N-30B-2 Part 1 of 2
SALOMON BROTHERS
INVESTMENT SERIES
SEMI-ANNUAL REPORT
JUNE 30, 1995
- CASH MANAGEMENT FUND
- NEW YORK MUNICIPAL
BOND FUND
- NATIONAL INTERMEDIATE
MUNICIPAL FUND
- U.S. GOVERNMENT
INCOME FUND
- HIGH YIELD BOND FUND
- STRATEGIC BOND FUND
- INVESTORS FUND
[SALOMON BROTHERS ASSET MANAGEMENT LOGO]
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
TO OUR SHAREHOLDERS
August 1, 1995
WE ARE PLEASED to provide this semi-annual report for the period ended June 30,
1995 for the Salomon Brothers Cash Management Fund, Salomon Brothers New York
Municipal Bond Fund, Salomon Brothers National Intermediate Municipal Fund,
Salomon Brothers U.S. Government Income Fund, Salomon Brothers High Yield Bond
Fund, Salomon Brothers Strategic Bond Fund and Salomon Brothers Investors Fund
Inc. A performance review for each fund can be found on page 1.
THE FEDERAL RESERVE'S July easing of interest rates resulting from the relative
absence of inflationary pressures has renewed consumer confidence and increased
the chances of a soft landing for the current economic expansion. Barring an
unexpected shock, we believe that neither a boom nor a recession is on the
horizon.
THE POTENTIAL FOR LARGE budget cuts later this year could hamper economic
growth in the short run. However, salutary effects of a credible budget plan on
financial markets and the possibility of further Fed interest rate cuts should
outweigh any negative impact. In the past, significant budget-cutting measures
have produced substantial bond rallies. Federal Reserve Chairman Alan Greenspan
has signaled that if budget cuts harm the economy more than the likely bond
rally helps it, then monetary policy would, in effect, make up the difference.
IN THE PAST MONTH, retail sales have strengthened, home sales have surged and
employment growth has resumed. Thus, earlier concerns that a slowdown could
deteriorate into a recession have ebbed somewhat. This year's surge in stocks
and bonds has buoyed consumer confidence, and the Fed interest rate cut, though
modest, will provide direct relief for borrowers. Housing in particular has
shown encouraging signs. Sales of new homes jumped by nearly 20% in May and
continue to be strong.
U.S. GROWTH will be tempered over the next six to nine months by several
international factors: signs of slowing in European economies, continued
stagnation in Japan and weakness in America's two important neighbors--Mexico
and Canada. Prospects for world growth are dimmer than they were just a few
months ago.
WITHIN THE EQUITY MARKET, second quarter earnings are generally coming in
better than analysts' expectations. In many cases the favorable position of the
U.S. dollar has allowed U.S. companies to offset weaker domestic results with
strong international operations.
IN FIXED-INCOME PORTFOLIOS, prospects for the mortgage sector have improved and
we are adding to our position in mortgages. The outlook for corporates is
positive. Within the corporate market, we emphasized investments in bank and
financial paper. In the high-yield market, we are split roughly 50-50 between
cyclicals and non-cyclicals. Prospectively, we anticipate increasing our
cyclical exposure. In emerging markets, country selection remains an important
factor. We are primarily invested in countries outside Latin America, such as
Poland and the Philippines. We have increased our position in Mexico to reflect
the end of the financial crisis. In equities, we are concentrated in basic
industry, capital goods and financial sectors.
ALL OF US at Salomon Brothers Asset Management Inc appreciate the confidence
you have demonstrated in the past and hope to continue to justify such
confidence in the future. Please call us with any questions or to receive a
prospectus containing more complete information regarding the Funds at
1-800-SALOMON (1-800-725-6666).
Cordially,
/s/ MICHAEL S. HYLAND
MICHAEL S. HYLAND
Chairman and President
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
RECENT PERFORMANCE RESULTS*
(unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS CASH MANAGEMENT FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 01/03/95 - 06/30/95 $1.00 $1.00 -- $0.017 +1.67%
CLASS B 01/03/95 - 06/30/95 $1.00 $1.00 -- $0.016 +1.58%
CLASS C 01/03/95 - 06/30/95 $1.00 $1.00 -- $0.015 +1.55%
CLASS O 01/01/95 - 06/30/95 $1.00 $1.00 -- $0.027 +2.77%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS NEW YORK MUNICIPAL BOND FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A 01/03/95 - 06/30/95 $8.96 $9.61 -- $0.17 +9.17%
CLASS B 01/03/95 - 06/30/95 $8.96 $9.61 -- $0.15 +8.90%
CLASS C 01/03/95 - 06/30/95 $8.96 $9.61 -- $0.15 +8.90%
CLASS O 01/01/95 - 06/30/95 $8.98 $9.62 -- $0.27 +10.16%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS NATIONAL INTERMEDIATE MUNICIPAL FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 02/22/95 - 06/30/95 $10.00 $10.14 -- $0.16 +3.01%
CLASS B 02/22/95 - 06/30/95 $10.00 $10.14 -- $0.13 +2.74%
CLASS C 02/22/95 - 06/30/95 $10.00 $10.14 -- $0.13 +2.74%
CLASS O 02/22/95 - 06/30/95 $10.00 $10.14 -- $0.17 +3.10%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS U.S. GOVERNMENT INCOME FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 02/22/95 - 06/30/95 $10.00 $10.24 -- $0.21 +4.56%
CLASS B 02/22/95 - 06/30/95 $10.00 $10.24 -- $0.18 +4.29%
CLASS C 02/22/95 - 06/30/95 $10.00 $10.24 -- $0.18 +4.28%
CLASS O 02/22/95 - 06/30/95 $10.00 $10.24 -- $0.22 +4.65%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS HIGH YIELD BOND FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.36 +8.28%
CLASS B 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.33 +7.98%
CLASS C 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.33 +8.00%
CLASS O 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.37 +8.37%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS STRATEGIC BOND FUND
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.32 +7.93%
CLASS B 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.30 +7.65%
CLASS C 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.30 +7.66%
CLASS O 02/22/95 - 06/30/95 $10.00 $10.46 -- $0.33 +8.03%
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS INVESTORS FUND INC
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE AGGREGATE
------------------------ CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 01/03/95 - 06/30/95 $13.61 $15.77 $0.07 $0.06 +16.89%
CLASS B 01/03/95 - 06/30/95 $13.61 $15.74 $0.07 $0.05 +16.55%
CLASS C 01/03/95 - 06/30/95 $13.61 $15.74 $0.07 $0.05 +16.55%
CLASS O 01/01/95 - 06/30/95 $13.63 $15.78 $0.07 $0.06 +16.79%
</TABLE>
* Aggregate total return figures assume reinvestment of all dividends at net
asset value on the payable date (ex-dividend date for the Salomon Brothers
Investors Fund Inc) and capital gains distributions at net asset value on
the ex-dividend date and do not include sales charges; results for Class
A, Class B and Class C shares would be lower if sales charges were
deducted.
See accompanying notes to financial statements
PAGE 1
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS CASH MANAGEMENT FUND
---------------------------------------------------------------------------------------------------------------
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT DESCRIPTION PURCHASE* DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- 36.3%
$ 200,000 BASF . . . . . . . . . . . . . . . . . . . . . . 6.000% 07/05/95 $ 199,867
400,000 Bell South . . . . . . . . . . . . . . . . . . . 6.100 07/05/95 399,729
400,000 Cargill . . . . . . . . . . . . . . . . . . . . 6.100 07/03/95 399,864
400,000 Central Illinois . . . . . . . . . . . . . . . . 6.200 07/03/95 399,862
500,000 De Kalb County, Georgia
Development Authority . . . . . . . . . . . . 6.000 07/06/95 501,953
400,000 General Electric . . . . . . . . . . . . . . . . 5.970 07/07/95 399,602
200,000 KFW International Finance . . . . . . . . . . . 6.200 07/06/95 199,828
400,000 Methodist Hospital (Houston, Texas) . . . . . . 5.900 08/04/95 400,000
200,000 PHH . . . . . . . . . . . . . . . . . . . . . . 6.000 07/18/95 199,433
322,000 Philip Morris . . . . . . . . . . . . . . . . . 6.100 07/03/95 321,891
235,000 Unilever . . . . . . . . . . . . . . . . . . . . 6.030 07/06/95 234,803
-----------
TOTAL COMMERCIAL PAPER
(cost $3,656,832) . . . . . . . . . . . . . . 3,656,832
-----------
FLOATING RATE NOTES -- 61.2%
400,000 Community Health Systems VR . . . . . . . . . . 6.400 07/05/95 400,000
400,000 Florida Housing Finance Agency VR . . . . . . . 6.100 07/05/95 400,000
400,000 Fulton County, New York
Industrial Development Agency VR . . . . . . . 6.300 07/06/95 400,000
200,000 Genesis Health Systems VR . . . . . . . . . . . 6.200 07/05/95 200,000
400,000 Greensboro, North Carolina GO VR . . . . . . . . 6.150 07/05/95 400,000
400,000 Health Insurance Plan, Greater New York VR . . . 6.170 07/05/95 400,000
400,000 Illinois Student Assistance Commission VR . . . 6.170 07/05/95 400,000
300,000 New Jersey Economic Development
Authority VR . . . . . . . . . . . . . . . . . 6.440 07/03/95 300,000
260,000 New Jersey Economic Development
Authority VR . . . . . . . . . . . . . . . . . 6.320 07/03/95 260,000
400,000 New York, New York GO VR . . . . . . . . . . . . 6.050 07/05/95 400,000
400,000 New York, New York
Industrial Development Agency VR . . . . . . . 6.200 07/05/95 400,000
200,000 New York, New York
Industrial Development Agency VR . . . . . . . 6.200 07/05/95 200,000
400,000 Pasadena, California
Certificates of Participation VR . . . . . . . 6.000 07/05/95 400,000
400,000 Selma, Alabama
Industrial Development Board VR . . . . . . . 6.460 07/11/95 400,000
400,000 Texas State GO VR . . . . . . . . . . . . . . . 6.100 07/05/95 400,000
400,000 Tyler, Texas
Health Facilities Development VR . . . . . . . 6.400 07/05/95 400,000
400,000 Virginia State,
Housing Development Authority VR . . . . . . . 6.170 07/05/95 400,000
-----------
TOTAL FLOATING RATE NOTES
(cost $6,160,000) . . . . . . . . . . . . . . 6,160,000
-----------
</TABLE>
See accompanying notes to financial statements
PAGE 2
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS CASH MANAGEMENT FUND (concluded)
---------------------------------------------------------------------------------------------------------------
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT DESCRIPTION PURCHASE* DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT -- 1.9%
$ 187,000 Repurchase Agreement dated 06/30/95, with
Merrill Lynch, collateralized by $220,000
U.S. Treasury Strips, Zero-coupon, due
11/15/97, valued at $192,500; proceeds:
$187,094 (Cost $187,000) . . . . . . . . . . . 6.000% 07/03/95 $ 187,000
-----------
TOTAL INVESTMENTS -- 99.4%
(cost $10,003,832) . . . . . . . . . . . . . . 10,003,832
Other assets in excess of liabilities -- 0.6% . 57,850
-----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $10,061,682
===========
</TABLE>
* Yield to maturity on date of purchase, except in the case of Variable Rate
Demand Notes (VR), whose yields are determined on date of the last
interest rate change. For Variable Rate Demand Notes, maturity date shown
is the date of next interest rate change.
Abbreviation used in this statement:
GO -- General Obligation
See accompanying notes to financial statements
PAGE 3
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS NEW YORK MUNICIPAL BOND FUND
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL SECURITIES
NEW YORK -- 73.2%
$ 120,000 Metropolitan Transportation Authority New York . 5.750% 07/01/15 $ 110,507
300,000 New York City, New York GO . . . . . . . . . . . 7.375 08/15/13 321,423
300,000 New York City, New York GO . . . . . . . . . . . 6.750 10/01/17 302,208
200,000 New York City, New York
Health & Hospital Corporation . . . . . . . . 6.300 02/15/20 192,726
300,000 New York City, New York
Municipal Water Finance Authority . . . . . . 6.000 06/15/17 290,748
100,000 New York State, Dormitory Authority
(City University System of New York) . . . . . 5.750 07/01/18 92,906
315,000 New York State, Dormitory Authority
(State University Educational Facilities) . . 6.000 05/15/17 298,825
200,000 New York State GO . . . . . . . . . . . . . . . 6.000 03/15/20 200,476
250,000 New York State,
Local Government Assistance Corporation . . . 6.000 04/01/18 245,110
100,000 New York State,
Medical Care Facilities Finance Agency . . . . 6.000 02/15/11 96,649
200,000 New York State, Mortgage Agency . . . . . . . . 6.500 04/01/13 204,256
250,000 New York State, Thruway Authority . . . . . . . 6.000 04/01/10 242,597
250,000 Onondaga County, New York
Industrial Development Agency . . . . . . . . 6.625 01/01/18 242,195
-----------
2,840,626
-----------
PUERTO RICO -- 20.8%
250,000 Puerto Rico Commonwealth, GO . . . . . . . . . . 6.000 07/01/14 245,278
250,000 Puerto Rico Commonwealth,
Highway Authority . . . . . . . . . . . . . . 6.000 07/01/20 242,755
325,000 Puerto Rico, Electric Power Authority . . . . . 6.000 07/01/10 321,831
-----------
809,864
-----------
TOTAL INVESTMENTS -- 94.0%
(cost $3,686,346) . . . . . . . . . . . . . . 3,650,490
Other assets in excess of liabilities -- 6.0% . 231,403
-----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $ 3,881,893
===========
</TABLE>
Abbreviation used in this statement:
GO -- General Obligation
See accompanying notes to financial statements
PAGE 4
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS
NATIONAL INTERMEDIATE MUNICIPAL FUND
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL SECURITIES
CALIFORNIA -- 6.4%
$ 180,000 California State GO . . . . . . . . . . . . . . 6.250% 06/01/06 $ 190,962
285,000 Los Angeles, California AMBAC . . . . . . . . . 6.000 08/01/03 298,919
180,000 Los Angeles County, California
Industrial Development Authority VR . . . . . 4.400 07/03/95 180,000
-----------
669,881
-----------
CONNECTICUT -- 4.7%
500,000 Connecticut State GO . . . . . . . . . . . . . . 5.250 03/15/06 498,335
-----------
FLORIDA -- 2.4%
250,000 Florida Housing Finance Agency . . . . . . . . . 6.150 07/01/06 257,248
-----------
ILLINOIS -- 6.9%
300,000 Chicago, Illinois Metropolitan Water GO . . . . 5.900 12/01/06 310,575
400,000 Illinois Student Assistance Commission . . . . . 6.400 03/01/04 416,960
-----------
727,535
-----------
INDIANA -- 6.5%
650,000 Indiana Transportation Finance Authority . . . . 6.250 11/01/03 686,632
-----------
LOUISIANA -- 6.4%
450,000 Louisiana Public Facilities Authority . . . . . 6.750 09/01/06 468,369
200,000 Louisiana State, Offshore Terminal Authority VR 4.200 07/03/95 200,000
-----------
668,369
-----------
MASSACHUSETTS -- 4.0%
400,000 Commonwealth of Massachusetts,
Health & Educational Facilities Authority . . 6.500 12/01/05 422,604
-----------
MICHIGAN -- 4.5%
475,000 Michigan State,
Housing Development Authority FGIC . . . . . . 6.300 04/01/03 475,884
-----------
MISSISSIPPI -- 4.8%
500,000 Mississippi Higher Education . . . . . . . . . . 6.050 09/01/07 500,985
-----------
NEW JERSEY -- 4.4%
450,000 Passaic Valley, New Jersey
Sewer Commission AMBAC . . . . . . . . . . . . 5.750 12/01/07 462,155
-----------
NEW YORK -- 30.4%
450,000 New York, New York GO . . . . . . . . . . . . . 6.500 02/01/02 469,008
300,000 New York State GO . . . . . . . . . . . . . . . 6.250 08/15/04 322,404
450,000 New York State, Dormitory Authority
(City University of New York) . . . . . . . . 6.375 07/01/08 451,670
400,000 New York State, Dormitory Authority
(State University of New York) . . . . . . . . 6.625 07/01/04 427,224
500,000 New York State, Mortgage Agency . . . . . . . . 5.900 10/01/06 509,415
1,000,000 Port Authority of New York & New Jersey . . . . 5.700 08/01/05 1,019,140
-----------
3,198,861
-----------
</TABLE>
See accompanying notes to financial statements
PAGE 5
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS
NATIONAL INTERMEDIATE MUNICIPAL FUND (concluded)
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PENNSYLVANIA -- 4.0%
$ 400,000 Geisinger Authority, Pennsylvania
Health System . . . . . . . . . . . . . . . . 6.000% 07/01/01 $ 417,364
-----------
SOUTH CAROLINA -- 7.8%
750,000 South Carolina State,
Public Service Authority FGIC . . . . . . . . 6.500 01/01/05 818,265
-----------
UTAH -- 4.2%
400,000 Intermountain Power Agency of Utah AMBAC . . . . 8.375 07/01/12 436,236
-----------
TOTAL INVESTMENTS -- 97.4%
(cost $10,097,958) . . . . . . . . . . . . . . 10,240,354
Other assets in excess of liabilities -- 2.6% . 276,354
-----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $10,516,708
===========
</TABLE>
Abbreviations used in this statement:
AMBAC -- Insured as to principal and interest by the AMBAC Indemnity
Corporation.
FGIC -- Insured as to principal and interest by the Financial Guarantee
Insurance Company.
GO -- General Obligation.
VR -- Variable Rate Demand Note. Maturity date shown is the date of next
interest rate change.
