage of the breakpoints in the sales charge schedule.
o Accumulation privilege -- lets you combine the current value of
Class A shares owned
o by you, or
o by members of your immediate family,
and for which a sales charge was paid, with the amount of your next purchase of
Class A shares for purposes of calculating the initial sales charge. Certain
trustees and fiduciaries may be entitled to combine accounts in determining
their sales charge.
Smith Barney Mutual Funds 11
<PAGE>
o Letter of intent -- lets you purchase Class A shares of the fund and other
Smith Barney funds over a 13-month period and pay the same sales charge,
if any, as if all shares had been purchased at once. You may include
purchases on which you paid a sales charge within 90 days before you sign
the letter.
Waivers for certain Class A investors Class A initial sales charges are waived
for certain types of investors, including:
o Employees of members of the NASD
o 403(b) or 401(k) retirement plans, if certain conditions are met
o Clients of newly employed Salomon Smith Barney Financial Consultants, if
certain conditions are met
o Investors who redeemed Class A shares of a Smith Barney fund in the past
60 days, if the investor's Salomon Smith Barney Financial Consultant or
dealer representative is notified
If you want to learn about additional waivers of Class A initial sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the Statement of Additional Information ("SAI").
Class B shares
You buy Class B shares at net asset value without paying an initial sales
charge. However, if you redeem your Class B shares within six years of purchase,
you will pay a deferred sales charge. The deferred sales charge decreases as the
number of years since your purchase increases.
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Year after purchase 1st 2nd 3rd 4th 5th 6th through 8th
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Deferred sales charge 5% 4% 3% 2% 1% 0%
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Class B conversion After 8 years, Class B shares automatically convert into
Class A shares. This helps you because Class A shares have lower annual
expenses. Your Class B shares will convert to Class A shares as follows:
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Shares issued: Shares issued: Shares issued:
At initial On reinvestment of Upon exchange from
purchase dividends and another Smith Barney
distributions fund
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Eight years In same proportion as On the date the shares
after the date the number of Class B originally acquired
of purchase shares converting is to would have converted
total Class B shares into Class A shares
you own
12 Concert Social Awareness Fund
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Class L shares
You buy Class L shares at the offering price, which is the net asset value plus
a sales charge of 1% (1.01% of the net amount invested). In addition, if you
redeem your Class L shares within one year of purchase, you will pay a deferred
sales charge of 1%. If you held Class C shares of the fund on June 12, 1998, you
will not pay an initial sales charge on Class L shares you buy before June 22,
2001.
Class Y shares
You buy Class Y shares at net asset value with no initial sales charge and no
deferred sales charge when you redeem. You must meet the $15,000,000 initial
investment requirement. You can use a letter of intent to meet this requirement
by buying Class Y shares of the fund over a 13-month period. To qualify, you
must initially invest $5,000,000.
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More about deferred sales charges
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The deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.
In addition, you do not pay a deferred sales charge on:
o Shares exchanged for shares of another Smith Barney fund
o Shares representing reinvested distributions and dividends
o Shares no longer subject to the deferred sales charge
If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your Salomon Smith Barney Financial Consultant or dealer representative.
Salomon Smith Barney receives deferred sales charges as partial compensation for
its expenses in selling shares, including the payment of compensation to your
Salomon Smith Barney Financial Consultant or dealer representative.
Deferred sales charge waivers
The deferred sales charge for each share class will generally be waived:
o On payments made through certain systematic withdrawal plans
o On certain distributions from a retirement plan
o For involuntary redemptions of small account balances
o For 12 months following the death or disability of a shareholder
If you want to learn more about additional waivers of deferred sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the SAI.
Smith Barney Mutual Funds 13
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Buying shares
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Through a You should contact your Salomon Smith Barney Financial
Salomon Smith Consultant or dealer representative to open a brokerage
Barney Financial account and make arrangements to buy shares.
Consultant or
dealer If you do not provide the following information, your
representative order will be rejected
o Class of shares being bought
o Dollar amount or number of shares being bought
You should pay for your shares through your brokerage
account no later than the third business day after you
place your order. Salomon Smith Barney or your dealer
representative may charge an annual account maintenance
fee.
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Through the Qualified retirement plans and certain other investors
fund's transfer who are clients of the selling group are eligible to buy
agent shares directly from the fund.
o Write the transfer agent at the following address:
Smith Barney Equity Funds
Concert Social Awareness Fund
(Specify class of shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
o Enclose a check to pay for the shares. For initial
purchases, complete and send an account
application.
o For more information, call the transfer agent at
1-800-451-2010.
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14 Concert Social Awareness Fund
<PAGE>
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Through a You may authorize Salomon Smith Barney, your dealer
systematic representative or the transfer agent to transfer funds
investment plan automatically from a regular bank account, cash held in
a Salomon Smith Barney brokerage account or Smith Barney
money market fund to buy shares on a regular basis.
o Amounts transferred should be at least: $25
monthly or $50 quarterly.
o If you do not have sufficient funds in your
account on a transfer date, Salomon Smith Barney,
your dealer representative or the transfer agent
may charge you a fee.
For more information, contact your Salomon Smith Barney
Financial Consultant, dealer representative or the
transfer agent or consult the SAI.
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Exchanging shares
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Smith Barney You should contact your Salomon Smith Barney Financial
offers a distinctive Consultant or dealer representative to exchange into
family of funds other Smith Barney funds. Be sure to read the prospectus
tailored to help of the Smith Barney fund you are exchanging into. An
meet the varying exchange is a taxable transaction.
needs of both large
and small investors. o You may exchange shares only for shares of the
same class of another Smith Barney fund. Not all
Smith Barney funds offer all classes.
o Not all Smith Barney funds may be offered in your
state of residence.Contact your Salomon Smith
Barney Financial Consultant, dealer representative
or the transfer agent.
o You must meet the minimum investment amount for
each fund.
o If you hold share certificates, the transfer agent
must receive the certificates endorsed for
transfer or with signed stock powers (documents
transferring ownership of certificates) before the
exchange is effective.
o The fund may suspend or terminate your exchange
privilege if you engage in an excessive pattern of
exchanges.
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Smith Barney Mutual Funds 15
<PAGE>
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Waiver of Your shares will not be subject to an initial sales
additional sales charge at the time of the exchange. Your deferred sales
charges charge (if any) will continue to be measured from the
date of your original purchase. If the fund you exchange
into has a higher deferred sales charge, you will be
subject to that charge. If you exchange at any time into
a fund with a lower charge, the sales charge will not be
reduced.
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By telephone If you do not have a brokerage account, you may be
eligible to exchange shares through the transfer agent.
You must complete an authorization form to authorize
telephone transfers. If eligible, you may make telephone
exchanges on any day the New York Stock Exchange is
open. Call the transfer agent at 1-800-451-2010 between
9:00 a.m. and 5:00 p.m. (Eastern time). Requests
received after the close of regular trading on the
Exchange are priced at the net asset value next
determined.
You can make telephone exchanges only between accounts
that have identical registrations.
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By mail If you do not have a Salomon Smith Barney brokerage
account, contact your dealer representative or write to
the transfer agent at the address on the opposite page.
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16 Concert Social Awareness Fund
<PAGE>
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Redeeming shares
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Generally Contact your Salomon Smith Barney Financial Consultant
or dealer representative to redeem shares of the fund.
If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with
signed stock powers before the redemption is effective.
If the shares are held by a fiduciary or corporation,
other documents may be required.
Your redemption proceeds will be sent within three
business days after your request is received in good
order. However, if you recently purchased your shares by
check, your redemption proceeds will not be sent to you
until your original check clears, which may take up to
15 days.
