<PAGE>
[GRAPHIC]
SMALL BOX ABOVE FUND NAME SHOWING
AN AERIAL SHOT OF THE LAND AND
OCEAN SURROUNDING IT.
SEMI- Smith Barney Shearson
ANNUAL LIMITED
REPORT MATURITY
MUNICIPALS
FUND
.......................................
MAY 31, 1994
[LOGO]
<PAGE>
Limited Maturity Municipals Fund
DEAR SHAREHOLDER:
We are pleased to provide you with the Semi-Annual
Report
which includes the portfolio of investments for Smith
Barney
Shearson Limited Maturity Municipals Fund for the six-
month
period ended May 31, 1994. During the past six months the Fund
paid
tax-exempt distributions of $0.17 per share, which largely offset
the
decline in the Fund's net asset value to $8.09 from $8.26 per
share
and resulted in a slightly negative total return of (0.05%).
MARKET AND ECONOMIC OVERVIEW
After a very strong market and rising valuations during the
Fund's
last fiscal year, municipal securities experienced increased
volatility and declining prices during the first half of the
current
fiscal year. The catalyst for this reversal was the Federal
Reserve's
aggressive attempt to control inflation by increasing the Federal
funds rate in four separate moves between February 4, 1994 and
May 17,
1994 and the discount rate, two very sensitive indicators of the
direction of interest rates. The textbook result of an increase
in
short-term rates is slower economic growth and low long-term
interest
rates. However, at the time there were many leveraged investments
in
the marketplace based on short-term interest rates staying low.
As
short-term rates rose, investors met liquidity demands by selling long-term
U.S.
Treasury securities, which caused an unintended and unwarranted rise in
long-term interest rates. Interest rates on municipal securities followed
suit
as dealers sold their municipal inventory in order to meet the selling
demands
of Treasury investors. This uncertain investment environment caused many
investors to purchase shorter maturities which are generally less volatile
than
longer-term issues. This general rule of investment was borne out by the
performance of the Fund's net asset value per share during this volatile
period:
although it declined, it declined far less than a longer-term fund.
It's clear to us from the Federal Reserve's actions of the last few months
that
they will continue to raise interest rates as long as they see inflation
building into the economy. But we believe that it will be later in the year
before we see any further movement in rates by the Federal Reserve. We
think
that the slowdown in mortgage refinancings, new construction, and sales of
single family homes will translate into a slowdown in economic growth. In
addition, job growth and wage growth haven't been contributing much
strength to
the
1
<PAGE>
economy. The real issue is whether or not the economy reaches the
equilibrium
state of growth with low inflation that the Federal Reserve is striving
for.
PORTFOLIO STRATEGY
We have maintained the Fund's average maturity at 4.4 years during the past
six
months. We believe this segment of the municipal yield curve represents the
best
value (defining value as the highest yield available relative to the credit
risk) because it doesn't have a large amount of debt issuance as in the
Treasury
market. The portfolio has a high concentration (approximately 34%) of AAA-
rated
securities. We are opposed to chasing yield, especially in a fund such as
this
which is used by investors to complement their short-term and long-term
holdings. We have invested the Fund's holdings in essential service revenue
issues, housing, hospital and education issues.
The past six months were a difficult investment environment, but we believe
we
have been successful in meeting our stated investment objective of
providing
investors with a high level of current income exempt from Federal income-
taxes*
and attempting to preserve principal. During the next six months we will
endeavor to do the same and look forward to reporting to you in the Fund's
Annual Report.
Sincerely,
Heath B. McLendon Lawrence T. McDermott
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
JULY 18, 1994
- - ---------------------------------------------------------------------------
- - -----
*Income may be subject to Federal alternative minimum tax.
2
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS (UNAUDITED) MAY 31,
1994
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the Income Trust Limited Maturity
Municipals Fund investment securities held at May 31, 1994 by industry
classification. The pie is broken in pieces representing industries in the
following percentages:
<TABLE>
<CAPTION>
INDUSTRY BREAKDOWN PERCENTAGE
<S> <C>
General Obligation 33.3%
Short-Term Municipal Bond and Net
Other Assets and Liabilities 1.4%
Education 9.7%
Housing 8.7%
Transportation 7.2%
Pollution Control Revenue 4.7%
Other Municipal Bonds and Notes 4.8%
Hospital 14.1%
Industrial Development Revenue 4.0%
Utility Revenue 12.1%
</TABLE>
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS
<TABLE>
<CAPTION>
Standard & Percent
Moody's Poor's of Value
<S> <C> <C>
- - -----------------------------------
AAA OR AAA 34.2%
- - -----------------------------------
AA AA 16.7
- - -----------------------------------
A A 24.0
- - -----------------------------------
BAA BBB 19.9
- - -----------------------------------
