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<PAGE> PAGE 7
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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072CC010400 0
072CC020400 4335
072DD010400 0
072DD020400 0
072EE000400 30878
073 A010400 0.0000
073 A020400 0.0000
073 B000400 1.7800
073 C000400 0.0000
074 A000400 0
074 B000400 9832
074 C000400 0
074 D000400 107088
074 E000400 0
074 F000400 87691
074 G000400 0
074 H000400 0
074 I000400 0
074 J000400 758
074 K000400 29
074 L000400 0
074 M000400 0
074 N000400 205398
074 O000400 624
074 P000400 311
074 Q000400 0
074 R010400 0
074 R020400 0
074 R030400 0
074 R040400 104
074 S000400 0
074 T000400 204359
074 U010400 20197849
074 U020400 0
074 V010400 10.12
<PAGE> PAGE 22
074 V020400 0.00
074 W000400 0.0000
074 X000400 19
074 Y000400 0
075 A000400 0
075 B000400 216634
076 000400 0.00
SIGNATURE THOMAS M. REYNOLDS
TITLE CONTROLLER
[ARTICLE] 6
[CIK] 0000841489
[NAME] SMITH BARNEY PRINCIPAL RETURN FUND
[SERIES]
[NUMBER] 1
[NAME] SB ZERO AND PLUS EMERGING GROWTH SERIES 2000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1997
[PERIOD-END] NOV-30-1997
[INVESTMENTS-AT-COST] 45,749,078
[INVESTMENTS-AT-VALUE] 58,827,923
[RECEIVABLES] 568,209
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 59,396,132
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 558,371
[TOTAL-LIABILITIES] 558,371
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 43,661,721
[SHARES-COMMON-STOCK] 6,957,549
[SHARES-COMMON-PRIOR] 7,579,650
[ACCUMULATED-NII-CURRENT] 1,930,992
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 166,203
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 13,078,845
[NET-ASSETS] 58,837,761
[DIVIDEND-INCOME] 9,000
[INTEREST-INCOME] 2,629,530
[OTHER-INCOME] 0
[EXPENSES-NET] 661,130
[NET-INVESTMENT-INCOME] 1,977,400
[REALIZED-GAINS-CURRENT] 7,309,576
[APPREC-INCREASE-CURRENT] (2,098,279)
[NET-CHANGE-FROM-OPS] 7,188,697
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 7,551,121
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 1,476,738
[SHARES-REINVESTED] 854,637
[NET-CHANGE-IN-ASSETS] (6,594,316)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 407,748
[OVERDISTRIB-NII-PRIOR] (46,408)
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 249,071
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 661,130
[AVERAGE-NET-ASSETS] 62,769,928
[PER-SHARE-NAV-BEGIN] 8.63
[PER-SHARE-NII] 0.28
[PER-SHARE-GAIN-APPREC] 0.78
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 1.23
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 8.46
[EXPENSE-RATIO] 1.05
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000841489
[NAME] SMITH BARNEY PRINCIPAL RETURN FUND
[SERIES]
[NUMBER] 2
[NAME] ZERO AND APPRECIATION SERIES 1998
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1997
[PERIOD-END] NOV-30-1997
[INVESTMENTS-AT-COST] 70,971,374
[INVESTMENTS-AT-VALUE] 86,151,419
[RECEIVABLES] 66,356
[ASSETS-OTHER] 86,151,419
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 86,191,169
[PAYABLE-FOR-SECURITIES] 32,525
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 88,536
[TOTAL-LIABILITIES] 121,061
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 62,771,562
[SHARES-COMMON-STOCK] 10,957,991
[SHARES-COMMON-PRIOR] 12,466,750
[ACCUMULATED-NII-CURRENT] 4,161,669
[OVERDISTRIBUTION-NII] (4,049,120)
[ACCUMULATED-NET-GAINS] 5,079,570
[OVERDISTRIBUTION-GAINS] 5,479,423
[ACCUM-APPREC-OR-DEPREC] 15,180,045
[NET-ASSETS] 86,096,714
[DIVIDEND-INCOME] 594,229
[INTEREST-INCOME] 4,413,464
[OTHER-INCOME] 0
[EXPENSES-NET] 846,024
[NET-INVESTMENT-INCOME] 416,669
[REALIZED-GAINS-CURRENT] 5,079,576
[APPREC-INCREASE-CURRENT] 436,994
[NET-CHANGE-FROM-OPS] 9,678,239
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 5,479,423
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 2,183,726
[SHARES-REINVESTED] 126,802
[NET-CHANGE-IN-ASSETS] (7,696,020)
[ACCUMULATED-NII-PRIOR] 4,422,626
[ACCUMULATED-GAINS-PRIOR] 4,226,911
[OVERDISTRIB-NII-PRIOR] (446,835)
[OVERDIST-NET-GAINS-PRIOR] 5,485,370
[GROSS-ADVISORY-FEES] 19,883
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 846,024
[AVERAGE-NET-ASSETS] 89,234,024
[PER-SHARE-NAV-BEGIN] 7.52
[PER-SHARE-NII] 0.38
[PER-SHARE-GAIN-APPREC] 0.49
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0.53
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 7.86
[EXPENSE-RATIO] 0.98
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000841489
[NAME] SMITH BARNEY PRINCIPAL RETURN FUND
[SERIES]
[NUMBER] 4
[NAME] SB SECURITIES AND GROWTH FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1997
[PERIOD-END] NOV-30-1997
[INVESTMENTS-AT-COST] 184,970,911
[INVESTMENTS-AT-VALUE] 204,611,202
[RECEIVABLES] 786,057
[ASSETS-OTHER] 404
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 205,397,663
