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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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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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072 X000400 1515
072 Y000400 0
072 Z000400 4662
072AA000400 0
072BB000400 7833
072CC010400 0
072CC020400 15571
072DD010400 5551
072DD020400 0
072EE000400 1373
073 A010400 0.2800
073 A020400 0.0000
073 B000400 0.0800
073 C000400 0.0000
074 A000400 0
074 B000400 2138
074 C000400 0
074 D000400 83609
074 E000400 0
074 F000400 35226
074 G000400 0
074 H000400 0
074 I000400 93
074 J000400 2084
074 K000400 0
074 L000400 7
074 M000400 0
074 N000400 123157
074 O000400 0
074 P000400 0
074 Q000400 0
074 R010400 0
074 R020400 0
074 R030400 0
074 R040400 430
074 S000400 0
<PAGE> PAGE 22
074 T000400 122727
074 U010400 14054
074 U020400 0
074 V010400 8.73
074 V020400 0.00
074 W000400 0.0000
074 X000400 0
074 Y000400 0
075 A000400 0
075 B000400 161695
076 000400 0.00
SIGNATURE PAUL BROOK
TITLE CONTROLLER
[ARTICLE] 6
[CIK] 0000841489
[NAME] SMITH BARNEY PRINCIPAL RETURN FUND
[SERIES]
[NUMBER] 1
[NAME] SB ZEROS PLUS EMERGING GROWTH SERIES 2000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1998
[PERIOD-END] NOV-30-1998
[INVESTMENTS-AT-COST] 38,703,133
[INVESTMENTS-AT-VALUE] 49,650,453
[RECEIVABLES] 0
[ASSETS-OTHER] 459,284
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 50,109,737
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 76,105
[TOTAL-LIABILITIES] 76,105
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 37,273,081
[SHARES-COMMON-STOCK] 6,196,939
[SHARES-COMMON-PRIOR] 6,957,549
[ACCUMULATED-NII-CURRENT] 1,561,508
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 251,723
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 10,947,320
[NET-ASSETS] 50,033,632
[DIVIDEND-INCOME] 5,375
[INTEREST-INCOME] 2,335,842
[OTHER-INCOME] 0
[EXPENSES-NET] 585,321
[NET-INVESTMENT-INCOME] 1,755,896
[REALIZED-GAINS-CURRENT] 2,958,032
[APPREC-INCREASE-CURRENT] (2,131,525)
[NET-CHANGE-FROM-OPS] 2,582,403
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,125,380
[DISTRIBUTIONS-OF-GAINS] 2,872,512
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 1,365,032
[SHARES-REINVESTED] 604,422
[NET-CHANGE-IN-ASSETS] (8,804,129)
[ACCUMULATED-NII-PRIOR] 1,930,992
[ACCUMULATED-GAINS-PRIOR] 166,203
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 213,776
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 585,321
[AVERAGE-NET-ASSETS] 53,166,779
[PER-SHARE-NAV-BEGIN] 8.46
[PER-SHARE-NII] 0.28
[PER-SHARE-GAIN-APPREC] 0.13
[PER-SHARE-DIVIDEND] 0.31
[PER-SHARE-DISTRIBUTIONS] 0.49
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 8.07
[EXPENSE-RATIO] 1.10
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000841489
[NAME] SMITH BARNEY PRINCIPAL RETURN FUND
[SERIES]
[NUMBER] 4
[NAME] SECURITY AND GROWTH FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] NOV-30-1998
[PERIOD-END] NOV-30-1998
[INVESTMENTS-AT-COST] 117,008,628
[INVESTMENTS-AT-VALUE] 121,067,109
[RECEIVABLES] 2,089,537
[ASSETS-OTHER] 418
[OTHER-ITEMS-ASSETS] 2,625,808
[TOTAL-ASSETS] 125,782,872
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 3,055,451
[TOTAL-LIABILITIES] 3,055,451
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 122,443,784
[SHARES-COMMON-STOCK] 14,054,462
[SHARES-COMMON-PRIOR] 20,197,849
[ACCUMULATED-NII-CURRENT] 4,083,876
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 7,858,720
[ACCUM-APPREC-OR-DEPREC] 4,058,481
[NET-ASSETS] 122,727,421
[DIVIDEND-INCOME] 139,451
[INTEREST-INCOME] 6,036,694
[OTHER-INCOME] 0
[EXPENSES-NET] 1,514,547
[NET-INVESTMENT-INCOME] 4,661,598
[REALIZED-GAINS-CURRENT] (7,832,521)
[APPREC-INCREASE-CURRENT] (15,570,740)
[NET-CHANGE-FROM-OPS] (18,741,663)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 5,551,293
[DISTRIBUTIONS-OF-GAINS] 1,372,771
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 6,865,212
[SHARES-REINVESTED] 721,825
[NET-CHANGE-IN-ASSETS] (81,631,015)
[ACCUMULATED-NII-PRIOR] 4,947,372
[ACCUMULATED-GAINS-PRIOR] 1,372,771
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 807,501
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,514,547
[AVERAGE-NET-ASSETS] 161,695,451
[PER-SHARE-NAV-BEGIN] 10.12
[PER-SHARE-NII] 00.32
[PER-SHARE-GAIN-APPREC] (01.35)
[PER-SHARE-DIVIDEND] 00.28
[PER-SHARE-DISTRIBUTIONS] 00.08
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 08.73
[EXPENSE-RATIO] 00.94
[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 Smith Barney Principal Return Fund (the "Funds") consisting
of Zeros Plus Emerging Growth Series 2000 and Security and Growth
Fund for the year ended November 30, 1998, 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 Funds 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, error or
fraud 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 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 misstatements caused by error or fraud 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
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 Trustees of the Funds, and the
Securities and Exchange Commission.
January 15, 1999
