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SMITH BARNEY
SMALL CAP BLEND
FUND, INC.
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STYLE PURE SERIES
SEMI-ANNUAL REPORT
JUNE 30, 2000
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[LOGO] Smith Barney
Mutual Funds
Your Serious Money Professionally Managed(SM)
NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
<PAGE>
Smith Barney Small Cap
Blend Fund, Inc.
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The Smith Barney Small Cap Blend Fund, Inc. ("Fund") seeks long-term capital
appreciation by investing primarily in common stocks of U.S. companies with
relatively small market capitalizations at the time of investment. These are
companies with market capitalizations in excess of $100 million and in the
lowest 20% of publicly traded U.S. companies.
Smith Barney Small Cap Blend Fund, Inc.
Average Annual Total Returns
June 30, 2000
Without Sales Charges(1)
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Class A Class B Class L
================================================================================
Six-Month+ 3.31% 2.89% 2.89%
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One-Year 15.73 14.82 14.74
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Five-Year 16.51 N/A N/A
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Ten-Year 11.02 N/A N/A
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Since Inception++ 10.89 12.17 12.41
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With Sales Charges(2)
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Class A Class B Class L
================================================================================
Six-Month+ (1.85)% (2.02)% 0.89%
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One-Year 9.94 9.98 12.65
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Five-Year 15.32 N/A N/A
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Ten-Year 10.45 N/A N/A
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Since Inception++ 10.34 11.64 12.05
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(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, 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. Prior to June
23, 1997, dividends were reinvested according to the Fund's reinvestment
plan, thereafter at net asset value.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any. Prior to June 23, 1997 dividends were reinvested according to the
Fund's reinvestment plan, thereafter at net asset value. In addition,
Class A and L shares reflect the deduction of the current maximum initial
sales charge of 5.00% and 1.00%, respectively; and 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. In addition, Class L 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.
+ 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 January 23, 1990, June 25,
1997 and June 24, 1997, respectively. The Fund operated as a closed-end
fund until June 23, 1997.
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STRATEGY HIGHLIGHT
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We look to offer long-term capital appreciation by employing an active
investment strategy that focuses primarily on individual stock selection and
remains diversified across several industries and sectors. We seek companies
with above -- average earnings growth, a pattern of reported earnings that
exceeds market expectations, rising earnings estimates over the next several
quarters and high relative return based on invested capital.
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WHAT'S INSIDE
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A Message from the Chairman ........................................... 1
Shareholder Letter .................................................... 2
Historical Performance ................................................ 4
Smith Barney Small Cap Blend Fund, Inc. at a Glance ................... 7
Schedule of Investments ............................................... 8
Statement of Assets and Liabilities ................................... 17
Statement of Operations ............................................... 18
Statements of Changes in Net Assets ................................... 19
Notes to Financial Statements ......................................... 20
Financial Highlights .................................................. 25
<PAGE>
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A Message from the Chairman
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[PHOTO OMITTED]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
For years, individuals and their families and businesses have looked to the
investment professionals of SSB Citi Fund Management LLC for thoughtful insights
and advice. For some, the solution has been a long-term investment strategy,
incorporating multiple stock and bond mutual funds. Others have invested with
specific portfolio managers who are recognized and respected for their insights
and record.
The Smith Barney Small Cap Blend Fund, Inc., which invests in U.S. companies
with relatively small market capitalizations, represents an opportunity for you,
the serious investor, to take part in the anticipated growth of many emerging
companies across several industry sectors.
In our opinion, the lessons of the past may be used to better understand the
challenges and opportunities of the future. We believe SSB Citi Fund Management
LLC represents extensive asset management expertise. We also believe that
expertise is achieved through the intelligent application of knowledge and
experience. Our portfolio managers have managed portfolios across markets and
cycles.
Whatever your investment objective may be, we think that following a disciplined
investment plan is of paramount importance in these exciting but also uncertain
times. We encourage you to work closely with your financial professional to map
out an investment plan that fits in with your objectives -- be it retirement,
estate planning or educational needs.
When you invest with SSB Citi Fund Management LLC, you 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 7, 2000
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Smith Barney Small Cap Blend Fund, Inc. 1
<PAGE>
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Shareholder Letter
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[PHOTO OMITTED]
SANDIP A.
BHAGAT, CFA
Vice President
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith Barney
Small Cap Blend Fund, Inc. ("Fund") for the period ended June 30, 2000. In this
report we have summarized the period's prevailing economic and market conditions
and outlined our portfolio strategy.(1) A detailed summary of the Fund's
performance can be found in the appropriate sections that follow. The
information provided 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's portfolio. We hope you find this report to be useful and
informative.
Performance Update & Investment Strategy
For the six months ended June 30, 2000, the Fund's Class A shares, without and
with sales charges, returned 3.31% and a negative 1.85%, respectively. In
comparison, the Russell 2000 Index(2) returned 3.04% for the same period. Please
note that past performance is not indicative of future results. For performance
on the Fund's other share classes, please refer to pages four through six.
One of the Fund's goals is to capture the performance of the small cap stock
market with a high degree of consistency. We do not attempt to time the market
nor do we focus on exploiting market sector opportunities based on economic
forecasts. Instead, we employ an active investment strategy based on a
sophisticated, proprietary model that seeks to identify small cap stocks that
are likely to perform better than their peers do. As a result of our investment
approach, the Fund's holdings are widely diversified among 250 to 300 companies
that may perform in a manner comparable to the Russell 2000 Index, a broad
measure of the small cap market.
Market Overview
The first half of 2000 saw unprecedented levels of volatility in the stock
market. Interest rates rose early in the first quarter and then fell
significantly as the quarter progressed. By the end of the first quarter, the
benchmark 30-year U.S. Treasury yield had dropped to below 6% while the
increasingly more relevant 10-year bond yield fell to 6%. Interest rates
experienced wide swings through the second quarter and the volatility in the
bond market negatively impacted the stock market.
The tug-of-war between growth(3) and value(4) stocks and large- and small-cap
stocks continued through the first half of 2000. Growth and small-cap stocks
came out ahead at the beginning of the year, stumbled badly in March and April
and then staged a comeback at the end of the quarter. The ebb and flow in style
performance coincided with market sentiment which in turn led to either a flight
or a return to quality.
In our opinion, the big stock market event of 2000 took place during the month
of April 2000 when the speculative bubble in the shares of what many
----------
(1) Please note that the Fund's holdings are subject to change and any
discussion of holdings is as of June 30, 2000. Please refer to pages eight
through sixteen for a complete list and percentage breakdown of the Fund's
holdings.
(2) 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. As of the
latest reconstitution, the average market capitalization was approximately
$580 million; the median market capitalization was approximately $466
million. The largest company in the index had an approximate market
capitalization of $1.5 million. Please note that the Russell 2000 Index is
unmanaged and is not subject to the same management and trading expenses
of a mutual fund. An investor cannot invest directly in an index.
(3) Growth stocks are the shares of those companies with historically strong
and relatively predictable earnings growth rates.
