SMITH BARNEY
PRECIOUS METALS AND MINERALS FUND INC.
(the "Fund")
Supplement to Prospectus dated March 1,
1995
New Management Agreement
At a special meeting held on December 18, 1995,
the shareholders of the Fund approved a new management
agreement (the "Agreement") between Smith Barney Mutual
Funds Management Inc. ("SBMFM") and the Fund. Under
the Agreement, SBMFM will provide investment advisory
and administrative services. For these services, SBMFM
will be paid a management fee at an annual rate of
0.75% of the value of the Fund's daily net assets. The
Agreement replaces the Fund's existing investment
advisory and administration agreements with Smith Barney
Strategy Advisers Inc. and SBMFM, respectively.
Change in Investment Objective
Also on December 18, 1995, the shareholders of the
Fund approved a proposal to amend the
Fund's investment
objective. As a result, the Fund's investment objective
has been broadened to permit the Fund to seek long-term
capital appreciation by investing primarily in "Natural
Resource Investments" which are defined as: (1) equity
and debt securities of companies principally engaged in
(a) owning or processing natural resources, such as
precious metals, other minerals, water, timberland,
agricultural commodities and forest
products, (b) owning or producing sources of energy
such as oil, natural gas, coal, uranium, geothermal,
oil shale and biomass, (c) participating in the
exploration and development, transportation,
distribution, and/or processing of natural resources, (d)
owning or controlling oil, gas, or other
mineral leases, rights or royalties, (e) providing
related services or supplies, such as drilling,
well servicing, chemicals, parts and equipment, (f)
developing or participating in energy-efficient
technologies or (g) the upgrading or processing of raw
commodities into intermediate products; and (2) gold
bullion and gold coins. A company will be considered to
be "principally engaged" in a business or an
activity if it derives at least 50% of its total
revenue from that business or activity.
Risk Factors and Special Considerations
No assurance can be given that the Fund will
achieve its investment objective. The Fund's
investments may be subject to greater risk and market
fluctuation than a fund that invests in securities
representing a broader range of investment alternatives.
Historically, stock prices
of
companies involved in natural resources industries have
been volatile. The Fund's policy of investing in
securities of foreign issuers also presents certain
risks not present in domestic investments. The Fund may
invest in medium- or lowrated
securities and unrated securities of comparable
qualities. Generally, these securities offer a
higher current yield than the yield offered by
higher-rated securities but involve greater volatility of
prices and risk of loss of income and principal,
including the probability of
default by or bankruptcy of the issuers of such
securities. Therefore, an investment in the Fund should
not be considered as a complete investment program and
may not be appropriate for all investors.
In addition, effective December 18, 1995, the name
of the Fund will become "Smith Barney Natural Resources
Fund Inc." to reflect the Fund's new investment objective.
Supplement dated December 18, 1995
FD0 1058 12/95
