<PAGE>
GREENWICH STREET SERIES FUND
Equity Index Portfolio
388 Greenwich Street
New York, New York 10013
Contract Owner Inquiries: (800) 451-2010
Prospectus dated April 29, 1997
Greenwich Street Series Fund (the "Fund") is a diversified, open-end
management investment company, with ten portfolios (the "Portfolios"), each with
separate goals and investment policies. Shares of the Equity Index Portfolio
(the "Portfolio") may be acquired only by investing in a qualifying variable
annuity or variable life insurance contract (a "Contract") offered by
participating life insurance companies.
The Portfolio's goal is to provide investment results that, before
deduction of operating expenses, match the price and yield performance of U.S.
publicly traded common stocks, as measured by the Standard & Poor's Daily Price
Index of 500 Common Stocks (the "S&P 500").
There can be no guarantee that the Portfolio's goal will be achieved
because any investment involves risks. Discussions of the investments which the
Portfolio will make, and their related risks, are found in the sections of this
Prospectus entitled "Investment Goal and Policies of the Portfolio," "Additional
Investments" and "Special Considerations" and the Appendix to this Prospectus.
This Prospectus, which sets forth certain information about the Fund and
the Portfolio that you should know before investing, should be read in
conjunction with the applicable Contract prospectus and retained for future
reference. Additional information about the Fund and the Portfolio has been
filed with the Securities and Exchange Commission (the "SEC") in a document
entitled "Statement of Additional Information," dated April 29, 1997, as amended
or supplemented from time to time, which is available upon request and without
charge by calling or writing the Fund at the telephone number or address set
forth above or by contacting a representative of a participating life insurance
company.
The Fund is responsible only for statements that are included in this
Prospectus, the Statement of Additional Information or in authorized sales
material. The Statement of Additional Information is incorporated by reference
into this Prospectus in its entirety. You cannot buy shares of the Fund
directly. You can invest in the Fund by buying separate accounts which fund
Contracts offered by designated insurance companies.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS OF THE
CONTRACT. BOTH PROSPECTUSES SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE
REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY
STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 29, 1997
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CONTENTS
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SUMMARY............................................................. 1
EXPENSES OF THE PORTFOLIO........................................... 2
FINANCIAL HIGHLIGHTS................................................ 2
INVESTMENT GOAL AND POLICIES OF THE PORTFOLIO....................... 3
ADDITIONAL INVESTMENTS.............................................. 3
CERTAIN INVESTMENT STRATEGIES AND GUIDELINES........................ 4
PORTFOLIO TRANSACTIONS.............................................. 5
NET ASSET VALUE..................................................... 5
HOW TO USE THE PORTFOLIO............................................ 6
DIVIDENDS AND TAXES................................................. 6
MANAGEMENT OF THE FUND.............................................. 8
PORTFOLIO MANAGEMENT................................................ 8
CUSTODIAN AND TRANSFER AGENT........................................ 9
DISTRIBUTOR......................................................... 9
ADDITIONAL INFORMATION.............................................. 9
THE PORTFOLIO'S PERFORMANCE......................................... 10
APPENDIX............................................................ 12
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, the Statement of
Additional Information or the Fund's official sales literature in connection
with the offering of the Fund's shares, and, if given or made, such other
information or representations must not be relied upon as having been authorized
by the Fund. This Prospectus does not constitute an offer in any state in which,
or to any person to whom, the offer may not lawfully be made.
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SUMMARY
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THE PORTFOLIO
The Portfolio is one of ten Portfolios of the Fund, a diversified, open-
end management investment company registered under the Investment Company Act of
1940 as amended (the "1940 Act"). The Portfolio's investment objective is to
provide investment results that, before deduction of operating expenses, match
the price and yield performance of U.S. publicly traded common stocks, as
measured by the S&P 500. The Portfolio invests primarily in the common stocks of
companies represented in the S&P 500.
MANAGEMENT
Travelers Investment Management Company ("TIMCO" or "Investment
Adviser") serves as the Portfolio's investment adviser. TIMCO is a wholly owned
subsidiary of Travelers Group Inc., ("Travelers") a diversified financial
services holding company engaged, through its subsidiaries, principally in four
business segments: Investment Services, Consumer Finance Services, Life
Insurance Services and Property & Casualty Insurance Services. Smith Barney
Mutual Funds Management Inc. ("SBMFM" or the "Administrator") serves as the
Portfolio's administrator. SBMFM is a wholly owned subsidiary of Smith Barney
Holdings Inc. ("Holdings"), which in turn is a wholly owned subsidiary of
Travelers. See "Management of the Fund."
BUYING SHARES
Shares of the Portfolio are offered only to Contract owners as set forth
in the specific Contract. In the future, the Fund may establish additional
portfolios which may or may not be available hereunder. See "How to Use the
Fund."
REDEEMING SHARES
Shares may be redeemed as described in the applicable Contract
prospectus. See "How to Use the Fund."