NR NR 3.3
- - -----------------------------------
VMIG1 A-1 1.9
- - -----------------------------------
100.0%
---------------
</TABLE>
AVERAGE MATURITY 4.4 years
3
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) MAY 31,
1994
-------------------------------------------------------------
<TABLE>
<S> <C> <C>
KEY TO INSURANCE ABBREVIATIONS
American Municipal Bond
AMBAC -- Assurance Corporation
College Construction Loan
CO LEE -- Association
Federal Guaranty Insurance
FGIC -- Corporation
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
Municipal Bond Investor
MBIA -- Assurance
</TABLE>
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
<C> <S> <C> <C> <C>
--------------------------------------------------------------------------
- - ---
MUNICIPAL BONDS AND NOTES -- 98.6%
ALABAMA -- 0.8%
Alabama Housing Finance
Authority, Single Mortgage:
$ 245,000 5.250% due 4/1/98+++ Aaa NR $
245,000
255,000 5.250% due 10/1/98+++ Aaa NR
255,000
260,000 5.400% due 4/1/99+++ Aaa NR
260,000
ALASKA -- 1.9%
North Slope Boro, Alaska,
Series A, (MBIA Insured):
500,000 4.650% due 6/30/97 Aaa AAA
498,750
1,300,000 4.850% due 6/30/98 Aaa AAA
1,303,250
ARIZONA -- 0.9%
810,000 Yuma & La Paz County,
Arizona, Community College
District, (Arizona Western
College), (AMBAC Insured),
6.200% due 7/1/98 Aaa AAA
851,513
CALIFORNIA -- 1.0%
1,000,000 Central Valley, California,
Financing Authority,
Cogeneration Project
Revenue, (Carson Inc.),
5.000% due 7/1/98 NR BBB-
980,000
COLORADO -- 1.7%
610,000 Arapahoe County, Colorado,
Certificates of
Participation, (AMBAC
Insured),
5.400% due 12/1/96 Aaa AAA
626,013
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
COLORADO -- (CONTINUED)
$ 405,000 Colorado Housing Finance
Authority, Single Family
Project, Series A3,
5.750% due 5/1/97 NR AA $
410,569
500,000 Meridian, Colorado,
Metropolitan District
Refunding,
7.000% due 12/1/97 A3 NR
528,750
CONNECTICUT -- 0.7%
625,000 New Haven, Connecticut,
General Obligation, Series
B,
5.700% due 12/1/97 Baa BBB-
632,813
DISTRICT OF COLUMBIA --
2.8%
995,000 District of Columbia,
Certificates of
Participation,
6.000% due 1/1/97 NR BBB
997,488
250,000 District of Columbia,
General Obligation, Series
A,
5.000% due 6/1/98 Baa A-
246,563
1,295,000 Washington, District of
Columbia, Metropolitan Area
Transportation, (FGIC
Insured),
6.000% due 7/1/98 Aaa AAA
1,354,894
FLORIDA -- 3.3%
1,450,000 Broward County, Florida,
Educational Facilities
Authority Revenue,
(Southeastern University
Project), Co Lee,
5.150% due 5/1/16+++ NR AAA
1,450,000
1,125,000 Dade County, Florida,
Health Facilities Authority
Hospital Revenue, Series A,
(Baptist Hospital, Miami),
5.75% due 5/1/16 NR A+
1,155,938
500,000 Florida Housing Finance
Agency, Adjustable
Multifamily Mortgage,
Series QQ, (FSA Insured),
5.500% due 11/1/07 Aaa AAA
508,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- 3.2%
$1,475,000 Georgia, State, Series D,
General Obligation,
6.500% due 8/1/98 Aaa AA+ $
1,574,563
1,250,000 Municipal Electric
Authority of Georgia,
Special Obligation
Refunding, Second Crossover
Series,
8.125% due 1/1/17 A A+
1,396,875
IDAHO -- 0.4%
365,000 Idaho Housing Agency,
Single Family Mortgage,
Refunding Revenue,
5.500% due 1/1/97 Aa NR
369,106
ILLINOIS -- 6.9%
250,000 Hoffman Estates, Illinois,
Tax Increment Revenue,
Junior Lien, (Hoffman
Estates Development
Project),
6.500% due 5/15/01 Baa1 BBB+
259,375
1,000,000 Illinois Development
Financing Authority
Revenue, (Catholic
Charities Housing), Series
A,
5.000% due 1/1/28 Aa2 NR
1,003,750
500,000 Illinois Educational
Facilities Authority,
Refunding Revenue, (Museum
of Science and Industry),
5.625% due 10/1/26 Aa3 NR
503,750
Illinois Health Facilities
Authority, Refunding
Revenue:
1,040,000 (Children's Memorial
Hospital), (MBIA Insured),
6.000% due 8/15/98 Aaa AAA
1,081,600
1,045,000 (Delnor Community
Hospital), (FSA Insured),
4.500% due 5/15/98 Aaa AAA
1,025,406
1,650,000 Joliet, Illinois, Corporate
Purpose, (MBIA Insured),
5.4% due 1/1/98 Aaa AAA
1,678,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$1,000,000 St. Clair County, Illinois,
General Obilgation, (FGIC
Insured),
4.600% due 10/1/98 Aaa AAA $
990,000
INDIANA -- 1.8%
Indiana Bond Bank, Special
Project:
415,000 Series D,
5.800% due 8/1/97 NR A
429,006
500,000 Student Loan,
guaranteed-St. Revolving,
4.900% due 2/1/99 NR A
497,500
750,000 Warrick County, Indiana,
Environmental Improvement,
(Southern Indiana Gas &
Electric Project), Series
A,
4.650% due 5/1/28 Aa2 AA
739,688
IOWA -- 4.8%
500,000 Iowa State, Certificates of
Participation, Series A,
(AMBAC Insured),
5.400% due 7/1/96 Aaa AAA
510,625
470,000 Iowa State, Housing Finance
Authority, Single Family
Mortgage, Series F, (AMBAC
Insured),
5.150% due 1/1/98 Aaa AAA
476,463
350,000 Iowa Student Loan Liquidity
Corporation, Student Loan
Revenue, Series A,
6.000% due 3/1/98 Aa1 NR
358,750
1,990,000 LeClaire, Iowa, Electric
Revenue, Series B,
4.125% due 9/1/26++++ NR NR
1,990,000
1,190,000 Sioux City, Iowa, Hospital
Revenue Refunding, (Sisters
of Mercy Health), Series D,
(MBIA Insured),
5.000% due 8/15/98 Aaa AAA
1,192,975
LOUISIANA -- 1.4%
305,000 Louisiana Public Facilities
Revenue, Student Loan,
Louisiana Opportunity Loan,
Series A, (FSA Insured),
5.700% due 1/1/97 Aaa AAA
311,863
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