If you have a Salomon Smith Barney brokerage account,
your redemption proceeds will be placed in your account
and not reinvested without your specific instruction. In
other cases, unless you direct otherwise, your
redemption proceeds will be paid by check mailed to your
address of record.
- --------------------------------------------------------------------------------
By mail For accounts held directly at the fund, send written
requests to the transfer agent at the following address:
Smith Barney Equity Funds
Concert Social Awareness Fund
(Specify class of shares)
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
Your written request must provide the following:
o Your account number
o The class of shares and the dollar amount or
number of shares to be redeemed
o Signatures of each owner exactly as the account is
registered
- --------------------------------------------------------------------------------
Smith Barney Mutual Funds 17
<PAGE>
- --------------------------------------------------------------------------------
By telephone If you do not have a brokerage account, you may be
eligible to redeem shares (except those held in
retirement plans) in amounts up to $10,000 per day
through the transfer agent. You must complete an
authorization form to authorize telephone redemptions.
If eligible, you may request redemptions by telephone on
any day the New York Stock Exchange is open. Call the
transfer agent at 1-800-451-2010 between 9:00 a.m. and
5:00 p.m. (Eastern time). Requests received after the
close of regular trading on the Exchange are priced at
the net asset value next determined.
Your redemption proceeds can be sent by check to your
address of record or by wire transfer to a bank account
designated on your authorization form. You must submit a
new authorization form to change the bank account
designated to receive wire transfers and you may be
asked to provide certain other documents.
- --------------------------------------------------------------------------------
Automatic cash You can arrange for the automatic redemption of a
withdrawal plans portion of your shares on a monthly or quarterly basis.
To qualify you must own shares of the fund with a value
of at least $10,000 ($5,000 for retirement plan
accounts) and each automatic redemption must be at least
$50. If your shares are subject to a deferred sales
charge, the sales charge will be waived if your
automatic payments do not exceed 1% per month of the
value of your shares subject to a deferred sales charge.
The following conditions apply:
o Your shares must not be represented by
certificates
o All dividends and distributions must be reinvested
For more information, contact your Salomon Smith Barney
Financial Consultant or dealer representative or consult
the SAI.
18 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Other things to know about share transactions
- --------------------------------------------------------------------------------
When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed:
o Name of the fund
o Account number
o Class of shares being bought, exchanged or redeemed
o Dollar amount or number of shares being bought, exchanged or
redeemed
o Signature of each owner exactly as the account is registered
The transfer agent will try to confirm that any telephone exchange or redemption
request is genuine by recording calls, asking the caller to provide a personal
identification number for the account, sending you a written confirmation or
requiring other confirmation procedures from time to time.
Signature guarantees To be in good order, your redemption request must include a
signature guarantee if you:
o Are redeeming over $10,000 of shares
o Are sending signed share certificates or stock powers to the transfer
agent
o Instruct the transfer agent to mail the check to an address different from
the one on your account
o Changed your account registration
o Want the check paid to someone other than the account owner(s)
o Are transferring the redemption proceeds to an account with a different
registration
You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.
Smith Barney Mutual Funds 19
<PAGE>
The fund has the right to:
o Suspend the offering of shares
o Waive or change minimum and additional investment amounts
o Reject any purchase or exchange order
o Change, revoke or suspend the exchange privilege
o Suspend telephone transactions
o Suspend or postpone redemptions of shares on any day when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
Securities and Exchange Commission
o Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities
Small account balances If your account falls below $500 because of a redemption
of fund shares, the fund may ask you to bring your account up to $500. If your
account is still below $500 after 60 days, the fund may close your account and
send you the redemption proceeds.
Excessive exchange transactions The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other
shareholders. If so, the fund may limit additional purchases and/or exchanges by
the shareholder.
Share certificates The fund does not issue share certificates unless a written
request signed by all registered owners is made to the transfer agent. If you
hold share certificates it will take longer to exchange or redeem shares.
20 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney 401(k) and ExecChoice(TM) programs
- --------------------------------------------------------------------------------
You may be eligible to participate in the Smith Barney 401(k) program or the
Smith Barney ExecChoice(TM) program. The fund offers Class A and Class L shares
to participating plans as investment alternatives under the programs. You can
meet minimum investment and exchange amounts by combining the plan's investments
in any of the Smith Barney mutual funds.
There are no sales charges when you buy or sell shares and the class of shares
you may purchase depends on the amount of your initial investment. Once a class
of shares is chosen, all additional purchases must be of the same class.
o Class A shares may be purchased by plans investing at least $1 million.
o Class L shares may be purchased by plans investing less than $1 million.
Class L shares are eligible for exchange into Class A shares not later
than 8 years after the plan joined the program. They are eligible for
exchange sooner in the following circumstances:
If the account was opened on or after June 21, 1996 and a total of
$1 million is invested in Smith Barney Funds Class L shares (other
than money market funds), all Class L shares are eligible for
exchange after the plan is in the program 5 years.
If the account was opened before June 21, 1996 and a total of
$500,000 is invested in Smith Barney Funds Class L shares (other
than money market funds) on December 31 in any year, all Class L
shares are eligible for exchange on or about March 31 of the
following year.
For more information, call your Salomon Smith Barney Financial Consultant or the
transfer agent, or consult the SAI.
Smith Barney Mutual Funds 21
<PAGE>
- --------------------------------------------------------------------------------
Dividends, distributions and taxes
- --------------------------------------------------------------------------------
Dividends The fund generally makes capital gain distributions and pays
dividends, if any, once a year, typically in December. The fund may pay
additional distributions and dividends at other times if necessary for the fund
to avoid a federal tax. Capital gain distributions and dividends are reinvested
in additional fund shares of the same class you hold. The fund expects
distributions to be primarily from capital gain. You do not pay a sales charge
on reinvested distributions or dividends. Alternatively, you can instruct your
Salomon Smith Barney Financial Consultant, dealer representative or the transfer
agent to have your distributions and/or dividends paid in cash. You can change
your choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.
Taxes In general, redeeming shares, exchanging shares and receiving
distributions (whether in cash or additional shares) are all taxable events.
- --------------------------------------------------------------------------------
Transaction Federal tax status
- --------------------------------------------------------------------------------
Redemption or exchange of shares Usually capital gain or loss;
long-term only if shares owned
more than one year
- --------------------------------------------------------------------------------
Long-term capital gain distributions Long-term capital gain
- --------------------------------------------------------------------------------
Short-term capital gain distributions Ordinary income
- --------------------------------------------------------------------------------
Dividends Ordinary income
- --------------------------------------------------------------------------------
Long-term capital gain distributions are taxable to you as long-term capital
gain regardless of how long you have owned your shares. You may want to avoid
buying shares when the fund is about to declare a capital gain distribution or a
dividend, because it will be taxable to you even though it may actually be a
return of a portion of your investment.
After the end of each year, the fund will provide you with information about the
distributions and dividends you received and any redemptions of shares during
the previous year. If you do not provide the fund with your correct taxpayer
identification number and any required certifications, you may be subject to
back-up withholding of 31% of your distributions, dividends, and redemption
proceeds. Because each shareholder's circumstances are different and special tax
rules may apply, you should consult your tax adviser about your investment in
the fund.
22 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Share price
- --------------------------------------------------------------------------------
You may buy, exchange or redeem shares at their net asset value, plus any
applicable sales charge, next determined after receipt of your request in good
order. The fund's net asset value is the value of its assets minus its
liabilities. Net asset value is calculated separately for each class of shares.