RISK FACTORS AND SPECIAL CONSIDERATIONS
Investors in the Portfolio should be aware of the following general
observations: the non-publicly traded and illiquid securities which the
Portfolio may hold may have to be sold at lower prices, or remain unsold, when
the Portfolio desires to dispose of them. The Portfolio may make certain
investments and employ certain investment techniques that involve other risks,
including entering into repurchase agreements, investing in exchange rate-
related securities, lending portfolio securities, and entering into futures
contracts and related options as hedges. These risks and those associated with
put and call options and covered option writing are described under "Investment
Goals and Policies of the Portfolio," "Special Considerations and Risk Factors"
and in the Appendix to this Prospectus.
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EXPENSES OF THE PORTFOLIO
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The Portfolio will bear its own expenses. Operating expenses for the
Portfolio generally will consist of all costs not specifically borne by its
Investment Adviser and Administrator or the Fund's distributor, including
organizational costs, investment advisory and administration fees, fees for
necessary professional and brokerage services, fees for any pricing service, the
costs of regulatory compliance and costs associated with maintaining legal
existence and shareholder relations. From time to time, the Investment Adviser
and/or Administrator of the Portfolio may waive all or a portion of the fees
payable to it by the Portfolio, thereby reducing the expenses of the Portfolio.
A detailed description of the expenses involved in investing in a Contract and
the Portfolio is included in the Contract prospectus.
FINANCIAL HIGHLIGHTS
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The following information for the fiscal years ended December 31, 1996
and 1995 has been audited by KPMG Peat Marwick LLP, independent auditors, whose
report thereon appears in the Fund's Annual Report dated December 31, 1996. The
information with respect to the four years ended December 31, 1994 has been
audited by other auditors whose report thereon appears in the Fund's Annual
Report dated December 31, 1994. The information set out below should be read in
conjunction with the financial statements and related notes that also appear in
the Fund's Annual Report to Shareholders which is incorporated by reference into
the Statement of Additional Information.
For a share of beneficial interest outstanding throughout each year:
<TABLE>
<CAPTION>
Equity Index Portfolio 1996 1995 1994 1993 1992 1991(1)
===========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 15.58 $ 11.69 $ 11.90 $11.27 $10.62 $ 10.00
Income From Operations:
Net investment income(2) 0.22 0.25 0.23 0.20 0.17 0.04
Net realized and unrealized gain (loss) 3.17 3.88 (0.14) 0.71 0.55 0.58
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Total Income From Operations 3.39 4.13 0.09 0.91 0.72 0.62
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Less Distributions From:
Net investment income (0.23) (0.23) (0.15) (0.16) (0.02) --
Net realized gains (0.38) (0.01) (0.15) (0.12) (0.05) --
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Total Distributions (0.61) (0.24) (0.30) (0.28) (0.07) --
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Net Asset Value, End of Year $ 18.36 $ 15.58 $ 11.69 $11.90 $11.27 $ 10.62
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Total Return 21.68% 35.81% 0.85% 8.66% 6.74% 6.20%+++
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Net Assets, End of Year (000's) $19,258 $15,230 $10,225 $8,842 $4,178 $ 1,733
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Ratios to Average Net Assets:
Expenses(2) 1.06% 1.00% 1.00% 1.00% 1.00% 0.98+
Net investment income 1.37% 1.84% 2.10% 1.77% 2.10% 2.91+
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Portfolio turnover rate 7% 5% 1% 1% 8% --
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Average commissions paid on
equity transactions(3) $ 0.04 $ 0.05 -- -- -- --
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</TABLE>
(1) For the period from October 16, 1991 (commencement of operations) to
December 31, 1991.
(2) The Investment Adviser waived all or part of its fees for the four-year
period ended December 31, 1995 and the period ended December 31, 1991. In
addition, IDS Life reimbursed expenses of $6,842, $25,496, $28,169, $31,633
and $7,408 for the four-year period ended December 31, 1995 and the period
ended December 31, 1991. If such fees had not been waived and expenses
reimbursed, the per share effect on net investment income and the expense
ratios would have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases to Expense Ratios Without
Net Investment Income Waivers and Reimbursements
-------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio 1995 1994 1993 1992 1991 1995 1994 1993 1992 1991
- ---------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Equity Index $0.02 $0.06 $0.10 $0.15 $0.09 1.17% 1.53% 1.88% 2.89% 7.60%+
</TABLE>
(3) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per year.
* Amount represents less than $0.01.
+++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
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INVESTMENT GOAL AND POLICIES OF THE PORTFOLIO
================================================================================
Set forth below is a description of the investment goal and policies of
the Portfolio. The investment goal of the Portfolio may not be changed without
the approval of the holders of a majority (as defined in the 1940 Act) of the
outstanding shares of the Portfolio. There can, of course, be no guarantee that
the Portfolio will achieve its investment goal. Additional information about
investment strategies that the Portfolio may employ and investment policies
mentioned below appears in the Appendix to this Prospectus and in the Statement
of Additional Information.