LOUISIANA -- (CONTINUED)
$ 500,000 Louisiana State Refunding,
Series A, (Capital
Guaranty),
6.600% due 8/1/97 Aaa AAA $
533,750
500,000 New Orleans, Louisiana,
Exhibit Hall Authority,
Hotel Occupancy Tax
Revenue, (AMBAC Insured),
5.250% due 1/15/97 Aaa AAA
508,750
KENTUCKY -- 1.1%
990,000 University of Louisville,
Kentucky, Series J,
4.875% due 5/1/98 A1 AA-
991,238
MAINE -- 0.3%
250,000 Maine Health & Higher
Educational Facilities,
Special Obligation Revenue,
Medium Term Facilities,
(FSA Insured),
5.500% due 7/1/97 Aaa AAA
256,250
MARYLAND -- 0.3%
320,000 Montgomery County,
Maryland, Housing
Authority, Multifamily
Revenue, Series 85A, (Hunt
Club),
6.000% due 2/1/07++++ Aa AA+
323,200
MASSACHUSETTS -- 7.0%
750,000 Lowell, Massachusetts,
General Obligation,
5.500% due 8/15/97 Baa1 NR
765,000
Massachusetts Municipal
Electric Wholesale Company,
Power Supply System
Revenue:
Series C:
285,000 5.800% due 7/1/96 A BBB+
289,988
205,000 6.000% due 7/1/97 A BBB+
209,869
Series E:
250,000 4.800% due 7/1/96 A BBB+
249,375
100,000 5.100% due 7/1/97 A BBB+
99,750
500,000 Massachusetts State
Convention Center, (Hynes
Convention Center), Series
A,
5.450% due 9/1/96 A A+
510,625
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MASSACHUSETTS --
(CONTINUED)
$ 445,000 Massachusetts State Health
and Educational Facilities
Authority, Medical Center
of Central Massachusetts,
Series A,
6.000% due 7/1/97 A A $
460,019
Massachusetts Water
Resources Authority:
500,000 Series A,
5.600% due 7/15/96 A A
510,625
300,000 New Bedford, Massachusetts,
General Obligation,
4.900% due 3/1/98 Baa1 NR
295,125
New England Educational
Loan Marketing Corporation:
Student Loan:
1,000,000 Series B,
5.000% due 6/1/98 A1 A-
993,750
1,000,000 Series C,
4.750% due 7/1/98 A1 A-
985,000
500,000 Plymouth County,
Massachusetts, Certificates
of Participation, Series A,
5.700% due 10/1/96 NR BBB-
506,250
720,000 Springfield, Massachusetts,
School Project, Series B,
5.300% due 9/1/97 Baa NR
730,800
MICHIGAN -- 2.2%
750,000 Detroit, Michigan, District
State Aid,
5.625% due 5/1/97 Baa BBB+
757,500
250,000 Michigan Higher Education
Student Loan, Education
Revenue, Series XIV-A,
5.400% due 10/1/96 A NR
252,500
1,030,000 Michigan Municipal Bond
Authority, Equipment and
Real Property Financing,
Series G, (FSA Insured),
4.600% due 5/1/97 Aaa AAA
1,031,288
MISSISSIPPI -- 1.3%
1,175,000 State of Mississippi,
Capital Improvement, Series
A,
6.000% due 8/1/98 Aa AA-
1,227,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NEVADA -- 2.3%
$1,000,000 Clark County, Nevada,
Airport Systems Revenue,
(MBIA Insured),
7.500% due 7/1/97 Aaa AAA $
1,081,250
1,000,000 Clark County, Nevada,
General Obligation, (FGIC
Insured),
7.500% due 7/1/04 Aaa AAA
1,111,250
NEW HAMPSHIRE -- 0.3%
275,000 New Hampshire Higher
Education & Health
Authority Revenue, (Elliot
Hospital of Manchester),
(AMBAC Insured),
5.700% due 10/1/97 Aaa AAA
282,906
NEW JERSEY -- 6.2%
500,000 Atlantic County, New
Jersey, Utilities
Authority, Solid Waste
Revenue,
6.250% due 3/1/97 Baa NR
510,625
435,000 Camden County, New Jersey,
Pollution Control, Finance
Authority, Solid Waste
Resource Recovery Revenue,
Series D,
6.350% due 12/1/97 Baa1 BBB+
449,138
1,075,000 Hudson County, New Jersey,
Improvement Authority,
5.750% due 1/1/98 NR BBB-
1,050,813
500,000 New Jersey Health Care
Facilities Center,
(Atlantic City Medical
Center), Series C,
5.600% due 7/1/96 A A-
511,250
1,250,000 New Jersey State,
Certificates of
Participation, (Centrex),
Series B,
5.000% due 5/1/97 A1 A+
1,251,563
2,000,000 New Jersey State, Turnpike
Authority, Series A,
6.000% due 1/1/98 A A
2,080,000
NEW MEXICO -- 0.5%
440,000 New Mexico Mortgage Finance
Authority, Single Family,
Series A1,
5.500% due 1/1/97 Aa AA
444,400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NEW YORK -- 13.9%
$1,450,000 Babylon, New York,
Industrial Development
Authority, Babylon
Community Waste Management,
Series A,
7.650% due 7/1/97 Baa1 NR $
1,573,250
600,000 Metropolitan Transit
Authority, New York,
Service Contract Transit
Fees, Series 5,
6.100% due 7/1/98 Baa1 BBB
617,250
500,000 Metropolitan Transit
Authority, New York,
General Obligation:
6.600% due 1/1/99 Aaa AAA
535,625
750,000 Series C,
5.400% due 8/1/97 Baa1 A-
757,500
2,000,000 Series H,
5.100% due 8/1/98 Baa1 A-
1,990,000
1,000,000 Series I,
6.000% due 8/1/96 Baa1 A-
1,026,250
850,000 New York State,
Certificates of
Participation,
5.150% due 2/1/98 Baa1 BBB
842,563
1,250,000 New York State Dormitory
Authority Revenue, Series
U, (City University),
5.250% due 7/1/97 Baa1 BBB
1,260,938
680,000 New York State Medical Care
Facilities Agency, Mental
Health Service Facilities
Improvement, Series D,
6.300% due 8/15/97 Baa1 BBB+
706,350
1,250,000 New York State,
Transportation Highway
Authority, Service
Contract, Highway and
Bridge Revenue,
5.200% due 4/1/97 Baa1 BBB
1,256,250
North Country, New York,
Solid Waste Disposal,
Series A:
455,000 5.400% due 7/1/95 Baa NR
457,275
400,000 6.000% due 7/1/97 Baa1 NR
408,000
1,500,000 West New York, New Jersey
Municipals Utility
Authority Revenue, Series
A, Baa NR
1,612,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NORTH CAROLINA -- 0.7%
$ 615,000 Charlotte, North Carolina,
Certificates of
Participation, Municipal
Facilities Purchase
Project, Series A,
