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[GRAPHIC OMITTED] SMITH BARNEY
LARGE CAP BLEND FUND
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STYLE PURE SERIES | SEMI-ANNUAL REPORT | JULY 31, 2000
[LOGO] Smith Barney
Mutual Funds
Your Serious Money, Professionally Managed.(TM)
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NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
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<PAGE>
Smith Barney
Large Cap Blend Fund
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The Large Cap Blend Fund ("Fund") seeks long-term capital growth by normally
investing 65% of its assets in equity securities of companies with market
capitalizations of $5 billion or more.
Smith Barney Large Cap Blend Fund
Average Annual Total Returns
July 31, 2000
Without Sales Charges(1)
------------------------------------------------
Class A Class B Class L Class O
================================================================================
Six-Month+ 0.14% (0.11)% (0.24)% (0.11)%
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One-Year 3.19 2.70 2.39 2.64
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Five-Year 14.73 14.15 N/A 14.15
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Since Inception++ 12.63 12.07 7.26 14.67
================================================================================
With Sales Charges(2)
------------------------------------------------
Class A Class B Class L Class O
================================================================================
Six-Month+ (4.86)% (5.01)% (2.20)% (1.09)%
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One-Year (1.98) (1.67) 0.50 1.77
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Five-Year 13.56 14.03 N/A 14.15
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Since Inception++ 11.89 12.07 6.76 14.67
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B, L and O shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase and declines
thereafter by 1.00% per year until no CDSC is incurred. Class L and O
shares reflect the deduction of a 1.00% CDSC, which applies if shares are
redeemed within the first year of purchase.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
+ Inception dates for Class A, B, L and O shares are November 6, 1992,
November 6, 1992, June 15, 1998 and August 15, 1994, respectively.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
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FUND HIGHLIGHT
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Effective August 14, 2000, Michael A. Kagan assumed the day-to-day management of
the Fund. Mr. Kagan is an investment officer of the Fund and a Director of
Salomon Smith Barney and has more than 17 years of investment industry
experience.
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NASDAQ SYMBOL
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Class A SGIAX
Class B SGIBX
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WHAT'S INSIDE
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Shareholder Letter ........................................................ 1
Historical Performance .................................................... 4
Smith Barney Large Cap Blend Fund
at a Glance ............................................................... 7
Schedule of Investments ................................................... 8
Statement of Assets and Liabilities ....................................... 12
Statement of Operations ................................................... 13
Statements of Changes in Net Assets ....................................... 14
Notes to Financial Statements ............................................. 15
Financial Highlights ...................................................... 20
<PAGE>
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Shareholder Letter
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[PHOTO OMITTED]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Large Cap
Blend Fund ("Fund") for the period ended July 31, 2000. In this report we
summarize the period's prevailing economic and market conditions and outline our
investment strategy. The information provided in this letter represents the
opinion of the manager and is not intended to be a forecast of future events, a
guarantee of future results nor investment advice.
Further, there is no assurance that certain securities will remain in or out of
the Fund. Please refer to pages 8 through 11 for a complete list and percentage
breakdown of the Fund's holdings. A detailed summary of the Fund's performance
and current holdings can be found in the appropriate sections that follow. Also,
please note that any discussion of the Fund's holdings is as of July 31, 2000.
We hope that you find this report to be useful and informative.
Special Shareholder Notice
Commencing on Monday, August 14, 2000, Michael A. Kagan assumed day-to-day
management of the Fund's portfolio. Mr. Kagan is an investment officer of the
Fund and a Director of Salomon Smith Barney and has more than 17 years of
investment industry experience.
In addition, on Thursday, September 7, 2000, the Board of Directors of the Smith
Barney Equity Funds on behalf of the Fund, approved a proposed reorganization
pursuant to which the Smith Barney Investment Series on behalf of the Smith
Barney Growth and Income Fund ("Growth and Income Fund") would acquire the
assets of the Fund in exchange for shares of the Growth and Income Fund. This
reorganization would permit the Fund's shareholders to maintain an investment in
a mutual fund with the same primary investment objective.
The proposed reorganization is subject to the fulfillment of certain conditions,
including the approval by the Fund's shareholders. Proxy materials describing
the proposed reorganization will be mailed to you in the near future in
anticipation of a meeting of the shareholders. This meeting is expected to be
held on Wednesday, November 22, 2000.
Performance Update
For the six months ended July 31, 2000, the Fund's Class A shares, without and
with sales charges, returned 0.14% and a negative 4.86%, respectively. In
comparison, the Standard & Poor's 500 Index ("S&P 500")(1) returned 3.20% for
the same period. Past performance is not indicative of future results.
We attribute the Fund's performance relative to the S&P 500 due to the
differential between growth stocks(2) and value stocks.(3) Although the Fund
employs a blend investment philosophy, during the period the Fund had a heavier
weighting in value stocks versus the S&P 500 -- a decision that negatively
impacted the Fund's performance during the period.
Market and Economic Overview
The stock market exhibited plenty of volatility, but little upward progress
during the period. After peaking in March, many stocks then gave up their gains
and ended the period largely unchanged from its beginning. Large capitalization
stocks, as measured by the S&P 500, were up 3.20% for the period. The
over-the-counter market, a mix of technology and smaller stocks, declined 4.40%
as measured by the Nasdaq Composite Index(4) during then period. The
----------
(1) The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. An investor cannot directly invest in an index.
(2) Growth stocks are the shares of companies with the potential for
faster-than-average growth within their industries.
(3) Value stocks are the shares of companies whose shares are considered to be
inexpensive relative to their asset values or earning power.
(4) The Nasdaq Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market. An investor cannot invest directly in an index.
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Smith Barney Large Cap Blend Fund 1
<PAGE>
mediocre performance of the stock market occurred despite strong corporate
earnings, which historically tends to support higher stock prices. In our view,
it can be presumed that the historic rise in the price of many shares during the
last couple of years has discounted some of this good news.
Bond investors enjoyed positive returns, as many investors appeared to think
that the Federal Reserve Board ("Fed") may be done with its recent round of
interest rate hikes. Given the generally flat stock prices during the period,
many bonds outperformed stocks. The outperformance of bonds is in marked
contrast to the last several reporting periods.
As typical for most of the last several years, growth stocks outperformed value
stocks and large capitalization stocks outperformed small capitalization stocks.
For example, the Russell 1000 Growth Index(5) rose 4.80% and the Russell 1000
Value Index(6) returned 0.24% during the period. As previously stated, the S&P
500 was up 3.20% while the Russell 2000 Index,(7) was up just 1.35% for the
period. This is clear evidence to us that the U.S. stock market has continued to
reward large, faster-growing companies, despite their generally higher
valuations.
Investment Strategy
As befits its name, the Smith Barney Large Cap Blend Fund employs a "blend"
stock selection philosophy. The term "blend" refers to an approach that combines
growth and value investment styles. Growth investors look for companies that
they believe are going to grow earnings quickly; value investors look for stocks
that are priced at less than their intrinsic value. As blend managers, we try to
pay as little as possible for as much growth as possible. We also focus on large
capitalization companies, typically those with market capitalizations greater
than $5 billion.
The blend moniker is appropriate for the Fund not only because of the blend of
growth and value characteristics, but also because of its blend of quantitative
and qualitative approaches to portfolio management. There are a number of
quantitative measures we look at to judge growth and value. And there are
qualitative measures that we also believe are important to the success of an
investment.
Quantitative growth measures that we examine include historical earnings
progression, forecasted earnings growth, earnings revisions, and corporate
profitability. Value measures include price-to-earnings(8), price-to-book(9) and
price-to-sales(10) ratios. Taken together, these measures provide a quantitative
look at our universe of large cap stocks. They allow us to estimate the growth
and value characteristics of each stock and to put together an optimal blend
Fund that balances these characteristics.
In addition to quantitative measures, we believe that qualitative factors are
also key to investment decisions. Issues such as management changes, corporate
strategy and evolution of the competitive landscape are important in judging a
company's future prospects.
Fund Update
During the period, we have meaningfully increased the technology exposure in the
Fund. For example, the electronic technology sector of the Fund increased from
19.0% to 24.0% over the period. The Fund's more significant holdings in the
technology sector correspond to a similar increase in the technology weighting
of the overall U.S. stock market.
----------
(5) The Russell 1000 Growth Index measures the performance of those Russell
1000 companies with higher price-to-book ratios and higher forecasted
growth values. An investor cannot invest directly in an index.
(6) Russell 1000 Value Index measures the performance of those Russell 1,000
companies with lower price-to-book ratios and lower forecasted growth
values.
(7) The Russell 2000 Index measures the performance of the 2,000 smallest
companies in the Russell 3000 Index, which represents approximately 8% of
the total market capitalization of the Russell 3000 Index. An investor
cannot invest directly in an index.
(8) The price-to-earnings ratio is the price of a stock divided by its
earnings per share.
(9) The price-to-book ratio is the price of a stock compared to the difference
between a company's assets and liabilities (net assets).
(10) The price-to-sales ratio is the price of a stock divided by the sales per
share for the past twelve months.
--------------------------------------------------------------------------------
2 2000 Semi-Annual Report to Shareholders
<PAGE>
Some of the technology names we purchased during the period include:
o Analog Devices, Inc., a premier manufacturer of specialty semiconductors;
o Applied Materials Inc., manufacturer of capital equipment designed for the
production of semiconductors;
o Oracle Corp., a creator of database software extensively used in corporate
and e-commerce applications; and
o Sun Microsystems Inc., a producer of computer hardware, much of it
destined for network computing.
The stocks eliminated from the Fund during the period were not concentrated in
any particular sector. We sold several consumer names, such as Gillette Co. and
Gap Inc., and several financial stocks, such as insurers Conseco Inc. and
Hartford Financial Services Group Inc.
Although Gillette Co. is a premier consumer brand, the non-core parts of its
business have stumbled in recent months. Gap Inc., a leading retailer, operates
a number of stores under the widely known Gap, Banana Republic and Old Navy
brands. In particular, the Old Navy brand has yielded disappointing results
during the period, which led to our decision to eliminate the Fund's holding in
Gap Inc.
We sold the Fund's holding in Conseco Inc. following a series of disappointing
results in its insurance businesses. Although we sold the Fund's holding in
Hartford Financial Service Group Inc. when its stock price began to improve, we
believe that the company may be negatively impacted over the near term due to
investors' concerns regarding interest rates.
Market Outlook
Despite solid economic fundamentals such as low inflation remaining intact, the
growth of the U.S. economy has slowed from its recent overheated pace. It
appears to us that the Fed, after enacting a series of interest rate increases,
may have succeeded in guiding the economy towards a "soft landing."
However, despite a favorable economy and as previously noted, the stock market
remains marked by increasing levels of volatility. We think volatility may
continue over the near term, as many investors address a number of concerns. One
primary concern is the possibility of further interest rate increases by the
Fed. We believe the recent round of interest rate increases may be complete, at
least for now, but not all investors are convinced.
In addition, while the technological changes requiring businesses to restructure
their operations creates tremendous opportunities, it also has triggered
uncertainty as to which companies may most likely benefit from technological
advances. However, we believe that most technological advances should drive
increased productivity over the long term. Given the solid economic
fundamentals, we believe that the performance of the stock market may move
upwards over the course of the year. (Of course, no guarantees can be given that
our expectations will be realized.)
In closing, thank you for your investment in the Smith Barney Large Cap Blend
Fund.