GOAL
The Portfolio's goal is to provide investment results that, before
deduction of operating expenses, match the price and yield performance of U.S.
publicly traded common stocks, as measured by the S&P 500.
INVESTMENT POLICIES
The Portfolio will seek to achieve its goal by owning all 500 stocks in
the S&P 500 in proportion to their actual market capitalization weightings. The
Portfolio will be reviewed daily and adjusted, when necessary, to maintain
security weightings as close to those of the S&P 500 as possible, given the
amount of assets in the Portfolio at that time. The Portfolio may invest up to
5% of its assets in equity securities that are not included in the S&P 500 if
TIMCO believes such investments will assist the Portfolio in approximating the
return of the S&P 500. The Portfolio may use up to an additional 20% of its
assets to enter into stock index futures and related options to increase
efficiency, may lend portfolio securities and write covered options to help
offset operating expenses, and may acquire money market instruments. Portfolio
turnover is expected to be lower than for most other investment companies.
No attempt will be made to manage the Portfolio in the traditional sense
using economic, financial and market analysis, nor will the adverse financial
situation of an issuer necessarily result in the elimination of its securities
from the Portfolio, unless the securities are removed from the S&P 500. From
time to time, administrative adjustments may be made in the Portfolio because of
changes in the composition of the S&P 500. TIMCO reserves the right to remove an
investment from the Portfolio if, in its opinion, the merit of the investment
has been substantially impaired by extraordinary events or financial conditions.
The Portfolio will use the S&P 500 as its standard for performance
comparison because the S&P 500 represents approximately 70% of the total market
value of all U.S. common stocks, is well known to investors and is
representative of the performance of publicly traded U.S. common stocks.
ADDITIONAL INVESTMENTS
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MONEY MARKET INSTRUMENTS
The Portfolio may, as a cash management tool, hold up to 20% of the
value of its total assets in cash and invest in short-term instruments and, for
temporary defensive purposes, may hold cash and invest in short-term instruments
without limitation. Short-term instruments in which the Portfolio may invest
include: U.S. government securities; obligations of banks having at least $1
billion in assets (including certificates of deposit, time deposits and bankers'
acceptances of U.S. or foreign banks, U.S. savings and loan associations and
similar institutions); commercial paper rated no lower than A-2 by Standard &
Poor's Ratings Group ("S&P") or Prime-2 by Moody's Investors Service, Inc.
("Moody's") or the equivalent from another nationally recognized statistical
ratings organization ("NRSRO") or, if unrated, of an issuer having an
outstanding, unsecured debt issue then rated within the two highest rating
categories; and repurchase
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3
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agreements with respect to any of the foregoing entered into with banks and non-
bank dealers approved by the Fund's Board of Trustees.
Currently, there are six NRSROs: S&P, Moody's, Fitch Investors Services,
Inc., Duff and Phelps Credit Rating Co., IBCA Limited and its affiliate, IBCA,
Inc. and Thomson Bankwatch. A discussion of the ratings categories of the NRSROs
is contained in the Appendix to the Statement of Additional Information.
U.S. GOVERNMENT SECURITIES
The U.S. government securities in which the Portfolio may invest
include: direct obligations of the United States Treasury (such as Treasury
Bills, Treasury Notes and Treasury Bonds), and obligations issued by U.S.
government agencies and instrumentalities, including securities that are
supported by the full faith and credit of the United States (such as
certificates issued by Government National Mortgage Association); securities
that are supported by the right of the issuer to borrow from the U.S. Treasury
(such as securities of Federal Home Loan Banks); and securities that are
supported only by the credit of the instrumentality (such as bonds issued by
Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation). Treasury Bills have maturities of less than one year, Treasury
Notes have maturities of one to ten years and Treasury Bonds generally have
maturities of greater than ten years at the date of issuance.
CERTAIN INVESTMENT STRATEGIES AND GUIDELINES
================================================================================
Up to 10% of the total assets of the Portfolio may be invested in
securities with contractual or other restrictions on resale and other
instruments that are not readily marketable, including repurchase agreements
with maturities greater than seven days and time deposits maturing in more than
seven calendar days. The Portfolio may borrow from banks for temporary or
emergency purposes, but not for leverage, in an amount up to 30% of its assets,
and may pledge its assets to the same extent in connection with such borrowings.
Whenever borrowings from banks exceed 5% of the value of the assets of the
Portfolio, the Portfolio will not make any additional investments. Except for
the limitations on borrowing, the investment guidelines set forth in this
paragraph may be changed at any time without shareholder consent by vote of the
Board of Trustees of the Fund. A complete list of investment restrictions that
identifies additional restrictions that cannot be changed without the approval
of a majority of the Portfolio's outstanding shares is contained in the
Statement of Additional Information.
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase agreement transactions on
portfolio securities, in each case with banks which are the issuers of
instruments acceptable for purchase by the Portfolio and with certain dealers
listed on the Federal Reserve Bank of New York's list of reporting dealers.