(4) Value stocks are the shares of those companies that are believed to be
undervalued but may have good longer term business prospects.
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2 2000 Semi-Annual Report to Shareholders
<PAGE>
deemed to be overvalued companies in the technology and biotechnology sectors
burst. The Nasdaq Composite Index(5) declined more than 25% during the week of
April 10, 2000 and declined approximately 15% for the entire month.
Portfolio Update
Over the first six months of 2000, the Fund benefited from its holdings in the
health care and producer durables sectors. In the health care sector, the Fund's
positions in biotechnology companies such as IDEC Pharmaceuticals, Cor
Therapeutics, Abgenix, Human Genome Sciences and Celera Genomics rose sharply in
the second quarter largely due to the reported completion of the human genome
map project. The recovery in these biotechnology stocks during the period
followed dramatic sell-off that began in early March 2000 and lasted until the
beginning of June.
The relative gains in the producer durables sector were driven by the strong
performance of C&D Technologies, a provider of integrated power systems and
components to the telecommunications industry. A significant positive earnings
surprise in the first quarter and steadily rising earnings estimates fueled a
60% rise in the price of the company's stock during June.
Unfortunately, the Fund's holdings in the materials and retail sectors
negatively impacted performance during the period. The value-oriented materials
sector was weak overall, primarily due, in our opinion, to investors' preference
for growth stocks. The Fund's holdings in Metals USA, the metals producer and
Centex Construction Products did not perform well during the period. Retail
stocks were negatively impacted due to rising interest rates, and the Fund's
holdings in specialty retailers Pacific Sunwear of California and Men's
Wearhouse underperformed.
Market Outlook
Our near-term outlook for the stock market relies heavily on the Fed's monetary
policy. The Fed has indicated that it will continue to monitor inflationary
developments closely. Economic data reported between now and the next Federal
Open Market Committee ("FOMC")(6) meeting scheduled for August will determine if
the Fed steps in and raises rates one more time or decides to step to the
sidelines as the U.S. election nears.
Thank you for your investment in the Smith Barney Small Cap Blend Fund, Inc. We
look forward to continuing to help you achieve your financial goals in the new
century.
Sincerely,
/s/ Sandip A. Bhagat, CFA
Sandip A. Bhagat, CFA
Vice President
August 7, 2000
----------
(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. Please note that an investor cannot invest directly in an index.
(6) 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.
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Smith Barney Small Cap Blend Fund, Inc. 3
<PAGE>
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Historical Performance -- Class A Shares(1)
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<TABLE>
<CAPTION>
Net Asset Value
-----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(2)
============================================================================================
<S> <C> <C> <C> <C> <C>
6/30/00 $14.26 $14.06 $0.00 $0.67 3.31%+
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12/31/99 13.35 14.26 0.08 1.68 21.09
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12/31/98 13.68 13.35 0.00 0.16 (1.31)
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12/31/97 12.30 13.68 0.04 1.98 28.25
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12/31/96 12.15 12.30 0.04 2.00 20.56
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12/31/95 11.78 12.15 0.11 1.94 18.90
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12/31/94 12.50 11.78 0.05 0.09 (4.36)
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12/31/93 11.49 12.50 0.01 0.00 8.90
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12/31/92 10.34 11.49 0.05 0.00 11.71
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12/31/91 9.32 10.34 0.14 0.79 22.69
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Inception* -- 12/31/90 11.12 9.32 0.37 0.00 (12.66)+
============================================================================================
Total $0.89 $9.31
============================================================================================
</TABLE>
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Historical Performance -- Class B 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(2)
============================================================================================
<S> <C> <C> <C> <C> <C>
6/30/00 $13.92 $13.65 $0.00 $0.67 2.89%+
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12/31/99 13.09 13.92 0.00 1.68 20.21
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12/31/98 13.52 13.09 0.00 0.16 (2.07)
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Inception* -- 12/31/97 13.34 13.52 0.01 1.98 16.73+
============================================================================================
Total $0.01 $4.49
============================================================================================
</TABLE>
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Historical Performance -- Class L 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(2)
============================================================================================
<S> <C> <C> <C> <C> <C>
6/30/00 $13.91 $13.64 $0.00 $0.67 2.89%+
--------------------------------------------------------------------------------------------
12/31/99 13.09 13.91 0.00 1.68 20.12
--------------------------------------------------------------------------------------------
12/31/98 13.51 13.09 0.00 0.16 (1.99)
--------------------------------------------------------------------------------------------
Inception* -- 12/31/97 13.24 13.51 0.01 1.98 17.53+
============================================================================================
Total $0.01 $4.49
============================================================================================
</TABLE>
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4 2000 Semi-Annual Report to Shareholders
<PAGE>
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Historical Performance -- Class Y 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(2)
============================================================================================
<S> <C> <C> <C> <C> <C>
6/30/00 $14.37 $14.20 $0.00 $0.67 3.49%+
------------------------------------------------------------------------------------------
12/31/99 13.34 14.37 0.03 1.68 21.55
--------------------------------------------------------------------------------------------
12/31/98 13.63 13.34 0.03 0.16 (0.80)
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Inception* -- 12/31/97 13.87 13.63 0.04 0.00 (1.42)+
============================================================================================
Total $0.10 $2.51
============================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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Average Annual Total Returns
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<TABLE>
<CAPTION>
Without Sales Charges(2)
--------------------------------------------
Class A(1) Class B Class L Class Y
========================================================================================
<S> <C> <C> <C> <C>
Six Months Ended 6/30/00+ 3.31% 2.89% 2.89% 3.49%
----------------------------------------------------------------------------------------
Year Ended 6/30/00 15.73 14.82 14.74 16.21
----------------------------------------------------------------------------------------
Five Years Ended 6/30/00 16.51 N/A N/A N/A
----------------------------------------------------------------------------------------
Ten Years Ended 6/30/00 11.02 N/A N/A N/A
----------------------------------------------------------------------------------------
Inception* through 6/30/00 10.89 12.17 12.41 8.63
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
With Sales Charges(3)
--------------------------------------------
Class A(1) Class B Class L Class Y
========================================================================================
<S> <C> <C> <C> <C>
Six Months Ended 6/30/00+ (1.85)% (2.02)% 0.89% 3.49%
----------------------------------------------------------------------------------------
Year Ended 6/30/00 9.94 9.98 12.65 16.21
----------------------------------------------------------------------------------------
Five Years Ended 6/30/00 15.32 N/A N/A N/A
----------------------------------------------------------------------------------------
Ten Years Ended 6/30/00 10.45 N/A N/A N/A
----------------------------------------------------------------------------------------
Inception* through 6/30/00 10.34 11.64 12.05 8.63
========================================================================================
</TABLE>
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Smith Barney Small Cap Blend Fund, Inc. 5
<PAGE>
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Cumulative Total Returns
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Without Sales Charges(2)
================================================================================
Class A (6/30/90 through 6/30/00) 184.35%
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Class B (Inception* through 6/30/00) 41.39
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Class L (Inception* through 6/30/00) 42.36
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Class Y (Inception* through 6/30/00) 25.09
================================================================================
(1) The Fund converted from a closed-end fund to an open-end fund on June 23,
1997. Prior to that date, its shares were traded on the American Stock
Exchange. As of June 23, 1997, all existing shares were converted to a
Class A shares. The total returns noted for Class A shares may have been
different if the Fund had been an open-end fund from inception. All
historical performance information for Class A shares through June 23,
1997 is based on net asset value while it was a closed-end fund.