See accompanying notes to financial statements
PAGE 6
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS U.S. GOVERNMENT INCOME FUND
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. TREASURY NOTES -- 43.8%
$3,200,000 U.S. Treasury Note . . . . . . . . . . . . . . . 7.125% 02/29/00 $ 3,342,496
1,200,000 U.S. Treasury Note . . . . . . . . . . . . . . . 6.250 05/31/00 1,212,744
-----------
TOTAL U.S. TREASURY NOTES
(cost $4,422,670) . . . . . . . . . . . . . . 4,555,240
-----------
U.S. GOVERNMENT AGENCY -- 33.7%
100,000 Federal Home Loan Bank . . . . . . . . . . . . . 5.940 06/13/00 98,702
400,000 Federal Home Loan Mortgage Corporation
CMO, PAC Bonds . . . . . . . . . . . . . . . . 5.250 11/15/13 388,372
1,600,000 Federal National Mortgage Association CMO,
PAC Bonds . . . . . . . . . . . . . . . . . . 6.250 03/25/18 1,583,489
1,500,000 Federal National Mortgage Association . . . . . 6.500 03/01/24 1,443,281
-----------
TOTAL U.S. GOVERNMENT AGENCY
(cost $3,500,357) . . . . . . . . . . . . . . 3,513,844
-----------
REPURCHASE AGREEMENTS -- 35.4%
1,842,000 Repurchase Agreement dated 06/30/95, with
Merrill Lynch, collateralized by $1,890,000
U.S. Treasury Notes, 5.625%, due 06/30/97,
valued at $1,883,291; proceeds: $1,842,921 . . 6.000 07/03/95 1,842,000
1,843,000 Repurchase Agreement dated 06/30/95, with
State Street Bank and Trust Company,
collateralized by $1,835,000 U.S. Treasury
Notes, 6.25%, due 08/31/96, valued at
$1,880,875; proceeds: $1,843,922 . . . . . . . 6.000 07/03/95 1,843,000
-----------
TOTAL REPURCHASE AGREEMENTS
(cost $3,685,000) . . . . . . . . . . . . . . 3,685,000
-----------
TOTAL INVESTMENTS -- 112.9%
(cost $11,608,027) . . . . . . . . . . . . . . 11,754,084
Liabilities in excess of other assets -- (12.9%) (1,344,785)
-----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $10,409,299
===========
</TABLE>
Abbreviations used in this statement:
CMO -- Collateralized Mortgage Obligation.
PAC -- Planned Amortization Class.
See accompanying notes to financial statements
PAGE 7
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS HIGH YIELD BOND FUND
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS -- 73.1%
BASIC INDUSTRIES -- 12.7%
$ 500,000 Harris Chemical (Zero Coupon until 01/15/96,
10.25% thereafter) (a) . . . . . . . . . . . . 11.110% 07/15/01 $ 453,750
500,000 International Semi-Technology (Zero Coupon
until 08/15/00, 11.50% thereafter) (a) . . . . 14.240 08/15/03 247,500
250,000 Renco Metals . . . . . . . . . . . . . . . . . . 12.000 07/15/00 256,875
500,000 Repap Wisconsin . . . . . . . . . . . . . . . . 9.875 05/01/06 483,750
250,000 Stone Container . . . . . . . . . . . . . . . . 9.875 02/01/01 247,813
250,000 Valcor . . . . . . . . . . . . . . . . . . . . . 9.625 11/01/03 228,750
-----------
1,918,438
-----------
CONSUMER CYCLICALS -- 9.6%
250,000 Cole National . . . . . . . . . . . . . . . . . 11.250 10/01/01 233,750
550,000 Finlay Fine Jewelry . . . . . . . . . . . . . . 10.625 05/01/03 525,250
250,000 Flagstar . . . . . . . . . . . . . . . . . . . . 10.750 09/15/01 235,000
500,000 Specialty Retailer . . . . . . . . . . . . . . . 11.000 08/15/03 460,000
-----------
1,454,000
-----------
CONSUMER NON-CYCLICALS -- 27.9%
250,000 Bally's Grand . . . . . . . . . . . . . . . . . 10.375 12/15/03 243,750
250,000 Berry Plastics . . . . . . . . . . . . . . . . . 12.250 04/15/04 253,750
250,000 Comcast . . . . . . . . . . . . . . . . . . . . 9.375 05/15/05 249,375
500,000 Consolidated Cigar . . . . . . . . . . . . . . . 10.500 03/01/03 497,500
250,000 Dade International . . . . . . . . . . . . . . . 13.000 02/01/05 263,750
250,000 National Medical Enterprises . . . . . . . . . . 10.125 03/01/05 264,063
250,000 Pathmark Stores . . . . . . . . . . . . . . . . 9.625 05/01/03 243,750
500,000 Penn Traffic . . . . . . . . . . . . . . . . . . 9.625 04/15/05 471,250
500,000 Ralphs Grocery . . . . . . . . . . . . . . . . . 11.000 06/15/05 481,250
250,000 Selmer . . . . . . . . . . . . . . . . . . . . . 11.000 05/15/05 243,750
250,000 Showboat . . . . . . . . . . . . . . . . . . . . 9.250 05/01/08 229,375
250,000 Telex Communications . . . . . . . . . . . . . . 12.000 07/15/04 255,000
356,912 Trump Taj Mahal . . . . . . . . . . . . . . . . 11.350 11/15/99 282,853
250,000 Williamhouse Regency . . . . . . . . . . . . . . 11.500 06/15/05 248,750
-----------
4,228,166
-----------
FINANCIAL -- 3.4%
250,000 Indah Kiat International Finance . . . . . . . . 12.500 06/15/06 252,500
250,000 Olympic Financial . . . . . . . . . . . . . . . 13.000 05/01/00 256,250
-----------
508,750
-----------
INDUSTRIAL/MANUFACTURING -- 8.6%
250,000 Foamex . . . . . . . . . . . . . . . . . . . . . 11.875 10/01/04 237,500
450,000 Jordan Industries (Zero Coupon until 08/01/98,
11.75% thereafter) (a) . . . . . . . . . . . . 14.010 08/01/05 267,750
250,000 Truck Components . . . . . . . . . . . . . . . . 12.250 06/30/01 266,250
500,000 UCAR Global Enterprises . . . . . . . . . . . . 12.000 01/15/05 540,000
-----------
1,311,500
-----------
MEDIA/TELECOMMUNICATIONS -- 9.2%
250,000 Adelphia Communications . . . . . . . . . . . . 12.500 05/15/02 248,750
400,000 In Flight Phone (Zero Coupon until 05/15/98,
14.00% thereafter) (a) . . . . . . . . . . . . 14.000 05/15/02 228,000
250,000 Katz . . . . . . . . . . . . . . . . . . . . . . 12.750 11/15/02 271,250
500,000 People's Choice TV (Zero Coupon until 06/01/00,
13.125% thereafter) (a) . . . . . . . . . . . 13.125 06/01/04 247,500
250,000 ProNet . . . . . . . . . . . . . . . . . . . . . 11.875 06/15/05 251,250
250,000 United International Holdings (a) . . . . . . . 13.890 11/15/99 142,500
-----------
1,389,250
-----------
</TABLE>
See accompanying notes to financial statements
PAGE 8
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS HIGH YIELD BOND FUND (concluded)
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION -- 1.7%
$ 250,000 Petro PSC Properties . . . . . . . . . . . . . . 12.500% 06/01/02 $ 251,250
-----------
TOTAL CORPORATE BONDS
(cost $10,971,126) . . . . . . . . . . . . . . 11,061,354
-----------
SOVEREIGN BONDS -- 13.5%
500,000 Republic of Argentina* . . . . . . . . . . . . . 7.313 03/31/05 308,125
250,000 Republic of Argentina, Par Bonds, Series L-GP . 5.000 03/31/23 119,063
891,808 Republic of Brazil, C Bond (b) . . . . . . . . . 8.000 04/15/14 441,445
250,000 Republic of Bulgaria, Discount Bonds, Series A* 7.563 07/28/24 124,688
350,000 Republic of Ecuador, Par Bonds* . . . . . . . . 3.000 02/28/25 113,750
507,378 Republic of Ecuador, PDI Bonds* (b) . . . . . . 7.250 02/28/15 169,655
500,000 Republic of Poland, PDI Bonds* . . . . . . . . . 3.250 10/27/14 300,000
350,000 Republic of Poland, Series RSTA* . . . . . . . . 2.750 10/27/24 164,935
500,000 United Mexican States, Par Bonds, Series A . . . 6.250 12/31/19 304,375
-----------
TOTAL SOVEREIGN BONDS
(cost $1,801,441) . . . . . . . . . . . . . . 2,046,036
-----------
LOAN PARTICIPATION -- 2.0%
500,000 Kingdom of Morocco, Tranche A* (c)
(Chase Manhattan Bank, N.A. and
Morgan Guaranty Trust Company)
(cost $312,253) . . . . . . . . . . . . . . . 7.375 01/01/09 294,375
-----------
<CAPTION>
SHARES
-----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCK -- 1.6%
2,573 K-III Communications, 11.625%, convertible
until 5/01/05 (cost $243,750) . . . . . . . . 244,709
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS -- 26.1%
$1,977,000 Repurchase Agreement dated 06/30/95, with
Merrill Lynch, collateralized by $2,025,000
U.S. Treasury Notes, 5.625%, due 06/30/97,
valued at $2,017,406; proceeds: $1,977,989 . . 6.000 07/03/95 1,977,000
1,978,000 Repurchase Agreement dated 06/30/95, with
State Street Bank and Trust Company,
collateralized by $1,970,000 U.S. Treasury
Notes, 6.25%, due 08/31/96, valued at
$2,019,250; proceeds: $1,978,989 . . . . . . . 6.000 07/03/95 1,978,000
-----------
TOTAL REPURCHASE AGREEMENTS
(cost $3,955,000) . . . . . . . . . . . . . . 3,955,000
-----------
TOTAL INVESTMENTS -- 116.3%
(cost $17,283,570) . . . . . . . . . . . . . . 17,601,474
Liabilities in excess of other assets -- (16.3%) (2,469,845)
----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $15,131,629
===========
</TABLE>
* Interest rate shown reflects current rate on instrument with variable rate
or step coupon rate.
(a) Zero or step coupon bond. Interest rate shown reflects yield to maturity
on date of purchase.
(b) Payment-in-kind security for which part of the interest earned is paid by
the issuance of additional bonds.
(c) Participation interest was acquired through the financial institutions
indicated parenthetically.
Abbreviation used in this statement:
PDI -- Past Due Interest.
See accompanying notes to financial statements
PAGE 9
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS STRATEGIC BOND FUND
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS -- 45.1%
BASIC INDUSTRIES -- 6.8%
$ 250,000 Renco Metals . . . . . . . . . . . . . . . . . . 12.000% 07/15/00 $ 256,875
250,000 Stone Container . . . . . . . . . . . . . . . . 9.875 02/01/01 247,813
250,000 Valcor . . . . . . . . . . . . . . . . . . . . . 9.625 11/01/03 228,750
-----------
733,438
-----------
CONSUMER CYCLICALS -- 4.2%
250,000 Cole National . . . . . . . . . . . . . . . . . 11.250 10/01/01 233,750
200,000 U.S. Leasing International . . . . . . . . . . . 8.450 01/25/05 217,198
-----------
450,948
-----------
CONSUMER NON-CYCLICALS -- 16.4%
250,000 Bally's Grand . . . . . . . . . . . . . . . . . 10.375 12/15/03 243,750
250,000 Berry Plastics . . . . . . . . . . . . . . . . . 12.250 04/15/04 253,750
250,000 Comcast . . . . . . . . . . . . . . . . . . . . 9.375 05/15/05 249,375
250,000 Dade International . . . . . . . . . . . . . . . 13.000 02/01/05 263,750
250,000 Pathmark Stores . . . . . . . . . . . . . . . . 9.625 05/01/03 243,750
250,000 Penn Traffic . . . . . . . . . . . . . . . . . . 9.625 04/15/05 235,625
356,912 Trump Taj Mahal . . . . . . . . . . . . . . . . 11.350 11/15/99 282,853
-----------
1,772,853
-----------
FINANCIAL -- 2.4%
250,000 Olympic Financial . . . . . . . . . . . . . . . 13.000 05/01/00 256,250
-----------
INDUSTRIAL/MANUFACTURING -- 9.6%
250,000 Foamex . . . . . . . . . . . . . . . . . . . . . 11.875 10/01/04 237,500
450,000 Jordan Industries (Zero Coupon until 08/01/98,
11.75% thereafter) (a) . . . . . . . . . . . . 14.010 08/01/05 267,750
250,000 Truck Components . . . . . . . . . . . . . . . . 12.250 06/30/01 266,250
250,000 UCAR Global Enterprises . . . . . . . . . . . . 12.000 01/15/05 270,000
-----------
1,041,500
-----------
MEDIA/TELECOMMUNICATIONS -- 5.7%
400,000 In Flight Phone (Zero Coupon until 05/15/98,
14.00% thereafter) (a) . . . . . . . . . . . . 14.000 05/15/02 228,000
500,000 People's Choice TV (Zero Coupon until 06/01/00,
13.125% thereafter) (a) . . . . . . . . . . . 13.125 06/01/04 247,500
250,000 United International Holdings (a) . . . . . . . 13.890 11/15/99 142,500
-----------
618,000
-----------
TOTAL CORPORATE BONDS
(cost $4,826,651) . . . . . . . . . . . . . . 4,872,989
-----------
</TABLE>
See accompanying notes to financial statements
PAGE 10
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS STRATEGIC BOND FUND (continued)
----------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SOVEREIGN BONDS -- 27.3%
$ 250,000 Republic of Argentina* . . . . . . . . . . . . 7.312% 03/31/05 $ 154,063
$ 250,000 Republic of Argentina, Par Bonds,
Series L-GP* . . . . . . . . . . . . . . . . 5.000 03/31/23 119,063
BEF 1,000,000 Kingdom of Belgium, Series 19 . . . . . . . . 6.500 03/31/05 32,641
$ 884,340 Republic of Brazil, C Bond (b) . . . . . . . . 8.000 04/15/14 441,445
$ 500,000 Republic of Bulgaria, Discount Bonds,
Series A* . . . . . . . . . . . . . . . . . 7.562 07/28/24 249,373
DKK 90,000 Kingdom of Denmark . . . . . . . . . . . . . . 9.000 11/15/98 17,285
DKK 50,000 Kingdom of Denmark . . . . . . . . . . . . . . 7.000 12/15/04 8,361
$ 850,000 Republic of Ecuador, Par Bonds* . . . . . . . 3.000 02/28/25 276,250
FRF 170,000 Government of France OAT . . . . . . . . . . . 7.500 04/25/05 34,795
FRF 300,000 Government of France Treasury . . . . . . . . 8.000 05/12/98 63,743
DEM 170,000 Government of Germany, Series 107 . . . . . . 6.375 05/20/98 125,360
DEM 240,000 Government of Germany, Series 95 . . . . . . . 6.875 05/12/05 172,812
ITL 120,000,000 Government of Italy Treasury . . . . . . . . . 9.500 01/01/05 62,160
ITL 15,000,000 Government of Italy Treasury . . . . . . . . . 9.500 12/01/97 8,715
JPY 20,600,000 Government of Japan, Series 106 . . . . . . . 4.900 03/20/98 266,276
JPY 3,050,000 Government of Japan, Series 177 . . . . . . . 4.600 03/21/05 41,007
NLG 60,000 Netherlands Government . . . . . . . . . . . . 6.250 07/15/98 39,220
NLG 20,000 Netherlands Government . . . . . . . . . . . . 7.000 06/15/05 12,874
$ 500,000 Republic of Poland, PDI Bonds* . . . . . . . . 3.250 10/27/14 300,000
$ 500,000 Republic of Poland, Series RSTA* . . . . . . . 2.750 10/27/24 235,625
ESP 7,700,000 Government of Spain . . . . . . . . . . . . . 10.000 02/28/05 57,250
GBP 26,000 United Kingdom Treasury . . . . . . . . . . . 8.500 12/07/05 41,489
GBP 25,000 United Kingdom Treasury . . . . . . . . . . . 7.250 03/30/98 39,236
$ 250,000 United Mexican States, Par Bonds,
Series A . . . . . . . . . . . . . . . . . . 6.250 12/31/19 152,188
-----------
TOTAL SOVEREIGN BONDS
(cost $2,692,081) . . . . . . . . . . . . . . 2,951,231
-----------
LOAN PARTICIPATION -- 2.7%
$ 500,000 Kingdom of Morocco, Tranche A* (c)
(Morgan Guaranty Trust Company)
(cost $312,253) . . . . . . . . . . . . . . 7.375 01/01/09 294,375
-----------
U.S. GOVERNMENT AGENCY -- 17.3%
$ 525,000 Federal National Mortgage Association
CMO, PAC Bonds . . . . . . . . . . . . . . . 6.250 03/25/18 519,582
$ 1,400,000 Federal National Mortgage Association . . . . 6.500 03/01/24 1,347,063
-----------
TOTAL U.S. GOVERNMENT AGENCY
(cost $1,867,563) . . . . . . . . . . . . . 1,866,645
-----------
</TABLE>
See accompanying notes to financial statements
PAGE 11
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS STRATEGIC BOND FUND (concluded)
---------------------------------------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT DESCRIPTION RATE DATE (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT -- 18.3%
$1,980,000 Repurchase Agreement dated 06/30/95, with
State Street Bank and Trust Company,
collateralized by $1,975,000 U.S. Treasury
Notes, 6.250%, due 08/31/95, valued at
$2,024,375; proceeds: $1,980,990
(cost $1,980,000) . . . . . . . . . . . . . . 6.000% 07/03/95 $ 1,980,000
-----------
TOTAL INVESTMENTS -- 110.7%
(cost $11,678,548) . . . . . . . . . . . . . . 11,965,240
Liabilities in excess of other assets -- (10.7%) (1,153,809)
-----------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . $10,811,431
===========
</TABLE>
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY CONTRACTS
----------------------------------------------------------------------------------------------------------------
UNREALIZED
CURRENCY TO APPRECIATION
DELIVER IN EXCHANGE FOR MATURITY DATES (DEPRECIATION)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Belgian Francs . . . . . . . . . 952,364 $ 33,068 09/22/95 $ (554)
British Pound Sterling . . . . . 52,012 82,855 09/22/95 90
Danish Krone . . . . . . . . . . 145,898 26,541 09/22/95 (453)
French Francs . . . . . . . . . . 483,987 97,730 09/22/95 (1,948)
German Deutschemarks . . . . . . 418,589 298,555 09/22/95 (5,255)
Italian Lira . . . . . . . . . . 125,983,020 75,451 07/03/95 to 09/22/95 (773)
Japanese Yen . . . . . . . . . . 26,234,327 314,184 09/22/95 940
Netherlands Guilders . . . . . . 84,713 54,026 09/22/95 (908)
Spanish Pesetas . . . . . . . . . 7,187,264 58,244 09/22/95 (683)
--------
$(9,544)
========
</TABLE>
* Interest rate shown reflects current rate on instrument with variable rate
or step coupon rate.