4.900% due 1/1/98 NR AA $
615,769
OHIO -- 1.1%
1,000,000 Ohio State, Public
Facilities Commission,
Series II-A, (FSA Insured),
5.300% due 12/1/97 Aaa AAA
1,026,250
OKLAHOMA -- 1.4%
Cleveland County, Oklahoma,
Home Loan Authority,
Single Family Mortgage
Revenue:
195,000 6.000% due 8/1/96 A NR
197,192
165,000 6.100% due 2/1/97 A NR
167,268
210,000 6.100% due 8/1/97 A NR
213,412
750,000 Grand River Dam Authority,
4.700% due 6/1/97 A A-
751,875
OREGON -- 0.5%
500,000 Clackamas County, Oregon,
Hospital Facilities
Authority Revenue, (Sisters
of Providence), Series A,
5.300% due 10/1/96 A1 AA-
510,000
PENNSYLVANIA -- 5.6%
153,000 Falls Township,
Pennsylvania Hospital
Authority Revenue,
(Delaware Valley Medical),
(FHA Insured),
6.000% due 8/1/01 NR AAA
150,322
500,000 Lehigh County,
Pennsylvania, Industrial
and Community Development
Authority, (Strawbridge
Project),
7.200% due 12/15/01 NR BBB
525,625
500,000 Pennsylvania State Higher
Education, Thomas Jefferson
University, Series A,
5.500% due 8/15/97 Aa A+
513,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PENNSYLVANIA -- (CONTINUED)
$1,170,000 Pennsylvania State
Industrial Development
Authority Revenue, (AMBAC
Insured),
6.000% due 1/1/99 Aaa AAA $
1,219,725
Philadelphia, Pennsylvania,
Hospitals and Higher
Education Facilities
Authority:
(Albert Einstein Medical
Center):
365,000 6.300% due 10/1/96 A BBB+
372,755
390,000 6.500% due 10/1/97 A BBB+
398,775
1,000,000 (Graduate Health Systems),
6.500% due 7/1/97 Baa1 BBB+
1,032,500
275,000 Philadelphia, Pennsylvania,
Water & Sewer Revenue, 12th
Series,
7.300% due 7/1/96 NR AAA
290,468
750,000 Westmoreland County,
Pennsylvania, Industrial
Development Authority,
(Valley Landfill Project),
4.375% due 5/1/18++++ Aa1 AA
742,500
PUERTO RICO -- 1.0%
550,000 Commonwealth of Puerto
Rico, Puerto Rico Sugar
Corporation,
6.800% due 7/1/94 Baa BBB
551,375
420,000 Puerto Rico Medical
Hospital, Series A, (St.
Luke's Hospital),
5.400% due 6/1/97 NR A-
422,100
RHODE ISLAND -- 1.0%
440,000 Rhode Island State, Health
and Higher Education
Facilities, (Salve Regina
College), (Co Lee Insured),
4.900% due 3/15/98 NR AAA
441,650
500,000 Rhode Island State, Student
Loan Authority, Series A,
5.700% due 12/1/96 A NR
507,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
SOUTH CAROLINA -- 0.5%
$ 500,000 South Carolina, State,
Public Service Authority,
(Santee -- Cooper Project),
Series D,
5.500% due 7/1/98 A1 A+ $
511,875
TENNESSEE -- 1.6%
1,000,000 Bristol, Tennessee, Health
& Educational Facilities
Board, Revenue, (Bristol
Regional Medical Center
Hospital), (FGIC Insured),
4.250% due 9/1/98 Aaa AAA
975,000
521,343 Metropolitan Government
Nashville and Davidson
County, Tennessee, Health
and Education Facilities
Board Revenue, (Lease
Purchase Sub -- Cooke
County Project),
7.250% due 9/1/96 NR NR
526,557
TEXAS -- 8.8%
500,000 Arlington, Texas,
Waterworks & Sewer Revenue,
Refunding and Improvement,
(FGIC Insured),
5.400% due 6/1/97 Aaa AAA
511,875
2,000,000 Bell County, Texas, Health
Facilities Development
Corporation, Central Texas
Pooled Health, Series A,
4.750% due 10/1/23 NR AA
1,915,000
1,000,000 Brazos, Texas, Higher
Education Authority, Series
A-1,
5.300% due 12/1/97 Aa NR
1,010,000
300,000 Dallas-Fort Worth, Texas,
Regional Airport Revenue,
Series A, (FGIC Insured),
5.875% due 11/1/07 Aaa AAA
303,000
1,000,000 North Texas, Higher
Education Authority,
Student Loan Revenue,
Series B,
4.850% due 4/1/98 Aaa NR
986,250
1,000,000 Port Houston Authority
Texas, Harris, (MBIA
Insured),
5.700% due 5/1/99 Aaa AAA
1,031,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TEXAS -- (CONTINUED)
$1,000,000 Tarrant County, Texas,
Housing Finance
Corporation, Multifamily
Housing, (Bedford Springs),
4.500% due 9/1/06 NR AA- $
1,000,000
Texas State Veterans
Housing Assistance, (FHA
Insured):
1,000,000 6.000% due 12/1/12 Aa AA
1,001,250
500,000 6.050% due 12/1/12 Aa AA
503,750
VIRGIN ISLANDS -- 0.7%
635,000 Virgin Islands Public
Financing Authority,
Matching Revenue Funding,
Series A,
6.250% due 10/1/96 NR NR
646,112
VIRGINIA -- 1.1%
500,000 Fairfax County, Virginia,
Redevelopment & Housing
Authority, Multifamily
Housing Revenue Refunding,
Mortgage Loan, Kingsley,
Series A, (FHA Insured),
6.500% due 11/1/01 NR AAA
519,375
500,000 Virginia Educational Loan
Authority, Guaranteed
Revenue, Series C,
4.850% due 3/1/98 Aaa NR
496,875
WASHINGTON -- 2.2%
485,000 Washington State Housing
Finance, Single Family
Mortgage Revenue, (GNMA and
FNMA Securities Program),
Series D,
5.800% due 7/1/97 NR AAA
485,605
1,500,000 Washington State Public
Power Supply, Series B,
(Nuclear Project No. 3),
7.000% due 7/1/97 Aa AA
1,582,500
WISCONSIN -- 3.9%
250,000 Wisconsin Housing Economic
Development Authority,
Series A,
5.400% due 11/1/97 A1 A
252,811
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31,
1994
<TABLE>
<CAPTION>
RATINGS MARKET
VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
--------------------------------------------------------------------------
- - ---
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
WISCONSIN -- (CONTINUED)
$1,045,000 Wisconsin Housing and
Economic Development,
4.500% due 11/1/98 A1 A $
1,020,180
2,360,000 Wisconsin, State Health &
Educational Facilities
Authority, (Aurora Health
Care), (MBIA Insured),
5.500% due 8/15/98 Aaa AAA
2,421,950