Closed-end funds are not subject to the same legal requirements as
open-end funds, especially to liquidity requirements.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, 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. Prior to June
23, 1997, dividends were reinvested according to the Fund's dividend
reinvestment plan, thereafter, at net asset value.
(3) Assumes reinvestment of all dividends and capital gain distributions, if
any. Prior to June 23, 1997, dividends were reinvested according to the
Fund's dividend reinvestment plan, thereafter at net asset value. In
addition, Class A and L shares reflect the deduction of the current
maximum 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 within 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, L and Y shares are January 23, 1990, June
25, 1997, June 24, 1997 and October 17, 1997, respectively
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6 2000 Semi-Annual Report to Shareholders
<PAGE>
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Smith Barney Small Cap Blend Fund, Inc. at a Glance (unaudited)
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Growth of $10,000 Invested in Class A Shares of the
Smith Barney Small Cap Blend Fund, Inc. vs. Russell 2000 Index+
June 1990 -- June 2000
[The following table was depicted as a line chart in the printed material.]
Smith Barney Small Cap Blend Fund, Inc. $28,435
Russell 2000 Index $35,713
+ Hypothetical illustration of $10,000 invested on June 30, 1990, assuming
reinvestment of dividends and capital gains, if any, through June 30,
2000. As of June 23, 1997, all existing shares became Class A shares. The
Fund operated as a closed-end mutual fund until June 23, 1997. Prior to
that date, its shares were traded on the American Stock Exchange, and
dividends were eligible for reinvestment through the Fund's dividend
reinvestment plan; since that time, dividends have been reinvested at net
asset value. Current total return information is based on net asset value
while it was a closed-end fund. For purposes of this illustration, the
current maximum front-end sales charge for Class A shares of 5.00% has
been used to compute the initial account value at inception. Closed-end
funds are not subject to the same legal requirements as open-end funds,
especially with respect to liquidity requirements; therefore, the
performance indicated above may have been different had the Fund been an
open-end fund since inception. The Russell 2000 Index is comprised of 2000
of the smallest stocks in the Russell 3000 Index. The Russell 3000 Index
is composed of 3,000 of the largest U.S. companies by market
capitalization. The index is unmanaged and is not subject to the same
management and trading expenses as a mutual fund. An investor may not
invest directly in an index. The performance of the Fund's other classes
may be greater or less than the Class A 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 of Common Stock*
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[The following table was depicted as a bar graph in the printed material]
Banks - Regional 4.4%
Bio Tech 6.9%
Drugs 2.9%
Financial Services 2.2%
Real Estate 5.1%
Semiconductors 3.4%
Retail - Specialty 2.8%
Software 7.7%
Telecommunications Equipment 5.0%
Other 59.6%
Top Ten Holdings*
------------------------------------------------------
1. IDEC Pharmaceuticals Corp. 1.0%
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2. Lattice Semiconductor Corp. 0.9
------------------------------------------------------
3. C&D Technologies, Inc. 0.9
------------------------------------------------------
4. Affiliated Managers Group, Inc. 0.9
------------------------------------------------------
5. Cor Therapeutics, Inc. 0.9
------------------------------------------------------
6. Sanmina Corp. 0.9
------------------------------------------------------
7. TranSwitch Corp. 0.8
------------------------------------------------------
8. National Computer Systems, Inc. 0.8
------------------------------------------------------
9. Medicis Pharmaceutical Corp. 0.8
------------------------------------------------------
10. ADVO, Inc. 0.8
------------------------------------------------------
* As a percentage of total common stock.
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Smith Barney Small Cap Blend Fund, Inc. 7
<PAGE>
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Schedule of Investments (unaudited) June 30, 2000
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SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 95.7%
Aerospace -- 0.4%
67,100 Primex Technologies, Inc. $ 1,476,200
--------------------------------------------------------------------------------
Airlines -- 0.6%
67,400 Atlas Air, Inc. (a) 2,417,975
--------------------------------------------------------------------------------
Auto Parts -- 1.2%
78,500 Arvin Industries, Inc. (a) 1,363,938
40,300 BorgWarner, Inc. 1,415,538
84,800 Donaldson Co., Inc. 1,674,800
--------------------------------------------------------------------------------
4,454,276
--------------------------------------------------------------------------------
Banks - Regional -- 4.2%
52,100 Bank United Corp., Class A Shares (b) 1,833,269
97,000 Banknorth Group, Inc. 1,485,313
92,421 Brenton Banks, Inc. 1,282,341
53,200 Commerce Bancorp, Inc. 2,447,200
96,100 Doral Financial Corp. 1,099,144
3,000 Greater Bay Bancorp 140,250
81,900 Pacific Century Financial Corp. 1,197,788
145,872 Republic Bancorp Inc. 1,303,731
113,000 Southwest Bancorporation of Texas, Inc. (a) 2,344,750
69,900 United Bankshares, Inc. 1,271,306
49,300 Westamerica Bancorporation 1,287,962
--------------------------------------------------------------------------------
15,693,054
--------------------------------------------------------------------------------
Beverage -- 0.8%
35,000 Canandaigua Brands, Class A Shares (a) 1,765,313
40,400 The Robert Mondavi Corp., Class A Shares (a) 1,239,775
--------------------------------------------------------------------------------
3,005,088
--------------------------------------------------------------------------------
Bio Tech -- 6.6%
17,400 Abgenix, Inc. (a) 2,085,553
6,630 Affymetrix, Inc. (a) 1,094,779
41,800 Aviron (a)(b) 1,290,575
19,400 Celera Genomics (a)(b) 1,813,900
36,900 Cor Therapeutics, Inc. (a)(b) 3,148,031
48,300 Corixa Corp. (a) 2,073,881
18,100 Gilead Sciences, Inc. (a) 1,287,363
15,460 Human Genome Sciences, Inc. (a) 2,061,978
30,400 IDEC Pharmaceuticals Corp. (a)(b) 3,566,300
11,100 ImClone Systems Inc. (a)(b) 848,456
8,810 Incyte Genomics, Inc. (a)(b) 724,072
21,500 Millennium Pharmaceuticals, Inc. (a) 2,405,312
15,000 Protein Design Labs, Inc. (a) 2,474,297
--------------------------------------------------------------------------------
24,874,497
--------------------------------------------------------------------------------
Broadcasters - Radio-- 0.6%
69,600 Westwood One, Inc. (a) 2,375,100
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See Notes to Financial Statements.