Under the terms of a typical repurchase agreement, the Portfolio would acquire
an underlying debt obligation for a relatively short period (usually not more
than one week) subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Portfolio's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Portfolio's holding period. The value of the underlying securities
will be monitored by the Investment Adviser to ensure that it at least equals at
all times the total amount of the repurchase obligation, including interest. The
Portfolio bears a risk of loss in the event that the other party to a repurchase
agreement defaults on its obligations and the Portfolio is delayed or prevented
from exercising its rights to dispose of the collateral securities, including
the risk of a possible decline in the value of the underlying securities during
the period while the Portfolio seeks to assert these rights. The Investment
Adviser, acting under the supervision
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4
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of the Fund's Board of Trustees, reviews on an ongoing basis the value of the
collateral and the creditworthiness of those banks and dealers with which the
Portfolio enters into repurchase agreements to evaluate potential risks. A
repurchase agreement is considered to be a loan collateralized by the underlying
securities under the 1940 Act.
LENDING OF SECURITIES
The Portfolio may lend its portfolio securities to brokers, dealers and
other financial organizations. By lending its securities, the Portfolio can
increase its income by continuing to receive interest on the loaned securities
as well as by either investing the cash collateral in short-term instruments or
obtaining yield in the form of interest paid by the borrower when U.S.
government securities are used as collateral. Loans of portfolio securities, if
and when made by the Portfolio, may not exceed 331/3% of the Portfolio's total
assets, taken at value. Loans of the Portfolio's securities will be
collateralized by cash, letters of credit or U.S. government securities, which
are maintained at all times in an amount equal to the current market value of
the loaned securities. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Portfolio.
PORTFOLIO TRANSACTIONS
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All orders for transactions in securities on behalf of the Portfolio
will be placed by the Investment Adviser with broker-dealers that the Investment
Adviser selects, including Smith Barney and other affiliated brokers. The
Portfolio may utilize Smith Barney or a Smith Barney-affiliated broker in
connection with a purchase or sale of securities when the Investment Adviser
believes that the broker's charge for the transaction does not exceed usual and
customary levels.
NET ASSET VALUE
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The value of an individual share of the Portfolio is the net asset value
of that share. The net asset value per share of the Portfolio will be calculated
separately on each day, Monday through Friday, except on days when the New York
Stock Exchange, Inc. (the "NYSE") is closed. The NYSE is currently scheduled to
be closed on New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas, and on the preceding
Friday or subsequent Monday when one of these holidays falls on a Saturday or
Sunday, respectively. Net asset value per share of the Portfolio is determined
as of the close of regular trading on the NYSE (currently 4:00 p.m., New York
time).
Net asset value per share is computed by dividing the value of the
Portfolio's net assets by the total number of its shares outstanding. Generally,
the Portfolio's investments are valued at market value or, in the absence of a
market value with respect to any portfolio securities, at fair value as
determined by or under the direction of the Fund's Board of Trustees. A security
that is primarily traded on a U.S. or foreign exchange (including securities
traded through the National Market System) is valued at the last sale price on
that exchange or, if there were no sales during the day, at the current quoted
bid price. Portfolio securities that are primarily traded on foreign exchanges
are generally valued at the preceding closing values of such securities on their
respective exchanges, except that when an occurrence subsequent to the time a
value was so established is likely to have changed the value, then the fair
value of those securities will be determined by consideration of other factors
by or under the direction of the Fund's Board of Trustees or its delegates.
Over-
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5
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the-counter securities that are not traded through the National Market
System and securities listed or traded on certain foreign exchanges whose
operations are similar to the U.S. over-the-counter market are valued on the
basis of the mean between the bid and asked prices at the close of business on
each day. Investments in U.S. government securities (other than short-term
securities) are valued at the average of the quoted bid and asked prices in the
over-the-counter market. Short-term investments that mature in 60 days or less
are valued at amortized cost when the Fund's Board of Trustees determines that
this constitutes fair value. Further information regarding the Fund's valuation
policies is contained in the Statement of Additional Information.
HOW TO USE THE PORTFOLIO
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INVESTING IN THE PORTFOLIO
Shares of the Portfolio are currently offered exclusively to Contract
owners. To find out which insurance companies offer Contracts that are eligible
to invest in the Fund, call the Fund at (800) 451-2010. For further information,
see the description provided in the Contract prospectus.
SALES CHARGES AND SURRENDER CHARGES
The Fund does not assess any sales charge, either when it sells or when
it redeems shares of the Portfolio. However, surrender charges that may be
assessed under the Contract are described in the Contract prospectus. Mortality
and expense risk fees and other charges are also described in the Contract
prospectus.
REDEEMING AND EXCHANGING SHARES
The Fund will redeem shares in response to full or partial surrenders of
a Contract. Generally, payment upon redemption will be made within three
business days after receiving a valid redemption request (unless redemption is
suspended or payment is delayed as permitted in accordance with SEC
regulations). The Fund will use the net asset value at the close of trading on
the NYSE on the day the notice of surrender or transfer is received. If the
request is received after the close of trading on the NYSE, the shares will be
redeemed at the net asset value at the close of the next business day. The value
of any redeemed shares may be more or less than their original purchase price.