(a) Zero or step coupon bond. Interest rate shown reflects yield to maturity
on date of purchase.
(b) Payment-in-kind security for which part of the interest earned is paid by
the issuance of additional bonds.
(c) Participation interest was acquired through the financial institutions
indicated parenthetically.
Abbreviations used in this statement:
CMO -- Collateralized Mortgage Obligation.
PAC -- Planned Amortization Class.
PDI -- Past Due Interest.
BEF -- Belgian Franc
DEM -- German Deutschemarks
DKK -- Danish Krone
ESP -- Spanish Peseta
FRF -- French Franc
GBP -- British Pound Sterling
ITL -- Italian Lira
JPY -- Japanese Yen
NLG -- Netherlands Guilder
See accompanying notes to financial statements
PAGE 12
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS INVESTORS FUND INC
---------------------------------------------------------------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 84.3%
BASIC INDUSTRIES -- 10.0%
150,000 Avery Dennison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000
55,000 Broken Hill Proprietary -- ADR . . . . . . . . . . . . . . . . . . . . . . . . 2,715,625
9,500 Crown Cork & Seal* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476,188
43,000 Dupont (E.I.) de Nemours . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,956,250
92,200 Hercules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,494,750
247,500 Lubrizol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,755,313
60,000 OM Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,710,000
399,000 Praxair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,975,000
54,750 Rayonier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,943,625
------------
39,026,751
------------
CAPITAL GOODS -- 11.8%
200,000 Albany International, Class A . . . . . . . . . . . . . . . . . . . . . . . . 4,775,000
167,500 AlliedSignal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,453,750
88,500 Deere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,577,813
107,500 General Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,060,313
121,000 Raytheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,392,625
200,000 Tyco International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,800,000
------------
46,059,501
------------
CONSUMER CYCLICALS -- 11.7%
82,500 Centex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,330,625
85,000 Eastman Kodak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,153,125
390,000 Federated Department Stores* . . . . . . . . . . . . . . . . . . . . . . . . . 10,042,500
188,750 Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,615,313
176,000 Host Marriott* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,870,000
73,600 Lennar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,380,000
87,700 MascoTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085,288
225,000 Sears, Roebuck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,471,875
133,000 Sherwin-Williams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,738,125
------------
45,686,851
------------
CONSUMER NON-CYCLICALS -- 12.3%
290,000 Albertson's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,627,500
195,000 ConAgra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,800,625
345,000 Kroger* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,271,875
115,000 Penn Traffic* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,068,125
13,500 Philip Morris Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,004,063
550,000 Stop & Shop Companies* . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,093,750
150,000 Sysco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,425,000
------------
48,290,938
------------
ENERGY -- 12.0%
153,500 Amoco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,226,938
217,500 Chevron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,140,938
105,000 Mobil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,080,000
90,000 Royal Dutch Petroleum, 5 Guilder . . . . . . . . . . . . . . . . . . . . . . . 10,968,750
127,000 TOTAL -- ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,841,750
75,000 Union Texas Petroleum Holdings . . . . . . . . . . . . . . . . . . . . . . . . 1,584,375
------------
46,842,751
------------
</TABLE>
See accompanying notes to financial statements
PAGE 13
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
SALOMON BROTHERS INVESTORS FUND INC (continued)
---------------------------------------------------------------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES -- 12.9%
147,500 American Express . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,180,938
60,000 Astoria Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,152,500
187,200 Bank of New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,558,200
40,000 Crescent Real Estate Equities . . . . . . . . . . . . . . . . . . . . . . . . 1,275,000
60,000 Federal Home Loan Mortgage Corporation . . . . . . . . . . . . . . . . . . . . 4,125,000
35,000 Federal National Mortgage Association . . . . . . . . . . . . . . . . . . . . 3,303,125
23,750 First USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,053,906
75,000 Highwoods Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,912,500
79,000 MGIC Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,703,125
175,400 St. Paul Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,638,450
80,000 SunAmerica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,080,000
168,843 Travelers Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,386,881
------------
50,369,625
------------
HEALTH CARE -- 2.8%
230,000 Columbia/HCA Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,947,500
22,000 United Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910,250
------------
10,857,750
------------
TECHNOLOGY -- 3.7%
96,000 BISYS Group* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,124,000
157,000 First Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,929,375
15,000 Hewlett-Packard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,117,500
15,000 HNC Software* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318,750
15,000 National Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,875
60,000 Plantronics* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,605,000
------------
14,441,500
------------
TELECOMMUNICATIONS & UTILITIES -- 4.6%
313,000 AirTouch Communications* . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,920,500
147,000 AT&T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,809,375
85,000 HighwayMaster Communications* . . . . . . . . . . . . . . . . . . . . . . . . 1,296,250
------------
18,026,125
------------
TRANSPORTATION -- 2.5%
90,000 Norfolk Southern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,063,750
160,000 Pittston Services Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,840,000
------------
9,903,750
------------
TOTAL COMMON STOCKS (cost $267,121,633) . . . . . . . . . . . . . . . . . . . 329,505,542
------------
PREFERRED STOCKS -- 6.5%
CAPITAL GOODS -- 0.5%
60,000 Browning-Ferris 7.25% Convertible, 06/30/98 . . . . . . . . . . . . . . . . . 2,190,000
------------
CONSUMER CYCLICALS -- 0.3%
75,000 MascoTech Convertible, 07/01/97 . . . . . . . . . . . . . . . . . . . . . . . 1,068,750
------------
FINANCIAL SERVICES -- 0.4%
17,500 St. Paul Capital 6.00% Convertible, 12/31/49 . . . . . . . . . . . . . . . . . 914,375
15,300 SunAmerica Convertible, 03/01/96 . . . . . . . . . . . . . . . . . . . . . . . 703,800
------------
1,618,175
------------
</TABLE>
See accompanying notes to financial statements
PAGE 14
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
SALOMON BROTHERS INVESTORS FUND INC (concluded)
---------------------------------------------------------------------------------------------------------------
VALUE
SHARES DESCRIPTION (NOTE 1a)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY -- 5.3%
100,000 Ceridian 5.50% Convertible . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,350,000
206,000 Nokia, Class A -- ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,282,745
------------
20,632,745
------------
TOTAL PREFERRED STOCKS (cost $17,077,925) . . . . . . . . . . . . . . . . . . 25,509,670
------------
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
CONVERTIBLE BONDS -- 3.6%
BASIC INDUSTRIES -- 0.8%
$ 3,000,000 Unifi, 6.00%, due 03/15/02 . . . . . . . . . . . . . . . . . . . . . . . . . . 2,970,000
------------
CONSUMER CYCLICALS -- 1.1%
6,000,000 MascoTech, 4.50%, due 12/15/03 . . . . . . . . . . . . . . . . . . . . . . . . 4,365,000
------------
FINANCIAL SERVICES -- 1.0%
4,000,000 Liberty Property Trust, 8.00%, due 07/01/01 . . . . . . . . . . . . . . . . . 3,960,000
------------
HEALTH CARE -- 0.7%
7,000,000 Roche Holdings, Zero-Coupon, due 04/20/10 . . . . . . . . . . . . . . . . . . 2,782,500
------------
TOTAL CONVERTIBLE BONDS (cost $13,830,912) . . . . . . . . . . . . . . . . . . 14,077,500
------------
<CAPTION>
NO. OF
CONTRACTS
------------
<S> <C> <C>
PURCHASED PUT OPTIONS -- 0.0%
525 Allstate (expiring July 1995, exercise price $30) . . . . . . . . . . . . . . 45,938
500 Standard & Poors Index (expiring July 1995, exercise price $485) . . . . . . . 6,250
100 Standard & Poors Index (expiring July 1995, exercise price $500) . . . . . . . 1,875
200 Standard & Poors Index (expiring August 1995, exercise price $500) . . . . . . 15,000
------------
TOTAL PURCHASED PUT OPTIONS (cost $249,631) . . . . . . . . . . . . . . . . . 69,063
------------
<CAPTION>
PRINCIPAL
AMOUNT
------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 5.5%
REPURCHASE AGREEMENT -- 4.4%
$17,239,000 Repurchase Agreement 6.00%, due 07/03/95, dated 06/30/95,
with Morgan Stanley, collateralized by $15,750,000
U.S. Treasury Notes, 7.875%, due 08/15/01, valued
at $17,583,779; proceeds: $17,247,620 . . . . . . . . . . . . . . . . . . . 17,239,000
------------
U.S. TREASURY OBLIGATION -- 1.1%
4,295,000 U.S. Treasury Bill, 6.81%, due 01/11/96 . . . . . . . . . . . . . . . . . . . 4,171,776
------------
TOTAL SHORT-TERM INVESTMENTS (cost $21,376,381) . . . . . . . . . . . . . . . 21,410,776
------------
TOTAL INVESTMENTS -- 99.9% (cost $319,656,482) . . . . . . . . . . . . . . . . 390,572,551
<CAPTION>
SHARES
------------
<S> <C> <C>
61,700 Sale of Security to be received (Proceeds $1,810,446) -- (0.5%) . . . . . . . (1,820,150)
Other assets in excess of liabilities -- 0.6% . . . . . . . . . . . . . . . . 2,363,118
---------
NET ASSETS -- 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $391,115,519
============
</TABLE>
* Non-income producing security.
See accompanying notes to financial statements
PAGE 15
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
CASH NEW YORK
MANAGEMENT MUNICIPAL
FUND BOND FUND
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at value (Note A) . . . . . . . . . . . . . . . . $ 9,816,832 $ 3,650,490
Repurchase agreements, at value and cost . . . . . . . . . . . 187,000 --
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 994 59,330
Receivable for securities sold . . . . . . . . . . . . . . . . -- --
Receivable for fund shares sold . . . . . . . . . . . . . . . . 17,119 61
Interest and dividends receivable . . . . . . . . . . . . . . . 33,385 83,856
Receivable from investment advisor . . . . . . . . . . . . . . -- 50,632
Deferred organization expense . . . . . . . . . . . . . . . . . 3,057 34,953
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 33,185 16,451
----------- -----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . 10,091,572 3,895,773
----------- -----------
LIABILITIES
Payable for:
Securities purchased . . . . . . . . . . . . . . . . . . . . -- --
Sale of security to be received . . . . . . . . . . . . . . -- --
Fund shares redeemed . . . . . . . . . . . . . . . . . . . . 8,412 --
Dividends declared . . . . . . . . . . . . . . . . . . . . . 19,001 3,866
Affiliate transactions:
Management fees . . . . . . . . . . . . . . . . . . . . . . -- --
Service and distribution fees . . . . . . . . . . . . . . . -- 1,926
Unrealized depreciation of forward foreign currency contracts . -- --
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . 2,477 8,088
----------- -----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 29,890 13,880
----------- -----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $10,061,682 $ 3,881,893
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . $10,063,796 $ 4,538,971
Undistributed net investment income . . . . . . . . . . . . . . -- --
Accumulated net realized gain (loss) on investments
and foreign currency transactions . . . . . . . . . . . . . (2,114) (621,222)
Net unrealized appreciation (depreciation) on investments,
foreign currency transactions and other assets . . . . . . . -- (35,856)
----------- -----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $10,061,682 $ 3,881,893
=========== ===========
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,163,315 $ 276,077
----------- -----------
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,382 $ 252,524
----------- -----------
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,283 $ 252,524
----------- -----------
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,828,702 $ 3,100,768
----------- -----------
SHARES OUTSTANDING
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,163,315 28,716
----------- -----------
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,382 26,267
----------- -----------
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,283 26,267
----------- -----------
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,830,816 322,423
----------- -----------
NET ASSET VALUE
CLASS A SHARES
Net asset value and redemption price per share . . . . . . . . $ 1.00 $ 9.61
=========== ===========
Maximum offering price per share (based on maximum sales
charge of 4.75%, except Cash Management Fund) . . . . . . . . $ 1.00 $ 10.09
=========== ===========
CLASS B SHARES
Net asset value and offering price per share* . . . . . . . . . $ 1.00 $ 9.61
=========== ===========
CLASS C SHARES
Net asset value and offering price per share* . . . . . . . . . $ 1.00 $ 9.61
=========== ===========
CLASS O SHARES
Net asset value, offering price and redemption price per share $ 1.00 $ 9.62
=========== ===========
Note A: Cost of investments . . . . . . . . . . . . . . . . . . $ 9,816,832 $ 3,686,346
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge (except for the Cash Management Fund).
See accompanying notes to financial statements
PAGE 16
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
NATIONAL U.S.
INTERMEDIATE GOVERNMENT HIGH YIELD STRATEGIC INVESTORS
MUNICIPAL FUND INCOME FUND BOND FUND BOND FUND FUND
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 10,240,354 $ 8,069,084 $ 13,646,474 $ 9,985,240 $373,333,551
-- 3,685,000 3,955,000 1,980,000 17,239,000
26,831 917 454 95 606
-- -- -- -- 5,708,650
30,008 -- 266,013 22,295 7,211
198,396 97,642 294,378 190,567 819,481
18,857 17,268 9,541 3,749 --
70,596 73,513 98,959 99,445 --
-- -- -- -- --
------------ ----------- ------------ ------------ -----------
10,585,042 11,943,424 18,270,819 12,281,391 397,108,499
------------ ----------- ------------ ------------ -----------
-- 1,453,797 3,018,545 1,356,877 3,591,697
-- -- -- -- 1,820,150
-- 7,131 -- -- 109,668
43,238 50,650 92,331 82,500 --
-- -- -- -- 468,023
2,141 2,194 2,639 2,141 2,110
-- -- -- 9,544 --
22,955 20,353 25,675 18,898 1,332
------------ ----------- ------------ ------------ ------------
68,334 1,534,125 3,139,190 1,469,960 5,992,980
------------ ----------- ------------ ------------ ------------
$ 10,516,708 $10,409,299 $ 15,131,629 $ 10,811,431 $391,115,519
============ =========== ============ ============ ============
$ 10,374,213 $10,169,493 $ 14,674,331 $ 10,352,669 $296,069,420
-- -- -- -- 1,888,024
99 93,749 139,394 181,457 22,251,710
142,396 146,057 317,904 277,305 70,906,365
------------ ----------- ------------ ------------ ------------
$ 10,516,708 $10,409,299 $ 15,131,629 $ 10,811,431 $391,115,519
============ =========== ============ ============ ============
$ 516,073 $ 264,231 $ 4,238,517 $ 335,515 $ 292,205
------------ ----------- ------------ ------------ ------------
$ 334,060 $ 408,701 $ 877,871 $ 526,375 $ 333,032
------------ ----------- ------------ ------------ ------------
$ 253,609 $ 256,125 $ 332,528 $ 268,622 $ 276,260
------------ ----------- ------------ ------------ ------------
$ 9,412,966 $ 9,480,242 $ 9,682,713 $ 9,680,919 $390,214,022
------------ ----------- ------------ ------------ ------------
50,871 25,810 405,182 32,083 18,529
------------ ----------- ------------ ------------ ------------
32,936 39,921 83,945 50,336 21,163
------------ ----------- ------------ ------------ ------------
25,003 25,018 31,803 25,687 17,556
------------ ----------- ------------ ------------ ------------
928,011 926,015 925,966 925,754 24,726,223
------------ ----------- ------------ ------------ ------------
$ 10.14 $ 10.24 $ 10.46 $ 10.46 $ 15.77
============ =========== ============ ============ ============
$ 10.65 $ 10.75 $ 10.98 $ 10.98 $ 16.56
============ =========== ============ ============ ============
$ 10.14 $ 10.24 $ 10.46 $ 10.46 $ 15.74
============ =========== ============ ============ ============
$ 10.14 $ 10.24 $ 10.46 $ 10.46 $ 15.74
============ =========== ============ ============ ============
$ 10.14 $ 10.24 $ 10.46 $ 10.46 $ 15.78
============ =========== ============ ============ ============
$ 10,097,958 $ 7,923,027 $ 13,328,570 $ 9,698,548 $302,417,482
</TABLE>
See accompanying notes to financial statements
PAGE 17
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
CASH NEW YORK
MANAGEMENT MUNICIPAL
FUND BOND FUND
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCOME (Note A)
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 439,966 $ 115,869
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
----------- -----------
439,966 115,869
EXPENSES
Management fee . . . . . . . . . . . . . . . . . . . . . . . . 14,547 9,466
Custody and administration fees . . . . . . . . . . . . . . . . 7,270 4,946
Amortization of organization expenses . . . . . . . . . . . . . 6,015 6,943
Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,816 12,500
Registration and filing fees . . . . . . . . . . . . . . . . . 5,089 5,500
Shareholder services . . . . . . . . . . . . . . . . . . . . . 4,362 3,000
Audit and tax return preparation fees . . . . . . . . . . . . . 3,635 3,750
Printing and postage . . . . . . . . . . . . . . . . . . . . . 2,908 7,500
Directors' fees and expenses . . . . . . . . . . . . . . . . . 1,454 1,375
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,462 2,500
----------- -----------
54,558 57,480
Management fee waived and expenses absorbed by
investment advisor . . . . . . . . . . . . . . . . . . . . (14,547) (48,014)
----------- -----------
40,011 9,466
Distribution and service fees:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . -- 218
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . -- 854
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . -- 854
----------- -----------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . 40,011 11,392
----------- -----------
Net investment income . . . . . . . . . . . . . . . . . . . . . 399,955 104,477
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments and options . . . . . . . . . . . . . . . . . . -- (62,743)
Foreign currency transactions . . . . . . . . . . . . . . . -- --
----------- -----------
Net realized gain (loss) . . . . . . . . . . . . . . . . . -- (62,743)
----------- -----------
Net change in unrealized appreciation (depreciation) on:
Investments and options . . . . . . . . . . . . . . . . . . -- 295,355
Foreign currency transactions and other assets . . . . . . . -- --
----------- -----------
Net unrealized appreciation during the period . . . . . . . -- 295,355
----------- -----------
NET REALIZED AND UNREALIZED GAIN . . . . . . . . . . . . . . . -- 232,612
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . $ 399,955 $ 337,089
=========== ===========
Note A: Net of foreign withholding tax of: . . . . . . . . . . -- --
</TABLE>
* Fund's commencement of investment operations was February 22, 1995.