WYOMING -- 1.5%
1,500,000 Platte County, Wyoming,
Pollution Control Revenue,
4.200% due 1/1/99 A2 A
1,438,125
--------------------------------------------------------------------------
- - ---
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $93,135,642)
92,790,460
--------------------------------------------------------------------------
- - ---
SHORT-TERM MUNICIPAL BOND -- 1.9% (COST $1,800,000)
PUERTO RICO -- 1.9%
1,800,000 Commonwealth of Puerto
Rico, Government
Development Bank,
2.600% due 12/1/15++ VMIG1 A-1+
1,800,000
--------------------------------------------------------------------------
- - ---
TOTAL INVESTMENTS (Cost $94,935,642*) 100.5%
94,590,460
OTHER ASSETS AND LIABILITIES (NET) (0.5)
(455,706)
--------------------------------------------------------------------------
- - ---
NET ASSETS 100.0% $
94,134,754
--------------------------------------------------------------------------
- - ---
<FN>
* Aggregate cost for Federal tax purposes.
++ Variable rate demand bonds and notes are payable upon not more than
seven
business days' notice.
+++ When-issued security (Note 1).
++++ "Put" bonds and notes have demand features with maturities greater
than one
year.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) MAY 31,
1994
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost
$94,935,642) (Note 1)
See accompanying schedule $94,590,460
Interest receivable 1,631,682
Receivable for Fund shares sold 601,047
Unamortized organization costs (Note 6) 31,109
- - --------------------------------------------------------------------------
TOTAL ASSETS 96,854,298
- - --------------------------------------------------------------------------
LIABILITIES:
Payable for investment securities
purchased $2,219,466
Dividends payable 226,107
Payable for Fund shares redeemed 85,381
Investment advisory fee payable (Note
2) 73,022
Administration fee payable (Note 2) 41,584
Due to custodian 21,380
Distribution fee payable (Note 3) 12,129
Custodian fees payable (Note 2) 6,000
Transfer agent fees payable (Note 2) 3,500
Accrued expenses and other payables 30,975
- - --------------------------------------------------------------------------
TOTAL LIABILITIES 2,719,544
- - --------------------------------------------------------------------------
NET ASSETS $94,134,754
- - --------------------------------------------------------------------------
NET ASSETS consist of:
Undistributed net investment income $ 8,275
Accumulated net realized loss on
investments sold (339,930)
Unrealized depreciation of investments (345,182)
Par value 11,637
Paid-in capital in excess of par value 94,799,954
- - --------------------------------------------------------------------------
TOTAL NET ASSETS $94,134,754
- - --------------------------------------------------------------------------
NET ASSET VALUE per share
($94,134,754 DIVIDED BY 11,636,524 shares of
beneficial interest outstanding)+ $8.09
- - --------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE ($8.09 DIVIDED BY
0.9875)
(based on sales charge of 1.25% of the offering price
at May 31, 1994) $8.19
- - --------------------------------------------------------------------------
<FN>
+Redemption price per share is equal to Net Asset Value less any
applicable
contingent deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
- - -------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31,
1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest
$2,427,463
- - ---------------------------------------------------------------------------
- - ------
EXPENSES:
Investment advisory fee (Note 2) $175,003
Administration fee (Note 2) 100,002
Distribution fee (Note 3) 75,001
Transfer agent fees (Note 2) 21,264
Custodian fees (Note 2) 16,883
Amortization of organization costs (Note 6) 6,021
Trustees' fees and expenses (Note 2) 2,288
Other 56,904
Fees waived by investment adviser and
administrator (Note 2) (53,399)
- - ---------------------------------------------------------------------------
- - ------
TOTAL EXPENSES
399,967
- - ---------------------------------------------------------------------------
- - ------
NET INVESTMENT INCOME
2,027,496
- - ---------------------------------------------------------------------------
- - ------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTES 1 AND 4):
Net realized loss on investments sold during the
period
(303,379)
Net unrealized depreciation of investments
during the period
(1,881,919)
- - ---------------------------------------------------------------------------
- - ------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(2,185,298)
- - ---------------------------------------------------------------------------
- - ------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $
(157,802)
- - ---------------------------------------------------------------------------
- - ------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
5/31/94 ENDED
(UNAUDITED) 11/30/93
<S> <C> <C>
Net investment income $ 2,027,496 $ 2,761,200
Net realized loss on investments sold
during the period (303,379) (36,551
)
Net unrealized appreciation/(depreciation)
of investments
during the period (1,881,919) 1,092,054
- - ---------------------------------------------------------------------------
- - -
Net increase/(decrease) in net assets
resulting from operations (157,802) 3,816,703