The fund calculates its net asset value every day the New York Stock Exchange is
open. The Exchange is closed on certain holidays listed in the SAI. This
calculation is done when regular trading closes on the Exchange (normally 4:00
p.m., Eastern time).
The fund generally values its fund securities based on market prices or
quotations. When reliable market prices or quotations are not readily available,
or when the value of a security has been materially affected by events occurring
after a foreign exchange closes, the fund may price those securities at fair
value. Fair value is determined in accordance with procedures approved by the
fund's board. A fund that uses fair value to price securities may value those
securities higher or lower than another fund using market quotations to price
the same securities.
International markets may be open on days when U.S. markets are closed, and the
value of foreign securities owned by the fund could change on days when you
cannot buy or redeem shares.
In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Salomon Smith Barney Financial Consultant or dealer
representative before the New York Stock Exchange closes. If the New York Stock
Exchange closes early, you must place your order prior to the actual closing
time. Otherwise, you will receive the next business day's price.
Salomon Smith Barney or members of the selling group must transmit all orders to
buy, exchange or redeem shares to the fund's agent before the agent's close of
business.
- --------------------------------------------------------------------------------
Financial highlights
- --------------------------------------------------------------------------------
The financial highlights tables are intended to help you understand the
performance of each class for the past 5 years (or since inception if less than
5 years). Certain information reflects financial results for a single share.
Total return represents the rate that a shareholder would have earned (or lost)
on a fund share assuming reinvestment of all dividends and distributions. The
information in the following tables for the fiscal years 1996 through 1999 was
audited by KPMG LLP, independent accountants. The 1995 fiscal year was audited
by other independent accountants.
Smith Barney Mutual Funds 23
<PAGE>
- --------------------------------------------------------------------------------
For a Class A share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999(1) 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 20.57 $ 19.36 $ 19.00 $ 15.91 $ 17.72
- -----------------------------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.29 0.48 0.57 0.61 0.57
Net realized and unrealized gain (loss) 5.87 3.27 1.71 3.52 (1.25)
- -----------------------------------------------------------------------------------------------------
Total income (loss) from operations 6.16 3.75 2.28 4.13 (0.68)
- -----------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.26) (0.55) (0.60) (0.52) (0.47)
Net realized gains (0.53) (1.99) (1.32) (0.52) (0.66)
- -----------------------------------------------------------------------------------------------------
Total distributions (0.79) (2.54) (1.92) (1.04) (1.13)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 25.94 $ 20.57 $ 19.36 $ 19.00 $ 15.91
- -----------------------------------------------------------------------------------------------------
Total return 30.47% 19.89% 12.41% 26.47% (3.82)%
- -----------------------------------------------------------------------------------------------------
Net assets, end of year (millions) $ 282 $ 202 $ 178 $ 175 $ 159
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 1.19% 1.19% 1.28% 1.21% 1.33%
Net investment income 1.23 2.34 2.98 3.10 2.89
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 62% 68% 81% 103%
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts calculated using the monthly average shares method.
24 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
For a Class B share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999(1) 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 20.63 $ 19.42 $ 19.05 $ 15.97 $ 17.79
- -----------------------------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.11 0.33 0.43 0.49 0.39
Net realized and unrealized gain (loss) 5.89 3.27 1.71 3.53 (1.20)
- -----------------------------------------------------------------------------------------------------
Total income (loss) from operations 6.00 3.60 2.14 4.02 (0.81)
- -----------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.14) (0.40) (0.45) (0.42) (0.35)
Net realized gains (0.53) (1.99) (1.32) (0.52) (0.66)
- -----------------------------------------------------------------------------------------------------
Total distributions (0.67) (2.39) (1.77) (0.94) (1.01)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 25.96 $ 20.63 $ 19.42 $ 19.05 $ 15.97
- -----------------------------------------------------------------------------------------------------
Total return 29.50% 18.95% 11.60% 25.58% (4.54)%
- -----------------------------------------------------------------------------------------------------
Net assets, end of year (millions) $ 198 $ 172 $ 203 $ 226 $ 216
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 1.94% 1.95% 2.03% 1.94% 2.00%
Net investment income 0.49 1.62 2.23 2.37 2.21
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 62% 68% 81% 103%
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts calculated using the monthly average shares method.
Smith Barney Mutual Funds 25
<PAGE>
- --------------------------------------------------------------------------------
For a Class L(1) share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999(2) 1998 1997 1996 1995(3)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 20.68 $ 19.46 $ 19.08 $ 15.97 $ 17.79
- ----------------------------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.11 0.34 0.44 0.45 0.38
Net realized and unrealized gain (loss) 5.91 3.27 1.71 3.60 (1.19)
- ----------------------------------------------------------------------------------------------------
Total income (loss) from operations 6.02 3.61 2.15 4.05 (0.81)
- ----------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.14) (0.40) (0.45) (0.42) (0.35)
Net realized gains (0.53) (1.99) (1.32) (0.52) (0.66)
- ----------------------------------------------------------------------------------------------------
Total distributions (0.67) (2.39) (1.77) (0.94) (1.01)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 26.03 $ 20.68 $ 19.46 $ 19.08 $ 15.97
- ----------------------------------------------------------------------------------------------------
Total return 29.53% % 18.97% % 11.65% % 25.77% % (4.54)
- ----------------------------------------------------------------------------------------------------
Net assets, end of year (millions) $ 15 $ 7 $ 4 $ 3 $ 2
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 1.92% 1.93% 2.01% 1.94% 1.98%
Net investment income 0.46 1.54 2.25 2.31 2.24
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 62% 68% 81% 103%
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) On June 12, 1998, Class C shares were renamed Class L shares.
(2) Per share amounts calculated using the monthly average shares method
(3) On November 7, 1994, the former Class D shares were renamed Class C
shares.
26 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
For a Class Y* share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
1998 1997(1)
- --------------------------------------------------------------------------------
Net asset value, beginning of year $ 19.39 $ 19.00
- --------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.56 0.51
Net realized and unrealized gain (loss) 3.27 1.69
- --------------------------------------------------------------------------------
Total income (loss) from operations 3.83 2.20
- --------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.61) (0.49)
Net realized gains (1.99) (1.32)
- --------------------------------------------------------------------------------
Total distributions (2.60) (1.81)
- --------------------------------------------------------------------------------
Net asset value, end of year $ 20.62 $ 19.39
- --------------------------------------------------------------------------------
Total return 20.31% 11.94%(2)
- --------------------------------------------------------------------------------
Net assets, end of year (millions) $ 0.2 $ 0.1
- --------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 0.84% 0.90%(3)
Net investment income 2.64% 3.31(3)
- --------------------------------------------------------------------------------
Portfolio turnover rate 62% 68%
- --------------------------------------------------------------------------------
* There were no Class Y shares outstanding for the year ended January 31,
1999.
(1) For the period from March 28, 1996 (inception date) to January 31, 1997.
(2) Not Annualized.
(3) Annualized.
Smith Barney Mutual Funds 27
<PAGE>
SALOMON SMITH BARNEY
-------------------------------
A member of citigroup [GRAPHIC]
Concert Social
Awareness Fund
An investment portfolio of
Smith Barney Equity Funds
Shareholder reports Annual and semiannual reports to shareholders provide
additional information about the fund's investments. These reports discuss the
market conditions and investment strategies that affected the fund's
performance.
The fund sends only one report to a household if more than one account has the
same address. Contact your Salomon Smith Barney Financial Consultant, dealer
representative or the transfer agent if you do not want this policy to apply to
you.