See accompanying notes to financial statements
PAGE 18
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
NATIONAL U.S.
INTERMEDIATE GOVERNMENT HIGH YIELD STRATEGIC INVESTORS
MUNICIPAL FUND* INCOME FUND* BOND FUND* BOND FUND* FUND
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 188,421 $ 243,060 $ 415,669 $ 369,200 $ 1,257,913
-- -- -- -- 3,325,130
------------ ----------- ------------ ------------ -----------
188,421 243,060 415,669 369,200 4,583,043
17,896 21,386 27,945 26,970 908,540
7,410 9,161 10,660 7,421 29,175
5,325 5,545 7,464 7,501 --
4,103 4,103 4,103 4,103 45,250
4,018 3,947 5,432 4,018 8,145
8,615 8,615 8,615 8,615 146,610
2,051 2,051 3,077 2,051 28,055
2,051 2,051 2,872 2,051 66,970
1,128 1,128 1,128 1,128 41,630
2,052 2,052 3,077 2,462 34,175
------------ ----------- ------------ ------------ -----------
54,649 60,039 74,373 66,320 1,308,550
(36,753) (38,653) (37,486) (30,719) --
------------ ----------- ------------ ------------ -----------
17,896 21,386 36,887 35,601 1,308,550
269 226 489 229 228
985 1,072 1,173 1,010 986
887 896 977 902 896
------------ ----------- ------------ ------------ -----------
20,037 23,580 39,526 37,742 1,310,660
------------ ----------- ------------ ------------ -----------
168,384 219,480 376,143 331,458 3,272,383
------------ ----------- ------------ ------------ -----------
99 93,749 139,394 178,870 22,501,163
-- -- -- 2,587 63
------------ ----------- ------------ ------------ -----------
99 93,749 139,394 181,457 22,501,226
------------ ----------- ------------ ------------ -----------
142,396 146,057 317,904 286,692 31,849,160
-- -- -- (9,387) (9,704)
------------ ----------- ------------ ------------ -----------
142,396 146,057 317,904 277,305 31,839,456
------------ ----------- ------------ ------------ -----------
142,495 239,806 457,298 458,762 54,340,682
------------ ----------- ------------ ------------ -----------
$ 310,879 $ 459,286 $ 833,441 $ 790,220 $57,613,065
============ =========== ============ ============ ===========
-- -- -- $ 98 $ 63,097
</TABLE>
See accompanying notes to financial statements
PAGE 19
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
CASH NEW YORK
MANAGEMENT MUNICIPAL
FUND BOND FUND
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . $ 399,955 $ 104,477
Net realized gain (loss) on investments, options
and foreign currency transactions . . . . . . . . . . . . . -- (62,743)
Net change in unrealized appreciation
(depreciation) on investments, options, foreign
currency transactions and other assets . . . . . . . . . . -- 295,355
----------- -----------
Net increase in net assets resulting from operations . . . . 399,955 337,089
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . (4,351) (4,557)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . (155) (3,843)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . (141) (3,843)
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . (395,308) (92,234)
----------- -----------
(399,955) (104,477)
----------- -----------
Distributions from net realized gains:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
----------- -----------
-- --
----------- -----------
NET FUND CAPITAL SHARE TRANSACTIONS
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . 1,163,315 273,879
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . 49,382 250,059
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . 20,283 250,059
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . (10,298,114) (458,146)
----------- -----------
Net increase (decrease) in net assets
derived from share transactions . . . . . . . . . . . . (9,065,134) 315,851
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS . . . . . . . . . . . . . (9,065,134) 548,463
NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . . . . . 19,126,816 3,333,430
----------- -----------
End of period** . . . . . . . . . . . . . . . . . . . . . . $10,061,682 $ 3,881,893
=========== ===========
* Fund's commencement of investment operations was
February 22, 1995.
** Including undistributed net investment income of: -- --
</TABLE>
See accompanying notes to financial statements
PAGE 20
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
NATIONAL U.S.
INTERMEDIATE GOVERNMENT HIGH YIELD STRATEGIC INVESTORS
MUNICIPAL FUND* INCOME FUND* BOND FUND* BOND FUND* FUND
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 168,384 $ 219,480 $ 376,143 $ 331,458 $ 3,272,383
99 93,749 139,394 181,457 22,501,226
142,396 146,057 317,904 277,305 31,839,456
------------ ----------- ------------ ------------ ------------
310,879 459,286 833,441 790,220 57,613,065
------------ ----------- ------------ ------------ ------------
(4,866) (5,398) (18,653) (8,263) (1,015)
(3,694) (5,603) (10,179) (8,160) (1,049)
(3,338) (4,678) (8,900) (7,466) (878)
(156,486) (203,801) (338,411) (307,569) (1,381,417)
------------ ----------- ------------ ------------ ------------
(168,384) (219,480) (376,143) (331,458) (1,384,359)
------------ ----------- ------------ ------------ ------------
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- (1,786,236)
------------ ----------- ------------ ------------ ------------
-- -- -- -- (1,786,236)
------------ ----------- ------------ ------------ ------------
512,962 258,088 4,226,890 323,433 264,517
330,434 401,137 867,063 514,464 303,270
250,010 250,054 320,721 257,185 249,878
9,280,727 9,260,134 9,259,577 9,257,507 (12,358,852)
------------ ----------- ------------ ------------ ------------
10,374,133 10,169,413 14,674,251 10,352,589 (11,541,187)
------------ ----------- ------------ ------------ ------------
10,516,628 10,409,219 15,131,549 10,811,351 42,901,283
80 80 80 80 348,214,236
------------ ----------- ------------ ------------ ------------
$ 10,516,708 $10,409,299 $ 15,131,629 $ 10,811,431 $391,115,519
============ =========== ============ ============ ============
-- -- -- -- $1,888,024
</TABLE>
* Fund's commencement of investment operations was February 22, 1995.
See accompanying notes to financial statements
PAGE 21
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
CASH NEW YORK
MANAGEMENT MUNICIPAL
FUND BOND FUND
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . $ 551,304 $ 416,648
Net realized gain (loss) on investments, options and foreign
currency transactions . . . . . . . . . . . . . . . . . . . (415) (552,459)
Net change in unrealized appreciation on
investments and options . . . . . . . . . . . . . . . . . . -- (636,046)
----------- -----------
Net increase (decrease) in net assets resulting from operations 550,889 (771,857)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . (551,304) (416,648)
----------- -----------
(551,304) (416,648)
----------- -----------
Distributions from net realized gains:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
----------- -----------
-- --
----------- -----------
NET FUND CAPITAL SHARE TRANSACTIONS
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Class O . . . . . . . . . . . . . . . . . . . . . . . . . . 4,077,861 (3,842,334)
----------- -----------
Net increase (decrease) in net assets
derived from share transactions . . . . . . . . . . . . 4,077,861 (3,842,334)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS . . . . . . . . . . . . . 4,077,446 (5,030,839)
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . . . . . 15,049,370 8,364,269
----------- -----------
End of year . . . . . . . . . . . . . . . . . . . . . . . . $19,126,816 $ 3,333,430
=========== ===========
</TABLE>
See accompanying notes to financial statements
PAGE 22
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
NATIONAL U.S.
INTERMEDIATE GOVERNMENT HIGH YIELD STRATEGIC INVESTORS
MUNICIPAL FUND INCOME FUND BOND FUND BOND FUND FUND
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-- -- -- -- $ 6,507,464
-- -- -- -- 26,937,166
-- -- -- -- (38,268,999)
------------ ----------- ------------ ------------ ------------
-- -- -- -- (4,824,369)
------------ ----------- ------------ ------------ ------------
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- (6,555,567)
------------ ----------- ------------ ------------ ------------
-- -- -- -- (6,555,567)
------------ ----------- ------------ ------------ ------------
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- (36,204,568)
------------ ----------- ------------ ------------ ------------
-- -- -- -- (36,204,568)
------------ ----------- ------------ ------------ ------------
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- 9,651,539
------------ ----------- ------------ ------------ ------------
-- -- -- -- 9,651,539
------------ ----------- ------------ ------------ ------------
-- -- -- -- (37,932,965)
-- -- -- -- 386,147,201
------------ ----------- ------------ ------------ ------------
-- -- -- -- $348,214,236
============ =========== ============ ============ ============
</TABLE>
See accompanying notes to financial statements
PAGE 23
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Salomon Brothers Investment Series (the "Investment Series") consists of
certain portfolios of the Salomon Brothers Series Funds Inc (the "Series
Funds"), as indicated below and the Salomon Brothers Investors Fund Inc (the
"Investors Fund"). The Series Funds were incorporated in Maryland on April 17,
1990 as an open-end management investment company, and currently operates as a
series company comprised of eight portfolios: Salomon Brothers Cash Management
Fund (the "Cash Management Fund"), Salomon Brothers New York Municipal Money
Market Fund, (the "New York Municipal Money Fund"), Salomon Brothers U.S.
Treasury Securities Money Market Fund (the "U.S. Treasury Fund"), Salomon
Brothers New York Municipal Bond Fund (the "New York Municipal Bond Fund"),
Salomon Brothers National Intermediate Municipal Fund (the "National
Intermediate Municipal Fund"), Salomon Brothers U.S. Government Income Fund
(the "U.S. Government Income Fund"), Salomon Brothers High Yield Bond Fund
(the "High Yield Bond Fund"), and Salomon Brothers Strategic Bond Fund (the
"Strategic Bond Fund"). Separate financial statements are prepared for the New
York Municipal Money Fund and U.S. Treasury Fund which are not part of the
Investment Series. All of the other portfolios of the Series Funds are included
in the Investment Series. The Investors Fund is a diversified open-end
management investment company incorporated in Maryland on April 2, 1958. The
Investment Series operates under a multiple class pricing structure, with each
Fund or portfolio of the Investment Series (individually, a "Fund") offering
Class A, Class B, Class C, and Class O shares, each with their own expense
structure.
Certain costs incurred in connection with the Series Funds' organization, which
were payable to Salomon Brothers Asset Management Inc ("SBAM") have been
deferred and are being amortized by the Series Funds over a 60 month period
from the date each Fund commenced investment operations. In the event that any
of the 100,000 shares purchased by SBAM on September 27, 1990 (the "Initial
Shares") are redeemed during the amortization period by SBAM, the applicable
Fund will be reimbursed by SBAM for any remaining unamortized costs in the same
proportion as the number of Initial Shares redeemed bears to the total number
of Initial Shares outstanding at the time of redemption. A summary of those
expenditures that remain as of June 30, 1995 for each Fund is as follows:
<TABLE>
<CAPTION>
FUND EXPIRATION OF AMORTIZATION AMOUNT
--------------------------------------------------------------------------------
<S> <C> <C>
Cash Management Fund . . . . . . . . . . . October 1995 $ 3,057
New York Municipal Bond Fund . . . . . . . February 1998 $34,953
National Intermediate Municipal Fund . . . February 2000 $70,596
U.S. Government Income Fund . . . . . . . . February 2000 $73,513
High Yield Bond Fund . . . . . . . . . . . February 2000 $98,959
Strategic Bond Fund . . . . . . . . . . . . February 2000 $99,445
</TABLE>
The following is a summary of significant accounting policies followed by the
Investment Series in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles.
PAGE 24
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
(a) INVESTMENT VALUATION. Portfolio securities listed or traded on
national securities exchanges, or reported on the NASDAQ national market
system, are valued at the last sale price, or if there have been no sales
on that day, at the mean of the current bid and ask price which represents
the current value of the security. Over-the-counter securities are valued
at the mean of the current bid and ask price. Debt securities are valued
by using either market quotations or independent pricing services which
use prices provided by market-makers or estimates of market values
obtained from yield data relating to instruments or securities with
similar characteristics. Publicly traded sovereign bonds are typically
traded internationally on the over-the-counter market and are valued at
the mean of the last current bid and asked price as of the close of
business of that market. Short-term securities with less than 60 days
remaining to maturity when acquired by the Fund will be valued at
amortized cost which approximates market value. If a Fund acquires such
securities with more than 60 days remaining to maturity, they will be
valued at current market value (using the bid price), with the exception
of those securities held by the Cash Management Fund, until the 60th day
prior to maturity, and will then be valued on an amortized cost basis.
Portfolio securities for the Cash Management Fund are valued using
the amortized cost method, which involves initially valuing an investment
at its cost and thereafter assuming a constant amortization to maturity of
any premium or discount. This method results in a value approximating
market value.
Foreign securities quoted in a foreign currency are translated into
U.S. dollars at exchange rates at 2:30 p.m. Eastern time or at such other
rates as SBAM may determine to be appropriate in computing net asset
value.
Securities for which reliable quotations or prices from pricing
services are not readily available (as may be the case for securities of
limited marketability) and all other assets will be valued at their
respective fair value as determined in good faith by, or under procedures
established by, the Board of Directors.
(b) FUTURES CONTRACTS. The New York Municipal Bond Fund, National
Intermediate Municipal Fund, High Yield Bond Fund, Strategic Bond Fund,
and Investors Fund may enter into futures contracts for hedging purposes,
which involves paying or receiving variation margin, which will be
recorded as unrealized gain or loss until the contract is closed. When the
contract is closed, a realized gain or loss will be recognized.
Outstanding contracts involve elements of market risk in excess of amounts
reported in the financial statements.
(c) WRITTEN OPTION CONTRACTS. When a Fund writes a call option or a
put option, an amount equal to the premium received by the Fund is
recorded as a liability, the value of which is marked-to-market daily to
reflect the current market value of the written option. When a written
option expires, the Fund realizes a gain equal to the amount of the
premium received. When the Fund enters into a closing purchase
transaction, it realizes a gain (or loss if the cost of the closing
purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying
security, and
PAGE 25
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
the liability related to such option is eliminated. When a call option is
exercised, the Fund realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. When a put option is exercised, the amount of
the premium received reduces the cost of the security that the Fund
purchased upon exercise.
(d) MORTGAGE ROLLS. The U.S. Government Income Fund and the
Strategic Bond Fund may enter into mortgage "dollar rolls" in which a Fund
sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. Mortgage
dollar rolls involve the risk that the market value of the securities the
Fund is obligated to repurchase under the agreement may decline below the
repurchase price. In the event the buyer of securities under a mortgage
dollar roll files for bankruptcy or becomes insolvent, the Fund's use of
proceeds of the dollar roll may be restricted pending a determination by
the other party, its trustee or receiver, whether to enforce the Fund's
obligation to repurchase the securities.
(e) REPURCHASE AGREEMENTS. When entering into repurchase agreements,
it is each Funds' policy to take possession, through its custodian, of the
underlying collateral and monitor the collateral's value at the time the
agreement is entered into and at all times during the term of the
repurchase agreement to ensure that it always equals or exceeds the
repurchase price. In the event of default or bankruptcy by the other party
to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings.
(f) FOREIGN CURRENCY TRANSLATION. The accounting records of each Fund
are maintained in U.S. dollars. Investment securities and other assets and
liabilities of the High Yield Bond Fund, Strategic Bond Fund and Investors
Fund denominated in a foreign currency are translated into U.S. dollars at
the prevailing rates of exchange each day. Purchases and sales of
securities, income receipts and expense payments are translated into U.S.
dollars at the prevailing exchange rate on the respective dates of the
transactions. Net realized gains and losses on foreign currency
transactions represent net gains and losses from sales and maturities of
forward foreign currency contracts, disposition of foreign currencies,
currency gains and losses realized between the trade and settlement dates
on securities transactions and the difference between the amount of net
investment income accrued and the U.S. dollar amount actually received.
The effect of changes in foreign currency exchange rates on investments in
securities are not segregated in the Statements of Operations from the
effects of changes in market prices of those securities, but are included
with the net realized and unrealized gain or loss on investment in
securities.
(g) FORWARD FOREIGN CURRENCY CONTRACTS. The High Yield Bond Fund,
Strategic Bond Fund and Investors Fund may enter into forward foreign
currency contracts in connection with planned purchases or sales of
securities or to hedge the value of portfolio securities. A forward
foreign currency contract is an agreement between two parties to buy and
sell a currency at a set price on a future date. The contract is
marked-to-market daily and the change in value is recorded by the Fund as
an unrealized gain or loss. When a forward foreign currency contract is
extinguished, through either delivery or offset by entering into an
offsetting forward foreign
PAGE 26
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
currency contract, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was entered
into and the value of the contract at the time it was extinguished or
offset.
(h) LOAN PARTICIPATIONS/ASSIGNMENTS. The High Yield Bond Fund and the
Strategic Bond Fund may invest in floating rate loans arranged through
private negotiations between a foreign sovereign entity and one or more
financial institutions ("lender"). The Fund's investment in any such loan
may be in the form of a participation in or an assignment of the loan. The
market value of the High Yield Bond Fund and the Strategic Bond Fund's
loan participations at June 30, 1995 was $294,375 each.
In connection with purchasing participations, the Fund generally will
have no right to enforce compliance by the borrower with the terms of the
loan agreement relating to the loan, nor any rights of set-off against the
borrower, and the Fund may not benefit directly from any collateral
supporting the loan in which it has purchased the participation. As a
result, the Fund will assume the credit risk of both the borrower and the
lender that is selling the participation. In the event of the insolvency
of the lender selling the participation, the Fund may be treated as a
general creditor of the lender and may not benefit from any set-off
between the lender and the borrower.
When the Fund purchases assignments from lenders, the Fund will
acquire direct rights against the borrower on the loan, except that under
certain circumstances such rights may be more limited than those held by
the assigning lender.
(i) FEDERAL INCOME TAXES. Each Fund intends to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies, including the distribution requirements of the Tax
Reform Act of 1986, and to distribute all of its income, including any net
realized gains, to shareholders. Therefore, no Federal income tax or
excise tax provision is required.
(j) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net
investment income on the shares of each of the Funds (except the Investors
Fund) are declared each business day to shareholders of record that day,
and are paid on the last day of the month. Dividends from net investment
income for the Investors Fund are declared on a quarterly basis.
Distributions of net realized gains to shareholders of each Fund, if any,
are declared at least annually. Dividends and distributions to
shareholders of each Fund are recorded on the ex-dividend date and are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles primarily due to deferral of wash
sales and post-October losses incurred by each Fund.