Sincerely,
/s/ Heath B McLendon
Heath B McLendon
Chairman
September 11, 2000
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Smith Barney Large Cap Blend Fund 3
<PAGE>
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Historical Performance -- Class A Shares
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<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
===========================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $15.97 $15.68 $ 0.00 $ 0.31 0.14%+
-------------------------------------------------------------------------------------------
1/31/00 17.88 15.97 0.01 2.78 5.10
-------------------------------------------------------------------------------------------
1/31/99 15.72 17.88 0.12 0.87 20.69
-------------------------------------------------------------------------------------------
1/31/98 14.30 15.72 0.19 0.70 16.30
-------------------------------------------------------------------------------------------
1/31/97 12.16 14.30 0.20 0.18 20.97
-------------------------------------------------------------------------------------------
1/31/96 9.62 12.16 0.20 0.20 30.97
-------------------------------------------------------------------------------------------
1/31/95 10.36 9.62 0.19 0.14 (3.93)
-------------------------------------------------------------------------------------------
1/31/94 9.58 10.36 0.23 0.00 10.70
-------------------------------------------------------------------------------------------
Inception* -- 1/31/93 9.50 9.58 0.00 0.00 0.84+
===========================================================================================
Total $ 1.14 $ 5.18
===========================================================================================
</TABLE>
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Historical Performance -- Class B Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
===========================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $15.87 $15.54 $ 0.00 $ 0.31 (0.11)%+
-------------------------------------------------------------------------------------------
1/31/00 17.86 15.87 0.00 2.78 4.55
-------------------------------------------------------------------------------------------
1/31/99 15.72 17.86 0.06 0.87 20.13
-------------------------------------------------------------------------------------------
1/31/98 14.33 15.72 0.14 0.70 15.65
-------------------------------------------------------------------------------------------
1/31/97 12.19 14.33 0.15 0.18 20.43
-------------------------------------------------------------------------------------------
1/31/96 9.65 12.19 0.15 0.20 30.23
-------------------------------------------------------------------------------------------
1/31/95 10.38 9.65 0.14 0.14 (4.33)
-------------------------------------------------------------------------------------------
1/31/94 9.58 10.38 0.15 0.00 10.01
-------------------------------------------------------------------------------------------
Inception* -- 1/31/93 9.50 9.58 0.00 0.00 0.84+
===========================================================================================
Total $ 0.79 $ 5.18
===========================================================================================
</TABLE>
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Historical Performance -- Class L Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
===========================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $15.84 $15.49 $ 0.00 $ 0.31 (0.24)%+
-------------------------------------------------------------------------------------------
1/31/00 17.87 15.84 0.00 2.78 4.31
-------------------------------------------------------------------------------------------
Inception* -- 1/31/99 16.89 17.87 0.01 0.87 11.57+
===========================================================================================
Total $ 0.01 $ 3.96
===========================================================================================
</TABLE>
--------------------------------------------------------------------------------
4 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance -- Class O Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
===========================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $15.87 $15.54 $ 0.00 $ 0.31 (0.11)%+
-------------------------------------------------------------------------------------------
1/31/00 17.86 15.87 0.00 2.78 4.55
-------------------------------------------------------------------------------------------
1/31/99 15.72 17.86 0.06 0.87 20.14
-------------------------------------------------------------------------------------------
1/31/98 14.33 15.72 0.14 0.70 15.65
-------------------------------------------------------------------------------------------
1/31/97 12.19 14.33 0.15 0.18 20.43
-------------------------------------------------------------------------------------------
1/31/96 9.65 12.19 0.15 0.20 30.23
-------------------------------------------------------------------------------------------
Inception* -- 1/31/95 9.91 9.65 0.06 0.14 (0.58)+
===========================================================================================
Total $ 0.56 $ 5.18
===========================================================================================
</TABLE>
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Historical Performance -- Class Y Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
===========================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $16.06 $15.77 $ 0.03 $ 0.31 0.34%+
-------------------------------------------------------------------------------------------
1/31/00 17.93 16.06 0.05 2.78 5.53
-------------------------------------------------------------------------------------------
1/31/99 15.73 17.93 0.15 0.87 21.16
-------------------------------------------------------------------------------------------
1/31/98 14.34 15.73 0.28 0.70 16.76
-------------------------------------------------------------------------------------------
1/31/97 12.16 14.34 0.22 0.18 21.48
-------------------------------------------------------------------------------------------
Inception* -- 1/31/96 12.08 12.16 0.00 0.00 N/A**
===========================================================================================
Total $ 0.73 $ 4.84
===========================================================================================
</TABLE>
It is the Fund's policy to distribute dividends quarterly and capital gains, if
any, annually.
--------------------------------------------------------------------------------
Average Annual Total Returns
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charges(1)
---------------------------------------------------------
Class A Class B Class L Class O Class Y
========================================================================================
<S> <C> <C> <C> <C> <C>
Six Months Ended 7/31/00+ 0.14% (0.11)% (0.24)% (0.11)% 0.34%
----------------------------------------------------------------------------------------
Year Ended 7/31/00 3.19 2.70 2.39 2.64 3.62
----------------------------------------------------------------------------------------
Five Years Ended 7/31/00 14.73 14.15 N/A 14.15 N/A
----------------------------------------------------------------------------------------
Inception* through 7/31/00 12.63 12.07 7.26 14.67 14.38
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Without Sales Charges(2)
---------------------------------------------------------
Class A Class B Class L Class O Class Y
=========================================================================================
<S> <C> <C> <C> <C> <C>
Six Months Ended 7/31/00+ (4.86)% (5.01)% (2.20)% (1.09)% 0.34%
-----------------------------------------------------------------------------------------
Year Ended 7/31/00 (1.98) (1.67) 0.50 1.77 3.62
-----------------------------------------------------------------------------------------
Five Years Ended 7/31/00 13.56 14.03 N/A 14.15 N/A
-----------------------------------------------------------------------------------------
Inception* through 7/31/00 11.89 12.07 6.76 14.67 14.38
=========================================================================================
</TABLE>
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Smith Barney Large Cap Blend Fund 5
<PAGE>
--------------------------------------------------------------------------------
Cumulative Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 7/31/00) 151.03%
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Class B (Inception* through 7/31/00) 141.52
--------------------------------------------------------------------------------
Class L (Inception* through 7/31/00) 16.10
--------------------------------------------------------------------------------
Class O (Inception* through 7/31/00) 126.23
--------------------------------------------------------------------------------
Class Y (Inception* through 7/31/00) 83.18
================================================================================
(1) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B, L and O shares.
(2) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase and declines
thereafter by 1.00% per year until no CDSC occurs. Class L and O shares
also reflect the deduction of a 1.00% CDSC, which applies if shares are
redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, B, L, O and Y shares are November 6, 1992,
November 6, 1992, June 15, 1998, August 15, 1994 and January 31, 1996,
respectively.
** Information is not meaningful since the class was only open for one day.
--------------------------------------------------------------------------------
6 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund at a Glance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A and B Shares of the
Smith Barney Large Cap Blend Fund vs. Standard & Poor's 500 Index+
--------------------------------------------------------------------------------
November 1992 -- July 2000
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
SB G&I Class A SB G&I Class B S&P
-------------- -------------- ---
Nov 6, 1992 9500 10000 10000
Jan 1993 9580 9584 10554
Jan 1994 10605 10694 11910
Jan 1995 10188 10314 11973
Jan 1996 13344 13622 16596
Jan 1997 16142 16546 20965
Jan 1998 18773 19251 26606
Jan 1999 22658 23126 35253
Jan 2000 23814 24179 38663
July 31, 2000 23847 24152 39900
+ Hypothetical illustration of $10,000 invested in Class A and B shares at
inception on November 6, 1992, assuming deduction of the maximum 5.00%
sales charge at the time of investment for Class A shares and the
deduction of the maximum 5.00% CDSC for Class B shares. It also assumes
reinvestment of dividends and capital gains, if any, at net asset value
through July 31, 2000. The Standard & Poor's 500 Index is composed of 500
widely held common stocks listed on the New York Stock Exchange, American
Stock Exchange and over-the-counter market. The index is unmanaged and is
not subject to the same management and trading expenses as a mutual fund.
The performance of the Fund's other classes may be greater or less than
the Class A and B shares' performance indicated on this chart, depending
on whether greater or lesser sales charges and fees were incurred by
shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Industry Diversification*
--------------------------------------------------------------------------------
[THE FOLLOWING INFORMATION WAS DEPICTED AS A BAR CHART
IN THE PRINTED MATERIAL.]
19.8% Electronic Technology
15.4% Finance
12.0% Healthcare
10.6% Technology Services
9.1% Utilities
4.9% Retail Trade
5.5% Consumer Non-Durables
4.0% Consumer Services
4.0% Energy Minerals
4.3% Process Industries
10.4% Other
* As a percentage of total common stock.
Investment Breakdown**
--------------------------------------------------------------------------------
[THE FOLLOWING INFORMATION WAS DEPICTED AS A PIE CHART
IN THE PRINTED MATERIAL.]
0.7% Repurchase Agreement
99.3% Common Stock
** As a percentage of total investments.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 7
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 99.3%
Aerospace/Defense -- 0.7%
65,000 General Dynamics Corp. $ 3,668,438
--------------------------------------------------------------------------------
Commercial Services -- 0.4%
60,000 W.W. Grainger, Inc.+ 1,905,000
--------------------------------------------------------------------------------
Consumer Durables -- 1.4%
100,000 Ford Motor Co. 4,656,250
33,844 General Motors Corp. 1,926,993
35,643 General Motors Corp., Class H Shares 922,263
--------------------------------------------------------------------------------
7,505,506
--------------------------------------------------------------------------------
Consumer Non-Durables -- 5.5%
65,000 Anheuser-Busch Cos., Inc. 5,232,500
60,000 Coca-Cola Co. 3,678,750
80,000 Kimberly-Clark Corp. 4,595,000
125,000 PepsiCo Inc. 5,726,563
60,000 Philip Morris Cos., Inc. 1,515,000
70,000 The Proctor & Gamble Co. 3,981,250
40,000 Quaker Oats Co. 2,690,000
55,000 V.F. Corp. 1,210,000
--------------------------------------------------------------------------------
28,629,063
--------------------------------------------------------------------------------
Consumer Services -- 4.0%
120,000 America Online, Inc.++ 6,397,500
81,580 Cox Communications, Inc.++ 3,013,361
45,000 McDonald's Corp.+ 1,417,500
95,000 Viacom Inc., Class B Shares++ 6,299,688
90,000 Walt Disney Co. 3,481,875
--------------------------------------------------------------------------------
20,609,924
--------------------------------------------------------------------------------
Electronic Technology -- 19.7%
290,000 Cisco Systems, Inc.++ 18,976,875
60,000 Compaq Computer Corp. 1,683,750
165,000 Dell Computer Corp.++ 7,249,688
48,000 Hewlett-Packard Co. 5,241,000
85,000 Honeywell International Inc. 2,858,125
330,000 Intel Corp. 22,027,500
95,000 International Business Machines Corp. 10,681,563
200,000 LM Ericsson Telephone Co. ADR 3,925,000
90,000 Lucent Technologies, Inc. 3,937,500
165,000 Motorola, Inc. 5,455,313
90,000 SCI Systems, Inc.++ 4,128,750
70,000 Seagate Technology, Inc.++ 3,548,125
33,000 Sun Microsystems Inc.++ 3,479,438
50,000 Teredyne, Inc.+ ++ 3,168,750
75,000 TXU Corp. 2,343,750
60,000 United Technologies Corp. 3,502,500
--------------------------------------------------------------------------------
102,207,627
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Energy Minerals -- 3.9%
115,000 Conoco Inc., Class A Shares $ 2,573,125
170,000 Exxon Mobil Corp.* 13,600,000
85,000 Phillips Petroleum Co. 4,319,063
--------------------------------------------------------------------------------
20,492,188
--------------------------------------------------------------------------------
Finance -- 15.3%
50,000 Allstate Corp. 1,378,125
30,000 American International Group, Inc. 2,630,625
115,000 AXA Financial, Inc. 4,398,750
95,000 Bank of America Corp. 4,500,625
85,000 Bear Stearns Cos., Inc.+ 4,579,375
120,000 Chase Manhattan Corp. 5,962,500
50,000 CIGNA Corp.+ 4,993,750
35,000 Fannie Mae 1,745,625
70,000 First Union Corp. 1,806,875
85,000 FleetBoston Financial Corp. 3,044,063
40,000 Goldman Sachs Group, Inc. 3,957,500
125,000 GreenPoint Financial Corp. 2,937,500
35,000 J.P. Morgan & Co., Inc. 4,672,500
115,000 KeyCorp 2,019,688
32,000 Lehman Brothers Holdings Inc. 3,596,000
15,000 Merrill Lynch & Co., Inc. 1,938,750
98,000 Morgan Stanley Dean Witter & Co. 8,942,500
60,000 PaineWebber Group Inc. 4,155,000
75,000 PNC Bank Corp.+ 3,815,625
85,000 Starwood Hotels & Resorts Worldwide, Inc. 2,900,625
115,000 UnionBanCal Corp. 2,185,000
100,000 Washington Mutual, Inc.+ 3,212,500
--------------------------------------------------------------------------------
79,373,501
--------------------------------------------------------------------------------
Health Care -- 11.9%
50,000 Abbott Laboratories 2,081,250
20,000 American Home Products Corp. 1,061,250
110,000 Amgen, Inc.++ 7,143,125
20,000 Baxter International, Inc. 1,555,000
50,000 Biogen, Inc.++ 2,650,000
80,000 Bristol-Myers Squibb & Co. 3,970,000
115,000 Columbia/HCA Healthcare Corp. 3,910,000
65,000 Eli Lilly & Co. 6,751,875
55,000 Johnson & Johnson 5,118,438
115,000 Merck & Co., Inc. 8,244,063
123,000 Mylan Laboratories Inc. 2,613,750
170,000 Pfizer Inc. 7,331,250
25,000 Schering-Plough Corp. 1,079,688
85,000 Watson Pharmaceuticals, Inc.++ 4,696,250
45,000 Wellpoint Health Networks, Inc.,
Class A Shares++ 3,923,438
--------------------------------------------------------------------------------
62,129,377
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Industrial Services -- 0.6%
105,000 Fluor Corp. $ 3,130,313
--------------------------------------------------------------------------------
Non-Energy Minerals -- 2.5%
100,000 Air Products and Chemicals, Inc. 3,337,500
120,000 Alcoa, Inc. 3,630,000
120,000 Dow Chemical Co.+ 3,450,000
100,000 Rohm & Hass Co. 2,600,000
--------------------------------------------------------------------------------
13,017,500
--------------------------------------------------------------------------------
Process Industries -- 4.3%
435,000 General Electric Co. 22,375,314
--------------------------------------------------------------------------------
Producer Manufacturing -- 1.8%
80,000 Caterpillar Inc. 2,725,000
70,000 Ingersoll-Rand Co. 2,747,500
40,000 Johnson Controls, Inc. 2,077,500
40,000 Lexmark International Group, Inc.,
Class A Shares++ 1,802,500
--------------------------------------------------------------------------------
9,352,500
--------------------------------------------------------------------------------
Publishing -- 1.9%
50,000 Knight-Ridder, Inc.+ 2,606,250
85,000 New York Times Co., Class A Shares 3,500,938
100,000 Readers Digest Association, Inc.+ 3,781,250
--------------------------------------------------------------------------------
9,888,438
--------------------------------------------------------------------------------
Retail Trade -- 4.9%
35,000 Best Buy Co., Inc.++ 2,546,250
95,000 Federated Department Store, Inc.++ 2,285,938
105,000 Home Depot, Inc. 5,433,750
200,000 The Limited, Inc.+ 4,087,500
100,000 SUPERVALU Inc. 1,768,750
120,000 The TJX Cos., Inc. 2,010,000
135,000 Wal-Mart Stores, Inc. 7,416,563
--------------------------------------------------------------------------------
25,548,751
--------------------------------------------------------------------------------
Technology Services -- 10.6%
60,000 Analog Devices, Inc.++ 4,012,500
60,000 Applied Materials Inc.++ 4,552,500
90,000 Atmel Corp.+ ++ 2,694,375
90,000 Automatic Data Processing, Inc. 4,460,625
25,000 BMC Software, Inc.++ 471,875
110,000 Compuware Corp.++ 880,000
80,000 Electronic Data Systems Corp. 3,440,000
36,000 EMC Corp. 3,064,500
20,000 Micron Technology, Inc. 1,630,000
175,000 Microsoft Corp.++ 12,217,188
50,000 National Semiconductor Corp. 1,809,375
55,000 Oracle Corp. 4,135,313
35,000 Siebel Systems, Inc.++ 5,075,000
40,000 Texas Instruments Inc. 2,347,500
120,000 Unisys Corp.++ 1,177,500
23,000 Yahoo! Inc.++ 2,959,813
--------------------------------------------------------------------------------
54,928,064
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Transportation -- 0.9%
40,000 AMR Corp. $ 1,322,500
28,906 Sabre Holding Corp.++ 706,390
120,000 Southwest Airlines Co. 2,835,000
--------------------------------------------------------------------------------
4,863,890
--------------------------------------------------------------------------------
Utilities -- 9.0%
130,000 AT&T Corp. 4,021,875
105,000 BellSouth Corp. 4,180,313
90,000 Coastal Corp. 5,197,500
60,000 DTE Energy Co.+ 1,882,500
55,000 Duke Energy Corp. 3,392,814
95,000 Edison International 1,870,313
75,000 Enron Corp. 5,521,875
95,000 PECO Energy Co. 4,055,314
145,000 SBC Communications, Inc. 6,171,562
112,600 Verizon Communications 5,292,200
140,000 WorldCom Inc. 5,468,750
--------------------------------------------------------------------------------
47,055,016
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $393,506,997) 516,680,410
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 0.7%
$3,394,000 Morgan Stanley Dean Witter & Co., 6.530%
due 8/1/00; Proceeds at maturity --
$3,394,616; (Fully collateralized by
U.S. Treasury Notes, 4.500% to 6.375%
due 8/15/00 to 2/15/07; Market value
-- $3,479,697) (Cost -- $3,394,000) 3,394,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $396,900,997*) $520,074,410
================================================================================
+ All or a portion of this security is on loan (See Note 8).
++ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 11
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) July 31, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $396,900,997) $520,074,410
Collateral for securities on loan (Note 8) 29,083,759
Receivable for securities sold 6,848,792
Receivable for Fund shares sold 126,953
Dividends and interest receivable 379,684
--------------------------------------------------------------------------------
Total Assets 556,513,598
--------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 8) 29,083,759
Payable for securities purchased 6,480,339
Payable to bank 4,843,187
Administration fees payable 184,146
Investment advisory fees payable 101,036
Distribution fees payable 39,078
Payable for Fund shares purchased 34,165
Accrued expenses 315,364
--------------------------------------------------------------------------------
Total Liabilities 41,081,074
--------------------------------------------------------------------------------
Total Net Assets $515,432,524
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 32,886
Capital paid in excess of par value 382,143,363
Undistributed net investment income 649,197
Accumulated net realized gain on security
transactions 9,433,665
Net unrealized appreciation of investments 123,173,413
--------------------------------------------------------------------------------
Total Net Assets $515,432,524
================================================================================
Shares Outstanding:
Class A 10,949,767
------------------------------------------------------------------------------
Class B 8,395,658
------------------------------------------------------------------------------
Class L 515,434
------------------------------------------------------------------------------
Class O 261,614
------------------------------------------------------------------------------
Class Y 12,763,730
------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $15.68
------------------------------------------------------------------------------
Class B* $15.54
------------------------------------------------------------------------------
Class L** $15.49
------------------------------------------------------------------------------
Class O** $15.54
------------------------------------------------------------------------------
Class Y (and redemption price) $15.77
------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per
share) $16.50
------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per
share) $15.65
================================================================================
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if
shares are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L and O shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended July 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 3,446,824
Interest 123,782
--------------------------------------------------------------------------------
Total Investment Income 3,570,606
--------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 1,198,258
Distribution fees (Note 2) 802,780
Administration fees (Note 2) 532,559
Shareholder and system servicing fees 207,018
Registration fees 74,795
Shareholder communications 31,313
Organization expense 26,448
Audit and legal 23,187
Custody 12,465
Trustees' fees 7,480
Other 4,488
--------------------------------------------------------------------------------
Total Expenses 2,920,791
--------------------------------------------------------------------------------
Net Investment Income 649,815
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 53,972,343
Cost of securities sold 43,780,887
--------------------------------------------------------------------------------
Net Realized Gain 10,191,456
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 133,151,349
End of period 123,173,413
--------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (9,977,936)
--------------------------------------------------------------------------------
Net Gain on Investments 213,520
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 863,335
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 13
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended July 31, 2000 (unaudited)
and the Year Ended January 31, 2000
July 31 January 31
================================================================================
OPERATIONS:
Net investment income $ 649,815 $ 1,051,018
Net realized gain 10,191,456 80,409,030
Decrease in net unrealized appreciation (9,977,936) (54,867,120)
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 863,335 26,592,928
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (403,334) (646,267)
Net realized gain (10,102,545) (82,901,133)
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (10,505,879) (83,547,400)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS:
Net proceeds from sales 45,178,715 83,963,088
Net asset value of shares issued for
reinvestment of dividends 5,661,829 49,389,118
Cost of shares reacquired (57,002,966) (70,965,654)
--------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (6,162,422) 62,386,552
--------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (15,804,966) 5,432,080
NET ASSETS:
Beginning of period 531,237,490 525,805,410
--------------------------------------------------------------------------------
End of period* $ 515,432,524 $ 531,237,490
================================================================================
* Includes undistributed net investment
income of: $ 649,197 $ 402,716
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Large Cap Blend Fund ("Fund"), a separate investment fund of
the Smith Barney Equity Funds ("Trust"), a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Trust consists of this
Fund and one other separate investment fund, Smith Barney Social Awareness Fund,
formally known as Concert Social Awareness Fund. The financial statements and
financial highlights for the other fund are presented in a separate shareholder
report.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets;
securities for which no sales price were reported and U.S. government agencies
and obligations are valued at current quoted bid prices; (c) securities that
have a maturity of more than 60 days are valued at prices based on market
quotations for securities of similar type, yield and maturity; (d) securities
maturing within 60 days are valued at cost plus accreted discount, or minus
amortized premium, which approximates value; (e) dividend income is recorded on
the ex-dividend date and interest income is recorded on an accrual basis; (f)
gains or losses on the sale of securities are calculated by using the specific
identification method; (g) dividends and distributions to shareholders are
recorded on the ex-dividend date; (h) the accounting records are maintained in
U.S. dollars. All assets and liabilities denominated in foreign currencies are
translated into U.S. dollars based on the rate of exchange of such currencies
against U.S. dollars on the date of valuation. Purchases and sales of
securities, and income and expenses are translated at the rate of exchange
quoted on the respective date that such transactions are recorded. Differences
between income or expense amounts recorded and collected or paid are adjusted
when reported by the custodian bank; (i) direct expenses are charged to each
class; management fees and general fund expenses are allocated on the basis of
relative net assets; (j) the Fund intends to comply with the applicable
provisions of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes;
(k) the character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. At January 31, 2000, reclassifications were made to the
Fund's capital accounts to reflect permanent book/tax differences and income and
gains available for distributions under income tax regulations. Net investment
income, net realized gains and net assets were not affected by this change; and
(l) estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ.
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment advisor to the Trust. The Fund pays SSBC an
advisory fee calculated at an annual rate of 0.45% of the average daily net
assets. This fee is calculated daily and paid monthly.
SSBC also acts as the Fund's administrator for which it receives a fee
calculated at an annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 15
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
Citi Fiduciary Trust Company ("CFTC"), formerly known as Smith Barney Private
Trust Company, another subsidiary of Citigroup, became the Fund's transfer agent
and PFPC Global Fund Services ("PFPC") became the Fund's sub-transfer agent.
CFTC receives account fees and asset-based fees that vary according to the size
and type of account. PFPC is responsible for shareholder recordkeeping and
financial processing for all shareholder accounts and is paid by CFTC. For the
six months ended July 31, 2000, the Fund paid transfer agent fees of $138,671 to
CFTC.
Effective June 5, 2000, Salomon Smith Barney Inc. ("SSB"), another subsidiary of
SSBH, became the Fund's distributor replacing CFBDS, Inc. ("CFBDS"). In
addition, SSB acts as the primary broker for the Fund's portfolio agency
transactions. Certain other broker-dealers, continue to sell Fund shares to the
public as members of the selling group. For the six months ended July 31, 2000,
SSB and its affiliates received brokerage commissions of $4,950.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. There is a contingent deferred sales charge ("CDSC") of
5.00% on Class B shares, which applies if redemption occurs within one year from
purchase and declines thereafter by 1.00% per year until no CDSC is incurred.
Class L and O shares also have a 1.00% CDSC, which applies if redemption occurs
within the first year of purchase.
For the six months ended July 31, 2000, SSB and CFBDS received sales charges of
$43,000, $24,000 and $24,000 on sales of the Fund's Class A, B and L shares,
respectively. In addition, CDSCs paid to SSB were approximately:
Class B Class L
================================================================================
CDSCs $58,000 $3,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
Class A, B, L and O shares calculated at the annual rate of 0.25% of the average
daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to Class B, L and O shares calculated at the
annual rate of 0.50%, 0.75% and 0.45% of the average daily net assets for each
class, respectively.
For the six months ended July 31, 2000, total Distribution Plan fees incurred
were:
Distribution
Plan Fees
================================================================================
Class A $222,229
--------------------------------------------------------------------------------
Class B 525,865
--------------------------------------------------------------------------------
Class L 37,900
--------------------------------------------------------------------------------
Class O 16,786
================================================================================
All officers and one Trustee of the Trust are employees of SSB.
3. Investments
During the six months ended July 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $40,169,319
--------------------------------------------------------------------------------
Sales 53,972,343
================================================================================
At July 31, 2000, aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 162,704,540
Gross unrealized depreciation (39,531,127)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 123,173,413
================================================================================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day) at
an agreed-upon higher repurchase price. The Fund requires continual maintenance
of the market value of the collateral in amounts at least equal to the
repurchase price.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
5. Reverse Repurchase Agreements
The Fund may enter into reverse repurchase agreement transactions for leveraging
purposes. A reverse repurchase agreement involves a sale by the Fund of
securities that it holds with an agreement by the Fund to repurchase the same
securities at an agreed upon price and date. A reverse repurchase agreement
involves the risk that the market value of the securities sold by the Fund may
decline below the repurchase price of the securities. The Fund will establish a
segregated account with its custodian, in which the Fund will maintain cash,
U.S. government securities or other liquid high grade debt obligations equal in
value to its obligations with respect to reverse repurchase agreements.
During the six months ended July 31, 2000, the Fund did not enter into any
reverse repurchase agreements.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are made or received and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transactions and the Fund's basis in the contract.
The Fund enters into such contracts to hedge a portion of its portfolio. The
Fund bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At July 31, 2000, the Fund had no open futures contracts.
7. Option Contracts
Premiums paid when put or call options are purchased by the Fund represent
investments which are marked-to-market daily. When a purchase option expires,
the Fund will realize a loss in the amount of the premium paid. When the fund
enters into a closing sales transaction, the Fund will realize a gain or loss
depending on whether the proceeds from the closing sales transaction are greater
or less than the premium paid for the option. When the Fund exercises a put
option, it will realize a gain or loss from the sale of the underlying security
and the proceeds from such sale will be decreased by the premium originally
paid. When the Fund exercises a call option, the cost of the security which the
Fund purchases upon exercise will be increased by the premium originally paid.
At July 31, 2000, the Fund had no open purchased call or put option contracts.
When a Fund writes a covered call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium received. When the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss depending upon whether
the cost of the closing transaction is greater or less than the premium
originally received without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is eliminated.