Distributions to shareholders from:
Net investment income (2,027,496) (2,752,925
)
Net realized gain on investments -- (20,318
)
Net increase/(decrease) in net assets from
Fund share
transactions (Note 5) (100,591) 58,998,036
- - ---------------------------------------------------------------------------
- - -
Net increase/(decrease) in net assets (2,285,889) 60,041,496
NET ASSETS:
Beginning of period 96,420,643 36,379,147
- - ---------------------------------------------------------------------------
- - -
End of period (including undistributed net
investment income
of $8,275 at May 31,1994 and November 30,
1993) $94,134,754 $96,420,643
- - ---------------------------------------------------------------------------
- - -
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS YEAR
PERIOD
ENDED ENDED
ENDED
5/31/94 11/30/93
11/30/92*
<S> <C> <C>
<C>
Net Asset Value, beginning of period $ 8.26 $ 8.07
$ 7.90
- - ---------------------------------------------------------------------------
- - ----------
Income from investment operations:
Net investment income+ 0.17 0.36
0.36
Net realized and unrealized gains on
investments (0.17) 0.19
0.17
- - ---------------------------------------------------------------------------
- - ----------
Total from investment operations 0.00** 0.55
0.53
Less distributions:
Dividends from net investment income (0.17) (0.36)
(0.36)
Distributions from net realized capital
gains -- (0.00)**
- - --
- - ---------------------------------------------------------------------------
- - ----------
Total distributions (0.17) (0.36)
(0.36)
- - ---------------------------------------------------------------------------
- - ----------
Net Asset Value, end of period $ 8.09 $ 8.26
$ 8.07
- - ---------------------------------------------------------------------------
- - ----------
Total return++ (0.05)% 6.98%
6.88%
- - ---------------------------------------------------------------------------
- - ----------
Ratios/supplemental data:
Net assets, end of period (in 000's) $ 94,135 $ 96,421
$ 36,379
Ratio of operating expenses to average net
assets+++ 0.80%*** 0.75%
0.65%***
Ratio of net investment income to average
net assets 4.05%*** 4.24%
4.74%***
Portfolio turnover rate 16% 4%
22%
- - ---------------------------------------------------------------------------
- - ----------
<FN>
* The Fund commenced operations on December 31, 1991.
** Amount represents less than $0.01 per share.
*** Annualized.
+ Net investment income before waiver of fees by investment adviser and
administrator for the six months ended May 31, 1994 and year ended
November
30, 1993 were $0.16 and $0.33, respectively. Net investment income
before
waiver of fees by investment adviser, sub-investment adviser and/or
administrator, custodian and distributor for the period ended November
30,
1992 was $0.31.
++ Total return represents aggregate total return for the periods
indicated and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratios before waiver of fees by
investment
adviser and administrator for the six months ended May 31, 1994 and
year ended
November 30, 1993 and waiver of fees by investment adviser, sub-
investment
adviser and administrator, custodian and distributor for the period
ended
November 30, 1992 were 0.91%, 1.07% and 1.28%, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Shearson Income Trust (the "Trust") was organized as a
"Massachusetts business trust" under the laws of the Commonwealth of
Massachusetts on October 17, 1991. The Trust is registered with the
Securities
and Exchange Commission under the Investment Company Act of 1940, as
amended
(the "1940 Act"), as an open-end management investment company. The Trust
consists of the following four funds: Smith Barney Shearson Limited
Maturity
Treasury Fund, Smith Barney Shearson Limited Maturity Municipals Fund (the
"Fund"), Smith Barney Shearson Intermediate Maturity California Municipals
Fund
and Smith Barney Intermediate Maturity New York Municipals Fund. The
following
is a summary of significant accounting policies consistently followed by
the
Fund in the preparation of its financial statements.
PORTFOLIO VALUATION: Securities are valued by The Boston Company Advisors,
Inc.
("Boston Advisors") after consultation with an independent pricing service
(the
"Service") approved by the Board of Trustees. When, in the judgment of the
Service, quoted bid prices for securities are readily available and are
representative of the bid side of the market, these investments are valued
at
the mean between the quoted bid prices and asked prices. Securities for
which,
in the judgment of the Service, there are no readily obtainable market
quotations (which may constitute a majority of the portfolio securities)
are
carried at fair value as determined by the Service, based on methods, which
include consideration of: yields or prices of municipal securities of
comparable
quality, coupon, maturity and type; indications as to values from dealers;
and
general market conditions. Securities, not valued by the service, for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Trustees.
Short-term investments that mature in 60 days or less are valued at
amortized
cost.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Interest income is recorded on the accrual
basis.