Statement of additional information The statement of additional information
provides more detailed information about the fund and is incorporated by
reference into (is legally part of) this prospectus.
You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Salomon
Smith Barney Financial Consultant or dealer representative, by calling the fund
at 1-800-451-2010, or by writing to the fund at Smith Barney Mutual Funds, 388
Greenwich Street, MF2, New York, New York 10013.
Visit our web site. Our web site is located at www.smithbarney.com
You can also review and copy the fund's shareholder reports, prospectus and
statement of additional information at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. You can get copies of these materials
for a duplicating fee by writing to the Public Reference Section of the
Commission, Washington, D.C. 20549-6009. Information about the public reference
room may be obtained by calling 1-800-SEC-0330. You can get the same information
free from the Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the fund that is not in this prospectus, you
should not rely upon that information. Neither the fund nor the distributor is
offering to sell shares of the fund to any person to whom the fund may not
lawfully sell its shares.
(SM) Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
(Investment Company Act file
no. 811-04551)
FD0225 5/99
- --------------------------------------------------------------------------------
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(R)
PROSPECTUS
Concert
Social Awareness
Fund
Class A and B Shares
-------------------------------------------------------------------------
May 31, 1999
The Securities and Exchange Commission has not approved or disapproved
these securities or determined whether this prospectus is accurate or
complete. Any statement to the contrary is a crime.
- --------------------------------------------------------------------------------
<PAGE>
Concert Social Awareness Fund
- --------------------------------------------------------------------------------
Contents
- --------------------------------------------------------------------------------
Investments, risks and performance ....................2
More on the fund's investments ........................6
More on the fund's social awareness criteria ..........7
Management ............................................8
Choosing a class of shares to buy .....................9
Comparing the fund's classes .........................10
Sales charge .........................................11
More about deferred sales charges ....................13
Buying shares ........................................14
Exchanging shares ....................................15
Redeeming shares .....................................17
Other things to know about share
transactions .........................................20
Dividends, distributions and taxes ...................21
Share price ..........................................22
Financial highlights .................................22
You should know: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.
Smith Barney Mutual Funds 1
<PAGE>
- --------------------------------------------------------------------------------
Investments, risks and performance
- --------------------------------------------------------------------------------
Investment objective
The fund seeks high total return consisting of capital appreciation and current
income.
Principal investment strategies
Key investments The fund invests primarily in common stocks and other equity
securities of U.S. companies. Equity securities include exchange traded and
over-the-counter common stocks and preferred shares, debt securities convertible
into equity securities, and warrants and rights relating to equity securities.
The fund also normally invests between 15% and 35% of its assets in fixed income
securities. The fixed income securities in which the fund invests are primarily
investment grade, and may be of any maturity. The fund also may invest a portion
of its assets in equity and debt securities of foreign issuers. As described
below, the fund emphasizes companies that both offer attractive investment
opportunities and demonstrate a positive awareness of their impact on the
society in which they operate, relative to other companies in their industry.
Selection process Equity Securities. The fund invests in a broad range of
companies, industries and sectors, without regard to market capitalization. The
manager uses a "value" approach to selecting equity securities. In selecting
individual equity securities, the manager looks for companies it believes are
undervalued.
Specifically, the manager looks for:
o Attractive risk-adjusted price/earnings ratio, relative to growth
o Positive earnings trends
o Favorable financial condition
Fixed Income Securities. In selecting fixed income investments, the manager:
o Determines sector and maturity weightings based on intermediate and
long-term assessments of the economic environment and interest rate
outlook
o Uses fundamental credit analysis to determine the relative value of bond
issues
o Identifies undervalued bonds and attempts to avoid bonds that may be
subject to credit downgrades
Social Awareness Criteria. As a component of the selection process, the manager
considers whether, relative to other companies in an industry, a company that
meets these investment criteria also is sensitive to social issues related to
its products, services, or methods of doing business.
2 Concert Social Awareness Fund
<PAGE>
Social factors considered include:
o Fairness of employment policies and labor relations
o Involvement in community causes
o Efforts and strategies to minimize the negative impact of business
activities and products and to embrace alternatives to unsafe polluting
and wasteful activities or products
o Responsibility and fairness of advertising and marketing practices
In addition, the fund seeks to avoid investing in a company if the manager has
significant reason to believe it is engaged in:
o Tobacco production
o Production of weapons
o Ownership or design of nuclear facilities
Principal risks of investing in the fund
Investors could lose money on their investment in the fund, or the fund may not
perform as well as other investments, if:
o Stock prices decline generally
o Socially aware companies fall out of favor with investors or fail to
perform as well as companies that do not fit the fund's social criteria
o Interest rates rise, causing the value of fixed income securities in the
fund's portfolio to decline
o The issuer of a fixed income security owned by the fund defaults on its
obligation to pay principal and/or interest or the security's credit
rating is downgraded
o The manager's judgment about the attractiveness, value or appreciation of
a particular security, or the creditworthiness of a company in which the
fund invests, proves to be incorrect
Because the manager uses social awareness criteria as a component of its
selection process, the fund's universe of investments may be smaller than that
of other funds. In some circumstances, this could cause the fund's return to be
lower than that of a fund that may invest in other issuers with strong earnings
and growth potential, but that do not meet the fund's social awareness criteria.
Who may want to invest The fund may be an appropriate investment if you:
o Are seeking to invest in a portfolio with a socially aware component
o Are seeking a combination of capital appreciation and current income
o Are willing to accept the risks of the stock and bond markets
Smith Barney Mutual Funds 3
<PAGE>
Risk return bar chart
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not
necessarily indicate how the fund will perform in the future.
The bar chart shows the performance of the fund's Class B shares for each of the
past 10 calendar years. Class A shares would have different performance because
of their different expenses. The performance information in the chart does not
reflect sales charges, which would reduce your return.
- --------------------------------------------------------------------------------
Total Return for Class B Shares
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
21.16% -2.19% 26.45% 6.59% 14.66% -1.75% 24.01% 11.42% 20.38% 26.63%
Quarterly returns: Highest: 19.07% in 4th quarter 1998; Lowest: (11.69)% in 3rd
quarter 1990
Risk return table
This table indicates the risks of investing in the fund by comparing the average
annual total return of each class for the periods shown with that of the
Standard & Poor's 500 ("S&P 500") Index, an unmanaged index of widely held
common stocks and the Lehman Government/Corporate Bond ("Lehman Gov/Corp")
Index, an unmanaged combination of government and bond indexes, including U.S.
treasury and agency securities and yankee bonds. This table assumes imposition
of the maximum sales charge applicable to the class, redemption of shares at the
end of the period, and reinvestment of distributions and dividends.
4 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Returns
Calendar Years Ended December 31, 1998
- --------------------------------------------------------------------------------
Since Inception
Class 1 year 5 years 10 years Inception Date
- --------------------------------------------------------------------------------
A 21.15% 15.32% n/a 15.67% 11/06/92
- --------------------------------------------------------------------------------
B 21.63% 15.54% 14.25% 12.66% 02/02/87
- --------------------------------------------------------------------------------
S&P 500 28.60 24.05% 19.19% 16.37% *
- --------------------------------------------------------------------------------
Lehman Gov/
Corp Index 9.47% 7.30% 9.33% 8.52% *
*Index comparison begins on February 28, 1987
Fee table
This table sets forth the fees and expenses you will pay if you invest in fund
shares.