When a written call option is exercised, the cost of the security sold will be
decreased by the premium originally received. When a put option is exercised,
the amount of the premium originally received will reduce the cost of the
security which the Fund purchases upon exercise. When written index options are
exercised, settlement is made in cash.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 17
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
The risk associated with purchasing options is limited to the premium originally
paid. The Fund enters into options for hedging purposes. The risk in writing a
covered call option is that the Fund gives up the opportunity to participate in
any increase in the price of the underlying security beyond the exercise price.
The risk in writing a put option is that the Fund is exposed to the risk of a
loss if the market price of the underlying security declines.
During the six months ended July 31, 2000, the Fund did not write any call or
put option contracts.
8. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. Government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Fund maintains exposure for the risk of any losses in
the investment of amounts received as collateral.
At July 31, 2000, the Fund had loaned common stocks having a value of
$28,435,290 and holds the following collateral for loaned securities:
Security Description Value
================================================================================
Time Deposits:
Bank Brussels L, 6.690% due 8/1/00 $ 4,252,595
Caisse Des Crespo, 6.660% due 8/1/00 2,437,916
KBC Bank NV, 6.640% due 8/1/00 3,844,405
Toronto Dominio, 6.690% due 8/1/00 881,195
Wells Fargo Bank, 6.660% due 8/1/00 2,437,916
Commercial Paper:
New Castle CTF, 6.650% due 8/21/00 3,767,873
Floating Rate CD:
Comerica Bank, 5.860% due 2/14/01 1,597,371
Floating Rate Notes:
Bank One, 6.680% due 7/2/01 595,888
First Union, 6.510% due 5/21/01 1,341,037
Goldman Sachs, 5.280% due 8/23/00 1,802,719
Morgan Stanley, 5.750% due 11/1/00 1,340,540
Sigma Finance, 6.480% due 11/6/00 2,669,288
Sigma Finance, 6.630% due 12/4/00 2,115,017
--------------------------------------------------------------------------------
Total $29,083,759
================================================================================
Income earned by the Fund from securities loaned for the six months ended July
31, 2000 was $35,013.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
9. Shares of Beneficial Interest
At July 31, 2000, the Trust had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct expenses, including those specifically related to the distribution of its
shares.
At July 31, 2000, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class L Class O Class Y
===========================================================================================
<S> <C> <C> <C> <C> <C>
Total Paid-in Capital $118,195,968 $63,820,100 $8,707,917 $3,315,407 $188,136,857
===========================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
--------------------- ----------------------
Shares Amount Shares Amount
========================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 1,411,403 $ 23,102,194 1,360,850 $ 23,899,206
Shares issued on reinvestment 202,257 3,145,097 1,626,185 26,270,970
Shares reacquired (1,811,906) (29,508,131) (1,842,142) (32,124,158)
----------------------------------------------------------------------------------------
Net Increase (Decrease) (198,246) $ (3,260,840) 1,144,893 $ 18,046,018
========================================================================================
Class B
Shares sold 249,405 $ 4,046,220 1,027,511 $ 17,976,862
Shares issued on reinvestment 148,949 2,295,303 1,339,694 21,539,615
Shares reacquired (1,369,479) (22,147,786) (2,061,578) (35,652,392)
----------------------------------------------------------------------------------------
Net Increase (Decrease) (971,125) $(15,806,263) 305,627 $ 3,864,085
========================================================================================
Class L
Shares sold 161,983 $ 2,613,418 324,282 $ 5,673,659
Shares issued on reinvestment 9,727 149,408 52,571 841,736
Shares reacquired (59,692) (959,741) (83,802) (1,421,571)
----------------------------------------------------------------------------------------
Net Increase 112,018 $ 1,803,085 293,051 $ 5,093,824
========================================================================================
Class O
Shares sold 7,578 $ 121,807 24,210 $ 420,416
Shares issued on reinvestment 4,674 72,021 45,814 736,797
Shares reacquired (60,210) (987,308) (81,611) (1,422,533)
----------------------------------------------------------------------------------------
Net Decrease (47,958) $ (793,480) (11,587) $ (265,320)
========================================================================================
Class Y
Shares sold 936,862 $ 15,295,076 2,153,895 $ 35,992,945
Shares issued on reinvestment -- -- -- --
Shares reacquired (205,013) (3,400,000) (18,760) (345,000)
----------------------------------------------------------------------------------------
Net Increase 731,849 $ 11,895,076 2,135,135 $ 35,647,945
========================================================================================
</TABLE>
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 19
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares 2000(1)(2) 2000(2) 1999(2) 1998 1997 1996(2)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.97 $ 17.88 $ 15.72 $ 14.30 $ 12.16 $ 9.62
-------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.02 0.04 0.13 0.21 0.19 0.20
Net realized and unrealized gain 0.00* 0.84 3.02 2.10 2.33 2.74
-------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.02 0.88 3.15 2.31 2.52 2.94
-------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.01) (0.12) (0.19) (0.20) (0.20)
Net realized gains (0.31) (2.78) (0.87) (0.70) (0.18) (0.20)
-------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (2.79) (0.99) (0.89) (0.38) (0.40)
-------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.68 $ 15.97 $ 17.88 $ 15.72 $ 14.30 $ 12.16
-------------------------------------------------------------------------------------------------------------------------
Total Return 0.14%++ 5.10% 20.69% 16.30% 20.97% 30.97%
-------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 171,672 $ 178,039 $ 178,847 $ 151,696 $ 133,272 $ 110,089
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.10%+ 1.11% 1.09% 1.09% 1.12% 1.16%
Net investment income 0.25+ 0.22 0.77 1.35 1.48 1.77
-------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 53% 29% 17% 9% 15%
=========================================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class B Shares 2000(1)(2) 2000(2) 1999(2) 1998 1997 1996(2)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.87 $ 17.86 $ 15.72 $ 14.33 $ 12.19 $ 9.65
-------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.02) (0.05) 0.05 0.13 0.13 0.14
Net realized and unrealized gain 0.00* 0.84 3.02 2.10 2.34 2.75
-------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.02) 0.79 3.07 2.23 2.47 2.89
-------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- (0.06) (0.14) (0.15) (0.15)
Net realized gains (0.31) (2.78) (0.87) (0.70) (0.18) (0.20)
-------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (2.78) (0.93) (0.84) (0.33) (0.35)
-------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.54 $ 15.87 $ 17.86 $ 15.72 $ 14.33 $ 12.19
-------------------------------------------------------------------------------------------------------------------------
Total Return (0.11)%++ 4.55% 20.13% 15.65% 20.43% 30.23%
-------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 130,462 $ 148,664 $ 161,801 $ 153,651 $ 137,187 $ 112,891
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.60%+ 1.61% 1.59% 1.59% 1.62% 1.65%
Net investment income (loss) (0.26)+ (0.29) 0.29 0.86 0.98 1.27
-------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 53% 29% 17% 9% 15%
=========================================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 21
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout the
period ended January 31, except where noted:
Class L Shares 2000(1)(2) 2000(2) 1999(2)(3)
================================================================================
Net Asset Value, Beginning of Period $ 15.84 $ 17.87 $ 16.89
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.04) (0.10) (0.04)
Net realized and unrealized gain 0.00* 0.85 1.90
--------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.04) 0.75 1.86
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- (0.01)
Net realized gains (0.31) (2.78) (0.87)
--------------------------------------------------------------------------------
Total Distributions (0.31) (2.78) (0.88)
--------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.49 $ 15.84 $ 17.87
--------------------------------------------------------------------------------
Total Return (0.24)%++ 4.31% 11.57%++
--------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 7,982 $ 6,390 $ 1,972
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.87%+ 1.92% 1.85%+
Net investment loss (0.54)+ (0.62) (0.37)+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 53% 29%
================================================================================
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from June 15, 1998 (inception date) to January 31, 1999.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
22 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class O Shares 2000(1)(2) 2000(2) 1999(2)(3) 1998 1997 1996(2)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.87 $ 17.86 $ 15.72 $ 14.33 $ 12.19 $ 9.65
-------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.02) (0.05) 0.05 0.13 0.14 0.13
Net realized and unrealized gain 0.00* 0.84 3.02 2.10 2.33 2.76
-------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.02) 0.79 3.07 2.23 2.47 2.89
-------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- (0.06) (0.14) (0.15) (0.15)
Net realized gains (0.31) (2.78) (0.87) (0.70) (0.18) (0.20)
-------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (2.78) (0.93) (0.84) (0.33) (0.35)
-------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.54 $ 15.87 $ 17.86 $ 15.72 $ 14.33 $ 12.19
-------------------------------------------------------------------------------------------------------------
Total Return (0.11)%++ 4.55% 20.14% 15.65% 20.43% 30.23%
-------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 4,066 $ 4,914 $ 5,736 $ 5,007 $ 2,958 $ 961
-------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.63%+ 1.63% 1.59% 1.57% 1.61% 1.62%
Net investment income (loss) (0.28)+ (0.30) 0.28 0.86 0.94 1.11
-------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 53% 29% 17% 9% 15%
=============================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class O shares.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Large Cap Blend Fund 23
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class Y Shares 2000(1)(2) 2000(2) 1999(2) 1998 1997 1996(2)(3)
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 16.06 $ 17.93 $ 15.73 $ 14.34 $ 12.16 $ 12.08
-----------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.05 0.10 0.19 0.27 0.22 --
Net realized and unrealized gain 0.00** 0.86 3.03 2.10 2.36 0.08
-----------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.05 0.96 3.22 2.37 2.58 0.08
-----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) (0.05) (0.15) (0.28) (0.22) --
Net realized gains (0.31) (2.78) (0.87) (0.70) (0.18) --
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.34) (2.83) (1.02) (0.98) (0.40) --
-----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.77 $ 16.06 $ 17.93 $ 15.73 $ 14.34 $ 12.16
-----------------------------------------------------------------------------------------------------------------------
Total Return 0.34%++ 5.53% 21.16% 16.76% 21.48% N/A*
-----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 201,251 $ 193,230 $ 177,449 $ 119,258 $ 78,192 $ 5
-----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.71%+ 0.71% 0.69% 0.69% 0.73% N/A*
Net investment income 0.63+ 0.62 1.14 1.73 1.73 N/A*
-----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 53% 29% 17% 9% 15%
=======================================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) Inception date is January 31, 1996.
* Information is not meaningful since the class was only open for one day.
** Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
24 2000 Semi-Annual Report to Shareholders
<PAGE>
Smith Barney
Large Cap
Blend Fund
Trustees
Lee Abraham
Allan J. Bloostein
Jane F. Dasher
Donald R. Foley
Richard E. Hanson, Jr.
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
R. Jay Gerken
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Advisor
SSB Citi Fund Management LLC
Distributor
Salomon Smith Barney Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
125 Broad Street, 11th Floor
New York, New York 10004
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney Equity Funds -- Smith Barney Large Cap Blend Fund, but it may also be
used as sales literature when preceded or accompanied by a current Prospectus,
which gives details about charges, expenses, investment objectives and operating
policies of the Fund. If used as sales material after October 31, 2000, this
report must be accompanied by performance information for the most recently
completed calendar quarter.
SALOMONSMITHBARNEY
------------------
A member of citigroup[LOGO]
Salomon Smith Barney is a Service mark of Salomon Smith Barney Inc.
Smith Barney Large Cap Blend Fund
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0425 9/00
<PAGE>
---------------------------------------------------------
SMITH BARNEY
SOCIAL AWARENESS FUND
---------------------------------------------------------
CLASSIC Series | Semi-annual report | July 31, 2000
[GRAPHIC OMITTED]
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed.(SM)
-------------------------------------------------------
Not Fdic Insured o Not Bank Guaranteed o May Lose Value
-------------------------------------------------------
<PAGE>
[LOGO] Classic Series
Semi-Annual Report o July 31, 2000
SMITH BARNEY SOCIAL
AWARENESS FUND
[PHOTO OMITTED] [PHOTO OMITTED]
Robert J. Brady Ellen S. Cammer
PORTFOLIO MANAGER PORTFOLIO MANAGER
--------------------------------------------------------------------------------
ROBERT J. BRADY, CFA
--------------------------------------------------------------------------------
Robert J. Brady, CFA, has more than 40 years of securities business experience
and has co-managed the Fund since 1995.
--------------------------------------------------------------------------------
ELLEN S. CAMMER
--------------------------------------------------------------------------------
Ellen S. Cammer has more than 18 years of securities business experience and has
co-managed the Fund since 1995.
Education: BFA from Windham College; MBA from Fordham University
--------------------------------------------------------------------------------
FUND OBJECTIVE
--------------------------------------------------------------------------------
The Fund seeks high total return consisting of capital appreciation and current
income by investing primarily in common stocks and other equity securities of
U.S. companies. The Fund also normally invests between 15% and 35% of its assets
in fixed-income securities.