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8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Building Materials -- 0.9%
52,400 Centex Construction Products, Inc. $ 1,188,825
42,100 Simpson Manufacturing Co., Inc. (a) 2,012,906
--------------------------------------------------------------------------------
3,201,731
--------------------------------------------------------------------------------
Chemicals -- 2.3%
77,200 Crompton Corp. 945,700
56,200 Cytec Industries Inc. (a) 1,387,438
50,900 The Dexter Corp. 2,443,200
77,200 Ferro Corp. 1,621,200
53,700 OM Group, Inc. 2,362,800
--------------------------------------------------------------------------------
8,760,338
--------------------------------------------------------------------------------
Computers and Peripherals -- 1.9%
27,000 Emulex Corp. (a) 1,773,563
31,800 Integrated Device Technology, Inc. (a)(b) 1,904,025
40,700 RadiSys Corp. (a) 2,309,725
18,500 SanDisk Corp. (a) 1,131,969
--------------------------------------------------------------------------------
7,119,282
--------------------------------------------------------------------------------
Computer Products and Technologies -- 1.7%
13,900 Cognex Corp. (a) 719,325
61,600 National Computer Systems, Inc. 3,033,800
22,000 Plexus Corp. (a) 2,486,000
--------------------------------------------------------------------------------
6,239,125
--------------------------------------------------------------------------------
Computer Services -- 0.6%
38,700 iGATE Capital Corp. (a) 532,125
118,200 Sensormatic Electronics Corp. (a) 1,869,037
--------------------------------------------------------------------------------
2,401,162
--------------------------------------------------------------------------------
Containers -- 1.0%
68,600 AptarGroup, Inc. 1,852,200
177,300 Ivex Packaging Corp. (a) 1,972,462
--------------------------------------------------------------------------------
3,824,662
--------------------------------------------------------------------------------
Contract Manufacturers -- 0.8%
35,840 Sanmina Corp. (a)(b) 3,064,320
--------------------------------------------------------------------------------
Diversified -- 0.8%
44,600 PerkinElmer, Inc. 2,949,175
--------------------------------------------------------------------------------
Drugs-- 2.8%
35,400 Alkermes, Inc. (a) 1,668,225
42,300 Alpharma Inc., Class A Shares 2,633,175
22,700 Celgene Corp. (a)(b) 1,336,463
42,988 King Pharmaceuticals, Inc. (a)(b) 1,886,099
53,150 Medicis Pharmaceutical Corp., Class A Shares (a 3,029,550
--------------------------------------------------------------------------------
10,553,512
--------------------------------------------------------------------------------
Electrical Equipment-- 0.9%
58,600 C&D Technologies, Inc. 3,310,900
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Engineering and Construction -- 0.5%
58,900 Jacobs Engineering Group Inc. $ 1,925,294
--------------------------------------------------------------------------------
Exploration and Production -- 1.7%
67,000 Barrett Resources Corp. (a) 2,039,313
69,700 Newfield Exploration Co. (a) 2,727,013
57,900 Swift Energy Co. (a) 1,642,912
--------------------------------------------------------------------------------
6,409,238
--------------------------------------------------------------------------------
Financial Services -- 2.1%
80,400 Enhance Financial Services Group Inc. 1,155,750
34,500 Financial Security Assurance Holdings Ltd. 2,617,687
78,000 The First American Corp. 1,116,375
100,900 Medallion Financial Corp. 1,557,644
31,200 Radian Group Inc. 1,614,600
--------------------------------------------------------------------------------
8,062,056
--------------------------------------------------------------------------------
Food -- 0.6%
120,900 The Earthgrains Co. 2,349,994
--------------------------------------------------------------------------------
Freight Shipping -- 0.6%
69,300 EGL, Inc. (a) 2,130,975
--------------------------------------------------------------------------------
Gaming -- 0.7%
171,000 Aztar Corp. (a) 2,650,50
--------------------------------------------------------------------------------
Healthcare Services -- 0.4%
14,200 Laboratory Corporation of America Holdings (a) 1,095,175
69,900 Res-Care, Inc. (a) 375,712
--------------------------------------------------------------------------------
1,470,887
--------------------------------------------------------------------------------
Healthcare Therapy -- 0.3%
53,500 Renal Care Group, Inc. (a) 1,308,242
--------------------------------------------------------------------------------
Home Furnishings -- 0.8%
61,650 Cost Plus, Inc. (a) 1,768,584
124,800 Haverty Furniture Companies, Inc. 1,060,800
--------------------------------------------------------------------------------
2,829,384
--------------------------------------------------------------------------------
Homebuilding -- 1.1%
46,900 Centex Corp. 1,102,150
101,000 D.R. Horton, Inc. 1,369,813
83,200 Lennar Corp. 1,684,800
--------------------------------------------------------------------------------
4,156,763
--------------------------------------------------------------------------------
Household Equipment -- 0.7%
59,700 Fossil, Inc. (a) 1,160,419
14,800 Technitrol, Inc. 1,433,750
--------------------------------------------------------------------------------
2,594,169
--------------------------------------------------------------------------------
Household Products and Cosmetics-- 0.4%
27,100 Alberto-Culver Co., Class B Shares 828,244
68,900 Oakley, Inc. (a) 792,350
--------------------------------------------------------------------------------
1,620,594
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Insurance -- 1.5%
44,500 Everest Re Group, Ltd. $ 1,462,938
103,570 Fidelity National Financial, Inc. 1,896,626
97,700 HCC Insurance Holdings, Inc. 1,844,087
47,933 Medical Assurance, Inc. (a) 539,246
--------------------------------------------------------------------------------
5,742,897
--------------------------------------------------------------------------------
Internet -- 1.7%
46,200 AppliedTheory Corp. (a) 693,000
60,200 Ask Jeeves, Inc. (a) 1,087,363
145,000 Juno Online Services, Inc. (a) 1,558,750
43,800 Open Market, Inc. (a) 604,987
35,600 Rare Medium Group, Inc. (a) 562,925
58,200 StarMedia Network, Inc. (a) 1,098,525
24,400 VerticalNet, Inc. (a)(b) 901,275