A detailed description of how to surrender the Contract is included in
the Contract prospectus.
DIVIDENDS AND TAXES
================================================================================
DIVIDENDS
Net Investment Income. Dividends and distributions will be automatically
reinvested, without a sales charge, in the shareholder's account at net asset
value in additional shares of the Portfolio, unless the shareholder instructs
the Portfolio to pay all dividends and distributions in cash. Net investment
income, including dividends on stocks and interest on bonds or other securities
the Fund holds, is distributed to the shareholders of the Portfolio annually.
Capital Gains. Distributions of any net realized capital gains of the
Portfolio will be paid annually shortly after the close of the fiscal year in
which they are earned.
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TAXES
In the opinion of counsel to the Fund, the Portfolio will be treated as
a separate taxpayer with the result that, for federal income tax purposes, the
amounts of investment income and capital gains earned will be determined on a
portfolio (rather than on a Fund-wide) basis.
The Fund intends that the Portfolio will separately meet the
requirements for qualification each year as a "regulated investment company"
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to qualify as a regulated investment company, the Portfolio
must meet certain income and diversification tests, including the requirement
that it derive less than 30% of its gross income in each taxable year from the
sale or other disposition of (a) stock or securities held for less than three
months; (b) options, futures or forward contracts (other than options, futures
or forward contracts on foreign currencies) held for less than three months and
(c) foreign currencies (or options, futures or forward contracts on such foreign
currencies) held for less than three months but only if such currencies (or
options, futures or forward contracts) are not directly related to the
Portfolio's principal business of investing in stock or securities (or options
or futures with respect to stock or securities). As a regulated investment
company and provided certain distribution requirements are met, the Portfolio
will not be subject to federal income tax on its net investment income and net
capital gains that it distributes to its shareholders.
Dividends paid by the Portfolio from taxable investment income and
distributions of short-term capital gains will be treated as ordinary income in
the hands of the shareholders for federal income tax purposes, whether received
in cash or reinvested in additional shares. Distributions of net long-term
capital gains will be treated as long-term capital gains in the hands of the
shareholders, if certain notice and designation requirements are satisfied,
whether paid in cash or reinvested in additional shares, regardless of the
length of time the investor has held shares of the Portfolio. The Fund has been
informed that the separate accounts represented by the Contracts should, for
federal income tax purposes, be considered the shareholders of the Portfolio.
To comply with regulations under Section 817(h) of the Code, the
Portfolio will be required to diversify its investments so that on the last day
of each calendar quarter no more than 55% of the value of its assets is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments and no
more than 90% is represented by any four investments. Generally, all securities
of the same issuer are treated as a single investment. For the purposes of
Section 817(h) of the Code, obligations of the United States Treasury and each
U.S. government agency or instrumentality are treated as securities of separate
issuers.
The Treasury Department has indicated that it may issue future
pronouncements addressing the circumstances in which a variable contract owner's
control of the investments of a separate account may cause the variable contract
owner, rather than the insurance company, to be treated as the owner of the
assets held by the separate account. If the variable contract owner is
considered the owner of the securities underlying the separate account, income
and gains produced by those securities would be included currently in the
variable contract owner's gross income. It is not known what standards will be
set forth in such pronouncements or when, if at all, these pronouncements may be
issued.
In the event that rules or regulations are adopted, there can be no
assurance that the Portfolio will be able to operate as currently described in
this Prospectus, or that the Fund will not have to change the investment goal or
investment policies of the Portfolio. While the Portfolio's investment goal is
fundamental
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7
<PAGE>
and may be changed only by a vote of a majority of the Portfolio's outstanding
shares, the Fund's Board of Trustees reserves the right to modify the investment
policies of the Portfolio as necessary to prevent any such prospective rules and
regulations from causing a Contract owner to be considered the owner of the
shares of the Portfolio.
Reference is made to the Contract prospectus for information regarding
the federal income tax treatment of distribution.
MANAGEMENT OF THE FUND
================================================================================
BOARD OF TRUSTEES
Overall responsibility for management and supervision of the Fund and
the Portfolio rests with the Fund's Board of Trustees. The Trustees approve all
significant agreements between the Fund and the persons or companies that
furnish services to the Fund and the Portfolio, including agreements with the
Investment Adviser and Administrator of the Portfolio, and with the Fund's
custodian, transfer agent and distributor. The day-to-day operations of the
Portfolio are delegated to the Investment Adviser and Administrator of the
Portfolio. The identities and backgrounds of the Trustees and officers of the
Fund, together with certain additional information about them, are contained in
the Statement of Additional Information. The Fund requires no employees other
than its executive officers, none of whom devotes full time to the affairs of
the Fund.