--------------------------------------------------------------------------------
FUND FACTS
--------------------------------------------------------------------------------
FUND INCEPTION
--------------------------------------------------------------------------------
November 6, 1992
MANAGER TENURE
--------------------------------------------------------------------------------
5 Years (Robert J. Brady)
5 Years (Ellen S. Cammer)
MANAGER INVESTMENT INDUSTRY EXPERIENCE
--------------------------------------------------------------------------------
40 Years (Robert J. Brady)
18 Years (Ellen S. Cammer)
CLASS A CLASS B CLASS L
--------------------------------------------------------------------------------
NASDAQ SSIAX SESIX SESLX
--------------------------------------------------------------------------------
INCEPTION 11/6/92 2/2/87 5/5/93
--------------------------------------------------------------------------------
Average Annual Total Returns as of July 31, 2000
Without Sales Charges(1)
Class A Class B Class L
--------------------------------------------------------------------------------
Six Months++ 4.26% 3.87% 3.90%
--------------------------------------------------------------------------------
One-Year 6.85 6.05 6.08
--------------------------------------------------------------------------------
Five-Year 16.08 15.20 15.23
--------------------------------------------------------------------------------
Ten-Year N/A 13.31 N/A
--------------------------------------------------------------------------------
Since Inception+ 14.88 12.04 13.48
--------------------------------------------------------------------------------
With Sales Charges(2)
Class A Class B Class L
--------------------------------------------------------------------------------
Six Months++ (0.96)% (1.00)% 1.91%
--------------------------------------------------------------------------------
One-Year 1.50 1.18 4.06
--------------------------------------------------------------------------------
Five-Year 14.90 15.09 15.00
--------------------------------------------------------------------------------
Ten-Year N/A 13.31 N/A
--------------------------------------------------------------------------------
Since Inception+ 14.12 12.04 13.32
--------------------------------------------------------------------------------
(1) Assumes reinvestment of all dividend and capital gain distri butions, if
any, at net asset value and does not reflect the de duc tion of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) Assumes reinvestment of all dividend and capital gain distri butions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charge of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are re deemed less than one year from purchase and
declines thereafter by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which applies if shares
are re deemed within the first year of purchase.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctu ate, and
redemption value may be more or less than the original cost.
+ Inception dates for Class A, B and L shares are November 6, 1992, February
2, 1987 and May 5, 1993, respectively.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
--------------------------------------------------------------------------------
What's Inside
A Message from the Chairman ............................................... 1
Shareholder Letter ........................................................ 2
Historical Performance .................................................... 6
Smith Barney Social Awareness Fund at a Glance ............................ 9
Schedule of Investments ................................................... 10
Statement of Assets and Liabilities ....................................... 15
Statement of Operations ................................................... 16
Statements of Changes in Net Assets ....................................... 17
Notes to Financial Statements ............................................. 18
Financial Highlights ...................................................... 22
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed.(SM)
----------------------------------------------------------------------------
Investment Products: Not FDIC Insured o Not Bank Guaranteed o May Lose Value
----------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
A Message from the Chairman
--------------------------------------------------------------------------------
[PHOTO OMITTED]
HEATH B. MCLENDON
Chairman
Dear Shareholder:
For years, individuals and businesses have looked to the investment
professionals of SSB Citi Fund Management LLC ("SSB Citi") for thoughtful
insights and advice. For some, the solution has been a long-term invest ment
strategy, incorporating multiple stock and bond mutual funds. Others have
invested with specific portfolio managers who are recognized for their insights
and record.
The Smith Barney Social Awareness Fund, which seeks high total return consisting
of capital appreciation and current income, we believe represents an opportunity
for you, the serious investor, to take part in companies that both offer
attractive investment opportunities and demonstrate a positive awareness of
their impact on the society in which they operate. Portfolio managers Robert J.
Brady and Ellen S. Cammer carefully search for companies that are sensitive to
social issues related to their products, services or methods of doing xbusiness.
In our opinion, the lessons of the past may be used to better understand the
challenges and opportunities of the future. We also believe that expertise is
achieved through the intelligent application of knowledge and experience. Our
portfolio managers provide asset management expertise and have managed
portfolios across up and down markets and business cycles.
With economic growth robust, interest rates stable and inflationary pressures
apparently in check, many investors may not feel compelled to alter their
portfolio mixes. Yet, when times are good, it may make sense for investors to
contact their investment professional and re-examine their current asset
allocation to see if it still meets their age, tolerance for risk and investment
time horizon.
When you invest with SSB Citi, you can do so with the confidence that your
interests come first, your investment success is paramount and that the ultimate
in resources is being committed to your financial future. Thank you for
investing with us.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
August 29, 2000
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 1
<PAGE>
--------------------------------------------------------------------------------
Shareholder Letter
--------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Social
Awareness Fund ("Fund") for the period ended July 31, 2000. In this report we
have summarized the period's prevailing economic and market conditions and
outlined our investment strategy. The information provided in this letter
represents the opinion of the managers and is not intended to be a forecast of
future results nor investment advice.
Additionally, please note that the statistical performance information that
appears throughout this report is compiled from SSB Citi Fund Management LLC
internal research. Further, there is no assurance that certain securities will
remain in or out of the Fund. Please refer to pages 10 through 14 for a complete
list and percentage breakdown of the Fund's holdings. A detailed summary of the
Fund's performance can be found in the appropriate sections that follow. Also,
please note that any discussion of the Fund's holdings is as of July 31, 2000
and is subject to change. We hope you find this report to be useful and
informative.
Performance Update
For the six months ended July 31, 2000, the Fund's Class A shares, without and
with sales charges, returned 4.26% and a negative 0.96%, respectively. In
comparison, the Standard & Poor's 500 Index ("S&P 500")(1) returned 3.20% and
the Lehman Brothers Government/Corporate Bond Index ("Lehman Gov't./Corporate
Index")(2) returned 5.31% for the same period. Past performance is not
indicative of future results.
Special Shareholder Notice
On August 18, 2000, the Board of Trustees of the Smith Barney Equity Funds, on
behalf of the Concert Social Awareness Fund, announced their decision to rename
the Concert Social Awareness Fund the Smith Barney Social Awareness Fund.
Please note that this name change, effective September 11, 2000, represents no
change to the Fund's investment objective, policies or management, but rather,
reflects a change in brand name only.
Investment Objective and Performance Update
As previously noted, the Fund seeks high total return consisting of capital
appreciation and current income by investing 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,3 and may be of any maturity.4 The Fund also may invest a
portion of its assets in equity and debt securities of foreign issuers. 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.
As you may know, we benchmark the Fund's performance against a mix of 75% of the
S&P 500 and 25% of the Lehman Gov't./Corporate Index, a
----------
(1) The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note that an investor cannot invest directly in an
index.
(2) The Lehman Gov't./Corporate Index tracks the performance of the overall
bond market and is a broad measure of the performance of government and
corporate fixed-rate debt issues. Please note that an investor cannot
invest directly in an index.
(3) Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings
Service, or that have an equivalent rating by any nationally recognized
statistical rating organization, are determined by the manager to be of
equivalent quality.
(4) Maturity refers to the date on which the principal is required to paid on
the bond.
--------------------------------------------------------------------------------
2 2000 Semi-Annual Report to Shareholders
<PAGE>
composition that captures our Fund's normal, long-term asset allocation target.
As noted later, the bond portion of the Fund's portfolio kept pace with its
respective benchmark. On an absolute basis, the bond market provided higher
investment returns than the stock market during the period. Earlier in the
period, we decided to be slightly overweight in bonds.
Accordingly, we believe our asset allocation decision helped the Fund's
performance relative to the S&P 500 and the Lehman Gov't./Corporate Index during
the period. With a stock market that provided positive returns (though less than
bonds), the Fund's stock portion outperformed the S&P 500 and that also
contributed to the Fund's favorable relative performance.
For the period January 31, 2000 through July 31, 2000, (the first half of the
Fund's fiscal year), the S&P 500 returned approximately 3.20%. As has been
common in recent years, the performance of the S&P 500 was largely attributable
to the electronic technology sector, which accounted for about 24% of the S&P
500's weighting.
Against this market backdrop, we estimate that the Fund's stock portion
outperformed the S&P 500 by some 1.3 percentage points. Since the Fund was
underexposed to the technology sector and overweighted in the poorer performing
consumer retail area, we think the Fund's strong relative performance came
entirely from our stock selections.
Market Overview
Several major stock and bond markets hit record highs in 2000, but have recently
backed off from their highs. The first half of 2000 was characterized by
increased levels of stock market volatility worldwide, predominantly in the
technology sector. In fact, the tech-laden Nasdaq Composite Index(5) experienced
four declines of 10% or more.
The first half of the year was also marked by the Federal Reserve Board ("Fed")
continuing to raise interest rates in an attempt to keep the economy growing at
a sustainable pace and by the continued reduction in U.S. Treasury supply. The
yield curve(6) has remained inverted(7) throughout the period as the U.S.
Treasury continues to buy back debt in light of record budget surpluses. At the
May 16, 2000 Fed meeting the Federal Open Market Committee ("FOMC")(8) raised
rates by 50 basis points(9) bringing the cycle total to 175 basis points of
tightening.
In the bond market, the biggest impact was due to the U.S. Treasury's
announcement that it would begin to buy back approximately $30 billion of its
long-term outstanding debt. In addition, the U.S. Treasury market got an added
boost when, in addition to the buyback announcement, the U.S. Treasury also
announced its intention to reduce overall issuance of U.S. Treasury securities
across the yield curve.
Expectations for a continued robust economic picture turned on a dime with the
June data releases gauging the strength of economic activity for the month of
May. No matter how you wanted to cut it, across almost all series of data, the
long-awaited slowdown in economic growth was clearly in evidence. Weaker than
expected employment data, changing consumer sentiment, lower producer price and
trade deficit data all contributed to expectations of a soft landing.
Stock Market Update and Portfolio Changes
We were fairly active managers during the period. We eliminated 15 stock
positions from the Fund's portfolio, while reducing another nine holdings. On
the other side of the ledger, we added 17 new
----------
(5) The Nasdaq Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market. An investor cannot invest directly in an index.
(6) The yield curve is the graphical depiction of the relationship between the
yield on bonds of the same credit quality but different maturities.
(7) An inverted yield curve represents an unusual situation where short-term
interest rates are higher than long-term rates.
(8) The FOMC is a policy-making body of the Federal Reserve System, the U.S.
central bank, that is responsible for the formulation of policy designed
to promote economic growth, full employment, stable prices and a
sustainable pattern of international trade and payments.
(9) A basis point is 0.01% or one one-hundredth of a percent.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 3
<PAGE>
names, and enlarged our holdings in seven companies. In the process of making
these changes, we reduced the Fund's significant exposure to direct
interest-rate sensitive areas such as the finance and consumer retail sectors,
and at the end of July, the Fund was approximately market weighted in those
combined areas.
In the technology sector, we sold several large-cap stocks that were performing
poorly and took partial profits in stocks that performed well within our
investment horizon. We reinvested in a broad list of companies in that sector
that we believe may benefit the Fund over the long-term. In a similar vein to
what we did in the Fund's technology holdings, the Fund's exposure to the
telecommunications area reflected some shifting from more traditional platforms
into companies in the newer Internet and wireless stages.
By the end of the period, 79 individual stocks made up the Fund's portfolio,
compared to 76 at the beginning of the period. This internal activity did not
noticeably alter the characteristics of the stock portion of the Fund's
portfolio. We look to retain what we deem to be a high-quality, low beta10 list
of stocks that appear to offer competitive future growth prospects a price
perceived to be somewhat lower than the overall market (as represented by the
S&P 500).
Bond Market Update and Portfolio Changes
Although the timing was unknown, we positioned the Fund with an overweight in
long-term U.S. Treasury issues when we were fairly certain that the buyback
program would come to pass. We entered 2000 with the Fund under-weighted in
corporate and agency bonds. The Fund's portfolio benefited from these weightings
as these sectors lagged the U.S. Treasury rally. In addition, the U.S. agency
market was under the shroud of Under Secretary of the Treasury for Domestic
Finance Gary Gensler's comments on eliminating the line of credit behind the
implied backing of the U.S. government.
At the beginning of the period, the Fund's bond portion had a 40% weighting in
government bonds, a 39.6% in corporate bonds, 7.5% in agency securities and
12.6% in mortgage issues. We maintained the Fund's weightings until May when
corporate yields versus U.S. Treasuries represented in our view, compelling
investment opportunities on a historical basis.
During the period, we added technology company Hewlett-Packard to the Fund's
portfolio. We continue to believe that corporate bonds represent compelling
investment opportunities in the immediate part of the yield curve and we
anticipate that the Fund's holdings in longer-term issues will remain in U.S.
Treasuries. (Please note that the Fund's holdings are subject to change.)
Thank you for your investment in the Smith Barney Social Awareness Fund. We look
forward to continuing to help you pursue your financial goals in the future.
Sincerely,
/s/ Robert J. Brady, CFA /s/ Ellen S. Cammer
Robert J. Brady, CFA Ellen S. Cammer
Vice President and Vice President and
Investment Officer Investment Officer
August 29, 2000
----------
(10) Beta is a financial indicator that measures a stock's volatility relative
to its market. A low beta reflects a stock that can be expected to rise or
fall more slowly than the market.