--------------------------------------------------------------------------------
6,506,825
--------------------------------------------------------------------------------
Investment Management Companies -- 0.6%
46,500 Eaton Vance Corp. 2,150,625
--------------------------------------------------------------------------------
Leisure -- 1.0%
74,700 Boca Resorts, Inc. (a) 737,663
31,600 Harman International Industries, Inc. 1,927,600
45,400 Speedway Motorsports, Inc. (a) 1,044,200
--------------------------------------------------------------------------------
3,709,463
--------------------------------------------------------------------------------
Long Distance Telephone Carriers -- 0.8%
61,000 ITC DeltaCom, Inc. (a) 1,361,062
60,900 Primus Telecommunications Group, Inc. (a) 1,514,888
--------------------------------------------------------------------------------
2,875,950
--------------------------------------------------------------------------------
Machinery -- 1.7%
77,000 AMETEK, Inc. 1,347,500
60,900 Astec Industries, Inc. (a) 1,545,338
29,800 The Manitowoc Co., Inc. 797,150
48,300 Mettler-Toledo International Inc. (a) 1,932,000
67,000 Terex Corp. (a) 946,375
--------------------------------------------------------------------------------
6,568,363
--------------------------------------------------------------------------------
Medical Devices -- 1.4%
61,000 CONMED Corp. (a) 1,578,375
66,500 Datascope Corp. 2,394,000
53,100 ResMed Inc. (a)(b) 1,420,425
--------------------------------------------------------------------------------
5,392,800
--------------------------------------------------------------------------------
Medical Services Distribution -- 1.8%
94,800 AmeriSource Health Corp., Class A Shares (a) 2,938,800
62,100 Bindley Western Industries, Inc. 1,641,769
31,299 Priority Healthcare Corp., Class B Shares (a) 2,325,907
--------------------------------------------------------------------------------
6,906,476
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Metals -- 1.0%
229,900 Metals USA, Inc. $ 1,077,656
76,500 Reliance Steel & Aluminum Co. 1,463,062
97,200 Tower Automotive, Inc. (a) 1,215,000
--------------------------------------------------------------------------------
3,755,718
--------------------------------------------------------------------------------
Newspapers -- 0.4%
46,800 The McClatchy Co., Class A Shares 1,550,250
--------------------------------------------------------------------------------
Networking -- 1.2%
48,800 Apex Inc. (a) 2,135,000
47,200 Xircom, Inc. (a) 2,242,000
--------------------------------------------------------------------------------
4,377,000
--------------------------------------------------------------------------------
Oil Wells and Drilling Equipment -- 1.6%
46,700 Cal Dive International, Inc. (a) 2,530,556
144,800 Friede Goldman Halter, Inc. (a) 1,294,150
78,000 Marine Drilling Cos., Inc. (a) 2,184,000
--------------------------------------------------------------------------------
6,008,706
--------------------------------------------------------------------------------
Paper and Forest Products -- 0.5%
56,000 Potlatch Corp. (b) 1,855,000
--------------------------------------------------------------------------------
Physician Practice Management -- 0.5%
300,200 Caremark Rx, Inc. (a) 2,045,112
--------------------------------------------------------------------------------
Publishing -- 1.2%
71,800 ADVO, Inc. 3,015,600
10,000 Forrester Research, Inc. (a) 728,125
96,700 Mail-Well, Inc. (a) 834,037
--------------------------------------------------------------------------------
4,577,762
--------------------------------------------------------------------------------
Railroad Equipment -- 0.1%
47,511 Wabtec Corp. 492,927
--------------------------------------------------------------------------------
Real Estate -- 4.9%
29,000 Castle & Cooke, Inc. (a) 560,063
2,900 Catellus Development Corp. (a) 43,500
38,200 Cousins Properties, Inc. 1,470,700
126,100 Equity Inns Inc. 772,362
51,300 First Industrial Realty Trust, Inc. 1,513,350
64,500 General Growth Properties, Inc. 2,047,875
35,600 Health Care Property Investors, Inc. 970,100
38,500 IndyMac Bancorp, Inc. (a) 522,156
83,400 Liberty Property Trust 2,163,187
41,500 Mid-America Apartment Communities, Inc. 996,000
34,800 NVR, Inc. (a) 1,983,600
64,900 Parkway Properties, Inc. 1,979,450
89,930 Reckson Associates Realty Corp. 2,135,837
49,300 Regency Realty Corp. 1,170,875
--------------------------------------------------------------------------------
18,329,055
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Regional Telephone Carriers -- 1.5%
31,600 Commonwealth Telephone Enterprises, Inc. $ 1,487,175
67,550 CTC Communications Group, Inc. (a) 2,431,800
51,500 Intermedia Communications Inc. (a)(b) 1,532,125
--------------------------------------------------------------------------------
5,451,100
--------------------------------------------------------------------------------
Restaurants -- 1.6%
77,187 Jack in the Box Inc. (a) 1,900,730
180,200 Lone Star Steakhouse & Saloon, Inc. (a) 1,824,525
81,950 Sonic Corp. (a) 2,407,281
--------------------------------------------------------------------------------
6,132,536
--------------------------------------------------------------------------------
Retail - Food -- 0.5%
55,800 Hain Celestial Group, Inc. (a) 2,047,162
--------------------------------------------------------------------------------
Retail - Department Stores -- 0.1%
59,000 Ames Department Stores, Inc. (a) 457,250
--------------------------------------------------------------------------------
Retail - Office Supplies -- 0.5%
56,400 United Stationers Inc. 1,825,950
--------------------------------------------------------------------------------
Retail - Specialty -- 2.7%
60,000 AnnTaylor Stores Corp. (a) 1,987,500
65,700 Bebe Stores, Inc. (a)(b) 550,238
102,000 Burlington Coat Factory Warehouse Corp. 1,102,875
104,900 The Cato Corp., Class A Shares 1,219,463
73,500 Chico's FAS, Inc. (a)(b) 1,470,000
48,300 Linens 'n Things, Inc. (a) 1,310,137
63,880 The Men's Wearhouse, Inc. (a) 1,425,322
82,500 Trans World Entertainment Corp. (a) 1,000,312
--------------------------------------------------------------------------------
10,065,847
--------------------------------------------------------------------------------
Savings and Loan -- 0.8%
26,100 Astoria Financial Corp. 672,075
58,900 Dime Bancorp Inc. 927,675
71,900 Firstfed Financial Corp. 1,015,587