- --------------------------------------------------------------------------------
Shareholder fees
- --------------------------------------------------------------------------------
(fees paid directly from your investment) Class A Class B
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed
on purchases
(as a % of offering price) 5.00% None
- --------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a % of the lower of net
asset value at purchase or redemption) None* 5.00%
- --------------------------------------------------------------------------------
Annual fund operating expenses
- --------------------------------------------------------------------------------
(expenses deducted from fund assets) Class A Class B
- --------------------------------------------------------------------------------
Management fee 0.75% 0.75%
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25 1.00
- --------------------------------------------------------------------------------
Other expenses 0.19 0.19
----- -----
- --------------------------------------------------------------------------------
Total annual fund operating expenses 1.19% 1.94%
*You may buy Class A shares in amounts of $500,000 or more at net asset value
(without an initial charge) but if you redeem those shares within 12 months of
their purchase, you will pay a deferred sales charge of 1.00%.
Smith Barney Mutual Funds 5
<PAGE>
Example
This example helps you compare the costs of investing in the fund with the costs
of investing in other mutual funds. Your actual costs may be higher or lower.
The example assumes:
o You invest $10,000 in the fund for the period shown
o Your investment has a 5% return each year
o You reinvest all distributions and dividends without a sales charge
o The fund's operating expenses remain the same
- --------------------------------------------------------------------------------
Number of years you own your shares
- --------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class A (with or without redemption) $615 $859 $1,122 $1,871
- --------------------------------------------------------------------------------
Class B (redemption at end of period) $697 $909 $1,147 $2,070
- --------------------------------------------------------------------------------
Class B (no redemption) $197 $609 $1,047 $2,070
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
More on the fund's investments
- --------------------------------------------------------------------------------
Derivative contracts The fund may, but need not, use derivative contracts, such
as futures and options on securities or securities indices, options on these
futures, and interest rate futures, for any of the following purposes:
o To hedge against the economic impact of adverse changes in the market
value of portfolio securities, because of changes in interest rates or
stock prices
o As a substitute for buying or selling securities
A derivative contract will obligate or entitle a fund to deliver or receive an
asset or cash payment based on the change in value of one or more securities or
indices. Even a small investment in derivative contracts can have a big impact
on a fund's interest rate or stock market exposure. Therefore, using derivatives
can disproportionately increase losses and reduce opportunities for gains. The
fund may not fully benefit from or may lose money on derivatives if changes in
their value do not correspond accurately to changes in the value of the fund's
holdings. The other parties to certain derivative contracts present the same
types of default risk as issuers of fixed income securities. Derivatives can
also make a fund less liquid and harder to value, especially in declining
markets.
6 Concert Social Awareness Fund
<PAGE>
Foreign securities The fund may invest a portion of its assets, generally under
15% (but not more than 25%), in securities of foreign issuers. These securities
generally include American Depositary Receipts (ADRs), Yankee Bonds and other
securities quoted in U.S. dollars, but may also include non-U.S. dollar
denominated securities. Because the fund may invest in securities of foreign
issuers, the fund carries additional risks. The value of your investment may
decline if the U.S. and/or foreign stock markets decline, currency rates
adversely affect the value of foreign currencies relative to the U.S. dollar, or
an adverse event, such as an unfavorable earnings report, depresses the value of
a particular company's stock. Prices of foreign securities may go down because
of foreign government actions, political instability or the more limited
availability of accurate information about foreign companies. These risks are
greater for issuers in emerging markets.
Defensive investing The fund may depart from its principal investment strategies
in response to adverse market, economic or political conditions by taking
temporary defensive positions in all types of money market and short-term debt
securities. If the fund takes a temporary defensive position, it may be unable
to achieve its investment goal.
- --------------------------------------------------------------------------------
More on the fund's social awareness criteria
- --------------------------------------------------------------------------------
The manager believes that there is a direct correlation between companies that
demonstrate an acute awareness of their impact on the society within which they
operate and companies which offer attractive long-term investment potential. The
manager believes that addressing social issues in a positive manner can
translate into sound business. For example, by ensuring a product or service
does not negatively impact the environment, a company can avoid costly
litigation and clean-up costs; and by maintaining positive standards for the
workplace and a diverse employee population, a company can better ensure access
to quality management talent and improved productivity; or by becoming more
involved in the community, a company can enhance its consumer franchise. The
manager also believes that top quality management teams who successfully balance
their companies' business interest with their social influences can gain
significant competitive advantages over the long run, which may result in
increased shareholder values and, therefore, make the company's shares a better
investment. The fund is designed to combine both financial and social criteria
in all of its investment decisions.
The manager will use its best efforts to assess a company's social performance.
This analysis will be based on present activities, and will not preclude
securities solely because of past activities. The manager will monitor the
social progress or deterioration of each company in which the fund invests.
Smith Barney Mutual Funds 7
<PAGE>
- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------
Manager The fund's investment manager is SSBC Fund Management Inc., an affiliate
of Salomon Smith Barney Inc. The manager's address is 388 Greenwich Street, New
York, New York 10013. The manager selects the fund's investments and oversees
its operations. The manager and Salomon Smith Barney are subsidiaries of
Citigroup Inc. Citigroup businesses produce a broad range of financial services
- -- asset management, banking and consumer finance, credit and charge cards,
insurance, investments, investment banking and trading -- and use diverse
channels to make them available to consumer and corporate customers around the
world.
Robert J. Brady and Ellen S. Cammer, each an investment officer of the manager
and a managing director of Salomon Smith Barney, have been responsible for the
day-to-day management of the fund's portfolio since 1995.
Management fee For its services, the manager received a fee during the fund's
last fiscal year equal to 0.55% of the fund's average daily net assets. In
addition, the manager received a fee for its administrative services to the fund
equal to 0.20% of the fund's average daily net assets.
Distributor The fund has entered into an agreement with CFBDS, Inc. to
distribute the fund's shares. Through a selling agreement, PFS Investments Inc.
sells fund shares to the public.
Distribution plans The fund has adopted Rule 12b-1 distribution plans for its
Class A and B shares. Under each plan, the fund pays distribution and service
fees. These fees are an ongoing expense and, over time, may cost you more than
other types of sales charges.
Year 2000 issue Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the fund. The cost of addressing the Year 2000 issue, if
substantial, could adversely affect companies and governments that issue
securities held by the fund. The manager and Salomon Smith Barney are addressing
the Year 2000 issue for their systems. The fund has been informed by other
service providers that they are taking similar measures. Although the fund does
not expect the Year 2000 issue to adversely affect it, the fund cannot guarantee
the efforts of the fund, which are limited to requesting and receiving reports
from its service providers, or the efforts of its service providers to correct
the problem will be successful.
8 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Choosing a class of shares to buy
- --------------------------------------------------------------------------------
You can choose between two classes of shares: Classes A and B. Each class has
different sales charges and expenses, allowing you to choose the class that best
meets your needs. Which class is more beneficial to an investor depends on the
amount and intended length of the investment.
o If you plan to invest regularly or in large amounts, buying Class A shares
may help you reduce sales charges and ongoing expenses.
o For Class B shares, all of your purchase amount will be immediately
invested. This may help offset the higher expenses of Class B shares, but
only if the fund performs well.
Initial purchases of shares must be made through a PFS Investments Registered
Representative.
Investment minimums Minimum initial and additional investment amounts vary
depending on the class of shares you buy and the nature of your investment
account.