--------------------------------------------------------------------------------
4 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Top Ten Holdings* As of July 31, 2000
--------------------------------------------------------------------------------
1. EMC Corp. 5.4%
--------------------------------------------------------------------------------
2. The AES Corp. 3.9
--------------------------------------------------------------------------------
3. International Business Machines Corp. 3.4
--------------------------------------------------------------------------------
4. The Home Depot, Inc. 3.0
--------------------------------------------------------------------------------
5. Amgen Inc. 2.9
--------------------------------------------------------------------------------
6. The Chase Manhattan Corp. 2.5
--------------------------------------------------------------------------------
7. Tyco International Ltd. 2.5
--------------------------------------------------------------------------------
8. BP Amoco PLC 2.5
--------------------------------------------------------------------------------
9. Intel Corp. 2.3
--------------------------------------------------------------------------------
10. American Express Co. 2.3
--------------------------------------------------------------------------------
* As a percentage of total common stock.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 5
<PAGE>
--------------------------------------------------------------------------------
Historical Performance -- Class A Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $25.79 $25.11 $0.22 $1.55 4.26%+
-------------------------------------------------------------------------------------------------------------
1/31/00 25.94 25.79 0.32 1.09 4.93
-------------------------------------------------------------------------------------------------------------
1/31/99 20.57 25.94 0.26 0.53 30.47
-------------------------------------------------------------------------------------------------------------
1/31/98 19.36 20.57 0.55 1.99 19.89
-------------------------------------------------------------------------------------------------------------
1/31/97 19.00 19.36 0.60 1.32 12.41
-------------------------------------------------------------------------------------------------------------
1/31/96 15.91 19.00 0.52 0.52 26.47
-------------------------------------------------------------------------------------------------------------
1/31/95 17.72 15.91 0.47 0.66 (3.82)
-------------------------------------------------------------------------------------------------------------
1/31/94 16.85 17.72 0.56 1.46 17.80
-------------------------------------------------------------------------------------------------------------
Inception* -- 1/31/93 16.80 16.85 0.11 0.85 6.12+
=============================================================================================================
Total $3.61 $9.97
=============================================================================================================
</TABLE>
--------------------------------------------------------------------------------
Historical Performance -- Class B Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $25.81 $25.13 $0.12 $1.55 3.87%+
-------------------------------------------------------------------------------------------------------------
1/31/00 25.96 25.81 0.12 1.09 4.13
-------------------------------------------------------------------------------------------------------------
1/31/99 20.63 25.96 0.14 0.53 29.50
-------------------------------------------------------------------------------------------------------------
1/31/98 19.42 20.63 0.40 1.99 18.95
-------------------------------------------------------------------------------------------------------------
1/31/97 19.05 19.42 0.45 1.32 11.60
-------------------------------------------------------------------------------------------------------------
1/31/96 15.97 19.05 0.42 0.52 25.58
-------------------------------------------------------------------------------------------------------------
1/31/95 17.79 15.97 0.35 0.66 (4.54)
-------------------------------------------------------------------------------------------------------------
1/31/94 16.84 17.79 0.34 1.46 16.88
-------------------------------------------------------------------------------------------------------------
1/31/93 17.26 16.84 0.50 1.49 9.68
-------------------------------------------------------------------------------------------------------------
1/31/92 15.61 17.26 0.55 0.88 19.96
-------------------------------------------------------------------------------------------------------------
1/31/91 15.57 15.61 0.51 0.46 6.80
=============================================================================================================
Total $3.90 $11.95
=============================================================================================================
</TABLE>
--------------------------------------------------------------------------------
6 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance -- Class L Shares
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C>
7/31/00 $25.88 $25.21 $0.12 $1.55 3.90%+
1/31/00 26.03 25.88 0.12 1.09 4.13
1/31/99 20.68 26.03 0.14 0.53 29.53
1/31/98 19.46 20.68 0.40 1.99 18.97
1/31/97 19.08 19.46 0.45 1.32 11.65
1/31/96 15.97 19.08 0.42 0.52 25.77
1/31/95 17.79 15.97 0.35 0.66 (4.54)
Inception* -- 1/31/94 17.54 17.79 0.28 1.46 11.83+
=============================================================================================================
Total $2.28 $9.12
=============================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends quarterly and capital gains, if
any, annually.
--------------------------------------------------------------------------------
Average Annual Total Returns
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charges(1)
-------------------------------------------
Class A Class B Class L
=============================================================================================================
<S> <C> <C> <C>
Six Months Ended 7/31/00+ 4.26% 3.87% 3.90%
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31/00 6.85 6.05 6.08
-------------------------------------------------------------------------------------------------------------
Five Years Ended 7/31/00 16.08 15.20 15.23
-------------------------------------------------------------------------------------------------------------
Ten Years Ended 71/31/00 N/A 13.31 N/A
-------------------------------------------------------------------------------------------------------------
Inception* through 7/31/00 14.88 12.04 13.48
=============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Without Sales Charges(2)
-------------------------------------------
Class A Class B Class L
=============================================================================================================
<S> <C> <C> <C>
Six Months Ended 7/31/00+ (0.96)% (1.00)% 1.91%
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31/00 1.50 1.18 4.06
-------------------------------------------------------------------------------------------------------------
Five Years Ended 7/31/00 14.90 15.09 15.00
-------------------------------------------------------------------------------------------------------------
Ten Years Ended 7/31/00 N/A 13.31 N/A
-------------------------------------------------------------------------------------------------------------
Inception* through 7/31/00 14.12 12.04 13.32
=============================================================================================================
</TABLE>
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 7
<PAGE>
--------------------------------------------------------------------------------
Cumulative Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 7/31/00) 192.49%
--------------------------------------------------------------------------------
Class B (7/31/90 through 7/31/00) 248.76
--------------------------------------------------------------------------------
Class L (Inception* through 7/31/00) 149.89
================================================================================
(1) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charge of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed less than one year from purchase and
declines thereafter by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which applies if shares
are redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, B and L shares are November 6, 1992, February
2, 1987 and May 5, 1993, respectively.
--------------------------------------------------------------------------------
8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund at a Glance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Class B Shares of the Smith Barney Social
Awareness Fund vs. the Lehman Brothers Government/Corporate Bond Index, Lehman
Brothers Government/Corporate Long-Term Bond Index and Standard & Poor's 500
Index+
--------------------------------------------------------------------------------
July 1990 -- July 2000
[The following table was depicted as a mountain chart in the printed material.]
<TABLE>
<CAPTION>
Lehman Brothers Lehman Brothers
Smith Barney Social Government/ Corporate Government/ Corporate Standard & Poor's
Awareness Fund Bond Index Long-Term Bond Index 500 Index
------------------- --------------------- --------------------- -----------------
<S> <C> <C> <C> <C>
July 1990 10,000 10,000 10,000 10,000
Jan 1991 9,983 10,561 10,577 9,840
Jan 1992 12,106 11,947 12,133 12,073
Jan 1993 13,387 13,330 13,902 13,351
Jan 1994 15,646 14,703 16,104 15,071
Jan 1995 14,935 14,246 14,982 15,150
Jan 1996 18,755 16,772 18,990 21,005
Jan 1997 20,931 17,171 18,899 26,535
Jan 1998 24,898 19,090 22,129 33,673
Jan 1999 32,243 20,755 24,777 44,618
Jan 2000 33,576 20,159 22,819 49,232
July 2000 34,876 21,230 24,549 50,807
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class B shares on July
31, 1990, assuming reinvestment of dividends and capital gains, if any, at
net asset value through July 31, 2000. The Lehman Brothers
Government/Corporate Bond Index is a combination of the Government and
Corporate Bond indexes, including U.S. Treasury and agency securities and
yankee bonds. The Lehman Brothers Government/Corporate Index is a
combination of Government and Corporate bonds with maturities of 10 years
or more. The Standard & Poor's 500 Index is composed of widely held common
stocks listed on the New York Stock Ex change, American Stock Exchange and
over-the-counter market. Figures for the index include reinvestment of
dividends. The indexes are unmanaged and are not subject to the same
management and trading expenses as a mutual fund. An investor cannot
invest directly in an index. The per formance of the Fund's other classes
may be greater or less than the Class B shares' performance indicated on
this chart, depending on whether greater or lesser sales charges and fees
were incurred by shareholders investing in other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Industry Diversification*
--------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
Basic Materials 5.5%
Communication Services 4.7%
Consumer Cyclicals 19.5%
Consumer Staples 4.8%
Energy 12.7%
Financial Services 11.7%
Health Care 9.7%
Publishing - Periodicals 3.5%
Technology 24.7%
Transportation 3.2%
Investment Breakdown**
--------------------------------------------------------------------------------
[The following table was depicted as a pie chart in the printed material.]
4.9% Mortgage-Backed Securities
13.4% Corporate Bonds and Notes
2.2% Asset-Backed Securities
70.7% Common Stock
8.8% U.S. Government Obligations
* As a percentage of total common stock.
** As a percentage of total investments.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 70.7%
Basic Materials -- 3.9%
300,000 Alcoa Inc. $ 9,075,000
30,000 E.I. du Pont de Nemours & Co. 1,359,375
100,000 Engelhard Corp. 1,806,250
150,000 Nucor Corp. 5,662,500
120,000 Praxair, Inc. 4,747,500
--------------------------------------------------------------------------------
22,650,625
--------------------------------------------------------------------------------
Communication Services -- 3.3%
140,000 Anixter International Inc.* 4,068,750
83,000 AT&T Wireless Group* 2,282,500
50,000 Convergys Corp.* 2,253,125
89,500 Genuity Inc.* 727,187
31,250 Time Warner Telecom Inc., Class A shares* 1,935,547
31,875 TyCom, Ltd.* 1,085,742
82,500 Verizon Communications 3,877,500
76,396 WorldCom, Inc.* 2,984,219
--------------------------------------------------------------------------------
19,214,570
--------------------------------------------------------------------------------
Consumer Cyclicals -- 13.8%
188,000 The Black & Decker Corp. 6,991,250
150,000 Deere & Co. 5,784,375
40,000 Ford Motor Co. 1,862,500
240,000 The Home Depot, Inc. 12,420,000
175,700 Interface, Inc. 900,463
168,400 Kaufman & Broad Home Corp. 3,294,325
125,000 Kimberly-Clark Corp. 7,179,688
109,024 Koninklijke Philips Electronics N.V. 4,899,266
124,700 Liz Claiborne, Inc. 4,863,300
170,000 Lowe's Cos., Inc. 7,171,875
175,000 Office Depot, Inc.* 1,093,750
150,000 Sara Lee Corp. 2,765,625
259,450 Staples, Inc.* 3,583,653
190,000 Tyco International Ltd. 10,165,000
5,237 Visteon Corp. 73,318
127,000 Wal-Mart Stores, Inc. 6,977,063
--------------------------------------------------------------------------------
80,025,451
--------------------------------------------------------------------------------
Consumer Staples -- 3.4%
150,100 Brinker International, Inc.* 4,287,231
214,800 The Kroger Co.* 4,443,675
200,000 SYSCO Corp. 7,875,000
187,000 Wendy's International, Inc. 3,167,312
--------------------------------------------------------------------------------
19,773,218
--------------------------------------------------------------------------------
Energy -- 9.0%
298,000 The AES Corp.* 15,924,375
192,772 BP Amoco PLC, ADR 10,084,385
70,000 The Coastal Corp. 4,042,500
114,200 Enron Corp. 8,407,975
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Energy -- 9.0% (continued)
100,000 Royal Dutch Petroleum Co. $ 5,825,000
190,000 The Williams Cos., Inc. 7,932,500
--------------------------------------------------------------------------------
52,216,735
--------------------------------------------------------------------------------
Financial Services -- 8.3%
165,000 American Express Co. 9,353,438
77,625 American International Group, Inc. 6,806,742
82,000 Associates First Capital Corp. 2,147,375
80,000 The Bank of New York Co., Inc. 3,745,000
204,864 The Chase Manhattan Corp. 10,179,180
35,200 Freddie Mac 1,388,200
50,000 The Hartford Financial Services Group, Inc. 3,212,500
35,000 Marsh & McLennan Cos., Inc. 4,270,000
75,000 PNC Financial Services Group 3,815,625
70,800 The St. Paul Cos., Inc. 3,146,175
--------------------------------------------------------------------------------
48,064,235
--------------------------------------------------------------------------------
Health Care -- 6.8%
182,000 Amgen Inc.* 11,818,625
42,800 C.R. Bard, Inc. 2,142,675
76,300 Johnson & Johnson 7,100,669
95,000 Medtronic, Inc. 4,850,938
24,600 Merck & Co., Inc. 1,763,512
156,000 Schering-Plough Corp. 6,737,250
170,500 Tenet Healthcare Corp.* 5,189,594