14,100 S1 Corp. (a) 328,706
--------------------------------------------------------------------------------
2,944,043
--------------------------------------------------------------------------------
Securis Brokerage and Services -- 0.9%
71,900 Affiliated Managers Group, Inc. (a) 3,271,450
--------------------------------------------------------------------------------
Semiconductors -- 3.2%
55,000 Alpha Industries, Inc. 2,423,438
77,453 Lam Research Corp. (a)(b) 2,904,487
49,300 Lattice Semiconductor Corp. (a)(b) 3,407,862
50,000 Micrel, Inc. (a)(b) 2,171,875
18,800 MRV Communications, Inc. (a)(b) 1,264,300
--------------------------------------------------------------------------------
12,171,962
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Semiconductor - Equipment Manufacturing -- 3.5%
36,400 Amkor Technology, Inc. (a) $ 1,285,375
37,700 Brooks Automation, Inc. (a) 2,410,444
9,400 Cree, Inc. (a)(b) 1,254,900
38,800 Cypress Semiconductor Corp. (a)(b) 1,639,300
24,400 DuPont Photomasks, Inc. (a) 1,671,400
30,000 Kulicke and Soffa Industries, Inc. (a)(b) 1,781,250
39,350 TranSwitch Corp. (a) 3,037,328
--------------------------------------------------------------------------------
13,079,997
--------------------------------------------------------------------------------
Services - Business -- 1.2%
49,300 ACNielsen Corp. (a) 1,084,600
66,500 Complete Business Solutions, Inc. (a) 1,167,906
21,400 F.Y.I. Inc. (a) 720,912
28,500 StarTek, Inc. (a) 1,435,688
--------------------------------------------------------------------------------
4,409,106
--------------------------------------------------------------------------------
Services - Consumer -- 0.8%
75,900 Education Management Corp. (a) 1,370,944
65,600 Rent-A-Center, Inc. (a) 1,476,000
--------------------------------------------------------------------------------
2,846,944
--------------------------------------------------------------------------------
Services - Employment -- 1.0%
102,000 Interim Services, Inc. (a) 1,810,500
62,300 On Assignment, Inc. (a) 1,900,150
--------------------------------------------------------------------------------
3,710,650
--------------------------------------------------------------------------------
Shoes -- 0.2%
47,500 Reebok International Ltd. (a) 757,031
--------------------------------------------------------------------------------
Software -- 7.4%
38,800 Advent Software, Inc. (a) 2,502,600
24,000 Allaire Corp. (a) 882,000
49,100 Answerthink Inc. (a) 816,287
125,100 AVT Corp. (a) 922,613
78,800 AXENT Technologies, Inc. (a) 1,955,225
122,500 Datastream Systems, Inc. (a) 1,531,250
84,250 Dendrite International, Inc. (a) 2,806,578
129,500 Informix Corp. (a) 963,156
23,500 ISS Group Inc. (a)(b) 2,320,258
92,200 JDA Software Group, Inc. (a) 1,769,088
20,000 Mercury Interactive Corp. (a) 1,935,000
7,900 Micromuse Inc. (a) 1,307,326
29,700 MicroStrategy Inc. (a)(b) 891,000
103,300 Progress Software Corp. (a) 1,852,944
41,400 Remedy Corp. (a) 2,308,050
11,700 TriQuint Semiconductor, Inc. (a)(b) 1,119,544
53,100 Wind River Systems, Inc. (a) 2,011,162
--------------------------------------------------------------------------------
27,894,081
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Steel -- 0.2%
105,600 AK Steel Holding Corp. $ 844,800
--------------------------------------------------------------------------------
Telecommunications Equipment -- 4.8%
62,900 Advanced Fibre Communications, Inc. (a) 2,850,156
34,600 ANTEC Corp. (a) 1,438,063
42,100 Aspect Communications Corp. (a)(b) 1,655,056
30,100 Carrier Access Corp. (a) 1,591,538
44,500 C-Cube Microsystems Inc. (a) 873,313
31,600 Digital Microwave Corp. (a) 1,204,750
41,850 Dycom Industries, Inc. (a) 1,925,100
46,650 MasTec, Inc. (a) 1,781,447
28,800 Polycom, Inc. (a) 2,709,900
11,200 Terayon Communication Systems, Inc. (a) 719,425
92,700 Westell Technologies, Inc., Class A Shares (a) 1,390,500
--------------------------------------------------------------------------------
18,139,248
--------------------------------------------------------------------------------
Textiles - Apparel Manufacturers -- 0.3%
51,450 Pacific Sunwear of California, Inc. (a) 964,687
--------------------------------------------------------------------------------
Transportation -- 0.3%
69,200 Airborne Freight Corp. 1,310,475
--------------------------------------------------------------------------------
Trucks and Parts -- 0.3%
36,400 Cummins Engine Co., Inc. 991,900
--------------------------------------------------------------------------------
Trucking -- 0.4%
2,900 Landstar System, Inc. (a) 172,731
46,800 USFrieghtways Corp. 1,149,525
--------------------------------------------------------------------------------
1,322,256
--------------------------------------------------------------------------------
Utilities - Electrical -- 2.2%
220,180 El Paso Electric Co. 2,463,264
10,553 Energy East Corp. 201,167
58,600 IDACORP, Inc. 1,889,850
80,400 MDU Resources Group, Inc. 1,738,650
80,900 NorthWestern Corp. 1,870,812
--------------------------------------------------------------------------------
8,163,743
--------------------------------------------------------------------------------
Utilities - Gas Distribution -- 1.1%
41,500 New Jersey Resources Corp. 1,579,594
56,000 Southwest Gas Corp. 980,000
67,900 UGI Corp. 1,391,950
--------------------------------------------------------------------------------
3,951,544
--------------------------------------------------------------------------------
Utilities - Telecommunications Equipment -- 0.3%
47,650 Harmonic Inc. (a) 1,179,337
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $354,531,025) 360,006,521
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
U.S. TREASURY BILL -- 0.4%
$ 1,515,000 U.S. Treasury Bill, due 9/14/00 (c)
(Cost -- $1,497,199) $ 1,497,673
================================================================================
REPURCHASE AGREEMENT -- 3.9%
14,557,000 J.P. Morgan & Co., Inc., 6.500% due 7/3/00;
Proceeds at maturity -- $14,564,885;
(Fully collateralized by U.S. Treasury Bonds and
Notes, 3.375% to 7.875% due 7/15/02 to 2/15/21;
Market value -- $14,848,147) (Cost -- $14,557,000) 14,557,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $370,585,224*) $376,061,194
================================================================================
(a) Non-income producing security.
(b) All or a portion of the security is on loan (See Note 7).