INVESTMENT ADVISER
Subject to the supervision and direction of the Fund's Board of
Trustees, the Investment Adviser of the Portfolio manages the Portfolio in
accordance with its goal and stated investment policies, makes investment
decisions for the Portfolio, places orders to purchase and sell securities on
behalf of the Portfolio and employs professional portfolio managers and
securities analysts who provide research services to the Portfolio.
TIMCO, located at One Tower Square, Hartford, CT 06183-2030, provides
investment advisory and management services to investment companies affiliated
with Holdings. TIMCO renders investment advice to investment companies that had
aggregate assets under management as of March 1, 1997, of approximately $1.4
billion.
ADMINISTRATOR
SBMFM, located at 388 Greenwich Street, New York, New York 10013,
provides investment advisory and management services to investment companies
affiliated with Holdings. SBMFM renders investment advice to investment
companies that had aggregate assets under management as of March 1, 1997, in
excess of $80 billion.
PORTFOLIO MANAGEMENT
================================================================================
Kent A. Kelley is Chief Executive Officer of TIMCO. Mr. Kelley joined
TIMCO in 1986. Mr. Sandip A. Bhagat is a Vice President and Investment Officer
of the Fund, and President of TIMCO. Mr. Bhagat joined TIMCO in 1987.
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The Fund's management discussion and analysis, and additional
performance information regarding the portfolios of the Fund during the fiscal
year ended December 31, 1996, is included in the Annual Report, dated December
31, 1996. A copy of the Annual Report may be obtained upon request without
charge from a representative of a participating life insurance company or by
writing or calling of the Fund at the address or phone number listed on the
cover page of this Prospectus.
CUSTODIAN AND TRANSFER AGENT
================================================================================
PNC, located at 17th and Chestnut Streets, Philadelphia, Pennsylvania
19103, acts as custodian of the Portfolio's investment generally.
The transfer agent, First Data Investor Serves Group, Inc., is located
at Exchange Place, Boston, Massachusetts 02109.
DISTRIBUTOR
================================================================================
Smith Barney Inc., a subsidiary of Holdings, located at 388 Greenwich
Street, New York, New York 10013, serves as distributor of the Fund's shares,
for which it receives no separate fee from the Fund. Insurance companies
offering the Contracts pay Smith Barney for the services it provides and the
expenses it bears in distributing the Contracts, including payment of
commissions for sales. Insurance companies offering the Contracts will bear
certain additional costs in connection with the offering of the Fund's shares,
including the costs of printing and distributing prospectuses, statements of
additional information and sales literature.
ADDITIONAL INFORMATION
================================================================================
FORMATION
The Fund was organized on May 13, 1991, under the laws of the
Commonwealth of Massachusetts and is a business entity commonly known as a
"Massachusetts business trust." The Fund registered with the SEC as a
diversified, open-end management investment company, as defined in the 1940 Act.
The Fund commenced operations on October 16, 1991, under the name Shearson
Series Fund. On July 30, 1993 and October 14, 1994, the Fund changed its name to
Smith Barney Shearson Series Fund and Smith Barney Series Fund, respectively. On
July 24, 1997, the Fund changed its name to Greenwich Street Series Fund.
SHARES OF BENEFICIAL INTEREST
The Fund offers shares of beneficial interest of separate series with a
par value of $0.001 per share. Shares of ten series have been authorized, which
represent the interests in ten portfolios. When matters are submitted for
shareholder vote, shareholders of each portfolio will have one vote for each
full share owned and proportionate, fractional votes for fractional shares held.
For a discussion of the rights of Contract owners concerning the voting
of shares, please refer to the Contract prospectus.
Generally, shares of the Fund vote by individual portfolio on all
matters except (a) matters affecting only the interests of more than one of the
portfolios, in which case shares of the affected portfolios would be
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entitled to vote, or (b) when the 1940 Act requires that shares of the
portfolios be voted in the aggregate. All shares of the Fund vote together as
one series for the election of Trustees. There will normally be no meetings of
shareholders for the purpose of electing Trustees unless less than a majority of
the Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Any Trustee may be removed from the office upon the vote of
shareholders holding at least two-thirds of the Fund's outstanding shares at a
meeting called for that purpose. The Trustees are required to call such a
meeting upon the written request of shareholders holding at least 10% of the
Fund's outstanding shares. In addition, shareholders who meet certain criteria
will be assisted by the Fund in communicating with other shareholders in seeking
the holding of such a meeting.
The Fund sends each owner of a Contract a semi-annual report and an
annual report, each of which includes a list of the investment securities held
by the Portfolio at the end of the period covered. Contract owners may make
inquiries regarding the Fund and the Portfolio, including the current
performance of the Portfolio, from a representative of a participating life
insurance company.