--------------------------------------------------------------------------------
39,603,263
--------------------------------------------------------------------------------
Publishing - Periodicals -- 2.5%
40,000 Harcourt General, Inc. 2,207,500
200,000 The Reader's Digest Association, Inc. 7,562,500
139,600 Tribune Co. 4,537,000
--------------------------------------------------------------------------------
14,307,000
--------------------------------------------------------------------------------
Technology -- 17.5%
156,000 America Online, Inc.* 8,316,750
132,000 Automatic Data Processing, Inc. 6,542,250
2,000 Avici Systems Inc.* 196,750
128,800 Cisco Systems, Inc.* 8,428,350
75,000 Compaq Computer Corp. 2,104,687
95,000 Electronic Data Systems Corp. 4,085,000
258,000 EMC Corp.* 21,962,250
4,000 Infineon Technologies AG* 272,000
142,000 Intel Corp. 9,478,500
124,800 International Business Machines Corp. 14,032,200
50,000 Microsoft Corp.* 3,490,625
55,000 N2H2, Inc.* 168,437
100,000 Oracle Corp.* 7,518,750
66,000 Pitney Bowes Inc. 2,285,250
75,000 Solectron Corp.* 3,023,438
79,400 Sun Microsystems, Inc.* 8,371,737
35,000 Vishay Intertechnology, Inc.* 1,082,813
--------------------------------------------------------------------------------
101,359,787
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Transportation -- 2.2%
156,375 Southwest Airlines Co. $ 3,694,359
109,300 United Parcel Service, Inc. 6,421,375
100,000 US Freightways Corp. 2,775,000
12,890,734
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $248,041,265) 410,105,618
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
U.S. GOVERNMENT OBLIGATIONS -- 8.8%
U.S. Treasury Notes:
$ 2,400,000 6.250% due 8/31/00 2,400,000
3,000,000 5.875% due 11/30/01 2,979,360
5,978,000 6.375% due 8/15/02 5,979,853
5,000,000 6.000% due 8/15/04 4,962,500
6,000,000 6.500% due 2/15/10 6,198,720
U.S. Treasury Bonds:
6,500,000 7.250% due 5/15/16 7,229,170
3,000,000 7.125% due 2/15/23 3,375,000
6,000,000 6.250% due 8/15/23 6,125,580
8,800,000 6.000% due 2/15/26 8,742,184
3,000,000 6.125% due 8/15/29 3,088,110
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost -- $50,090,705) 51,080,477
================================================================================
CORPORATE BONDS & NOTES -- 13.4%
Financial Services -- 7.2%
3,000,000 ABN AMRO Bank N.V., Sub. Notes, 7.125%
due 6/18/07 2,925,000
2,000,000 AES Corp, Sr. Sub. Notes, 10.250% due 7/15/06 2,032,500
3,000,000 Associates Corp. of North America, Sr. Notes,
5.750% due 11/1/03 2,842,500
2,000,000 AT&T Corp., Notes, 6.500% due 3/15/29 1,687,500
2,000,000 Australia & NZ Banking Group, Sub. Notes,
6.250% due 2/1/04 1,920,000
2,000,000 Bank of America Corp., Sub. Notes,
7.750% due 7/15/02 2,017,500
2,000,000 Bank One Corp., Notes, 6.400% due 8/1/02 1,970,000
3,000,000 Chase Manhattan Corp., Sub. Notes, 7.875%
due 6/15/10 3,033,750
2,000,000 Countrywide Home Loan, Company Guaranteed,
6.380% due 10/8/02 1,955,000
3,000,000 Fannie Mae, Notes, 6.500% due 4/29/09 2,808,420
1,000,000 First USA Bank, Deposit Notes, 6.375% due 10/23/00 998,750
2,000,000 Ford Motor Credit Corp., Notes, 7.500% due 3/15/05 1,992,500
2,000,000 Inter-American Development Bank, Bonds,
7.375% due 1/15/10 2,035,000
2,000,000 Lehman Brothers Holdings, Notes, 6.625%
due 12/27/02 1,955,000
2,000,000 Merrill Lynch & Co. Inc., Notes, 6.875%
due 11/15/18 1,812,500
Morgan Stanley Dean Witter & Co., Notes:
2,000,000 7.750% due 6/15/05 2,020,000
2,000,000 8.000% due 6/15/10 2,037,500
4,000,000 Ontario Province, Sr. Unsubordinated Notes,
5.500% due 10/1/08 3,595,000
2,000,000 Wells Fargo Co., Notes, 6.875% due 8/8/06 1,950,000
--------------------------------------------------------------------------------
41,588,420
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=============================================================================================================
<S> <C> <C>
Industrial -- 4.7%
$ 2,000,000 Fred Meyer Inc., Company Guaranteed, 7.375% due 3/1/05 $ 1,957,500
2,000,000 Global Crossing Holdings Ltd., Company Guaranteed, 9.125% due 11/15/06 1,930,000
2,000,000 Hewlett-Packard Co., Notes, 7.150% due 6/15/05 2,007,500
2,000,000 International Business Machines Corp., Notes, 5.400% due 1/26/09 1,752,500
2,500,000 Lucent Technologies, Inc., Notes, 7.250% due 7/15/06 2,515,625
2,513,000 Pepsi Bottling Holdings Inc., Company Guaranteed, 5.375% due 2/17/04 2,381,068
3,000,000 Qwest Capital Funding, Company Guaranteed, 6.875% due 8/15/01 2,988,750
303,938 Southwest Airlines Co., Series A3, 8.700% due 7/1/11 320,332
3,000,000 Staples Inc., Sr. Notes, 7.125% due 8/15/07 2,805,000
Sun Microsystems, Sr. Notes:
1,000,000 7.000% due 8/15/02 996,250
2,000,000 7.500% due 8/15/06 2,000,000
2,000,000 Time Warner Inc., Company Guaranteed, 6.950% due 1/15/28 1,772,500
2,375,000 Tricon Global Restaurant, Sr. Notes, 7.450% due 5/15/05 2,232,500
2,000,000 Xerox Corp., Notes, 5.250% due 12/15/03 1,782,500
-------------------------------------------------------------------------------------------------------------
27,442,025
-------------------------------------------------------------------------------------------------------------
Utilities -- 1.5%
Enron Corp., Notes:
1,500,000 6.750% due 9/1/04 1,466,250
2,200,000 6.950% due 7/15/28 1,969,000
2,000,000 Vodafone Group PLC, Notes, 7.625% due 2/15/05 2,017,500
3,000,000 Worldcom, Inc., Notes, 7.750% due 4/1/07 3,022,500
-------------------------------------------------------------------------------------------------------------
8,475,250
-------------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost -- $79,966,835) 77,505,695
=============================================================================================================
ASSET-BACKED SECURITIES -- 2.2%
3,000,000 Chase Credit Card Master Trust, Series 1997-2A, 6.300%, due 4/15/03 2,999,130
190,919 Equity Credit Corp., Home Equity Loan Trust, Series 1993-3A,
5.150% due 9/15/08 184,034
8,765,000 MBNA Master Credit Trust, Series 1995-F, 6.600% due 1/15/03 8,763,510
500,000 Sears Credit Account Master Trust, Series 1995-2A, 8.100% due 6/15/04 501,380
-------------------------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost -- $12,524,680) 12,448,054
=============================================================================================================
MORTGAGE-BACKED SECURITIES -- 4.9%
Federal Home Loan Mortgage Corporation (FHLMC):
1,756 6.250% due 7/1/02 1,663
5,072 8.500% due 12/1/02 5,218
1,688,496 7.000% due 2/1/29 1,634,143
Federal National Mortgage Association (FNMA):
1,085,683 6.000% due 2/1/11 1,028,685
3,007,224 7.000% due 1/1/13 2,953,635
6,937,496 7.000% due 7/1/15 6,813,869
57,466 8.000% due 7/1/24 57,681
905,064 6.500% due 3/1/29 855,566
922,829 6.500% due 4/1/29 872,359
1,907,015 7.000% due 7/1/29 1,843,245
1,985,474 8.000% due 1/1/30 1,992,920
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 13
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) July 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
====================================================================================================
<S> <C> <C>
MORTGAGE-BACKED SECURITIES -- 4.9% (continued)
Government National Mortgage Association (GNMA):
$ 1,976,962 6.500% due 7/15/29 $ 1,876,868
2,950,489 7.000% due 8/15/29 2,870,265
4,876,215 7.000% due 9/15/29 4,743,631
954,336 7.500% due 1/15/30 946,845
----------------------------------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost -- $28,969,066) 28,496,593
====================================================================================================
REPURCHASE AGREEMENT -- 0.0%
21,000 Morgan Stanley Dean Witter & Co., 6.530% due 8/1/00;
Proceeds at maturity -- $21,004; (Fully collateralized by
U.S. Treasury Notes and Bonds, 4.500% to 8.000% due 8/15/00
to 2/15/07; Market value -- $21,530) (Cost -- $21,000) 21,000
====================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $419,613,551**) $ 579,657,437
====================================================================================================
</TABLE>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) July 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost -- $419,613,551) $579,657,437
Cash 590
Interest receivable 2,945,791
Receivable for Fund shares sold 64,909
Dividends receivable 277,903
---------------------------------------------------------------------------------------
Total Assets 582,946,630
---------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,082,000
Investment advisory fees payable 270,753
Administration fees payable 98,339
Distribution fees payable 81,742
Payable for Fund shares purchased 59,687
Accrued expenses 256,375
---------------------------------------------------------------------------------------
Total Liabilities 1,848,896
---------------------------------------------------------------------------------------
Total Net Assets $581,097,734
=======================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 23,128
Capital paid in excess of par value 401,350,521
Undistributed net investment income 1,062,257
Accumulated net realized gain from security transactions 18,617,942
Net unrealized appreciation of investments 160,043,886
---------------------------------------------------------------------------------------
Total Net Assets $581,097,734
=======================================================================================
Shares Outstanding:
Class A 13,949,186
----------------------------------------------------------------------------------
Class B 8,041,828
----------------------------------------------------------------------------------
Class L 1,137,344
----------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 25.11
----------------------------------------------------------------------------------
Class B * $ 25.13
----------------------------------------------------------------------------------
Class L ** $ 25.21
----------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $ 26.43
----------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $ 25.46
==================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if
shares are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 15
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended July 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 5,939,942
Dividends 2,044,270
Less: Interest expense (29,151)
--------------------------------------------------------------------------------
Total Investment Income 7,955,061
--------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 2) 1,610,851
Investment advisory fees (Note 2) 1,593,176
Administration fees (Note 2) 579,337
Shareholder and system servicing fees 329,293
Registration fees 50,303
Shareholder communications 31,511
Audit and legal 24,080
Trustees' fees 10,551
Custody 9,178
Other 31,141
--------------------------------------------------------------------------------
Total Expenses 4,269,421
--------------------------------------------------------------------------------
Net Investment Income 3,685,640
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 126,984,106
Cost of securities sold 107,188,924
--------------------------------------------------------------------------------
Net Realized Gain 19,795,182
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 160,195,133
End of period 160,043,886
--------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (151,247)
--------------------------------------------------------------------------------
Net Gain on Investments 19,643,935
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 23,329,575
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended July 31, 2000 (unaudited)
and the Year Ended January 31, 2000
<TABLE>
<CAPTION>
July 31 January 31
=========================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 3,685,640 $ 6,332,586
Net realized gain 19,795,182 42,431,453
Decrease in net unrealized appreciation (151,247) (23,838,911)
---------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 23,329,575 24,925,128
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (3,981,501) (4,981,131)
Net realized gains (33,871,928) (23,616,050)
---------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (37,853,429) (28,597,181)
---------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 58,676,958 185,704,680
Net asset value of shares issued for reinvestment of dividends 35,962,508 27,161,910
Cost of shares reacquired (83,748,524) (120,157,647)
---------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 10,890,942 92,708,943
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (3,632,912) 89,036,890
NET ASSETS:
Beginning of period 584,730,646 495,693,756
---------------------------------------------------------------------------------------------------------
End of period* $ 581,097,734 $ 584,730,646
=========================================================================================================
* Includes undistributed net investment income of: $ 1,062,257 $ 1,358,118
=========================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 17
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Social Awareness Fund ("Fund"), formerly known as the Concert
Social Awareness Fund, a separate investment fund of Smith Barney Equity Funds
("Trust"), a Massachusetts business trust, is registered under the Investment
Company Act of 1940, as amend ed, as a diversified, open-end management
investment company. The Trust consists of this Fund and one other separate
investment fund, the Smith Barney Large Cap Blend Fund. The financial statements
and financial highlights for the other fund are presented in a separate
shareholder report.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded in
national securities markets are valued at the closing prices in the primary
exchange on which they are traded or, if there were no sales during the day, at
current quoted bid price; securities primarily traded on foreign exchanges are
generally valued at the pre ceding closing values of such securities on their re
spec tive exchanges, except that when a significant occurrence subsequent to the
time a value was so es tablished is likely to have significantly changed the
value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Board of
Trustees or its delegates; over-the-counter securities and U.S. government agen
cy and obligations are valued at the mean between the bid and asked prices; (c)
securities for which market quotations are not available will be valued in good
faith at fair value by or under the direction of the Board of Trustees; (d)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized pre mium, which ap proxi mates value; (e) dividend income is re
corded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Fund determines the existence
of a dividend declaration after exercising reasonable due diligence; (f)
interest income is recorded on an accrual basis including the amortization of
premium and the accretion of discount, where applicable; (g) gains and losses on
the sale of securities are calculated by using the specific iden tification
method; (h) dividends and distributions to share holders are recorded on the
ex-dividend date; (i) the accounting records are main tained in U.S. dollars.