(c) Security is segregated by the custodian for futures contracts commitments.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost -- $370,585,224) $376,061,194
Cash 978
Collateral for securities on loan (Note 7) 59,287,061
Receivable for securities sold 10,506,918
Receivable for Fund shares sold 1,243,691
Dividends and interest receivable 240,686
Receivable from broker - variation margin 250,025
-----------------------------------------------------------------------------------------------------
Total Assets 447,590,553
-----------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 7) 59,287,061
Payable for securities purchased 14,842,278
Investment advisory fees payable 203,684
Administration fees payable 31,725
Distribution fees payable 19,443
Accrued expenses 82,888
-----------------------------------------------------------------------------------------------------
Total Liabilities 74,467,079
-----------------------------------------------------------------------------------------------------
Total Net Assets $373,123,474
=====================================================================================================
NET ASSETS:
Par value of capital shares $ 26,445
Capital paid in excess of par value 343,521,007
Undistributed net investment income 899,434
Accumulated net realized gain from security transactions and futures contracts 23,606,375
Net unrealized appreciation of investments and futures contracts 5,070,213
-----------------------------------------------------------------------------------------------------
Total Net Assets $373,123,474
=====================================================================================================
Shares Outstanding:
Class A 3,126,491
------------------------------------------------------------------------------------------------
Class B 2,184,953
------------------------------------------------------------------------------------------------
Class L 1,219,105
------------------------------------------------------------------------------------------------
Class Y 19,914,040
------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 14.06
------------------------------------------------------------------------------------------------
Class B * $ 13.65
------------------------------------------------------------------------------------------------
Class L ** $ 13.64
------------------------------------------------------------------------------------------------
Class Y (and redemption price) $ 14.20
------------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $ 14.80
------------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $ 13.78
=====================================================================================================
</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 Small Cap Blend Fund, Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended June 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 1,554,987
Interest 773,328
Less: Foreign withholding tax (1,660)
--------------------------------------------------------------------------------
Total Investment Income 2,326,655
--------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 1,181,997
Distribution fees (Note 2) 281,069
Administration fees (Note 2) 181,846
Registration fees 56,831
Shareholder and system servicing fees 48,465
Audit and legal 20,545
Shareholder communications 19,593
Custody 12,466
Directors' fees 1,337
Other 5,876
--------------------------------------------------------------------------------
Total Expenses 1,810,025
--------------------------------------------------------------------------------
Net Investment Income 516,630
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 5):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) 27,096,909
Futures contracts (401,587)
--------------------------------------------------------------------------------
Net Realized Gain 26,695,322
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments and
Futures Contracts:
Beginning of period 19,169,449
End of period 5,070,213
--------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (14,099,236)
--------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 12,596,086
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 13,112,716
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 2000 (unaudited)
and the Year Ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
=====================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 516,630 $ 1,079,990
Net realized gain 26,695,322 65,293,020
Decrease in net unrealized appreciation (14,099,236) (4,324,590)
-----------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 13,112,716 62,048,420
-----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (649,805)
Net realized gains (17,607,845) (37,772,099)
-----------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (17,607,845) (38,421,904)
-----------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 147,229,618 182,774,760
Net asset value of shares issued for reinvestment of dividends 3,437,519 7,478,235
Cost of shares reacquired (116,741,550) (151,098,520)
-----------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 33,925,587 39,154,475
-----------------------------------------------------------------------------------------------------
Increase in Net Assets 29,430,458 62,780,991
NET ASSETS:
Beginning of period 343,693,016 280,912,025
-----------------------------------------------------------------------------------------------------
End of period* $ 373,123,474 $ 343,693,016
=====================================================================================================
* Includes undistributed net investment income of: $ 899,434 $ 382,804
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Small Cap Blend Fund, Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
a national securities exchange or on the Nasdaq National Market System are
valued at closing prices on such exchange or market; securities for which no
sales prices are reported are valued at the mean between the most recently
quoted bid and ask 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 Directors; (d) securities maturing within 60 days or less 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 the accrual basis; (f) dividends and
distributions to shareholders are recorded on the ex-dividend date; (g) gains or
losses on the sale of securities are calculated by using the specific
identification method; (h) direct expenses are charged to each class; management
fees and general fund expenses are allocated on the basis of relative net
assets; (i) 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; (j) the character of
income and gains distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
December 31, 1999, 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 (k) 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. Management Agreement and Transactions with Affiliated Persons
Travelers Investment Management Company ("TIMCO"), a subsidiary of Salomon Smith
Barney Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment manager to the Fund. The Fund pays TIMCO a fee
calculated at the annual rate of 0.65% of the Fund's average daily net assets.
This fee is calculated daily and paid monthly.
SSB Citi Fund Management LLC ("SSBC"), another subsidiary of SSBH, acts as the
Fund's administrator. As compensation for its services, the Fund pays SSBC a fee
calculated at the annual rate of 0.10% of the Fund's 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 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 recordkeeping and
financial processing for all shareholder accounts and is paid by CFTC. During
the six months ended June 30, 2000, the Fund paid transfer agent fees of $40,982
to CFTC.
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
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 June 30, 2000,
SSB and its affiliates received brokerage commissions of $1,785.
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 shares are being sold at net asset value plus a maximum initial 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 June 30, 2000, SSB and CFBDS received sales charges of
approximately $73,000 and $38,000 on sales of the Fund's Class A and Class L
shares, respectively. In addition, CDSCs paid to SSB were approximately:
Class B Class L
================================================================================
CDSCs $36,000 $ 3,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class. In addition, the Fund also pays a
distribution fee with respect to Class B and L shares calculated at the annual
rate of 0.75% of the average daily net assets of each class.
For the six months ended June 30, 2000, total Distribution Plan fees were as
follows:
Class A Class B Class L
================================================================================
Distribution Plan Fees $ 57,277 $145,983 $ 77,809
================================================================================
All officers and one director of the Fund are employees of SSB.
3. Investments
For the six months ended June 30, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $153,303,879
--------------------------------------------------------------------------------
Sales 133,086,695
================================================================================
At June 30, 2000, aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 57,592,563
Gross unrealized depreciation (52,116,593)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 5,475,970
================================================================================
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 daily maintenance of
the market value of the collateral in amounts at least equal to the repurchase
price.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
5. 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 contract. 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 received or made and recognized as assets due from or
liabilities due to the 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
transaction 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 June 30, 2000, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
# of Basis Market Unrealized
Purchased Contracts Contracts Expiration Value Value Loss
==============================================================================================
<S> <C> <C> <C> <C> <C>
Russell 2000 73 9/00 $19,480,657 $19,074,900 $(405,757)
==============================================================================================
</TABLE>
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 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 June 30, 2000, the Fund had no open purchased 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 securities loaned, 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.
--------------------------------------------------------------------------------
22 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
At June 30, 2000, the Fund loaned common stocks having a value of $57,702,784
and holds the following collateral for loaned securities:
Security Description Value
================================================================================
Time Deposits:
Banco Bilboa, 7.13% due 7/3/00 $16,826,163
Bank of Brussels, 7.13% due 7/3/00 849,610
CAISSE des Depo, 7.06% due 7/3/00 8,352,897
CAISSE des Cons, 6.94% due 7/3/00 16,826,163
Credit Suisse, 7.13% due 7/3/00 49,915
Credit Suisse, 7.16% due 7/3/00 4,374,802
San Paolo, 7.00% due 7/3/00 8,413,082
Certificates of Deposit:
Comerica Bank, 5.86% due 2/14/01 383,396
Floating Rate Notes:
Bank One, 6.68% due 7/2/01 1,411,944
Goldman, Sachs & Co., 5.28% due 8/23/00 1,799,089
--------------------------------------------------------------------------------
Total $59,287,061
================================================================================
For the six months ended June 30, 2000, interest income earned by the Fund from
securities lending was $119,992.
8. Capital Shares
At June 30, 2000, the Fund had 400 million shares of capital stock 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 in the
Fund and has the same rights, except that each class bears certain expenses
specifically related to the distribution of its shares.