(k) EXPENSES. Operating expenses directly attributable to a class of
shares are charged to that class' operations. Direct expenses are charged
to the Fund that incurred them, and general expenses of the Investment
Series are allocated to the Funds based on each Fund's relative average
daily net assets for the period.
(l) OTHER. Investment transactions are recorded as of the trade date.
Dividend income is recorded on the ex-dividend date. Interest income,
including the accretion of discounts or
PAGE 27
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
amortization of premiums, is recognized when earned. Gains or losses on
sales of securities are calculated for financial accounting and Federal
income tax purposes on the identified cost basis. Net investment income
(other than distribution fees) and unrealized and realized gains or losses
are allocated daily to each class of shares based upon the relative
proportion of each class's net assets to the Fund's total net assets.
2. MANAGEMENT FEE, TRANSACTIONS WITH AFFILIATES AND OTHER AGREEMENTS
The Investment Series retains SBAM, an indirect wholly-owned subsidiary of
Salomon Inc, to act as investment manager of each Fund, subject to the
supervision by the Board of Directors of each Fund. SBAM furnishes the
Investment Series with office space and certain services and facilities
required for conducting the business of the Investment Series and pays the
compensation of its officers. The management fee for these services for each
Fund (except the Investors Fund) is payable monthly and is based on the
following annual percentages of each Funds' average daily net assets: .20% for
the Cash Management Fund, .50% for the New York Municipal Bond Fund and the
National Intermediate Municipal Fund, .60% for the U.S Government Income Fund
and .75% for the High Yield Bond Fund and Strategic Bond Fund. SBAM Limited
provides certain advisory services to SBAM for the benefit of the Strategic
Bond Fund. SBAM Limited is compensated by SBAM at no additional expense to the
Strategic Bond Fund.
The Investors Fund pays SBAM a base fee subject to an increase or decrease
depending on the extent, if any, to which the investment performance of the
Investors Fund exceeds or is exceeded by the investment record of the Standard
& Poor's 500 Index of Composite Stocks ("S&P 500 Index"). The first performance
adjustment, if any, will be paid on September 30, 1995. Thereafter, the
performance adjustment will be paid quarterly based on a rolling one year
period. The base fee will be paid quarterly based on the following annual
rates:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-------------------------------------------------------------------------------
<S> <C>
First $350 million . . . . . . . . . . . . . . . . . . . . . . . .500%
Next $150 million . . . . . . . . . . . . . . . . . . . . . . . . .400%
Next $250 million . . . . . . . . . . . . . . . . . . . . . . . . .375%
Next $250 million . . . . . . . . . . . . . . . . . . . . . . . . .350%
Over $1 billion . . . . . . . . . . . . . . . . . . . . . . . . . .300%
</TABLE>
For each percentage point by which the investment performance of the Investors
Fund exceeds or is exceeded by the investment record of the S&P 500 Index, the
base fee will be adjusted upward or downward by .01% (annualized). The maximum
annual adjustment is .10% which would occur if the Investors Fund's performance
exceeds or is exceeded by the S&P 500 Index by ten or more percentage points.
For the nine months ended June 30, 1995, the S&P 500 Index's performance
exceeded the Fund's performance by six percent. Under the performance fee
arrangement, the Fund would be entitled to a .06% reduction in its management
fee payable to SBAM should this performance continue at this level through
September 30, 1995.
PAGE 28
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
If in any fiscal year total expenses of any Fund, excluding taxes, interest,
brokerage and extraordinary expenses, but including the management fee, exceed
the most stringent expense limitations imposed by state securities regulations
applicable to the Fund, SBAM will pay or reimburse the Fund for the excess.
Currently, the most restrictive of these limitations on an annual basis is 2.5%
of the first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets and 1.5% of average daily net assets in
excess of $100 million. No such expense reimbursement is expected to be
required for the year ending December 31, 1995. However, for the six months
ended June 30, 1995, SBAM voluntarily waived its management fees of $14,547,
$9,466, $17,896, $21,386, $27,945 and $26,970 for the Cash Management Fund, New
York Municipal Bond Fund, National Intermediate Municipal Fund, U.S.
Government Income Fund, High Yield Bond Fund, and Strategic Bond Fund,
respectively, and voluntarily absorbed expenses of $38,548, $18,857, $17,267,
$9,541, and $3,749 for the New York Municipal Bond Fund, National Intermediate
Municipal Fund, U.S. Government Income Fund, High Yield Bond Fund, and
Strategic Bond Fund, respectively.
Investors Bank & Trust Company serves as custodian and administrator for each
Fund, which includes performing certain administrative services in connection
with the operation of each Fund. The Shareholder Services Group, Inc. ("TSSG")
serves as each Fund's transfer and shareholder services agent.
Each Fund has an agreement with Salomon Brothers Inc ("Salomon Brothers") to
distribute its shares pursuant to a multiple class pricing system. Each class
(other than Class O) of each Fund (other than Cash Management Fund) is
authorized pursuant to a services and distribution plan applicable to that
class of shares (the "Class A Plan," the "Class B Plan," and the "Class C
Plan," collectively, the "Plans") adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"), to pay Salomon
Brothers an annual service fee with respect to Class A, Class B, and Class C
shares of the applicable Funds at the rate of .25% of the value of the average
daily net assets of the respective class. Salomon Brothers is also paid an
annual distribution fee with respect to Class B and Class C shares of each Fund
(other than the Cash Management Fund) at the rate of .75% of the value of the
average daily net assets of the respective class. Class O shares are not
subject to a services and distribution plan.
Brokerage commissions of $52,331 were paid by the Investors Fund to Salomon
Brothers, the Fund's distributor and an indirect wholly-owned subsidiary of
Salomon Inc, for transactions executed on behalf of the Investors Fund for the
six months ended June 30, 1995.
Contingent deferred sales charges of $1,579 were paid to Salomon Brothers in
connection with redemptions of certain Class B and Class C shares of the Funds
during the six months ended June 30, 1995.
PAGE 29
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
3. CAPITAL STOCK
At June 30, 1995, the Series Funds had 10,000,000,000 shares of authorized
capital stock, par value $.001 per share and the Investors Fund had 50,000,000
shares of authorized capital stock, $1.00 par value. Transactions in Fund
shares for the periods indicated were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------- -------------------------------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994 JUNE 30, 1995 DECEMBER 31, 1994
------------------------ --------------------- ---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ---------- -------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CASH
MANAGEMENT FUND
Sold . . . . . . . . . . 2,717,378 $2,717,378 -- -- 49,241 $ 49,241 -- --
Issued as
reinvestment . . . . . . 210 210 -- -- 141 141 -- --
Redeemed . . . . . . . . (1,554,273) (1,554,273) -- -- -- -- -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase
(decrease) . . . . . . . 1,163,315 $1,163,315 -- -- 49,382 $ 49,382 -- --
========== ========== ======= ======= ======= ========= ======= =======
NEW YORK MUNICIPAL
BOND FUND
Sold . . . . . . . . . . 28,711 $ 273,830 -- -- 26,263 $ 250,020 -- --
Issued as
reinvestment . . . . . . 7 70 -- -- 6 60 -- --
Redeemed . . . . . . . . (2) (21) -- -- (2) (21) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase
(decrease) . . . . . . . 28,716 $ 273,879 -- -- 26,267 $ 250,059 -- --
========== ========== ======= ======= ======= ========= ======= =======
NATIONAL
INTERMEDIATE
MUNICIPAL FUND
Sold . . . . . . . . . . 50,789 $ 512,147 -- -- 32,897 $ 330,058 -- --
Issued as
reinvestment . . . . . . 82 835 -- -- 39 396 -- --
Redeemed . . . . . . . . (2) (20) -- -- (2) (20) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase . . . . . . 50,869 $ 512,962 -- -- 32,934 $ 330,434 -- --
========== ========== ======= ======= ======= ========= ======= =======
U.S. GOVERNMENT
INCOME FUND
Sold . . . . . . . . . . 25,778 $ 257,786 -- -- 39,807 $ 400,000 -- --
Issued as
reinvestment . . . . . . 32 322 -- -- 114 1,157 -- --
Redeemed . . . . . . . . (2) (20) -- -- (2) (20) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase . . . . . . 25,808 $ 258,088 -- -- 39,919 $ 401,137 -- --
========== ========== ======= ======= ======= ========= ======= =======
HIGH YIELD
BOND FUND
Sold . . . . . . . . . . 406,451 $4,240,232 -- -- 85,774 $ 886,183 -- --
Issued as
reinvestment . . . . . . 547 5,708 -- -- 115 1,198 -- --
Redeemed . . . . . . . . (1,818) (19,050) -- -- (1,946) (20,318) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase . . . . . . 405,180 $4,226,890 -- -- 83,943 $ 867,063 -- --
========== ========== ======= ======= ======= ========= ======= =======
STRATEGIC BOND FUND
Sold . . . . . . . . . . 32,047 $ 323,085 -- -- 50,299 $ 514,100 -- --
Issued as
reinvestment . . . . . . 36 368 -- -- 37 384 -- --
Redeemed . . . . . . . . (2) (20) -- -- (2) (20) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase . . . . . . 32,081 $ 323,433 -- -- 50,334 $ 514,464 -- --
========== ========== ======= ======= ======= ========= ======= =======
INVESTORS FUND
Sold . . . . . . . . . . 18,528 $ 264,500 -- -- 21,153 $ 303,120 -- --
Issued as
reinvestment . . . . . . 2 38 -- -- 11 171 -- --
Redeemed . . . . . . . . (1) (21) -- -- (1) (21) -- --
---------- ---------- ------- ------- ------- --------- ------- -------
Net increase
(decrease) . . . . . . . 18,529 $ 264,517 -- -- 21,163 $ 303,270 -- --
========== ========== ======= ======= ======= ========= ======= =======
</TABLE>
PAGE 30
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
CLASS C CLASS O
---------------------------------------------- ---------------------------------------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994 JUNE 30, 1995 DECEMBER 31, 1994
--------------------- --------------------- ----------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ -------- -------- -------- -------- -------- -------- ----------
<C> <C> <C> <C> <C> <C> <C> <C>
20,142 $ 20,142 -- -- 28,645,762 $ 28,645,762 75,796,036 $75,796,036
141 141 -- -- 283,967 283,967 401,895 401,895
-- -- -- -- (39,227,843) (39,227,843) (72,120,070) (72,120,070)
------ ---------- ------- ------- ----------- ------------ ----------- -----------
20,283 $ 20,283 -- -- (10,298,114) $(10,298,114) 4,077,861 $ 4,077,861
====== ========== ======= ======= =========== ============ =========== ===========
26,263 $ 250,020 -- -- 2,438 $ 23,211 194,976 $ 1,960,677
6 60 -- -- 11,204 105,407 40,650 390,961
(2) (21) -- -- (62,226) (586,764) (665,997) (6,193,972)
------ ---------- ------- ------- ----------- ------------ ----------- -----------
26,267 $ 250,059 -- -- (48,584) $ (458,146) (430,371) $(3,842,334)
====== ========== ======= ======= =========== ============ =========== ===========
25,000 $ 250,000 -- -- 927,748 $ 9,278,116 -- --
3 30 -- -- 263 2,631 -- --
(2) (20) -- -- (2) (20) -- --
------ ---------- ------- ------- ----------- ------------ ----------- -----------
25,001 $ 250,010 -- -- 928,009 $ 9,280,727 -- --
====== ========== ======= ======= =========== ============ =========== ===========
25,694 $ 257,000 -- -- 925,200 $ 9,252,000 -- --
20 206 -- -- 815 8,154 -- --
(698) (7,152) -- -- (2) (20) -- --
------ ---------- ------- ------- ----------- ------------ ----------- -----------
25,016 $ 250,054 -- -- 926,013 $ 9,260,134 -- --
====== ========== ======= ======= =========== ============ =========== ===========
36,238 $ 367,000 -- -- 925,205 $ 9,252,000 -- --
16 162 -- -- 761 7,597 -- --
(4,453) (46,441) -- -- (2) (20) -- --
------ ---------- ------- ------- ----------- ------------ ----------- -----------
31,801 $ 320,721 -- -- 925,964 $ 9,259,577 -- --
====== ========== ======= ======= =========== ============ =========== ===========
25,667 $ 257,000 -- -- 925,000 $ 9,250,000 -- --
20 205 -- -- 754 7,527 -- --
(2) (20) -- -- (2) (20) -- --
------ ---------- ------- ------- ----------- ------------ ----------- -----------
25,685 $ 257,185 -- -- 925,752 $ 9,257,507 -- --
====== ========== ======= ======= =========== ============ =========== ===========
17,756 $ 253,020 -- -- 142,457 $ 2,047,417 1,535,504 $22,813,829
-- -- -- -- 163,206 2,324,883 2,324,823 32,449,031
(200) (3,142) -- -- (1,131,223) (16,731,152) (3,057,955) (45,611,321)
------ ---------- ------- ------- ----------- ------------ ----------- -----------
17,556 $ 249,878 -- -- (825,560) $(12,358,852) 802,372 $ 9,651,539
====== ========== ======= ======= =========== ============ =========== ===========
</TABLE>
PAGE 31
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
At June 30, 1995, Salomon Brothers owned approximately the following
percentages of total shares outstanding of each Fund:
<TABLE>
<S> <C>
Cash Management Fund . . . . . . . . . . . . . . . . . . . . . . . 1%
New York Municipal Bond Fund . . . . . . . . . . . . . . . . . . . 20%
National Intermediate Municipal Fund . . . . . . . . . . . . . . . 96%
U.S. Government Income Fund . . . . . . . . . . . . . . . . . . . . 98%
High Yield Bond Fund . . . . . . . . . . . . . . . . . . . . . . . 69%
Strategic Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . 97%
</TABLE>
4. PORTFOLIO ACTIVITY
Cost of purchases and proceeds from sales of securities, excluding short-term
obligations and written options, for the period ended June 30, 1995, were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------------------------------------------------------------------------------
<S> <C> <C>
New York Municipal Bond Fund . . . . . . . . . . . . . . . $ 397,750 $ 550,377
============ ============
National Intermediate Municipal Fund . . . . . . . . . . . $ 14,536,200 $ 1,013,664
============ ============
U.S. Government Income Fund
U.S. Government Securities . . . . . . . . . . . . . . . $ 20,169,609 $ 12,389,297
============ ============
High Yield Bond Fund . . . . . . . . . . . . . . . . . . . $ 19,447,550 $ 6,341,697
============ ============
Strategic Bond Fund
U.S. Government Securities . . . . . . . . . . . . . . . $ 7,684,578 $ 5,909,906
Other Investments . . . . . . . . . . . . . . . . . . . 12,354,791 4,672,250
------------ ------------
$ 20,039,369 $ 10,582,156
============ ============
Investors Fund
U.S. Government Securities . . . . . . . . . . . . . . . -- $ 3,962,031
Other Investments . . . . . . . . . . . . . . . . . . . $182,413,272 195,091,457
------------ ------------
$182,413,272 $199,053,488
============ ============
</TABLE>
Transactions in options written for the Investors Fund during the six months
ended June 30, 1995 were as follows:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 . . . . . . . . . (1,825) $(428,151)
Options written . . . . . . . . . . . . . . . . . . . . . . (1,115) (289,198)
Options terminated in closing purchase transactions . . . . 2,765 681,423
Options expired . . . . . . . . . . . . . . . . . . . . . . -- --
Options exercised . . . . . . . . . . . . . . . . . . . . . 175 35,926
------- ---------
Options outstanding at June 30, 1995 . . . . . . . . . . . -- --
======= =========
</TABLE>
PAGE 32
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
During the six months ended June 30, 1995, net realized loss from written
option transactions for the Investors Fund amounted to $268,953 and net
realized gain from purchased option transactions amounted to $126,353, for a
net realized loss on all option transactions for the Investors Fund of
$142,600.
5. PORTFOLIO INVESTMENT RISKS
CREDIT RISK. The yields of high yield and emerging market debt obligations
reflect, among other things, perceived credit risk. The Funds' investment in
securities rated below investment grade typically involve risks not associated
with higher rated securities including, among others, greater risk of timely
and ultimate payment of interest and principal, greater market price volatility
and less liquid secondary market trading. The consequences of political,
social, economic or diplomatic changes may have disruptive effects on the
market prices of investments held by the Funds. The Funds' investment in
non-dollar denominated securities may also result in foreign currency losses
caused by devaluations and exchange rate fluctuations.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK. Certain Funds enter into
forward foreign currency contracts ("forward contracts") to facilitate
settlement of foreign currency denominated portfolio transactions or to manage
foreign currency exposure associated with foreign currency denominated
securities. Forward contracts involve elements of market risk in excess of the
amounts reflected in the Statements of Assets and Liabilities. The Funds bear
the risk of an unfavorable change in the foreign exchange rate underlying the
forward contract. Risks may also arise upon entering into these contracts from
the potential inability of the counterparties to meet the terms of their
contracts.
Consistent with their objective to seek high current income, the High Yield
Bond Fund and the Strategic Bond Fund may invest in instruments whose values
and interest rates may be linked to foreign currencies, interest rates, indices
or some other financial indicator. The value at maturity or interest rates for
these instruments will increase or decrease according to the change in the
indicator to which it is indexed. These securities are generally more volatile
in nature and the risk of loss of principal or interest is greater.
A risk in writing a call option is that the Fund may forego the opportunity of
profit if the market price of the underlying security increases and the option
is exercised. A risk in writing a put option is that the Fund may incur a loss
if the market price of the underlying security decreases and the option is
exercised. In addition, there is the risk that the Fund may not be able to
enter a closing transaction because of an illiquid secondary market.
The Cash Management Fund invests in money market instruments maturing in
thirteen months or less whose credit ratings are within the highest ratings
category of two nationally recognized statistical rating organizations
("NRSROs") or if rated by only one NRSRO, the highest rating of that NRSRO, or,
if not rated, are believed by the investment manager to be of comparable
quality. The New York Municipal Bond Fund pursues its investment objectives by
investing at least 65% of its net assets in obligations that are exempt from
regular Federal income tax and from personal income taxes of the State and City
of New York. Because the New York Municipal Bond Fund invests primarily in
obligations of the State and City of New York, it is more susceptible to
factors adversely affecting issuers of such obligations than a fund that is
more diversified.