THE PORTFOLIO'S PERFORMANCE
================================================================================
TOTAL RETURN
From time to time, the Portfolio may advertise its "average annual total
return" over various periods of time. Such total return figure shows average
percentage change in value of an investment in the Portfolio from the beginning
date of the measuring period to the end of the measuring period. These figures
reflect changes in the price of the Portfolio's shares and assume that any
income dividends and/or capital gains distributions made by the Portfolio during
the period were reinvested in shares of the Portfolio. Figures will be given for
recent one-, five- and ten-year periods (if applicable), and may be given for
other periods as well (such as from commencement of the Portfolio's operations,
or on a year-by-year basis). When considering average annual total figures for
periods longer than one year, it is important to note that the Portfolio's
annual total return for any one year in the period might have been greater than
the average for the entire period. A Portfolio also may use "aggregate" total
return figures for various periods, representing the cumulative change in value
of an investment in the Portfolio for the specific period (again reflecting
changes in the Portfolio's share prices and assuming reinvestment of dividends
and distributions). Aggregate total returns may be shown by means of schedules,
charts or graphs and may indicate subtotals of the various components of total
return (i.e., change in value of initial investment, income dividends and
capital gains distributions).
It is important to note that total return figures are based on
historical earnings and are not intended to indicate future performance. The
Statement of Additional Information describes the method used to determine the
Portfolio's total return. Shareholders may make inquiries regarding the
Portfolio, including total return figures, of a representative of a
participating life insurance company.
In reports or other communications to shareholders or in advertising
material, the Portfolio may compare its performance with that of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services, Inc. or
similar independent services that monitor the performance of mutual funds or
with other appropriate indices of investment securities, such as the S&P 500,
the Consumer Price Index, Dow Jones Industrial Average or NASDAQ, or with
investment or savings vehicles. The performance information also may include
evaluations of the Portfolio published by nationally recognized ranking services
and by financial publications that are nationally recognized, such as Barron's,
Business Week, Forbes, Fortune, Institutional
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Investor, Investor's Business Daily, Kiplinger's Personal Finance Magazine,
Money, Morningstar Mutual Fund Values, Mutual Fund Forecaster, The New York
Times, Stranger's Investment Advisor, USA Today, U.S. News & World Report and
The Wall Street Journal. Such comparative performance information will be stated
in the same terms in which the comparative data or indices are stated. Any such
advertisement also would include the standard performance information required
by the SEC as described above. For these purposes, the performance of the
Portfolio, as well as the performance of other mutual funds or indices, does not
reflect sales charges, the inclusion of which would reduce the Portfolio's
performance.
The Portfolio may also utilize performance information in hypothetical
illustrations provided in narrative form. These hypotheticals will be
accompanied by the standard performance information required by the SEC as
described above.
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APPENDIX
================================================================================
FUTURES AND OPTIONS ON FUTURES
When deemed advisable by the Investment Adviser, the Portfolio may enter
into stock index futures contracts and related options that are traded on a U.S.
exchange or board of trade. These transactions will be made solely for the
purpose of hedging against the effects of changes in the value of portfolio
securities due to anticipated changes in market conditions. The Portfolio will
enter into futures and options on futures to purchase stock indices in
anticipation of future purchases of securities ("long positions"). All futures
and options contracts will be entered into only when the transactions are
economically appropriate to the reduction of risks inherent in the management of
the Portfolio.
Stock index futures are based on indices that reflect the market value
of common stock of the firms included in the indices. An index futures contract
is an agreement pursuant to which two parties agree to take or make delivery of
an amount of cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at which the index
contract was originally entered into. An option on a stock index futures
contract gives the purchaser the right, in return for the premium paid, to
assume a position in a futures contract (a long position if the option is a call
and a short position if the option is a put) at a specified exercise price at
any time prior to the expiration date of the option.
The use of futures contracts and options on futures contracts as a
hedging device involves several risks. There can be no assurance that there will
be a correlation between price movements in the underlying securities or index,
on the one hand, and price movements in the securities that are the subject of
the hedge, on the other hand. Positions in futures contracts and options on
futures contracts may be closed out only on the exchange or board of trade on
which they were entered into, and there can be no assurance that an active
market will exist for a particular contract or option at any particular time.
The Portfolio may not enter into futures and options contracts for which
aggregate initial margin deposits and premiums paid exceed 5% of the fair market
value of the Portfolio's assets, after taking into account unrealized profits
and unrealized losses on futures contracts into which it has entered. With
respect to long positions in futures or options on futures, a Portfolio will
"cover" the position in a manner consistent with SEC guidance.
PURCHASING OPTIONS ON SECURITIES AND STOCK INDICES
The Portfolio may purchase call options on stock indices. Options on
stock indices are similar to options on securities, except options on stock
indices do not involve the delivery of an underlying security; rather, the
options represent the holder's right to obtain from the writer in cash a fixed
multiple of the amount by which the exercise price exceeds (in the case of a
put) or is less than (in the case of a call) the closing value of the underlying
index on the exercise date.
A stock index measures the movement of a certain group of stocks by
assigning relative values to the common stocks included in the index. The
advisability of using stock index options to hedge against the risk of
marketwide movements will depend on the extent of diversification of the stock
investments of the Portfolio and the sensitivity of its stock investments to
factors influencing the underlying index. The effectiveness of purchasing or
writing stock index options as a hedging technique will depend upon the extent
to which price movements in the Portfolio's securities investments correlate
with price movements in the stock index selected.