- --------------------------------------------------------------------------------
Initial Additional
- --------------------------------------------------------------------------------
Classes A and B Both Classes
- --------------------------------------------------------------------------------
General $1,000 $50
- --------------------------------------------------------------------------------
IRAs, Self Employed Retirement
Plans, Uniform Gift to Minor
Accounts $250 $50
- --------------------------------------------------------------------------------
Qualified Retirement Plans* $25 $25
- --------------------------------------------------------------------------------
Systematic Investment Plans $25 $25
*Qualified Retirement Plans are retirement plans qualified under Section
403(b)(7) or Section 401(a) of the Internal Revenue Code, including 401(k) plans
Smith Barney Mutual Funds 9
<PAGE>
- --------------------------------------------------------------------------------
Comparing the fund's classes
- --------------------------------------------------------------------------------
Your PFS Investments Registered Representative can help you decide which class
meets your goals. They may receive different compensation depending upon which
class you choose.
- --------------------------------------------------------------------------------
Class A Class B
- --------------------------------------------------------------------------------
Key features o Initial sales charge o No initial sales charge
o You may qualify for reduction o Deferred sales charge
or waiver of initial sales declines over time
charge o Converts to Class A after
o Lower annual expenses than 8 years
Class B o Higher annual expenses than
Class A
- --------------------------------------------------------------------------------
Initial sales Up to 5.00%; reduced for None
charge large purchases and waived
for certain investors.No
charge for purchases of
$500,000 or more
- --------------------------------------------------------------------------------
Deferred 1% on purchases of $500,000 Up to 5.00% charged when you
sales charge or more if you redeem within redeem shares. The charge is
1 year of purchase reduced over time and there
is no deferred sales charge
after 6 years
- --------------------------------------------------------------------------------
Annual 0.25% of average daily net 1% of average daily net
distribution assets assets
and service
fees
- --------------------------------------------------------------------------------
Exchange Class A shares Class B shares
privilege* of certain Smith Barney funds of certain Smith Barney funds.
- --------------------------------------------------------------------------------
*Ask your PFS Investments Registered Representative for the funds available for
exchange.
10 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Sales charge
- --------------------------------------------------------------------------------
Class A shares
You buy Class A shares at the offering price, which is the net asset value plus
a sales charge. You pay a lower sales charge as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge on
the fund's distributions or dividends you reinvest in additional Class A shares.
- --------------------------------------------------------------------------------
Sales Charge as a % of
Offering Net amount
Amount of purchase price (%) invested (%)
- --------------------------------------------------------------------------------
Less than $25,000 5.00 5.26
- --------------------------------------------------------------------------------
$25,000 but less than $50,000 4.00 4.17
- --------------------------------------------------------------------------------
$50,000 but less than $100,000 3.50 3.63
- --------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00 3.09
- --------------------------------------------------------------------------------
$250,000 but less than $500,000 2.00 2.04
- --------------------------------------------------------------------------------
$500,000 or more 0.00 0.00
- --------------------------------------------------------------------------------
Investments of $500,000 or more You do not pay an initial sales charge when you
buy $500,000 or more of Class A shares. However, if you redeem these Class A
shares within one year of purchase, you will pay a deferred sales charge of 1%.
Qualifying for a reduced Class A sales charge There are several ways you can
combine multiple purchases of Class A shares of Smith Barney funds to take
advantage of the breakpoints in the sales charge schedule.
o Accumulation privilege -- lets you combine the current value of
Class A shares owned
o by you, or
o by members of your immediate family,
and for which a sales charge was paid, with the amount of your next purchase of
Class A shares for purposes of calculating the initial sales charge. Certain
trustees and fiduciaries may be entitled to combine accounts in determining
their sales charge.
Smith Barney Mutual Funds 11
<PAGE>
o Letter of intent -- lets you purchase Class A shares of the fund and
certain Smith Barney funds over a 13-month period and pay the same sales
charge, if any, as if all shares had been purchased at once. You may
include purchases on which you paid a sales charge within 90 days before
you sign the letter.
Waivers for certain Class A investors Class A initial sales charges are waived
for certain types of investors, including:
o Employees of members of the NASD
o 403(b) or 401(k) retirement plans, if certain conditions are met
o Investors who redeemed Class A shares of a Smith Barney fund in the past
60 days, if your PFS Investments Registered Representative is notified
o Participants in the Primerica Corporation Savings and Retirement Plan
o Investors who purchase through a PFS Investments Registered Representative
with proceeds from a prior mutual fund redemption, if certain conditions
are met.
If you want to learn about additional waivers of Class A initial sales charges,
contact your PFS Investments Registered Representative or consult the Statement
of Additional Information ("SAI").
Class B shares
You buy Class B shares at net asset value without paying an initial sales
charge. However, if you redeem your Class B shares within six years of purchase,
you will pay a deferred sales charge. The deferred sales charge decreases as the
number of years since your purchase increases.
- --------------------------------------------------------------------------------
Year after purchase 1st 2nd 3rd 4th 5th 6th through 8th
- --------------------------------------------------------------------------------
Deferred sales charge 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
Class B conversion After 8 years, Class B shares automatically convert into
Class A shares. This helps you because Class A shares have lower annual
expenses. Your Class B shares will convert to Class A shares as follows:
- --------------------------------------------------------------------------------
Shares issued: Shares issued: Shares issued:
At initial On reinvestment of Upon exchange from
purchase dividends and another Smith Barney
distributions fund
- --------------------------------------------------------------------------------
Eight years In same proportion as On the date the shares
after the date the number of Class B originally acquired
of purchase shares converting is to would have converted
total Class B shares into Class A shares
you own
12 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
More about deferred sales charges
- --------------------------------------------------------------------------------
The deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.
In addition, you do not pay a deferred sales charge on:
o Shares exchanged for shares of another Smith Barney fund
o Shares representing reinvested distributions and dividends
o Shares no longer subject to the deferred sales charge
If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your PFS Investments Registered Representative.
PFS Distributors Inc., an affiliate of PFS Investments Inc., receives deferred
sales charges as reimbursement for shares sold, including the payment of
compensation to your PFS Investments Registered Representative.
Deferred sales charge waivers
The deferred sales charge for each share class will generally be waived:
o On payments made through certain systematic withdrawal plans
o On certain distributions from a retirement plan
o For involuntary redemptions of small account balances
o For 12 months following the death or disability of a shareholder
If you want to learn more about additional waivers of deferred sales charges,
contact your PFS Investments Registered Representative or consult the SAI.
Smith Barney Mutual Funds 13
<PAGE>
- --------------------------------------------------------------------------------
Buying shares
- --------------------------------------------------------------------------------
Buying shares by mail
o Initial purchases of shares of each fund must be made through a PFS
Investments Registered Representative by completing the appropriate
application. The completed application should be forwarded to the Fund's
sub-transfer agent, PFS Shareholder Services. Subsequent investments may
be sent by mail directly to PFS Shareholder Services.
- --------------------------------------------------------------------------------
Buying shares by telephone
o Upon completion of certain automated systems, you will be able to elect
telephone transactions on your account application and call PFS
Shareholder Services and request a purchase through a transfer from your
bank account. Telephone purchases can be made between 8:00 a.m. and 8:00
p.m. eastern time on any day the New York Stock Exchange is open. Purchase
orders received after the close of regular trading on the Exchange are
priced at the net asset value next determined. The minimum telephone
investment is $250 and the maximum is $10,000. You will be charged a fee
if you have insufficient funds to complete the investment.
o The address and telephone number of PFS Shareholder Services is: 3100
Breckinridge Blvd., Bldg. 200, Duluth, Georgia 30099-0062; (800) 544-5445.
o You may also reach PFS Shareholder Services by calling (800) 544-7278 for
Spanish speaking representatives or (800) 824-1721 for the TDDLine for the
Hearing Impaired.
o Checks drawn on foreign banks must be payable in U.S. dollars and have the
routing number of the U.S. bank encoded on the check.