Realized gains and losses from securities sold are recorded on the
identified
cost basis.
21
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Securities purchased or sold on a when-issued or delayed-delivery basis may
be
settled a month or more after the trade date; interest income is not
accrued
until settlement date. When required, the Fund instructs the custodian to
segregate assets in a separate account with a current value at least equal
to
the amount of its when-issued purchase commitments.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund
to
declare dividends from net investment income daily and to pay such
dividends
monthly. Distributions from net realized capital gains, if any, are
declared and
paid annually, after the end of the calendar year in which earned. In
addition,
in order to avoid the application of a 4% nondeductible excise tax on
certain
undistributed amounts of ordinary income and capital gains, the Fund may
make an
additional distribution shortly before December 31 in each year of any
undistributed ordinary income or capital gains and expects to make any
other
distributions as are necessary to avoid this tax. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and
gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
FEDERAL INCOME TAXES: The Trust intends that the Fund separately qualify as
a
regulated investment company, if such qualification is in the best interest
of
its shareholders, which distributes exempt-interest dividends, by complying
with
the requirements of the Internal Revenue Code of 1986, as amended,
applicable to
regulated investment companies and by distributing substantially all of its
earnings to its shareholders. Therefore, no Federal income tax provision is
required.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE
AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Greenwich Street Advisors, a division of Mutual Management
Corp., which is controlled by Smith Barney Holdings Inc. ("Holdings").
22
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Holdings is a wholly owned subsidiary of The Travelers Inc. Under the
Advisory
Agreement, the Fund pays a monthly fee at the annual rate of 0.35% of the
value
of its average daily net assets.
Prior to April 20, 1994, the Fund was a party to an administration
agreement
with Boston Advisors, an indirect wholly owned subsidiary of Mellon Bank
Corporation ("Mellon"). Under this agreement, the Fund paid a monthly fee
at the
annual rate of 0.20% of the value of its average daily net assets.
As of the close of business on April 20, 1994, Smith, Barney Advisers, Inc.
("SBA"), which is controlled by Holdings, succeeded Boston Advisors as the
Fund's administrator. The new administration agreement contains
substantially
the same terms and conditions, including the level of fees, as the
predecessor
agreement.
As of the close of business on April 20, 1994, the Fund also entered into a
sub-administration agreement (the "Sub-Administration Agreement") with
Boston
Advisors. Under the Sub-Administration Agreement, Boston Advisors is paid a
portion of the fee paid by the Fund to SBA at a rate agreed upon from time
to
time between SBA and Boston Advisors.
From time to time, Greenwich Street Advisors and the Fund's administrator
may
voluntarily waive a portion or all of their respective fees otherwise
payable to
them. For the six months ended May 31, 1994, Greenwich Street Advisors and
Boston Advisors, the Fund's prior administrator, voluntarily waived fees of
$33,981 and $19,418, respectively.
For the six months ended May 31, 1994, Smith Barney Inc. ("Smith Barney")
received $127,260 from investors representing commissions (sales charges)
on
sales of Fund shares.
A contingent deferred sales charge is generally payable by a shareholder in
connection with the redemption of shares within one year after the date of
purchase. For the six months ended May 31, 1994, Smith Barney received from
shareholders $55,698 in contingent deferred sales charges.
23
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
No officer, director or employee of Smith Barney or of any parent or
subsidiary
of Smith Barney receives any compensation from the Trust for serving as a
Trustee or officer of the Trust. The Trust pays each Trustee who is not an
officer, director or employee of Smith Barney or any of its affiliates
$4,000
per annum plus $500 per meeting attended and reimburses each such Trustee
for
travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of
Mellon, serves as the Trust's custodian. The Shareholder Services Group
Inc., a
subsidiary of First Data Corporation, serves as the Trust's transfer agent.
3. DISTRIBUTION PLAN
The Trust has adopted a plan of distribution (the "Plan") under Rule 12b-1
of
the 1940 Act. Under the Plan, the Fund pays Smith Barney a monthly fee at
the
annual rate of 0.15% of the value of its average daily net assets for
activities
primarily intended to result in the sale of its shares.
Under its terms, the Plan shall remain in effect from year to year,
provided
that such continuance is approved annually by vote of the Trust's Trustees,
including a majority of those Trustees who are not "interested persons" of
the
Trust and who have no direct or indirect financial interest in the
operation of
the Plan.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding short-
term
investments, for the six months ended May 31, 1994 were $18,255,735 and
$15,176,078, respectively.
At May 31, 1994, aggregate gross unrealized appreciation for all securities
in
which there was an excess of value over tax cost was $593,198, and
aggregate
gross unrealized depreciation for all securities in which there was an
excess of
tax cost over value was $938,380.
24
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest
with a
$.001 par value. Changes in shares of beneficial interest in the Fund were
as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED
5/31/94
11/30/93
Shares Amount
Shares Amount
<S> <C> <C> <C>
<C>
- - ---------------------------------------------------------------------------
- - ----------
Sold 2,730,182 $ 22,486,915
8,687,874 $71,494,853
Issued as reinvestment of dividends 185,039 1,517,831
249,827 2,058,125
Redeemed (2,958,340) (24,105,337)
(1,768,690) (14,554,942)
- - ---------------------------------------------------------------------------
- - ----------
Net increase/(decrease) (43,119) $ (100,591)
7,169,011 $58,998,036
- - ---------------------------------------------------------------------------
- - ----------
</TABLE>
6. ORGANIZATION COSTS
The Fund bears all costs in connection with its organization including the
fees
and expenses of registering and qualifying its shares for distribution
under
Federal and state securities regulations. All such costs are being
amortized on
the straight-line method over a period of five years from the commencement
of
operations of the Fund. In the event that any of the initial shares of the
Fund
are redeemed during such amortization period, the Fund will be reimbursed
for
any unamortized organization costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.