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COVERED OPTION WRITING
The Portfolio may write put and call options on securities. The
Portfolio realizes fees (referred to as "premiums") for granting the rights
evidenced by the options. A put option embodies the right of its purchaser to
compel the writer of the option to purchase from the option holder an underlying
security at a specified price at any time during the option period. In contrast,
a call option embodies the right of its purchaser to compel the writer of the
option to sell to the option holder an underlying security at a specified price
at any time during the option period. Thus, the purchaser of a put option
written by the Portfolio has the right to compel the Portfolio to purchase from
it the underlying security at the agreed-upon price for a specified time period,
while the purchaser of a call option written by the Portfolio has the right to
purchase from the Portfolio the underlying security owned by the Portfolio at
the agreed-upon price for a specified time period.
Upon the exercise of a put option written by the Portfolio, the
Portfolio may suffer a loss equal to the difference between the price at which
the Portfolio is required to purchase the underlying security plus the premium
received for writing the option and its market value at the time of the option
exercise. Upon the exercise of a call option written by the Portfolio, the
Portfolio may suffer a loss equal to the difference between the security's
market value at the time of the option exercise less the premium received for
writing the option and the Portfolio's acquisition cost of the security.
The Portfolio will write only covered options. Accordingly, whenever the
Portfolio writes a call option, it will continue to own or have the present
right to acquire the underlying security for as long as it remains obligated as
the writer of the option. To support its obligation to purchase the underlying
security if a put option is exercised, the Portfolio that has written a put
option will either (a) deposit with the Portfolio's custodian in a segregated
account cash, U.S. government securities, debt obligations of any grade or
equity securities having a value equal to or greater than the exercise price of
the underlying securities, provided such securities have been determined by the
Investment Adviser to be liquid and unencumbered, and are marked to market daily
pursuant to guidelines established by the Trustees or (b) continue to own an
equivalent number of puts of the same "series" (that is, puts on the same
underlying security having the same exercise prices and expiration dates as
those written by the Portfolio) or an equivalent number of puts of the same
"class" (that is, puts on the same underlying security) with exercise prices
greater than those that it has written (or, if the exercise prices of the puts
that it holds are less than the exercise prices of those that it has written, it
will deposit the difference with the Portfolio's custodian in a segregated
account).
The Portfolio may engage in a closing purchase transaction to realize a
profit, to prevent an underlying security from being called or put or, in the
case of a call option, to unfreeze an underlying security (thereby permitting
its sale or the writing of a new option on the security prior to the outstanding
option's expiration). To effect a closing purchase transaction, the Portfolio
would purchase, prior to the holder's exercise of an option that the Portfolio
has written, an option of the same series as that on which the Portfolio desires
to terminate its obligation. The obligation of the Portfolio under an option
that it has written would be terminated by a closing purchase transaction, but
the Portfolio would not be deemed to own an option as the result of the
transaction. There can be no assurance that the Portfolio will be able to effect
closing purchase transactions at a time when it wishes to do so. To facilitate
closing purchase transactions, however, the Portfolio ordinarily will write
options only if a secondary market for the options exists on a U.S. securities
exchange or in the over-the-counter market. The staff of the SEC considers most
over-the-counter options to be illiquid. The ability to terminate options
positions established in the over-the-counter market may be more limited than in
the case of exchange-traded options and also may involve the risk that
securities dealers participating in such transactions would fail to meet their
obligations to the Portfolio.
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INDEX STRATEGY
The Portfolio will invest in the common stocks of the companies
represented in the S&P 500 with the goal of matching, before deduction of
operating expenses, the price and yield performance of the S&P 500. The S&P 500
is composed of 500 selected common stocks, most of which are listed on the NYSE.
S&P chooses the stocks to be included in the S&P 500 solely on a statistical
basis. The S&P 500 is a trademark of S&P and inclusion of a stock in the S&P 500
in no way implies an opinion by S&P as to its attractiveness as an investment.
S&P is neither a sponsor nor in any way affiliated with the Portfolio.
The weightings of stocks in the S&P 500 are based on each stock's
relative total market value; that is, its market price per share times the
number of shares outstanding. The Investment Adviser generally will select
stocks for the Portfolio in the order of their weightings in the S&P 500,
beginning with the heaviest weighted stocks.
The Investment Adviser expects that, once the Portfolio's assets reach
$25 million, the correlation between the performance of the Portfolio and that
of the S&P 500 will be above 0.95, with a figure of 1.00 indicating perfect
correlation. Perfect correlation would be achieved when the Portfolio's net
asset value per share increases and decreases in exact proportion to changes in
the S&P 500. The Portfolio's ability to replicate the performance of the S&P 500
will depend to some extent on the size of cash flows into and out of the
Portfolio. Investment changes to accommodate these cash flows will be made to
maintain the similarity of the Portfolio's assets to the S&P 500 to the maximum
extent practicable.
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L-21217 9/97