- --------------------------------------------------------------------------------
Buying shares by wire
Initial purchases of shares for $10,000 may be made by wire order from your bank
account. Contact your PFS Investments Registered Representative for
details. In addition, once an account is open, you may make additional wire
orders through PFS Shareholder Services.
- --------------------------------------------------------------------------------
14 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Through a systematic investment plan
You may authorize PFS Shareholder Services to transfer funds automatically from
a regular bank account or other financial institution to buy shares of a fund.
o Amounts transferred should be at least $25 monthly.
o If you do not have sufficient funds in your account on a transfer date,
PFS Shareholder Services may charge you a fee.
For more information, contact your PFS Investments Registered Representative or
the transfer agent or consult the SAI.
- --------------------------------------------------------------------------------
Exchanging shares
- --------------------------------------------------------------------------------
Smith Barney offers a distinctive family of funds tailored to help meet the
varying needs of both large and small investors
You should contact your PFS Investments Registered Representative to exchange
into other eligible Smith Barney funds. Be sure to read the prospectus of the
Smith Barney fund you are exchanging into. An exchange is a taxable transaction.
o You may exchange shares only for shares of the same class of certain Smith
Barney funds. Not all Smith Barney funds offer all classes.
o Not all Smith Barney funds may be offered in your state of
residence. Contact your PFS Investments Registered Representative.
o You must meet the minimum investment amount for each fund.
o If you hold share certificates, the transfer agent must receive the
certificates endorsed for transfer or with signed stock powers (documents
transferring ownership of certificates) before the exchange is effective.
o The fund may suspend or terminate your exchange privilege if you engage in
an excessive pattern of exchanges.
- --------------------------------------------------------------------------------
Smith Barney Mutual Funds 15
<PAGE>
- --------------------------------------------------------------------------------
Waiver of additional sales charges
Your shares will not be subject to an initial sales charge at the time of the
exchange. Your deferred sales charge (if any) will continue to be measured from
the date of your original purchase. If the fund you exchange into has a higher
deferred sales charge, you will be subject to that charge. If you exchange at
any time into a fund with a lower charge, the sales charge will not be reduced.
- --------------------------------------------------------------------------------
By telephone
Upon completion of certain automated systems, you will be able to exchange
shares by telephone if you elect telephone transactions on your account
application. Telephone exchanges are subject to the same limitations as
telephone redemptions.
To learn more about the exchange privilege and Smith Barney mutual funds you may
be eligible to exchange into, contact your PFS Investments Registered
Representative or consult the SAI.
- --------------------------------------------------------------------------------
16 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Redeeming shares
- --------------------------------------------------------------------------------
Redemptions by mail
Generally, a properly completed Redemption Form with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary.
You may redeem some or all of your shares by sending a Redemption Form or other
written request in proper form to PFS Shareholder Services, 3100 Breckinridge
Blvd., Bldg. 200, Duluth, Georgia 30099-0062. You may also reach PFS Shareholder
Services by calling (800) 544-5445 or (800) 544-7278 for Spanish speaking
representatives or (800) 824-1721 for the TDD Line for the Hearing Impaired. The
written request for redemption must be in good order. This means that you have
provided the following information. Your request will not be processed without
this information.
o Name of the fund
o Account number
o Dollar amount or number of shares to redeem
o Signature of each owner exactly as account is registered
o Other documentation required by PFS Shareholder Services
To be in good order, your request must include a signature guarantee if:
o The proceeds of the redemption exceed $50,000
o The proceeds are not paid to the record owner(s) at the record address
o The shareholder(s) has had an address change in the past 45 days
o The shareholder(s) is a corporation, sole proprietor, partnership, trust
or fiduciary
You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loans, but not from a notary public.
- --------------------------------------------------------------------------------
Smith Barney Mutual Funds 17
<PAGE>
- --------------------------------------------------------------------------------
In all cases, your redemption price is the net asset value next determined after
your request is received in good order. Redemption proceeds normally will be
sent within three days. However, if you recently purchased your shares by check,
your redemption proceeds will not be sent to you until your original check
clears, which may take up to 15 days. Any request that your redemption proceeds
be sent to a destination other than your bank account or address of record must
be in writing and must include signature guarantees.
- --------------------------------------------------------------------------------
Redemptions by telephone
You may redeem shares by telephone if you elect the telephone transaction option
on your account application. This is available only for redemptions of $50,000
or less, and the proceeds must be mailed to your address of record. In addition,
you must be able to provide proper identification information. You may not
redeem by telephone if your address has changed within the past 45 days or if
your shares are in certificate form. Telephone redemption requests may be made
by calling PFS Shareholder Services at (800) 544-5445 between 8:00 a.m. and 8:00
p.m. eastern time on any day the New York Stock Exchange is open. Requests
received after the close of regular trading on the New York Stock Exchange are
priced at the net asset value next computed. If telephone redemptions are not
available for any reason, you may use the Fund's regular redemption procedure
described above.
- --------------------------------------------------------------------------------
Payment of redemption proceeds
Whether you redeem by mail, fax or telephone, your redemption proceeds can be
sent by check to your address of record or by wire transfer to a bank account
designated on your application. You will be charged a service fee for wire
transfers and for transfers made directly to your bank by the Automated
Clearinghouse (ACH).
18 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Automatic cash withdrawal plan
You can arrange for the automatic redemption of a portion of your shares on a
monthly or quarterly basis. To qualify you must own shares of the fund with a
value of at least $10,000 ($5,000 for retirement plan accounts) and each
automatic redemption must be at least $50. If your shares are subject to a
deferred sales charge, the sales charge will be waived if your automatic
payments are equal to or less than 1% per month of the value of your shares
subject to a deferred sales charge. The following conditions apply:
o Shares may not be represented by certificates
o All dividends and distributions must be reinvested
o You can establish a withdrawal plan for a retirement account only if you
are eligible to receive distributions from the account
- --------------------------------------------------------------------------------
Smith Barney Mutual Funds 19
<PAGE>
- --------------------------------------------------------------------------------
Other things to know about share transactions
- --------------------------------------------------------------------------------
The fund has the right to:
o Suspend the offering of shares
o Waive or change minimum and additional investment amounts
o Reject any purchase or exchange order
o Change, revoke or suspend the exchange privilege
o Suspend telephone transactions
o Suspend or postpone redemptions of shares on any day when trading on the
New York Stock Exchange is restricted, or as otherwise permitted by the
Securities and Exchange Commission
o Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities
Small account balances If your account falls below $500 because of a redemption
of fund shares, the fund may ask you to bring your account up to $500. If your
account is still below $500 after 60 days, the fund may close your account and
send you the redemption proceeds.
Excessive exchange transactions The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other
shareholders. If so, the fund may limit additional purchases and/or exchanges by
the shareholder.
Share certificates The fund does not issue share certificates unless a written
request signed by all registered owners is made to the transfer agent. If you
hold share certificates it will take longer to exchange or redeem shares.
20 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
Dividends, distributions and taxes
- --------------------------------------------------------------------------------
Dividends The fund generally makes capital gain distributions and pays
dividends, if any, once a year, typically in December. The fund may pay
additional distributions and dividends at other times if necessary for the fund
to avoid a federal tax. Capital gain distributions and dividends are reinvested
in additional fund shares of the same class you hold. The fund expects
distributions to be primarily from capital gain. You do not pay a sales charge
on reinvested distributions or dividends. Alternatively, you can instruct your
PFS Investments Registered Representative or the transfer agent to have your
distributions and/or dividends paid in cash. You can change your choice at any
time to be effective as of the next distribution or dividend, except that any
change given to the transfer agent less than five days before the payment date
will not be effective until the next distribution or dividend is paid.