At June 30, 2000, total paid-in capital amounted to the following for each
class:
Class A Class B Class L Class Y
================================================================================
Total Paid-in Capital $ 32,850,676 $ 30,324,976 $ 16,280,123 $264,091,677
================================================================================
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------------------------ -------------------------------
Shares Amount Shares Amount
=============================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 7,499,251 $ 108,266,393 9,105,221 $ 126,323,039
Shares issued on reinvestment 94,932 1,331,902 223,589 2,946,905
Shares reacquired (7,390,027) (106,886,944) (9,608,982) (133,273,922)
-------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 204,156 $ 2,711,351 (280,172) $ (4,003,978)
=============================================================================================================
Class B
Shares sold 292,372 $ 4,159,728 715,813 $ 9,567,489
Shares issued on reinvestment 98,302 1,339,861 234,980 3,024,197
Shares reacquired (271,261) (3,837,297) (683,740) (9,004,356)
-------------------------------------------------------------------------------------------------------------
Net Increase 119,413 $ 1,662,292 267,053 $ 3,587,330
=============================================================================================================
Class L
Shares sold 521,381 $ 7,369,652 1,056,665 $ 14,118,611
Shares issued on reinvestment 56,222 765,756 117,104 1,507,133
Shares reacquired (413,792) (5,878,964) (661,100) (8,820,242)
-------------------------------------------------------------------------------------------------------------
Net Increase 163,811 $ 2,256,444 512,669 $ 6,805,502
=============================================================================================================
Class Y
Shares sold 1,926,940 $ 27,433,845 2,435,314 $ 32,765,621
Shares reacquired (9,354) (138,345) -- --
-------------------------------------------------------------------------------------------------------------
Net Increase 1,917,586 $ 27,295,500 2,435,314 $ 32,765,621
=============================================================================================================
</TABLE>
--------------------------------------------------------------------------------
24 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares(1) 2000(2)(3) 1999(3) 1998(3) 1997 1996 1995
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.26 $13.35 $13.68 $12.30 $12.15 $11.78
-------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.01 0.02 0.00* 0.04 0.05 0.11
Net realized and unrealized gain (loss) 0.46 2.65 (0.17)** 3.23 2.14 2.31
-------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.47 2.67 (0.17) 3.27 2.19 2.42
-------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.08) -- (0.04) (0.04) (0.11)
Net realized gains (0.67) (1.68) (0.16) (1.98) (2.00) (1.94)
-------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.67) (1.76) (0.16) (2.02) (2.04) (2.05)
-------------------------------------------------------------------------------------------------------------------------
Redemption Fee(4) -- -- -- 0.13 -- --
-------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.06 $14.26 $13.35 $13.68 $12.30 $12.15
-------------------------------------------------------------------------------------------------------------------------
Total Return 3.31%++ 21.09% (1.31)% 28.25% 20.56% 18.90%
-------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $43,946 $41,669 $42,747 $46,036 $52,911 $52,546
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.17%+ 1.23% 1.33% 1.21% 1.21% 1.22%
Net investment income 0.11+ 0.13 0.03 0.24 0.43 0.84
-------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 104% 129% 140% 151% 177%
=========================================================================================================================
</TABLE>
(1) The Fund operated as a closed-end investment company until June 23, 1997.
As of that date all existing shares were converted to Class A shares.
Closed-end funds are not subject to the same legal requirements as
open-end funds, especially with respect to liquidity requirements. The
total returns noted for each year may have been different if the Fund had
been an open-end fund from inception. The Fund's total returns while it
was a closed-end fund are based on net asset value.
(2) For the six months ended June 30, 2000 (unaudited).
(3) Per share amounts have been calculated using the monthly average shares
method.
(4) Amount relates to a redemption fee which was in effect through December
31, 1997.
* Amount represents less than $0.01 per share.
** The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 25
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31, except where noted:
<TABLE>
<CAPTION>
Class B Shares 2000(1)(2) 1999(2) 1998(2) 1997(3)
================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.92 $13.09 $13.52 $13.34
------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.05) (0.09) (0.09) (0.01)
Net realized and unrealized gain (loss) 0.45 2.60 (0.18)* 2.18
------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.40 2.51 (0.27) 2.17
------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- -- (0.01)
Net realized gains (0.67) (1.68) (0.16) (1.98)
------------------------------------------------------------------------------------------------
Total Distributions (0.67) (1.68) (0.16) (1.99)
------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.65 $13.92 $13.09 $13.52
------------------------------------------------------------------------------------------------
Total Return 2.89%++ 20.21% (2.07)% 16.73%++
------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $29,816 $28,746 $23,551 $12,685
------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.97%+ 2.04% 2.10% 1.99%+
Net investment loss (0.69)+ (0.66) (0.72) (0.26)+
------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 104% 129% 140%
================================================================================================
</TABLE>
(1) For the six months ended June 30, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from June 25, 1997 (inception date) to December 31, 1997.
* The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
26 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares 2000(1)(2) 1999(2) 1998(2)(3) 1997(4)
=============================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.91 $13.09 $13.51 $13.24
---------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.05) (0.08) (0.10) (0.01)
Net realized and unrealized gain (loss) 0.45 2.58 (0.16)* 2.27
---------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.40 2.50 (0.26) 2.26
---------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- -- (0.01)
Net realized gains (0.67) (1.68) (0.16) (1.98)
---------------------------------------------------------------------------------------------
Total Distributions (0.67) (1.68) (0.16) (1.99)
---------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.64 $13.91 $13.09 $13.51
---------------------------------------------------------------------------------------------
Total Return 2.89%++ 20.12% (1.99)% 17.53%++
---------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $16,634 $14,684 $7,101 $2,974
---------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.95%+ 2.01% 2.13% 2.00%+
Net investment loss (0.67)+ (0.61) (0.74) (0.26)+
---------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 104% 129% 140%
=============================================================================================
</TABLE>
(1) For the six months ended June 30, 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.
(4) For the period from June 24, 1997 (inception date) to December 31, 1997.
* The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Smith Barney Small Cap Blend Fund, Inc. 27
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31, except where noted:
<TABLE>
<CAPTION>
Class Y Shares 2000(1)(2) 1999(2) 1998(2) 1997(3)
=====================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.37 $13.34 $13.63 $13.87
-----------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.03 0.08 0.06 0.01
Net realized and unrealized gain (loss) 0.47 2.66 (0.16)* (0.21)
-----------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.50 2.74 (0.10) (0.20)
-----------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.03) (0.03) (0.04)
Net realized gains (0.67) (1.68) (0.16) --
-----------------------------------------------------------------------------------------------------
Total Distributions (0.67) (1.71) (0.19) (0.04)
-----------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.20 $14.37 $13.34 $13.63
-----------------------------------------------------------------------------------------------------
Total Return 3.49%++ 21.55% (0.80)% (1.42)%++
-----------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $282,727 $258,594 $207,513 $104,503
-----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.81%+ 0.82% 0.94% 1.11%+
Net investment income 0.47+ 0.56 0.44 0.58+
-----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 104% 129% 140%
=====================================================================================================
</TABLE>
(1) For the six months ended June 30, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from October 17, 1997 (inception date) to December 31,
1997.
* The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
28 2000 Semi-Annual Report to Shareholders
<PAGE>
Smith Barney
Small Cap Blend
Fund, Inc.
Directors
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
Joseph H. Fleiss, Emeritus
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Sandip A. Bhagat, CFA
Vice President
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Manager
Travelers Investment Management Company
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 the shareholders of
Smith Barney Small Cap Blend Fund, Inc., 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 September 30, 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
Small Cap Blend Fund, Inc.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD01319 8/00