PAGE 33
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
NOTES TO FINANCIAL STATEMENTS
(unaudited)
6. TAX INFORMATION
At December 31, 1994, the Cash Management Fund and New York Municipal Bond Fund
had net capital loss carry-forwards available to offset future capital gains as
follows:
<TABLE>
<CAPTION>
NEW YORK
CASH MUNICIPAL
YEAR OF MANAGEMENT BOND
EXPIRATION FUND FUND
----------------------------------------------------------------------------------------------------
<S> <C> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 894 --
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 396 --
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 --
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 $305,822
------- --------
$ 2,114 $305,822
======= ========
</TABLE>
At December 31, 1994, as permitted under federal income tax regulations, the
New York Municipal Bond Fund has elected to defer $252,597 of post-October
losses to the next taxable year.
At June 30, 1995, the cost for Federal income tax purposes and gross unrealized
appreciation and depreciation in value of investments held in each Fund were as
follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York Municipal Bond Fund . . . . . . . $ 3,686,346 $ 48,623 $ (84,479) $ (35,856)
National Intermediate Municipal Fund . . . 10,097,958 146,719 (4,323) 142,396
U.S. Government Income Fund . . . . . . . . 11,608,027 153,942 (7,885) 146,057
High Yield Bond Fund . . . . . . . . . . . 17,283,570 440,492 (122,588) 317,904
Strategic Bond Fund . . . . . . . . . . . . 11,678,548 391,327 (104,635) 286,692
Investors Fund . . . . . . . . . . . . . . 319,656,482 72,610,474 (1,694,405) 70,916,069
</TABLE>
PAGE 34
[This page intentionally left blank].
PAGE 35
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
FINANCIAL HIGHLIGHTS
Selected data per share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
---------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------
PERIOD ENDED JUNE 30, 1995
(UNAUDITED)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
----------- ----------- -----------
Net investment income . . . . . . . . . . . . . . . . . . . 0.017 0.016 0.015
Dividends from net investment income . . . . . . . . . . . (0.017) (0.016) (0.015)
----------- ----------- -----------
Net asset value, end of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
=========== =========== ===========
Net assets, end of period (thousands) . . . . . . . . . . . $ 1,163 $ 49 $ 20
Total return* . . . . . . . . . . . . . . . . . . . . . . . +1.7 % +1.6 % +1.6 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 0.55 %** 0.55 %** 0.55 %**
Net investment income . . . . . . . . . . . . . . . . . . . 6.22 %** 5.60 %** 5.59 %**
Before waiver of management fee and/or expenses
absorbed by Salomon Brothers Asset Management
Inc ("SBAM"), net investment income per share and
expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . $ 0.016 $ 0.015 $ 0.015
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . 0.75 %** 0.75 %** 0.75 %**
</TABLE>
<TABLE>
<CAPTION>
NEW YORK MUNICIPAL BOND FUND
---------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------
PERIOD ENDED JUNE 30, 1995
(UNAUDITED)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . $ 8.96 $ 8.96 $ 8.96
----------- ----------- -----------
Net investment income . . . . . . . . . . . . . . . . . . . 0.17 0.15 0.15
Net gain (loss) on securities and futures
(both realized and unrealized) . . . . . . . . . . . . . 0.65 0.65 0.65
----------- ----------- -----------
Total from investment operations . . . . . . . . . . . . . 0.82 0.80 0.80
----------- ----------- -----------
Dividends from net investment income . . . . . . . . . . . (0.17) (0.15) (0.15)
Distributions from net realized gain on securities
and futures . . . . . . . . . . . . . . . . . . . . . . -- -- --
----------- ----------- -----------
Total dividends and distributions . . . . . . . . . . . . . (0.17) (0.15) (0.15)
----------- ----------- -----------
Net asset value, end of period . . . . . . . . . . . . . . $ 9.61 $ 9.61 $ 9.61
=========== =========== ===========
Net assets, end of period (thousands) . . . . . . . . . . . $ 276 $ 253 $ 253
Total return* . . . . . . . . . . . . . . . . . . . . . . . +9.2 % +8.9 % +8.9 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 0.75%** 1.50%** 1.50%**
Net investment income . . . . . . . . . . . . . . . . . . . 5.27%** 4.54%** 4.54%**
Portfolio turnover rate . . . . . . . . . . . . . . . . . . 11% 11% 11%
Before waiver of management fee and/or expenses
absorbed by Salomon Brothers Asset Management
Inc ("SBAM"), net investment income per share and
expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . $ 0.09 $ 0.06 $ 0.06
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . 3.30%** 4.05%** 4.05%**
</TABLE>
(a) October 2, 1990, commencement of investment operations, through December
31, 1990.
(b) February 1, 1993, commencement of investment operations, through December
31, 1993.
* Total return is calculated assuming a $1,000 investment on the first day
of each period reported, reinvestment of all dividends at the net asset
value on the payable date, and a sale at net asset value on the last day
of each period reported. Initial sales charge or contingent deferred sales
charge is not reflected in the calculation of total return. Total return
calculated for a period of less than one year is not annualized.
** Annualized.
Due to the recent commencement of their offering, the ratios for Class A, Class
B and Class C shares may not necessarily be comparable to that of the Class O
shares and are not necessarily indicative of future ratios.
See accompanying notes to financial statements
PAGE 36
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
CLASS O
------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, PERIOD ENDED
JUNE 30, 1995 ---------------------------------------------------- DECEMBER 31,
(UNAUDITED) 1994 1993 1992 1991 1990(a)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- -------
0.027 0.038 0.027 0.033 0.055 0.019
(0.027) (0.038) (0.027) (0.033) (0.055) (0.019)
------- ------- ------- ------- ------- -------
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= =======
$ 8,829 $19,127 $15,049 $11,613 $22,982 $10,293
+2.8 % +3.9 % +2.7 % +3.4 % +5.7 % +1.9 %
0.55 %** 0.61 % 0.65 % 0.65 % 0.65 % 0.65 %**
5.49 %** 3.79 % 2.68 % 3.41 % 5.43 % 7.46 %**
$ 0.026 $ 0.036 $ 0.025 $ 0.030 $ 0.053 $ 0.018
0.75 %** 0.81 % 0.85 % 0.85 % 0.85 % 0.97 %**
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------
CLASS O
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(b)
--------------------------------------------
<S> <C> <C>
$ 8.98 $10.44 $10.00
------- ------ ------
0.27 0.55 0.46
0.64 (1.46) 0.46
------- ------ ------
0.91 (0.91) 0.92
------- ------ ------
(0.27) (0.55) (0.46)
-- -- (0.02)
------- ------ ------
(0.27) (0.55) (0.48)
------- ------ ------
$ 9.62 $ 8.98 $10.44
======= ====== ======
$ 3,101 $3,333 $8,364
+10.2 % -8.8 % +9.4 %
0.50%** 0.50% 0.50%**
5.67%** 5.72% 4.99%**
11 % 63 % 24 %
$ 0.15 $ 0.49 $ 0.40
3.05%** 1.17% 1.24%**
</TABLE>
See accompanying notes to financial statements
PAGE 37
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
FINANCIAL HIGHLIGHTS
Selected data per share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
NATIONAL INTERMEDIATE MUNICIPAL FUND
-------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS O
-----------------------------------------------------
PERIOD ENDED JUNE 30, 1995(a)
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . $10.00 $10.00 $10.00 $10.00
------ ------ ------ ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 0.16 0.13 0.13 0.17
Net gain (loss) on investments (both realized and unrealized) . . 0.14 0.14 0.14 0.14
------ ------ ------ ------
Total from investment operations . . . . . . . . . . . . . . . . 0.30 0.27 0.27 0.31
------ ------ ------ ------
Dividends from net investment income . . . . . . . . . . . . . . (0.16) (0.13) (0.13) (0.17)
Distributions from net realized gain on investments . . . . . . . -- -- -- --
------ ------ ------ ------
Total dividends and distributions . . . . . . . . . . . . . . . . (0.16) (0.13) (0.13) (0.17)
------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . $10.14 $10.14 $10.14 $10.14
====== ====== ====== ======
Net assets, end of period (thousands) . . . . . . . . . . . . . . $ 516 $ 334 $ 254 $9,413
Total return* . . . . . . . . . . . . . . . . . . . . . . . . . . +3.0 % +2.7 % +2.7 % +3.1 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75%** 1.50%** 1.50%** 0.50%**
Net investment income . . . . . . . . . . . . . . . . . . . . . . 4.53%** 3.75%** 3.76%** 4.76%**
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 12% 12% 12% 12%
Before waiver of management fee and/or expenses absorbed by
Salomon Brothers Asset Management Inc ("SBAM"), net investment
income per share and expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . . . . $ 0.12 $ 0.10 $ 0.10 $ 0.13
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 1.78%** 2.53%** 2.53%** 1.53%**
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
-------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS O
-----------------------------------------------------
PERIOD ENDED JUNE 30, 1995(a)
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . $10.00 $10.00 $10.00 $10.00
------ ------ ------ ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 0.21 0.18 0.18 0.22
Net gain (loss) on investments (both realized and unrealized) . . 0.24 0.24 0.24 0.24
------ ------ ------ ------
Total from investment operations . . . . . . . . . . . . . . . . 0.45 0.42 0.42 0.46
------ ------ ------ ------
Dividends from net investment income . . . . . . . . . . . . . . (0.21) (0.18) (0.18) (0.22)
Distributions from net realized gain on investments . . . . . . . -- -- -- --
------ ------ ------ ------
Total dividends and distributions . . . . . . . . . . . . . . . . (0.21) (0.18) (0.18) (0.22)
------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . $10.24 $10.24 $10.24 $10.24
====== ====== ====== ======
Net assets, end of period (thousands) . . . . . . . . . . . . . . $ 264 $ 409 $ 256 $9,480
Total return* . . . . . . . . . . . . . . . . . . . . . . . . . . +4.6 % +4.3 % +4.3 % +4.7 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85%** 1.60%** 1.60%** 0.60%**
Net investment income . . . . . . . . . . . . . . . . . . . . . . 5.97%** 5.23%** 5.22%** 6.22%**
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 203% 203% 203% 203%
Before waiver of management fee and/or expenses absorbed by
Salomon Brothers Asset Management Inc ("SBAM"), net investment
income per share and expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . . . . $ 0.17 $ 0.15 $ 0.15 $ 0.18
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 1.93%** 2.68%** 2.68%** 1.68%**
</TABLE>
(a) February 22, 1995, commencement of investment operations, through June 30,
1995
* Total return is calculated assuming a $1,000 investment on the first day
of each period reported, reinvestment of all dividends at the net asset
value on the payable date, and a sale at net asset value on the last day
of each period reported. Initial sales charge or contingent deferred sales
charge is not reflected in the calculation of total return. Total return
calculated for a period of less than one year is not annualized.
** Annualized.
Due to the recent commencement of their offering, the ratios for Class A, Class
B and Class C shares may not necessarily be comparable to that of the Class O
shares and are not necessarily indicative of future ratios.
See accompanying notes to financial statements
PAGE 38
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
FINANCIAL HIGHLIGHTS
Selected data per share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
HIGH YIELD BOND FUND
-------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS O
-----------------------------------------------------
PERIOD ENDED JUNE 30, 1995(a)
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . $10.00 $10.00 $10.00 $10.00
------ ------ ------ ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 0.36 0.33 0.33 0.37
Net gain (loss) on investments (both realized and unrealized) . . 0.46 0.46 0.46 0.46
------ ------ ------ ------
Total from investment operations . . . . . . . . . . . . . . . . 0.82 0.79 0.79 0.83
------ ------ ------ ------
Dividends from net investment income . . . . . . . . . . . . . . (0.36) (0.33) (0.33) (0.37)
Distributions from net realized gain on investments . . . . . . . -- -- -- --
------ ------ ------ ------
Total dividends and distributions . . . . . . . . . . . . . . . . (0.36) (0.33) (0.33) (0.37)
------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . $10.46 $10.46 $10.46 $10.46
====== ====== ====== ======
Net assets, end of period (thousands) . . . . . . . . . . . . . . $4,239 $ 878 $ 333 $9,683
Total return* . . . . . . . . . . . . . . . . . . . . . . . . . . +8.3 % +8.0 % +8.0 % +8.4 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24%** 1.99%** 1.99%** 0.99%**
Net investment income . . . . . . . . . . . . . . . . . . . . . . 9.54%** 8.67%** 9.11%** 10.21%**
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 63% 63% 63% 63%
Before waiver of management fee and/or expenses absorbed by
Salomon Brothers Asset Management Inc ("SBAM"), net investment
income per share and expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . . . . $ 0.32 $ 0.29 $ 0.30 $ 0.33
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 2.25%** 3.00%** 3.00%** 2.00%**
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC BOND FUND
-------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS O
-----------------------------------------------------
PERIOD ENDED JUNE 30, 1995(a)
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . $10.00 $10.00 $10.00 $10.00
------ ------ ------ ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 0.32 0.30 0.30 0.33
Net gain (loss) on investments (both realized and unrealized) . . 0.46 0.46 0.46 0.46
------ ------ ------ ------
Total from investment operations . . . . . . . . . . . . . . . . 0.78 0.76 0.76 0.79
------ ------ ------ ------
Dividends from net investment income . . . . . . . . . . . . . . (0.32) (0.30) (0.30) (0.33)
Distributions from net realized gain on investments . . . . . . . -- -- -- --
------ ------ ------ ------
Total dividends and distributions . . . . . . . . . . . . . . . . (0.32) (0.30) (0.30) (0.33)
------ ------ ------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . $10.46 $10.46 $10.46 $10.46
====== ====== ====== ======
Net assets, end of period (thousands) . . . . . . . . . . . . . . $ 336 $ 526 $ 269 $9,681
Total return* . . . . . . . . . . . . . . . . . . . . . . . . . . +7.9 % +7.7 % +7.7 % +8.0 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24%** 1.99%** 1.99%** 0.99%**
Net investment income . . . . . . . . . . . . . . . . . . . . . . 9.00%** 8.08%** 8.28%** 9.28%**
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 123% 123% 123% 123%
Before waiver of management fee and/or expenses absorbed by
Salomon Brothers Asset Management Inc ("SBAM"), net investment
income per share and expense ratios would have been:
Net investment income per share . . . . . . . . . . . . . . . . . $ 0.29 $ 0.26 $ 0.27 $ 0.30
Expense ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10%** 2.85%** 2.85%** 1.85%**
</TABLE>
(a) February 22, 1995, commencement of investment operations, through June 30,
1995
* Total return is calculated assuming a $1,000 investment on the first day
of each period reported, reinvestment of all dividends at the net asset
value on the payable date, and a sale at net asset value on the last day
of each period reported. Initial sales charge or contingent deferred sales
charge is not reflected in the calculation of total return. Total return
calculated for a period of less than one year is not annualized.
** Annualized.
Due to the recent commencement of their offering, the ratios for Class A, Class
B and Class C shares may not necessarily be comparable to that of the Class O
shares and are not necessarily indicative of future ratios.
See accompanying notes to financial statements
PAGE 39
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
FINANCIAL HIGHLIGHTS
Selected data per share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
INVESTORS FUND
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
-------------------------------------
PERIOD ENDED JUNE 30, 1995
(UNAUDITED)
-------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . $13.61 $13.61 $13.61
------ ------ ------
Net investment income . . . . . . . . . . . . . . . . . . . . . . 0.08 0.04 0.04
Net gain (loss) on investments
(both realized and unrealized) . . . . . . . . . . . . . . . . 2.21 2.21 2.21
------ ------ ------
Total from investment operations . . . . . . . . . . . . . . . . 2.29 2.25 2.25
------ ------ ------
Dividends from net investment income . . . . . . . . . . . . . . (0.06) (0.05) (0.05)
Distributions from net realized gain on investments . . . . . . . (0.07) (0.07) (0.07)
------ ------ ------
Total dividends and distributions . . . . . . . . . . . . . . . . (0.13) (0.12) (0.12)
------ ------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . $15.77 $15.74 $15.74
====== ====== ======
Net assets, end of period (thousands) . . . . . . . . . . . . . . $ 292 $ 333 $ 276
Total return** . . . . . . . . . . . . . . . . . . . . . . . . . +16.9 % +16.6 % +16.6 %
Ratios to average net assets:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.96%*** 1.71%*** 1.71%***
Net investment income . . . . . . . . . . . . . . . . . . . . . . 1.54%*** 0.81%*** 0.78%***
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 52% 52% 52%
</TABLE>
* Since May 1, 1990, the Fund has been managed by SBAM. Prior thereto, the
Lehman Management Co. division of Shearson Lehman Brothers Inc. served as
the Fund's investment manager.
** Total return is calculated assuming a $1,000 investment on the first day
of each period reported, reinvestment of all divdends at the net asset
value on the "ex-dividend" date, and a sale at net asset value on the last
day of each period reported. Initial sales charge or contingent deferred
sales charge is not reflected in the calculation of total return. Total
return calculated for a period of less than one year is not annualized.
*** Annualized.
Due to the recent commencement of their offering, the ratios for Class A, Class
B and Class C shares may not necessarily be comparable to that of the Class O
shares and are not necessarily indicative of future ratios.
See accompanying notes to financial statements
PAGE 40
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
CLASS O
------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 ----------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990*
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 13.63 $ 15.60 $ 16.10 $ 17.10 $ 14.54 $ 16.65
---------- ---------- ---------- --------- ---------- -----------
0.13 0.27 0.32 0.41 0.44 0.49
2.15 (0.48) 2.03 0.79 3.68 (1.55)
---------- ---------- ---------- --------- ---------- -----------
2.28 (0.21) 2.35 1.20 4.12 (1.06)
---------- ---------- ---------- --------- ---------- -----------
(0.06) (0.27) (0.33) (0.41) (0.46) (0.55)
(0.07) (1.49) (2.52) (1.79) (1.10) (0.50)
---------- ---------- ---------- --------- ---------- -----------
(0.13) (1.76) (2.85) (2.20) (1.56) (1.05)
---------- ---------- ---------- --------- ---------- -----------
$ 15.78 $ 13.63 $ 15.60 $ 16.10 $ 17.10 $ 14.54
========== ========== ========== ========= ========== ===========
$ 390,214 $ 348,214 $ 386,147 $ 370,350 $ 378,615 $ 330,814
+16.8 % -1.3 % +15.1 % +7.4 % +29.3 % -6.5 %
0.71%*** 0.69% 0.68% 0.68% 0.70% 0.68%
1.78%*** 1.75% 1.90% 2.47% 2.67% 3.13%
52% 66% 79% 48% 44% 22%
</TABLE>
See accompanying notes to financial statements
PAGE 41
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
SALOMON BROTHERS INVESTMENT SERIES
DIRECTORS
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
ANDREW L. BREECH*
President, Dealer Operating Control
Service, Inc
THOMAS W. BROCK*
Chairman and Chief Executive Officer,
Salomon Brothers Asset Management
Inc; Managing Director, Salomon
Brothers Inc
CAROL L. COLMAN
President, Colman Consulting Co., Inc.