Taxes In general, redeeming shares, exchanging shares and receiving
distributions (whether in cash or additional shares) are all taxable events.
- --------------------------------------------------------------------------------
Transaction Federal tax status
- --------------------------------------------------------------------------------
Redemption or exchange of shares Usually capital gain or loss;
long-term only if shares owned
more than one year
- --------------------------------------------------------------------------------
Long-term capital gain distributions Long-term capital gain
- --------------------------------------------------------------------------------
Short-term capital gain distributions Ordinary income
- --------------------------------------------------------------------------------
Dividends Ordinary income
- --------------------------------------------------------------------------------
Long-term capital gain distributions are taxable to you as long-term capital
gain regardless of how long you have owned your shares. You may want to avoid
buying shares when the fund is about to declare a capital gain distribution or a
dividend, because it will be taxable to you even though it may actually be a
return of a portion of your investment.
After the end of each year, the fund will provide you with information about the
distributions and dividends you received and any redemptions of shares during
the previous year. If you do not provide the fund with your correct taxpayer
identification number and any required certifications, you may be subject to
back-up withholding of 31% of your distributions, dividends, and redemption
proceeds. Because each shareholder's circumstances are different and special tax
rules may apply, you should consult your tax adviser about your investment in
the fund.
Smith Barney Mutual Funds 21
<PAGE>
- --------------------------------------------------------------------------------
Share price
- --------------------------------------------------------------------------------
You may buy, exchange or redeem shares at their net asset value, plus any
applicable sales charge, next determined after receipt of your request in good
order. The fund's net asset value is the value of its assets minus its
liabilities. Net asset value is calculated separately for each class of shares.
The fund calculates its net asset value every day the New York Stock Exchange is
open. The Exchange is closed on certain holidays listed in the SAI. This
calculation is done when regular trading closes on the Exchange (normally 4:00
p.m., Eastern time).
The fund generally values its fund securities based on market prices or
quotations. When reliable market prices or quotations are not readily available,
or when the value of a security has been materially affected by events occurring
after a foreign exchange closes, the fund may price those securities at fair
value. Fair value is determined in accordance with procedures approved by the
fund's board. A fund that uses fair value to price securities may value those
securities higher or lower than another fund using market quotations to price
the same securities.
International markets may be open on days when U.S. markets are closed, and the
value of foreign securities owned by the fund could change on days when you
cannot buy or redeem shares.
In order to buy, redeem or exchange shares at that day's price, you must place
your order with PFS Shareholder Services before the New York Stock Exchange
closes. If the New York Stock Exchange closes early, you must place your order
prior to the actual closing time. Otherwise, you will receive the next business
day's price.
Salomon Smith Barney or members of the selling group must transmit all orders to
buy, exchange or redeem shares to the fund's agent before the agent's close of
business.
- --------------------------------------------------------------------------------
Financial highlights
- --------------------------------------------------------------------------------
The financial highlights tables are intended to help you understand the
performance of each class for the past 5 years (or since inception if less than
5 years). Certain information reflects financial results for a single share.
Total return represents the rate that a shareholder would have earned (or lost)
on a fund share assuming reinvestment of all dividends and distributions. The
information in the following tables for the fiscal years 1996 through 1999 was
audited by KPMG LLP, independent accountants. The 1995 fiscal year was audited
by other independent accountants.
22 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
For a Class A share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Net asset value, beginning of year $20.57 $19.36 $19.00 $15.91 $17.72
- --------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.29 0.48 0.57 0.61 0.57
Net realized and unrealized
gain (loss) 5.87 3.27 1.71 3.52 (1.25)
- --------------------------------------------------------------------------------
Total income (loss) from operations 6.16 3.75 2.28 4.13 (0.68)
- --------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.26) (0.55) (0.60) (0.52) (0.47)
Net realized gains (0.53) (1.99) (1.32) (0.52) (0.66)
- --------------------------------------------------------------------------------
Total distributions (0.79) (2.54) (1.92) (1.04) (1.13)
- --------------------------------------------------------------------------------
Net asset value, end of year $25.94 $20.57 $19.36 $19.00 $15.91
- --------------------------------------------------------------------------------
Total return 30.47% 19.89% 12.41% 26.47% (3.82)%
- --------------------------------------------------------------------------------
Net assets, end of year (millions) $282 $202 $178 $175 $159
- --------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 1.19% 1.19% 1.28% 1.21% 1.33%
Net investment income 1.23 2.34 2.98 3.10 2.89
- --------------------------------------------------------------------------------
Portfolio turnover rate 36% 62% 68% 81% 103%
- --------------------------------------------------------------------------------
(1) Per share amounts calculated using the monthly average shares method.
Smith Barney Mutual Funds 23
<PAGE>
- --------------------------------------------------------------------------------
For a Class B share of capital stock
outstanding throughout each year ended January 31:
- --------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Net asset value, beginning of year $20.63 $19.42 $19.05 $15.97 $17.79
- --------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income 0.11 0.33 0.43 0.49 0.39
Net realized and unrealized
gain (loss) 5.89 3.27 1.71 3.53 (1.20)
- --------------------------------------------------------------------------------
Total income (loss) from operations 6.00 3.60 2.14 4.02 (0.81)
- --------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.14) (0.40) (0.45) (0.42) (0.35)
Net realized gains (0.53) (1.99) (1.32) (0.52) (0.66)
- --------------------------------------------------------------------------------
Total distributions (0.67) (2.39) (1.77) (0.94) (1.01)
- --------------------------------------------------------------------------------
Net asset value, end of year $25.96 $20.63 $19.42 $19.05 $15.97
- --------------------------------------------------------------------------------
Total return 29.50% 18.95% 11.60% 25.58% (4.54)%
- --------------------------------------------------------------------------------
Net assets, end of year (millions) $198 $172 $203 $226 $216
- --------------------------------------------------------------------------------
Ratios to average net assets:
Expenses 1.94% 1.95% 2.03% 1.94% 2.00%
Net investment income 0.49 1.62 2.23 2.37 2.21
- --------------------------------------------------------------------------------
Portfolio turnover rate 36% 62% 68% 81% 103%
- --------------------------------------------------------------------------------
(1) Per share amounts calculated using the monthly average shares method.
24 Concert Social Awareness Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities offers through
PFS INVESTMENTS INC.
--------------------
A member of citigroup[LOGO]
Concert Social Awareness Fund
An investment portfolio of Smith Barney Equity Funds
Shareholder reports Annual and semiannual reports to shareholders provide
additional information about the fund's investments. These reports discuss the
market conditions and investment strategies that affected the fund's
performance.
Statement of additional information The statement of additional information
provides more detailed information about the fund and is incorporated by
reference into (is legally part of) this prospectus.
You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your
PFS Investments Registered Representative, by calling PFS Share holder Services
at 1-800-544-5445, or by writing to the fund at 3100 Breckinridge Boulevard,
Building 200, Duluth, Georgia 30099-0062.
You can also review and copy the fund's shareholder reports, prospectus and
statement of additional information at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. You can get copies of these materials
for a duplicating fee by writing to the Public Reference Section of the
Commission, Washington, D.C. 20549-6009. Information about the public reference
room may be obtained by calling 1-800-SEC-0330. You can get the same information
free from the Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the fund that is not in this prospectus, you
should not rely upon that information. Neither the fund nor the distributor is
offering to sell shares of the fund to any person to whom the fund may not
lawfully sell its shares.
(Investment Company Act file no. 811-04551)
PFS Investments Inc.
SB-1F
5.99