25
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
Greenwich Street Advisors
Two World Trade Center
New York, New York 10048
ADMINISTRATOR
Smith, Barney Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services
Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, Massachusetts 02108
26
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
GLOSSARY OF COMMONLY USED MUTUAL FUND TERMS
CAPITAL GAIN (OR LOSS): This is the increase (or decrease) in the market
value
(price) of a security in your portfolio. If a stock or bond appreciates in
price, there is a capital gain; if it depreciates there is a capital loss.
A
capital gain or loss is "realized" upon the sale of a security; if net
capital
gains exceed net capital losses, there may be a capital gain distribution
to
shareholders.
CDSC (CONTINGENT DEFERRED SALES CHARGE): One kind of back-end load, a CDSC
is
imposed if shares are redeemed during the first few years of ownership. The
CDSC
may be expressed as a percentage of either the original purchase price or
the
redemption proceeds. Most CDSCs decline over time, and some will not be
charged
if shares are redeemed after a certain period of time.
DISTRIBUTION RATE: This is the rate at which a mutual fund pays out (or
distributes) interest, dividends and realized capital gains to
shareholders. A
fund's distribution rate is usually expressed as an annualized percent of
the
fund's offering price.
DIVIDEND: This is income generated by securities in a portfolio and
distributed
after expenses to shareholders.
FRONT-END SALES CHARGE: This is the sales charge applied to an investment
at the
time of initial purchase.
NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities held by a fund, minus any liabilities, divided by the number of
shares outstanding. It is the value of a single share of a mutual fund on a
given day. The total value of your investment would be the NAV multiplied
by the
number of shares you own.
SEC YIELD: This standardized calculation of a mutual fund's yield is based
on a
formula developed by the Securities and Exchange Commission (SEC) to allow
funds
to be compared on an equal basis. It is an annualized yield based on the
portfolio's potential earnings from dividends, interest and yield to
maturity of
its holdings, and it reflects the payments of all portfolio expenses for
the
most recent 30-day period. Mutual funds are required to use this figure
when
stating yield.
TOTAL RETURN: Total return measures a fund's performance, taking into
account
the combination of dividends paid and the gain or loss in the value of the
securities held in the portfolio. It may be expressed on an AVERAGE ANNUAL
basis
or CUMULATIVE basis (total change over a given period). In addition, total
return may be expressed with or without the effects of sales charges or the
reinvestment of dividends and capital gains.
Whenever a fund reports any type of performance, it must also report the
average
annual total return according to the standardized calculation developed by
the
SEC. This standardized calculation was introduced to insure that investors
can
compare different funds on an equal basis. The SEC AVERAGE ANNUAL TOTAL
RETURN
calculation includes the effects of all fees and sales charges and assumes
the
reinvestment of all dividends and capital gains.
27
<PAGE>
Smith Barney Shearson
Limited Maturity Municipals Fund
- - ---------------------------------------------------------------------------
OUR APPROACH TO MUTUAL FUND INVESTING
1. PERSONAL SERVICE
The Smith Barney Financial Consultant ("FC") is highly trained and deeply
committed to client service. Your FC works with you to establish a
relationship
based on one-to-one communication and the highest standards of quality.
2. ANALYZING YOUR NEEDS
Defining your needs and establishing specific goals is the first step
toward any
successful investment program. The Smith Barney Strategic Asset Allocator -
- - - a
sophisticated financial planning tool -- can help you and your FC evaluate
your
resources and objectives. This groundwork then becomes the basis for a
strategy
designed specifically for you. Your FC can use the Strategic Asset
Allocator on
a periodic basis to ensure that your investment strategy is keeping pace
with
your changing needs and goals.
3. A UNIQUE MUTUAL FUND INVESTMENT PROGRAM
Your Smith Barney FC offers a number of mutual fund assessment tools that
are
unmatched in the financial services industry. Smith Barney FCs have access
to a
proprietary mutual fund research database that provides information at
their
fingertips on more than 2,100 funds. In addition, working with another
proprietary system known as the Mutual Fund Evaluation Service, your FC can
help
guide you through the complex mutual fund maze. Specifically, the
Evaluation
Service can provide a clear picture of the past performance of mutual funds
you
currently own. Presented in both graphic and numerical form, this
illustration
provides a wealth of easily understood data on more than 2,100 funds. This
complimentary service allows you to judge whether your mutual fund has
helped
meet your investment needs.
4. LOOKING AHEAD
Selecting a mutual fund should not be a one-event process that ends with
the
purchase of shares. You can count on the expertise of your FC as he or she
continues to monitor and evaluate your funds, to suggest new strategies and
to
listen. That, in our opinion, is how to use mutual funds to help achieve
your
financial goals.
28
<PAGE>
LIMITED
MATURITY
MUNICIPALS
FUND
TRUSTEES
Burt N. Dorsett
Elliot S. Jaffe
Harry W. Knight
Heath B. McLendon
Cornelius C. Rose
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD
Stephen J. Treadway
PRESIDENT
Richard P. Roelofs
EXECUTIVE VICE PRESIDENT
Lawrence T. McDermott
VICE PRESIDENT AND
INVESTMENT OFFICER
Karen L. Mahoney-Malcomson
INVESTMENT OFFICER
Lewis E. Daidone
TREASURER
Christina T. Sydor
SECRETARY
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF
SMITH BARNEY SHEARSON LIMITED MATURITY MUNICIPALS FUND. 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, FEES AND EXPENSES AS WELL AS OTHER PERTINENT
INFORMATION.
[LOGO]
SMITH BARNEY SHEARSON
MUTUAL FUNDS
Two World Trade Center
New York, New York 10048
Fund 163
FD2233 G4