DANIEL P. CRONIN**
Vice President-General Counsel,
Pfizer International Inc.
WILLIAM R. DILL*
President, Anna Maria College; Formerly
Consultant and Director of the Office of
Global Enterprise and Adjunct Professor,
University of Southern Maine
MICHAEL S. HYLAND
Chairman and President; President,
Salomon Brothers Asset Management Inc;
Managing Director, Salomon Brothers Inc
CLIFFORD M. KIRTLAND, JR.*
Formerly Chairman,
Cox Communications, Inc.
ROBERT W. LAWLESS*
President and Chief Executive Officer,
Texas Tech University
LOUIS P. MATTIS*
Formerly Chairman and President,
Sterling Winthrop, Inc.
THOMAS F. SCHLAFLY*
Of counsel to law firm of Peper, Martin,
Jensen, Maichel & Hetlage; President,
The Saint Louis Brewery, Inc.
OFFICERS
MICHAEL S. HYLAND
Chairman and President
RICHARD E. DAHLBERG*
Executive Vice President
MARYBETH WHYTE**
Executive Vice President
ALLAN R. WHITE, III*
Executive Vice President
ROSS S. MARGOLIES*
Executive Vice President
ALAN M. MANDEL
Treasurer
TANA E. TSELEPIS
Secretary
JANET S. TOLCHIN
Assistant Treasurer
REJI PAUL
Assistant Treasurer
JENNIFER G. MUZZEY*
Assistant Secretary
HONORARY DIRECTOR
EDWIN A. GEE*
Formerly Chairman,
International Paper Company
INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
DISTRIBUTOR
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
DIVIDEND DISBURSING AND TRANSFER AGENT
The Shareholder Services Group, Inc.
P.O. Box 9109
Boston, Massachusetts 02205-9109
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
-------------------------------------------------------------------------------
* Only on The Salomon Brothers Investors Fund Inc
** Only on The Salomon Brothers Series Funds Inc
S A L O M O N B R O T H E R S I N V E S T M E N T S E R I E S
THE SALOMON BROTHERS INVESTMENT SERIES*
Seven World Trade Center
New York, New York 10048
1-800-SALOMON (1-800-725-6666)
SALOMON BROTHERS CASH MANAGEMENT FUND
A GENERAL PURPOSE MONEY MARKET FUND that aims to produce as high a level of
current income as is consistent with liquidity and stability of principal. The
fund invests only in high-quality, short-term money market instruments.
SALOMON BROTHERS NEW YORK MUNICIPAL BOND FUND
A MUNICIPAL BOND FUND that seeks to achieve a high level of current income
which is exempt from regular Federal income taxes and New York State and New
York City personal income taxes as is consistent with the preservation of
capital. Income may not be exempt from certain state or local taxes.
SALOMON BROTHERS NATIONAL INTERMEDIATE
MUNICIPAL FUND
A MUNICIPAL BOND FUND that invests towards the goal of achieving a high level
of current income which is exempt from regular federal income taxes. The Fund
expects to maintain a dollar-weighted average portfolio maturity of 3 to 10
years.
SALOMON BROTHERS U.S. GOVERNMENT INCOME FUND
THE FUND seeks to maintain a high level of current income by investing under
normal market conditions 100% of its assets in debt obligations and
mortgage-backed securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities. The Fund expects to maintain an average
portfolio duration of three to five years.
SALOMON BROTHERS HIGH YIELD BOND FUND
THE FUND seeks to maximize current income by investing in a diversified
portfolio of high yield fixed-income securities rated in medium or lower rating
categories or determined by the investment manager to be of comparable quality.
The Fund may invest up to 35% of its assets in foreign securities.
SALOMON BROTHERS STRATEGIC BOND FUND
THE FUND seeks capital appreciation by investing in a globally diverse
portfolio of fixed-income investments and by giving the investment manager
broad discretion to deploy the Fund's assets among segments of the fixed-income
markets that the investment manager believes will best contribute to the
achievement of the Fund's objectives.
SALOMON BROTHERS INVESTORS FUND INC
PRIMARILY AN EQUITY FUND emphasizing long-term growth of capital with income as
a secondary goal. The Fund invests primarily in securities listed on the New
York Stock Exchange or other national securities exchanges.
-------------------------------------------------------------------------------
* For more complete information about the Salomon Brothers Investment Series
Funds, you may obtain a prospectus by calling the telephone number listed
above.
This report is submitted for the general information of the shareholders
of the Salomon Brothers Investment Series Funds. It is not authorized for
distribution to prospective investors unless accompanied or preceded by an
effective Prospectus for the Funds, which contains information concerning
the Fund's investment policies and expenses as well as other pertinent
information.
-----------------
Salomon Brothers Asset Management BULK RATE
P.O. Box 9109 U.S. POSTAGE
Boston, MA 02205-9109 PAID
BOSTON, MA
PERMIT NO.
54201
-----------------
N-30B-2 Part 2 of 2
---------------------------------------------------------------------
SALOMON BROTHERS
NEW YORK MUNICIPAL MONEY MARKET FUND
SALOMON BROTHERS
August 1, 1995 U.S. TREASURY SECURITIES MONEY MARKET FUND
To Our Shareholders:
WE ARE PLEASED to provide this semi-annual report for the period ended June 30,
1995 for the Salomon Brothers New York Municipal Money Market Fund and the
Salomon Brothers U.S. Treasury Securities Money Market Fund.
ANNUALIZED YIELDS for the seven days ended July 31, 1995 were 3.63% for the New
York Municipal Money Market Fund and 5.04% for the U.S. Treasury Securities
Money Market Fund. For the same period, shareholders reinvesting their dividends
obtained compounded effective annualized yields for the Funds of 3.70% and
5.17%, respectively.
THE FEDERAL RESERVE'S July easing of interest rates resulting from the relative
absence of inflationary pressures has renewed consumer confidence and increased
the chances of a soft landing for the current economic expansion. Barring an
unexpected shock, we believe that neither a boom nor a recession is on the
horizon.
THE POTENTIAL FOR large budget cuts later this year could hamper economic growth
in the short run. However, salutary effects of a credible budget plan on
financial markets and the possibility of further Fed interest rate cuts should
outweigh any negative impact. In the past, significant budget-cutting measures
have produced substantial bond rallies. Federal Reserve Chairman Alan Greenspan
has signaled that if budget cuts harm the economy more than the likely bond
rally helps it, then monetary policy would, in effect, make up the difference.
ALL OF US at Salomon Brothers Asset Management Inc appreciate the confidence you
have demonstrated in the past and hope to continue to justify such confidence in
the future. Please call us with any questions or to receive a prospectus
containing more complete information regarding the Funds at 1-800-SALOMON
(1-800-725-6666).
Cordially,
/s/ MICHAEL S. HYLAND
MICHAEL S. HYLAND
Chairman and President
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES
NEW YORK -- 99.3%
$2,745,000 Albany County, New York
Industrial Development Agency PUT....................... 4.650 % 08/15/95 $ 2,745,000
1,210,000 Albany County, New York
Industrial Development Agency PUT....................... 5.000 12/01/95 1,210,000
2,540,000 Albany, New York
Industrial Development Agency PUT....................... 4.250 07/01/95 2,540,000
875,000 Albany County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 875,000
1,139,000 Albany, New York
Housing Authority VR.................................... 4.300 07/03/95 1,139,000
2,600,000 Amherst, New York
Industrial Development Agency VR........................ 4.300 07/06/95 2,600,000
400,000 Amherst, New York
Industrial Development Agency VR........................ 4.250 07/06/95 400,000
950,000 Auburn, New York
Industrial Development Agency VR........................ 4.200 07/05/95 950,000
1,175,000 Babylon, New York
Industrial Development Agency VR........................ 4.350 07/06/95 1,175,000
2,350,000 Broome County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 2,350,000
650,000 Broome County, New York
Industrial Development Agency VR........................ 4.000 07/05/95 650,000
2,450,000 Chautaqua County, New York
Industrial Development Agency VR........................ 4.200 07/05/95 2,450,000
750,000 Colonie, New York
Housing Development Corporation VR...................... 4.300 07/03/95 750,000
3,760,000 Colonie, New York
Industrial Development Agency PUT....................... 5.000 12/01/95 3,760,000
630,000 Colonie, New York
Industrial Development Agency VR........................ 4.250 07/06/95 630,000
1,400,000 Dutchess County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,400,000
1,240,000 Erie County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,240,000
590,000 Erie County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 590,000
500,000 Erie County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 500,000
450,800 Erie County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 450,800
</TABLE>
See accompanying notes to financial statements.
PAGE 2
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$1,330,000 Fulton County, New York
Industrial Development Agency PUT....................... 5.000 % 12/01/95 $ 1,330,000
1,860,000 Fulton County, New York
Industrial Development Agency VR........................ 4.100 07/06/95 1,860,000
3,030,000 Hempstead Town, New York BAN.............................. 4.500 08/17/95 3,031,044
600,000 Lewis County, New York
Industrial Development Agency VR........................ 4.200 07/05/95 600,000
1,000,000 Metropolitan Transportation Authority
New York AMBAC P/R...................................... 3.650 07/01/96 1,065,231
3,400,000 Metropolitan Transportation Authority
New York VR............................................. 3.750 07/05/95 3,400,000
1,950,000 Monroe County, New York
Industrial Development Agency PUT....................... 4.000 12/01/95 1,950,000
700,000 Monroe County, New York
Industrial Development Agency PUT....................... 4.400 12/15/95 700,000
6,500,000 Monroe County, New York
Industrial Development Agency VR........................ 4.200 07/05/95 6,500,000
4,375,000 Monroe County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 4,375,000
4,300,000 Monroe County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 4,300,000
3,325,000 Monroe County, New York
Industrial Development Agency VR........................ 4.050 07/06/95 3,325,000
2,370,000 Monroe County, New York
Industrial Development Agency VR........................ 4.350 07/06/95 2,370,000
1,740,000 Monroe County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,740,000
1,700,000 Monroe County, New York
Industrial Development Agency VR........................ 4.250 07/05/95 1,700,000
1,580,000 Monroe County, New York
Industrial Development Agency VR........................ 4.350 07/06/95 1,580,000
1,005,000 Monroe County, New York
Industrial Development Agency VR........................ 4.350 07/06/95 1,005,000
250,000 Monroe County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 250,000
</TABLE>
See accompanying notes to financial statements.
PAGE 3
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$5,475,000 Mount Pleasant, New York
Industrial Development Agency VR........................ 4.100 % 07/04/95 $ 5,475,000
8,000,000 Nassau County, New York GO BAN............................ 3.650-3.670 03/15/96 8,032,992
4,685,000 Nassau County, New York GO BAN............................ 4.125-4.150 08/15/95 4,689,734
300,000 Nassau County, New York GO BAN............................ 4.200 11/15/95 301,132
1,230,000 Nassau County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,230,000
800,000 New York City, New York GO VR............................. 3.950 07/05/95 800,000
800,000 New York City, New York GO VR............................. 4.200 07/03/95 800,000
500,000 New York City, New York GO VR............................. 4.200 07/03/95 500,000
4,900,000 New York City, New York
Industrial Development Agency VR........................ 4.900 07/03/95 4,900,000
1,650,000 New York City, New York
Industrial Development Agency VR........................ 4.350 07/06/95 1,650,000
1,600,000 New York City, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,600,000
1,255,000 New York City, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,255,000
860,000 New York City, New York
Industrial Development Agency VR........................ 4.350 07/06/95 860,000
700,000 New York City, New York
Industrial Development Agency VR........................ 4.350 07/06/95 700,000
475,000 New York City, New York
Industrial Development Agency VR........................ 4.400 07/06/95 475,000
300,000 New York City, New York
Industrial Development Agency VR........................ 3.850 07/05/95 300,000
230,000 New York City, New York
Industrial Development Agency VR........................ 4.250 07/06/95 230,000
16,000,000 New York City, New York
Housing Development Corporation VR...................... 4.200 07/06/95 16,000,000
2,000,000 New York City, New York
Housing Development Corporation VR...................... 4.350 07/06/95 2,000,000
1,900,000 New York City, New York
Housing Development Corporation VR...................... 4.200 07/06/95 1,900,000
</TABLE>
See accompanying notes to financial statements.
PAGE 4
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 1,000,000 New York City, New York
Housing Development Corporation VR..................... 3.850 % 07/05/95 $ 1,000,000
500,000 New York City, New York
Housing Development Corporation VR..................... 3.950 07/06/95 500,000
1,000,000 New York City, New York
Municipal Water Finance Authority TECP................. 3.650 08/03/95 1,000,000
100,000 New York City, New York
Trust for Cultural Resources VR........................ 4.050 07/05/95 100,000
16,636,000 New York State,
Dormitory Authority TECP............................... 4.450 08/08/95 16,636,000
500,000 New York State,
Energy Research & Development VR....................... 3.800 07/03/95 500,000
1,000,000 New York State,
Housing Finance Agency VR.............................. 4.000 07/05/95 1,000,000
1,705,000 New York State,
Job Development Authority VR........................... 3.600 07/03/95 1,705,000
925,000 New York State,
Job Development Authority VR........................... 3.600 07/03/95 925,000
500,000 New York State,
Job Development Authority VR........................... 3.700 07/03/95 500,000
100,000 New York State,
Job Development Authority VR........................... 3.600 07/03/95 100,000
100,000 New York State,
Job Development Authority VR........................... 3.600 07/03/95 100,000
75,000 New York State,
Job Development Authority VR........................... 3.700 07/03/95 75,000
2,550,000 New York State,
Medical Care Facilities Finance Agency FHA P/R......... 3.600-4.100 01/15/96 2,667,652
1,000,000 New York State,
Urban Development Corporation BIG P/R.................. 3.500 01/01/96 1,046,061
1,350,000 New York State,
Urban Development Corporation P/R...................... 3.500 01/01/96 1,414,344
1,600,000 Newburgh, New York
Industrial Development Agency VR....................... 4.000 07/05/95 1,600,000
2,935,000 Niagara County, New York
Industrial Development Agency VR....................... 4.150 07/05/95 2,935,000
</TABLE>
See accompanying notes to financial statements.
PAGE 5
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$1,180,000 Niagara County, New York
Industrial Development Agency VR........................ 4.350 % 07/06/95 $ 1,180,000
2,050,000 Oneida County, New York
Industrial Development Agency VR........................ 4.350 07/06/95 2,050,000
379,000 Oneida County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 379,000
3,800,000 Onondaga County, New York
Industrial Development Agency VR........................ 4.150 07/05/95 3,800,000
3,100,000 Onondaga County, New York
Industrial Development Agency VR........................ 4.000 07/06/95 3,100,000
1,300,000 Onondaga County, New York
Industrial Development Agency VR........................ 4.150 07/05/95 1,300,000
3,500,000 Ontario County, New York
Industrial Development Agency VR........................ 5.400 07/03/95 3,500,000
1,500,000 Pelham, New York
Union Free School District TAN.......................... 3.500 11/06/95 1,502,460
1,335,000 Port Authority of
New York and New Jersey TECP............................ 3.200 07/12/95 1,335,000
1,800,000 Rockland County, New York
Industrial Development Agency VR........................ 4.350 07/06/95 1,800,000
430,000 Schoharie County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 430,000
80,000 St. Lawrence County, New York
Industrial Development Agency VR........................ 4.100 07/05/95 80,000
3,250,000 Suffolk County, New York
Industrial Development Agency VR........................ 4.100 07/05/95 3,250,000
2,000,000 Suffolk County, New York
Industrial Development Agency VR........................ 4.000 07/05/95 2,000,000
1,930,000 Suffolk County, New York
Industrial Development Agency VR........................ 3.950 07/05/95 1,930,000
1,500,000 Suffolk County, New York TAN.............................. 3.600 08/15/95 1,502,857
4,000,000 Suffolk County, New York
Water Authority BAN VR.................................. 4.150 07/05/95 4,000,000
3,550,000 Syracuse, New York
Industrial Development Agency VR........................ 4.250 07/05/95 3,550,000
</TABLE>
See accompanying notes to financial statements.
PAGE 6
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND (concluded)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
PRINCIPAL DATE OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$1,500,000 Syracuse, New York
Industrial Development Agency PUT....................... 4.400 % 12/15/95 $ 1,500,000
3,330,000 Triborough Bridge & Tunnel Authority
New York P/R............................................ 3.450-3.600 01/01/96 3,463,510
2,000,000 United Nations Development Corporation
New York P/R............................................ 3.650 07/01/96 2,120,727
725,000 Wyoming County, New York
Industrial Development Agency VR........................ 4.250 07/06/95 725,000
1,440,000 Yates County, New York
Industrial Development Agency VR........................ 4.100 07/06/95 1,440,000
1,230,000 Yonkers, New York
Industrial Development Agency VR........................ 4.250 07/06/95 1,230,000
------------
TOTAL INVESTMENTS -- 99.3% (COST $204,157,544)............ 204,157,544
Other assets in excess of liabilities -- 0.7%............. 1,446,898
------------
NET ASSETS -- 100.0%...................................... $205,604,442
============
</TABLE>
*Yield to maturity on date of purchase, except in the case of Variable Rate
Demand Notes (VR) and Put Bonds, whose yields are determined on date of the
last interest rate change. For Variable Rate Demand Notes and Put Bonds,
maturity date shown is the date of next interest rate change.