[PAYABLE-FOR-SECURITIES] 624,050
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 415,177
[TOTAL-LIABILITIES] 1,039,227
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 178,408,472
[SHARES-COMMON-STOCK] 20,197,849
[SHARES-COMMON-PRIOR] 23,868,390
[ACCUMULATED-NII-CURRENT] 5,432,460
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 887,683
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 19,640,291
[NET-ASSETS] 204,358,436
[DIVIDEND-INCOME] 165,667
[INTEREST-INCOME] 7,428,873
[OTHER-INCOME] 7,594,540
[EXPENSES-NET] 1,969,709
[NET-INVESTMENT-INCOME] 5,624,831
[REALIZED-GAINS-CURRENT] 29,915,321
[APPREC-INCREASE-CURRENT] (4,335,441)
[NET-CHANGE-FROM-OPS] 31,204,711
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 30,878,439
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 6,617,924
[SHARES-REINVESTED] 2,947,383
[NET-CHANGE-IN-ASSETS] (39,648,167)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 192,371
[OVERDIST-NET-GAINS-PRIOR] 1,850,801
[GROSS-ADVISORY-FEES] 1,077,814
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,969,709
[AVERAGE-NET-ASSETS] 216,633,595
[PER-SHARE-NAV-BEGIN] 10.22
[PER-SHARE-NII] 00.28
[PER-SHARE-GAIN-APPREC] 01.40
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 01.78
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.12
[EXPENSE-RATIO] 00.92
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
To the Shareholders and Board of Trustees of
Smith Barney Principal Return Fund:
In planning and performing our audit of the financial statements
of the Zeros and Appreciation Series 1998 of Smith Barney
Principal Return Fund (the "Fund") for the year ended November
30, 1997, we considered its internal control, including control
activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of
Form N-SAR, not to provide assurance on the internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection
of any evaluation of internal control to future periods is
subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily
disclose all matters in the internal control that might be
material weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of one or more of
the internal control components does not reduce to a relatively
low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned
functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding
securities that we consider to be material weaknesses as defined
above.
This report is intended solely for the information and use of
management, the Board of Directors of the Fund, and the
Securities and Exchange Commission.
January 15, 1998
To the Shareholders and Board of Trustees of
Smith Barney Principal Return Fund:
In planning and performing our audit of the financial statements
of the Zeros Plus Emerging Growth Series 2000 of Smith Barney
Principal Return Fund (the "Fund") for the year ended November
30, 1997, we considered its internal control, including control
activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of
Form N-SAR, not to provide assurance on the internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection
of any evaluation of internal control to future periods is
subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily
disclose all matters in the internal control that might be
material weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of one or more of
the internal control components does not reduce to a relatively
low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned
functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding
securities that we consider to be material weaknesses as defined
above.
This report is intended solely for the information and use of
management, the Board of Directors of the Fund, and the
Securities and Exchange Commission.
January 15, 1998
To the Shareholders and Board of Trustees of
Smith Barney Principal Return Fund:
In planning and performing our audit of the financial statements
of the Security and Growth Fund of Smith Barney Principal Return
Fund (the "Fund") for the year ended November 30, 1997, we
considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection
of any evaluation of internal control to future periods is
subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily
disclose all matters in the internal control that might be
material weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of one or more of
the internal control components does not reduce to a relatively
low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned
functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding
securities that we consider to be material weaknesses as defined
above.
This report is intended solely for the information and use of
management, the Board of Directors of the Fund, and the
Securities and Exchange Commission.
January 15, 1998