All assets and liabilities denominated in foreign currencies are translated into
U.S. dollars based on the rate of exchange of such currencies against U.S.
dollars on the date of valuation. Purchases and sales of securities, and income
and expenses are translated at the rate of exchange quoted on the respective
date that such transactions are recorded. Differences between income or ex pense
amounts recorded and collected or paid are adjusted when reported by the
custodian bank; (j) direct expenses are charged to each class; management fees
and general fund expenses are allocated on the basis of relative net assets; (k)
the Fund in tends to comply with the applicable provisions of the Internal
Revenue Code of 1986, as amended, pertaining to regulated investment companies
and to make dis tribu tions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes; (l) the character of income
and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
January 31, 2000, reclassifications were made to the Fund's capital accounts to
reflect permanent book/tax differences and income and gains available for
distribution under income tax regulations. Net investment income, net realized
gains and net assets were not affected by this change; and (m) estimates and
assumptions are re quired to be made regarding assets, liabilities and changes
in net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Sal omon Smith Barney
Holdings Inc. ("SSBH") which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment advisor to the Fund. The Fund pays SSBC an in
vestment advisory fee calculated at an annual rate of 0.55% of the average daily
net assets. This fee is calculated daily and paid monthly.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly.
Citi Fiduciary Trust Company ("CFTC"), formerly known as Smith Barney Private
Trust Company, another subsidiary of Citigroup, acts as the Fund's transfer
agent and PFPC Global Fund Services ("PFPC") acts as the Fund's sub-transfer
agent. CFTC receives account fees and asset-based fees that vary according to
the account size and type of account. PFPC is responsible for shareholder
recordkeeping and financial processing for all shareholder accounts and is paid
by CFTC. For the six months ended July 31, 2000, the Fund paid transfer agent
fees of $218,307 to CFTC.
Effective June 5, 2000, Salomon Smith Barney Inc. ("SSB"), another subsidiary of
SSBH, became the Fund's distributor replacing CFBDS, Inc. ("CFBDS"). In
addition, SSB acts as the primary broker for the Fund's portfolio agency
transactions. Certain other broker-dealers, continue to sell Fund shares to the
public as members of the selling group. For the six months ended July 31, 2000,
SSB received brokerage commissions of $1,650.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. There is a contingent deferred sales charge ("CDSC") of
5.00% on Class B shares, which applies if redemption occurs within one year from
purchase. This CDSC declines by 1.00% the first year after purchase and
thereafter by 1.00% per year until no CDSC is incurred. Class L shares are being
sold at net asset value plus a maximum sales charge of 1.00%. Class L shares
also have a 1.00% CDSC, which applies if redemption occurs within the first year
of purchase. In certain cases, Class A shares also have a 1.00% CDSC, which
applies if redemption occurs within the first year of purchase. This CDSC only
applies to those purchases of Class A shares, which, when combined with current
holdings of Class A shares, equal or exceed $500,000 in the aggregate. These
purchases do not incur an initial sales charge.
For the six months ended July 31, 2000, SSB and CFBDS received sales charges of
$115,000 and $34,000 on sales of the Fund's Class A and L shares, respectively.
In addition, CDSCs paid to SSB were:
Class A Class B Class L
================================================================================
CDSC $ 2,000 $23,000 $ 6,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
Class A, B and L shares cal culated at an annual rate of 0.25% of the average
daily net assets of each respective class. The Fund also pays a distribution fee
with respect to Class B and L shares calculated at an annual rate of 0.75% of
the average daily net assets for each class, respectively. For the six months
ended July 31, 2000, total Distribution Plan fees incurred were:
Class A Class B Class L
================================================================================
Distribution Plan Fees $ 428,611 $1,042,320 $ 139,920
================================================================================
All officers and one Trustee of the Trust are employees of SSB.
3. Investments
During the six months ended July 31, 2000, the aggregate cost of purchases and
proceeds from sales of in vest ments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $107,120,507
--------------------------------------------------------------------------------
Sales 126,984,106
================================================================================
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 19
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
At July 31, 2000, the aggregate gross unrealized ap pre ci a tion and
depreciation of investments for Federal in come tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $ 176,451,548
Gross unrealized depreciation (16,407,662)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 160,043,886
================================================================================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual main
tenance of the market value of the collateral in amounts at least equal to the
repurchase price.
5. Futures Contracts
Initial margin deposits made upon entering into fu tures contracts are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities are
also segregated up to the current market value of the futures contracts. During
the period the futures contract is open, changes in the value of the contract
are recognized as unrealized gains or losses by "marking to market" on a daily
basis to re flect the market value of the contract at the end of each day's
trading. Variation margin payments are made or received and recognized as assets
due from or liabilities due to broker, depending upon whether unrealized gains
or losses are incurred. When the con tract is closed, the Fund records a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transactions and the Fund's basis in the contract.
The Fund enters into such contracts to hedge a portion of its portfolio. The
Fund bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At July 31, 2000, the Fund had no open futures contracts.
6. Option Contracts
Premiums paid when put or call options are purchased by the Fund represent
investments, which are marked-to-market daily. When a purchased option expires,
the Fund will realize a loss in the amount of the pre mium paid. When the Fund
enters into a closing sales transaction, the Fund will realize a gain or loss de
pending on whether the sales proceeds from the closing sales transaction are
greater or less than the premium paid for the option. When the Fund exercises a
put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the pre mium
originally paid. When the Fund exercises a call op tion, the cost of the
security which the Fund pur chases upon exercise will be increased by the pre
mium originally paid.
At July 31, 2000, the Fund had no open purchased call or put option contracts.
When a Fund writes a covered call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium re ceived. When the Fund enters into a
closing purchase transaction, the Fund realizes a gain or loss de pending upon
whether the cost of the closing trans action is greater or less than the premium
originally re ceived, without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is eliminated.
When a written call option is exercised, the cost of the security sold will be
de creased by the premium originally received. When a written put option is
exercised, the amount of the pre mium originally received will reduce the cost
of the security which the Fund purchased upon exercise. When a written index
option is exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Fund enters into options for hedging purposes. The risk in writing a
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
covered call option is that the Fund gives up the opportunity to par ticipate in
any increase in the price of the underlying security beyond the exercise price.
The risk in writing a put option is that the Fund is exposed to the risk of a
loss if the market price of the underlying security declines.
During the six months ended July 31, 2000, the Fund did not write any call or
put option contracts.
7. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations, and receives a lenders fee. Fees earned by the Fund on securities
lending are recorded in interest income. Loans of securities by the Fund are
collateralized by cash, U.S. government securities or high quality money market
instruments that are maintained at all times in an amount at least equal to the
current market value of the loaned securities, plus a margin which may vary
depending on the type of securities loaned. The custodian establishes and
maintains the collateral in a segregated account. The Fund maintains exposure
for the risk of any losses in the investment of amounts received as collateral.
At July 31, 2000, the Fund had no securities on loan.
8. Shares of Beneficial Interest
At July 31, 2000, the Trust had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct ex penses, including those specifically related to the distribution of
its shares.
At July 31, 2000, total paid-in capital amounted to the following for each
class:
Class A Class B Class L
================================================================================
Total Paid-in Capital $265,784,349 $109,016,510 $ 26,572,790
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
----------------------------- -----------------------------
Shares Amount Shares Amount
=========================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 1,422,863 $ 37,296,439 3,479,437 $ 90,293,494
Shares issued on reinvestment 877,254 22,082,095 624,601 16,162,588
Shares reaquired (1,401,583) (36,617,936) (1,926,793) (50,099,372)
---------------------------------------------------------------------------------------------------------
Net Increase 898,534 $ 22,760,598 2,177,245 $ 56,356,710
=========================================================================================================
Class B
Shares sold 675,571 $ 17,655,042 3,118,093 $ 81,272,290
Shares issued on reinvestment 483,541 12,147,871 382,627 9,901,915
Shares reaquired (1,679,308) (43,905,014) (2,572,959) (66,702,505)
---------------------------------------------------------------------------------------------------------
Net Increase (Decrease) (520,196) $(14,102,101) 927,761 $ 24,471,700
=========================================================================================================
Class L
Shares sold 143,019 $ 3,725,477 540,901 $ 14,138,896
Shares issued on reinvestment 68,759 1,732,542 42,281 1,097,407
Shares reaquired (123,266) (3,225,574) (128,063) (3,355,770)
---------------------------------------------------------------------------------------------------------
Net Increase 88,512 $ 2,232,445 455,119 $ 11,880,533
=========================================================================================================
</TABLE>
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 21
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares 2000(1)(2) 2000(2) 1999(2) 1998 1997 1996
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 25.79 $ 25.94 $ 20.57 $ 19.36 $ 19.00 $ 15.91
-----------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.21 0.38 0.29 0.48 0.57 0.61
Net realized and unrealized gain 0.88 0.88 5.87 3.27 1.71 3.52
-----------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.09 1.26 6.16 3.75 2.28 4.13
-----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.22) (0.32) (0.26) (0.55) (0.60) (0.52)
Net realized gains (1.55) (1.09) (0.53) (1.99) (1.32) (0.52)
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (1.77) (1.41) (0.79) (2.54) (1.92) (1.04)
-----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 25.11 $ 25.79 $ 25.94 $ 20.57 $ 19.36 $ 19.00
-----------------------------------------------------------------------------------------------------------------------
Total Return 4.26%++ 4.93% 30.47% 19.89% 12.41% 26.47%
-----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $350,322 $336,595 $282,060 $202,026 $178,072 $175,007
-----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.17%+ 1.17% 1.19% 1.19% 1.28% 1.21%
Net investment income 1.59+ 1.47 1.23 2.34 2.98 3.10
-----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 19% 43% 36% 62% 68% 81%
=======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class B Shares 2000(1)(2) 2000(2) 1999(2) 1998 1997 1996
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 25.81 $ 25.96 $ 20.63 $ 19.42 $ 19.05 $ 15.97
-----------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.11 0.19 0.11 0.33 0.43 0.49
Net realized and unrealized gain 0.88 0.87 5.89 3.27 1.71 3.53
-----------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.99 1.06 6.00 3.60 2.14 4.02
-----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.12) (0.12) (0.14) (0.40) (0.45) (0.42)
Net realized gains (1.55) (1.09) (0.53) (1.99) (1.32) (0.52)
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (1.67) (1.21) (0.67) (2.39) (1.77) (0.94)
-----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 25.13 $ 25.81 $ 25.96 $ 20.63 $ 19.42 $ 19.05
-----------------------------------------------------------------------------------------------------------------------
Total Return 3.87%++ 4.13% 29.50% 18.95% 11.60% 25.58%
-----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $202,106 $220,989 $198,181 $172,115 $202,597 $226,360
-----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.93%+ 1.93% 1.94% 1.95% 2.03% 1.94%
Net investment income 0.83+ 0.71 0.49 1.62 2.23 2.37
-----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 19% 43% 36% 62% 68% 81%
=======================================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
22 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares 2000(1)(2) 2000(2) 1999(2) 1998(3) 1997 1996
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 25.88 $ 26.03 $ 20.68 $19.46 $19.08 $15.97
--------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.11 0.19 0.11 0.34 0.44 0.45
Net realized and unrealized gain 0.89 0.87 5.91 3.27 1.71 3.60
--------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.00 1.06 6.02 3.61 2.15 4.05
--------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.12) (0.12) (0.14) (0.40) (0.45) (0.42)
Net realized gains (1.55) (1.09) (0.53) (1.99) (1.32) (0.52)
--------------------------------------------------------------------------------------------------------------
Total Distributions (1.67) (1.21) (0.67) (2.39) (1.77) (0.94)
--------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 25.21 $ 25.88 $ 26.03 $20.68 $19.46 $19.08
--------------------------------------------------------------------------------------------------------------
Total Return 3.90%++ 4.13% 29.53% 18.97% 11.65% 25.77%
--------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $28,670 $27,147 $15,453 $7,173 $4,000 $3,396
--------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.92%+ 1.92% 1.92% 1.93% 2.01% 1.94%
Net investment income 0.84+ 0.73 0.46 1.54 2.25 2.31
--------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 19% 43% 36% 62% 68% 81%
==============================================================================================================
</TABLE>
(1) For the six months ended July 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Social Awareness Fund 23
<PAGE>
Smith Barney Social
Awareness Fund
Trustees
Lee Abraham
Allan J. Bloostein
Jane F. Dasher
Donald R. Foley
Richard E. Hanson, Jr.
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Robert J. Brady, CFA
Vice President and Investment Officer
Ellen S. Cammer
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Advisor
SSB Citi Fund Management LLC
Distributor
Salomon Smith Barney Inc.
PFS Distributors, Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
125 Broad Street, 11th Floor
New York, New York 10004
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of the shareholders of
Smith Barney Social Awareness Fund, but it may also be used as sales literature
when proceeded or accompanied by the current Prospectus, which gives details
about charges, expenses, investment objectives and operating policies of the
Fund. If used as sales material after October 31, 2000, this report must be
accompanied by performance information for the most recently completed calendar
quarter.
SALOMON SMITH BARNEY
-------------------------------------------------
A member of citigroup[LOGO]
Salomon Smith Barney is a Service mark of Salomon Smith Barney Inc.
Smith Barney Social Awareness Fund
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0423 9/00
[GRAPHIC OMITTED]
[LOGO] Because we care about the environment, this annual report has been
printed with soy-based inks on 20% post-consumer recycled paper,
deinked using a non-chlorine bleach process.