Abbreviations used in this statement:
<TABLE>
<S> <C>
AMBAC -- Insured as to principal and interest by the AMBAC Indemnity Corporation
BAN -- Bond Anticipation Note
BIG -- Insured as to principal and interest by the Bond Investors Guaranty Insurance Company
FHA -- Mortgage insured by Federal Housing Administration
GO -- General Obligation
P/R -- Pre-refunded in U.S. Treasury Securities
PUT -- Optional or mandatory put. Maturity date shown is the put date as well as the date of the next
interest rate change.
TAN -- Tax Anticipation Note
TECP -- Tax Exempt Commercial Paper
</TABLE>
See accompanying notes to financial statements.
PAGE 7
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $204,157,544).................................................... $204,157,544
Cash......................................................................................... 181,978
Interest receivable.......................................................................... 1,581,393
Receivable for Fund shares sold.............................................................. 1,484,310
Deferred organization expense................................................................ 3,057
------------
Total assets......................................................................... 207,408,282
------------
LIABILITIES
Payable for securities purchased............................................................. 1,502,460
Payable for Fund shares redeemed............................................................. 223,287
Dividend payable............................................................................. 18,371
Accrued expenses............................................................................. 59,722
------------
Total liabilities.................................................................... 1,803,840
------------
NET ASSETS (equivalent to $1.00 per share on 205,830,167 shares of $.001 par value
capital stock outstanding)................................................................. $205,604,442
============
</TABLE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995 (unaudited)
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INCOME
Interest......................................................................... $4,978,572
EXPENSES
Management fee................................................................... $243,555
Custody and administration fees.................................................. 121,778
Shareholder services............................................................. 48,711
Audit and tax return preparation fees............................................ 24,356
Legal fees....................................................................... 24,356
Printing expenses................................................................ 12,178
Amortization of organization expenses............................................ 6,014
Directors' fees and expenses..................................................... 2,750
Other............................................................................ 27,769 511,467
-------- ----------
Net investment income............................................................ 4,467,105
NET REALIZED GAIN ON INVESTMENTS..................................................... 30,376
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................. $4,497,480
==========
</TABLE>
See accompanying notes to financial statements.
PAGE 8
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income............................................. $ 4,467,105 $ 6,160,954
Net realized gain (loss) on investments........................... 30,376 (65,622)
------------- -------------
Net increase in net assets resulting from operations.............. 4,497,481 6,095,332
------------- -------------
DIVIDENDS FROM NET INVESTMENT INCOME.................................. (4,467,105) (6,160,954)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of shares..................................... 153,390,602 424,692,601
Net asset value of shares issued as reinvestment of dividends..... 4,256,699 5,955,238
Payment for redemption of shares.................................. (221,861,230) (423,206,832)
------------- -------------
Net increase (decrease) in net assets derived from share
transactions.................................................... (64,213,929) 7,441,007
------------- -------------
Net increase (decrease) in net assets............................. (64,183,553) 7,375,385
NET ASSETS
Beginning of period............................................... 269,787,995 262,412,610
------------- -------------
End of period..................................................... $ 205,604,442 $ 269,787,995
============= =============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
SALOMON BROTHERS NEW YORK MUNICIPAL MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER
1995 -------------------------------------------- 31,
(UNAUDITED) 1994 1993 1992 1991 1990*
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------
Net investment income............... 0.018 0.027 0.023 0.031 0.047 0.014sec.
Dividends from net investment
income............................ (0.018) (0.027) (0.023) (0.031) (0.047) (0.014)
-------- -------- -------- -------- -------- -------
Net asset value, end of period...... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== =======
Net assets, end of period
(thousands)....................... $205,604 $269,788 $262,413 $263,685 $154,782 $34,529
Total return........................ +1.8% +2.7% +2.3% +3.1% +4.8% +1.4%
Ratios to average net assets:
Expenses........................ 0.42%** 0.41% 0.41% 0.42% 0.60% 0.64%**sec.
Net investment income........... 3.67%** 2.63% 2.31% 3.07% 4.63% 5.79%**
</TABLE>
* October 2, 1990, commencement of investment operations, through December 31,
1990.
** Annualized.
sec. Net investment income would have been $.012, and the expense ratio would
have been 1.23% for the period ended December 31, 1990 before waiver of
management fee and expenses absorbed by SBAM.
See accompanying notes to financial statements.
PAGE 9
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 1995 (unaudited)
SALOMON BROTHERS U.S. TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD
TO
MATURITY
ON
DATE
PRINCIPAL OF MATURITY VALUE (NOTE
AMOUNT DESCRIPTION PURCHASE* DATE 1a)
------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. TREASURY BILLS -- 63.3%
$ 333,000 U.S. Treasury Bill......................................... 5.580% 08/03/95 $ 331,297
2,371,000 U.S. Treasury Bill......................................... 5.630 08/24/95 2,350,977
3,613,000 U.S. Treasury Bill......................................... 5.440 09/14/95 3,572,052
609,000 U.S. Treasury Bill......................................... 5.485 09/28/95 600,742
2,000,000 U.S. Treasury Bill......................................... 5.520 10/05/95 1,970,560
-----------
TOTAL U.S. TREASURY BILLS (COST $8,825,628)................ 8,825,628
-----------
U.S. TREASURY NOTE -- 35.7%
5,000,000 U.S. Treasury Note (cost $4,984,363)....................... 3.875 08/31/95 4,984,363
-----------
TOTAL INVESTMENTS -- 99.0% (COST $13,809,991).............. 13,809,991
Other assets in excess of liabilities -- 1.0%.............. 143,734
-----------
NET ASSETS -- 100.0%....................................... $13,953,725
===========
</TABLE>
* Yield to maturity on date of purchase, except in the case of the U.S. Treasury
Note. For the U.S. Treasury Note, rate shown is the actual coupon interest
rate.
See accompanying notes to financial statements.
PAGE 10
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
SALOMON BROTHERS U.S. TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $13,809,991)...................................................... $13,809,991
Cash.......................................................................................... 907
Receivable for Fund shares sold............................................................... 95,966
Interest receivable........................................................................... 64,759
Deferred organization expense................................................................. 5,257
-----------
Total assets.......................................................................... 13,976,880
-----------
LIABILITIES
Payable for Fund shares redeemed.............................................................. 126
Dividend payable.............................................................................. 12,225
Accrued expenses.............................................................................. 10,804
-----------
Total liabilities..................................................................... 23,155
-----------
NET ASSETS (equivalent to $1.00 per share on 13,951,647 shares of $.001 par value
capital stock outstanding).................................................................. $13,953,725
===========
</TABLE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995 (unaudited)
SALOMON BROTHERS U.S. TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INCOME
Interest..................................................................................... $535,712
EXPENSES
Custody and administration fees.................................................... $13,916
Management fee..................................................................... 9,666
Shareholder services............................................................... 7,733
Amortization of organization expenses.............................................. 5,984
Audit and tax return preparation fees.............................................. 5,799
Printing expenses.................................................................. 4,833
Registration and filing fees....................................................... 4,833
Legal fees......................................................................... 3,866
Directors' fees and expenses....................................................... 1,933
Other.............................................................................. 4,264 62,827
------- --------
Net investment income........................................................................ 472,885
NET REALIZED GAIN ON INVESTMENTS................................................................. 7,473
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. $480,358
========
</TABLE>
See accompanying notes to financial statements.
PAGE 11
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SALOMON BROTHERS U.S. TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1995 DECEMBER 31,
(UNAUDITED) 1994
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income............................................... $ 472,885 $ 1,045,249
Net realized gain (loss) on investments............................. 7,473 (2,037)
------------ -------------
Net increase in net assets resulting from operations................ 480,358 1,043,212
------------ -------------
DIVIDENDS FROM NET INVESTMENT INCOME.................................... (472,885) (1,045,249)
------------ -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of shares....................................... 43,713,521 127,781,043
Net asset value of shares issued as reinvestment of dividends....... 352,052 881,270
Payment for redemption of shares.................................... (57,834,458) (135,113,944)
------------ -------------
Net decrease in net assets derived from share transactions.......... (13,768,885) (6,451,631)
------------ -------------
Contribution from investment advisor................................ 48,447 --
------------ -------------
Net decrease in net assets.......................................... (13,712,965) (6,453,668)
NET ASSETS
Beginning of period................................................. 27,666,690 34,120,358
------------ -------------
End of period....................................................... $ 13,953,725 $ 27,666,690
============ =============
</TABLE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED DATA PER SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
SALOMON BROTHERS U.S. TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED PERIOD
JUNE ENDED
30, YEAR ENDED DECEMBER 31, DECEMBER
1995 ---------------------------------------- 31,
(UNAUDITED) 1994 1993 1992 1991 1990*
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- -------
Net investment income.................. 0.024 0.036 0.028 0.034 0.054sec. 0.005sec.
Dividends from net investment income... (0.024) (0.036) (0.028) (0.034) (0.054) (0.005)
------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= =======
Net assets, end of period
(thousands).......................... $13,954 $27,667 $34,120 $50,554 $35,414 $ 4,596
Total return........................... +2.5% +3.6% +2.9% +3.4% +5.5% +0.5%
Ratios to average net assets:
Expenses........................... 0.65%** 0.45% 0.35% 0.44% 0.54%sec. 0.74%**sec.
Net investment income.............. 4.89%** 3.53% 2.83% 3.42% 5.23% 6.45%**
</TABLE>
* December 7, 1990, commencement of investment operations, through December 31,
1990.
** Annualized.
sec. Net investment income would have been $.052 and $.004, and the expense
ratios would have been .64% and 1.72%, respectively, for the years ended
December 31, 1991 and 1990 before waiver of management fee and expenses
absorbed by SBAM.
See accompanying notes to financial statements.
PAGE 12
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Salomon Brothers Series Funds Inc (the "Company") was incorporated in Maryland
on April 17, 1990 as an open-end management investment company, and currently
operates as a series company comprised of eight portfolios: Salomon Brothers
Cash Management Fund (the "Cash Management Fund"), Salomon Brothers New York
Municipal Money Market Fund (the "New York Municipal Money Fund"), Salomon
Brothers U.S. Treasury Securities Money Market Fund (the "U.S. Treasury Fund"),
Salomon Brothers New York Municipal Bond Fund (the "New York Municipal Bond
Fund"), Salomon Brothers National Intermediate Municipal Fund (the "National
Intermediate Municipal Fund"), Salomon Brothers U.S. Government Income Fund (the
"U.S. Government Income Fund"), Salomon Brothers High Yield Bond Fund (the "High
Yield Bond Fund"), and Salomon Brothers Strategic Bond Fund (the "Strategic Bond
Fund"). The New York Municipal Money Fund and the U.S. Treasury Fund
(individually, a "Fund", collectively, the "Funds") are reported in this report.
The Cash Management Fund, New York Municipal Bond Fund, National Intermediate
Municipal Fund, U.S. Government Income Fund, High Yield Bond Fund, and Strategic
Bond Fund are reported in a separate report and are not included herein.
Certain costs incurred in connection with the Company's organization, which were
payable to Salomon Brothers Asset Management Inc ("SBAM"), have been deferred
and are being amortized by the Company over a 60 month period from the date each
Fund commenced investment operations. In the event that any of the 100,000
shares purchased by SBAM on September 27, 1990 (the "Initial Shares") are
redeemed during the amortization period by SBAM, the applicable Fund will be
reimbursed by SBAM for any remaining unamortized costs in the same proportion as
the number of Initial Shares redeemed bears to the total number of Initial
Shares outstanding at the time of redemption.
Following is a summary of significant accounting policies followed by each Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
(a) SECURITIES VALUATION. Portfolio securities are valued using the
amortized cost method, which involves initially valuing an investment at
its cost and thereafter assuming a constant amortization to maturity of any
premium or discount. This method results in a value approximating market
value.
(b) FEDERAL INCOME TAXES. Each Fund has complied and intends to
continue to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies, including the distribution
requirements of the Tax Reform Act of 1986, and to distribute all of its
income, including any net realized gains, to shareholders. Therefore, no
Federal income tax or excise tax provision is required.
PAGE 13
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(c) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends on the
shares of each Fund are declared each business day to shareholders of
record that day, and paid on the last business day of the month.
Distributions of net realized gains to shareholders, if any, are declared
annually and recorded on the ex-dividend date.
(d) EXPENSES. Direct expenses are charged to the Fund that incurred
them, and general expenses are allocated to the Funds based on each Fund's
relative average net assets for the period the expense was incurred.
(e) OTHER. Investment transactions are recorded as of the trade date.
Interest income, including the accretion of discounts or amortization of
premiums, is recognized when earned. Gains or losses on sales of securities
are calculated on the identified cost basis.
2. MANAGEMENT FEE AND OTHER AGREEMENTS
The Company retains SBAM, an indirect wholly-owned subsidiary of Salomon Inc, to
act as investment manager of each Fund, subject to the supervision by the Board
of Directors of the Company. SBAM furnishes the Company with office space and
certain services and facilities required for conducting the business of the
Company and pays the compensation of its officers. The management fee for these
services is payable monthly and is based on the following annual percentages of
the Funds' average daily net assets: .20% for the New York Municipal Money Fund
and .10% for the U.S. Treasury Fund.
If in any fiscal year total expenses of any Fund, excluding taxes, interest,
brokerage and extraordinary expenses, but including the management fee, exceed
the most stringent expense limitations imposed by state securities regulations
applicable to the Fund, SBAM will pay or reimburse the Fund for the excess.
Currently, the most restrictive of these limitations on an annual basis is 2.5%
of the first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets and 1.5% of average daily net assets in
excess of $100 million. No such expense reimbursement is expected to be required
for the year ending December 31, 1995.
Investors Bank and Trust Company serves as custodian and administrator for each
Fund, which includes performing custodial and certain administrative services in
connection with the operation of each Fund. The Shareholder Services Group, Inc.
("TSSG") serves as each Fund's transfer and shareholder services agent.
Each Fund has an agreement with Salomon Brothers Inc to distribute its shares.
PAGE 14
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
3. CAPITAL STOCK
At June 30, 1995, the Company had 10,000,000,000 shares of authorized capital
stock, par value $.001 per share. On February 28, 1995, SBAM contributed $48,447
to the U.S. Treasury Fund to offset cumulative net realized losses on investment
transactions.
Net assets consist of:
<TABLE>
<CAPTION>
NEW YORK U.S.
MUNICIPAL TREASURY
MONEY FUND FUND
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Par value............................................................ $ 205,830 $ 13,952
Paid-in capital in excess of par..................................... 205,624,337 13,986,142
Accumulated net realized loss on investments......................... (225,725) (46,369)
------------ -----------
Net assets........................................................... $205,604,442 $13,953,725
=========== ==========
</TABLE>
4. PORTFOLIO ACTIVITY
The New York Municipal Money Fund invests in money market instruments maturing
in thirteen months or less whose credit ratings are within the highest ratings
category of two nationally recognized statistical rating organizations
("NRSROs") or if rated by only one NRSRO, the highest rating of that NRSRO, or,
if not rated, are believed by the investment manager to be of comparable
quality. The U.S. Treasury Fund invests in U.S. Treasury Securities maturing in
thirteen months or less. The New York Municipal Money Fund pursues its
investment objectives by investing at least 65% of its net assets in obligations
that are exempt from regular Federal income tax and from personal income taxes
of the State and City of New York. Because the New York Municipal Money Fund
invests primarily in obligations of the State and City of New York, it is more
susceptible to factors adversely affecting issuers of such obligations than a
fund that is more diversified.
PAGE 15
<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(unaudited)
At December 31, 1994, the New York Municipal Money Fund and the U.S. Treasury
Fund had net capital loss carry-forwards available to offset future capital
gains as follows:
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL U.S.
MONEY TREASURY
YEAR OF EXPIRATION FUND FUND
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
1999......................................................................... $ 94,844 --
2000......................................................................... 94,778 $48,666
2001......................................................................... -- 4,363
2002......................................................................... 65,321 2,005
-------- -------
$254,943 $55,034
======== =======
</TABLE>
At December 31, 1994, as permitted under Federal income tax regulations, the New
York Municipal Money Fund and the U.S. Treasury Fund have elected to defer $301
and $32, respectively, of post-October losses to the next taxable year.
PAGE 16
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SALOMON BROTHERS MONEY MARKET FUNDS
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DIRECTORS
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
CAROL L. COLMAN
President, Colman Consulting Co., Inc.
DANIEL P. CRONIN
Vice President-General Counsel,
Pfizer International Inc.
MICHAEL S. HYLAND
Chairman and President; President,
Salomon Brothers Asset Management Inc;
Managing Director, Salomon Brothers Inc
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OFFICERS
MICHAEL S. HYLAND
Chairman and President
MARYBETH WHYTE
Executive Vice President
ALAN M. MANDEL
Treasurer
TANA E. TSELEPIS
Secretary
JANET S. TOLCHIN
Assistant Treasurer
REJI PAUL
Assistant Treasurer
JENNIFER G. MUZZEY
Assistant Secretary
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SALOMON BROTHERS MONEY MARKET FUNDS
7 World Trade Center
New York, New York 10048
1-800-SALOMON (1-800-725-6666)
INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
DISTRIBUTOR
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
DIVIDEND DISBURSING AND TRANSFER AGENT
The Shareholder Services Group, Inc.
P.O. Box 9109
Boston, Massachusetts 02205-9109
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
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<PAGE>
SALOMON BROTHERS MONEY MARKET FUNDS
-------------------------------------------------------------
THE SALOMON BROTHERS FAMILY OF FUNDS *
SALOMON BROTHERS CAPITAL FUND INC
PRIMARILY AN EQUITY FUND emphasizing capital appreciation. Current income is
incidental. The Fund invests in securities believed to have above-average
appreciation possibilities and may involve above-average risk.
SALOMON BROTHERS OPPORTUNITY FUND INC
AN EQUITY FUND that invests for long-term capital appreciation. Current income
is secondary. The Fund may employ speculative investment techniques to attain
its goals.
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*For more complete information about the Salomon Brothers Family of Funds, you
may obtain a Prospectus by calling 1-800-SALOMON (1-800-725-6666).
This report is submitted for the general information of the shareholders of
Salomon Brothers Family of Funds. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
<PAGE>
SALOMON BROTHERS ASSET MANAGEMENT INC
P.O. BOX 9109
BOSTON, MA 02205-9109
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BULK RATE
U.S. POSTAGE
PAID
BOSTON, MA
PERMIT NO.
54201
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