<PAGE>
[GRAPHIC]
SMALL BOX ABOVE FUND NAME SHOWING
AN AERIAL SHOT OF THE LAND AND
OCEAN SURROUNDING IT.
SEMI- SMITH BARNEY
ANNUAL LIMITED
REPORT MATURITY
MUNICIPALS
FUND
.......................................
MAY 31, 1995
[LOGO]
<PAGE>
Limited Maturity Municipals Fund
DEAR SHAREHOLDER:
We are pleased to provide you with the
semiannual report and
portfolio of investments for Smith Barney
Limited Maturity
Municipals Fund for the six-month period
ended May 31, 1995.
Although bond prices declined precipitously during
the first part of
the Fund's fiscal year, the municipal market
improved in late 1994 and
into 1995, allowing the Fund to provide investors
in Class A shares
with a total return of 4.66% for the six-month
period ended May 31,
1995. Class C shares, a newly-available class of
shares, earned a
total return of 4.55% for the period between
November 17, 1994 and May
31, 1995. Additional performance data for each
class of shares during
this and previous reporting periods is available
in the "Financial
Highlights" section of this report.
ECONOMIC AND MARKET UPDATE
After implementing tighter monetary policy by
raising the Federal
funds rate 300 basis points (three percentage
points) over a 13-month
period beginning in February 1994, the Federal
Reserve Board has
succeeded in slowing the rate of economic
growth. Growth continued to slow during the second quarter
of 1995 with the
decline in consumption expenditures intensifying. The retail
sector of the
economy appears even softer and most retail chains seem to
have little pricing
power. Even the automobile industry, which enjoyed a very
strong 1994, has
encountered weaker sales in 1995. Individuals financed a
large portion of their
purchases with debt throughout 1994 and as a result
individuals' debt levels are
becoming a source of concern. This is acting as a drag on
consumption
expenditures and could continue to hamper consumption trends
for the rest of
1995 as consumers try to bring their debt levels down to
more manageable levels.
The industrial side of the economy has benefited from strong
overseas demand but
this also appears to be moderating based upon recent
economic statistics on
industrial production. In summary, while we do not
anticipate a recession, we
believe an economic slowdown exists that will present more
of a challenge to
corporate profitability, especially in those sectors of the
economy that depend
on the consumer. Although unemployment rates are relatively
low, the corporate
sector continues to trim costs and cut payrolls, which could
further hinder
consumer spending.
After initially rising for most of 1994 as the Federal
Reserve raised short-term
interest rates, longer-term interest rates declined since
November as it
1
<PAGE>
became apparent that the Federal Reserve was successfully
slowing the rate of
economic growth and keeping inflation under control. The
municipal market had
stronger performance during the first five months of 1995.
New bond issuance is
at remarkably low levels nationally, contributing to
increases in prices for
tax-exempt securities. A defining moment for the municipal
market occurred when
Orange County, California filed for bankruptcy in December
of 1994 and cast a
pall on the entire market. Its impact on the broader market
since then has been
minimal, but has strongly impacted the securities of the
County itself.
Some uncertainties surround the market, however. Among these
are the many flat
tax proposals being championed by members of both political
parties. Real
legislative action is several years away and must be REVENUE
NEUTRAL to make any
economic sense -- a very difficult balancing act to
accomplish. These
discussions have caused periodic weakness in the municipal
market during the
past months and will no doubt continue to cause periodic
weakness over the next
few years, which may create some attractive investment
opportunities.
PORTFOLIO STRATEGY
At the end of this reporting period, 98% of the portfolio
was rated investment
grade (BBB/Baa and higher) by either Standard & Poor's
Corporation or Moody's
Investors Service, Inc. The Fund invested its assets in
general obligation,
hospital, education, and housing bonds. The average maturity
of the Fund was 2.2
years as of May 31, 1995. This investment allocation is very
similar to the one
we reported to you in the Fund's annual report.
We look forward to reporting to you in the Fund's next
report to investors.
Should you have any questions about your investment in the
Fund or how other
Smith Barney mutual funds may be useful in helping you reach
your financial
goals, please speak with your Smith Barney Financial
Consultant.
Heath B. McLendon Lawrence T.
McDermott
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
JULY 18, 1995
2
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
PORTFOLIO HIGHLIGHTS (UNAUDITED)
MAY 31, 1995
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the Income Trust
Limited Maturity
Municipals Fund investment securities held at May 31, 1995
by industry
classification. The pie is broken in pieces representing
industries in the
following percentages:
<TABLE>
<CAPTION>
INDUSTRY BREAKDOWN PERCENTAGE
<S> <C>
Pollution Control 6.7%
Hospital 17.7%
Industrial Control 3.2%
Utility Revenue 8.6%
General Obligation 19.5%
Privately Placed Tax-Exempt
Municipal Lease Agreement and Net
Other Assets and Liabilities 1.7%
Other Municipal Bonds and Notes 9.8%
Education 15.7%
Housing 11.6%
Transportation 5.5%
-----
100.0%
</TABLE>
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS.
<TABLE>
<CAPTION>
Percent
Standard & of
Moody's Poor's Value
<S> <C> <C> <C>
-------------------------------------------
AAA OR AAA 34.6%
-------------------------------------------
AA AA 19.9
-------------------------------------------
A A 21.3
-------------------------------------------
BAA BBB 22.7
-------------------------------------------
NR NR 1.5
-------------------------------------------
100.0%
---------------
</TABLE>
AVERAGE MATURITY 2.2 years
3
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
MAY 31, 1995
---------------------------------------------------
- ----------
<TABLE>
<S> <C>
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance
Corporation
CGIC -- Capital Guaranty Insurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
</TABLE>
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
-----------------------------------------------------------
- -----------------
MUNICIPAL BONDS AND NOTES -- 98.3%
ARIZONA -- 1.3%
$ 810,000 Yuma & La Paz County,
Arizona, Community College
District, (Arizona Western
College), (AMBAC Insured),
6.200% due 7/1/98 Aaa
AAA $ 844,425
CALIFORNIA -- 1.5%
1,000,000 Central Valley, California,
Financing Authority,
Cogeneration Project
Revenue, (Carson Inc.),
5.000% due 7/1/98 NR
BBB- 993,750
COLORADO -- 2.3%
610,000 Arapahoe County, Colorado,
Certificates of
Participation, (AMBAC
Insured),
5.400% due 12/1/96 Aaa
AAA 620,675
360,000 Colorado Housing Finance
Authority, Single Family
Project, Series A3,
5.750% due 5/1/97 NR
AA 364,950
500,000 Meridian, Colorado,
Metropolitan District,
General Obligation,
Refunding Bonds,
7.000% due 12/1/97 A3
NR 516,875
CONNECTICUT -- 1.0%
625,000 New Haven, Connecticut,
General Obligation, Series
B,
5.700% due 12/1/97 Baa
BBB- 635,938
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
DISTRICT OF COLUMBIA --
3.5%
$ 685,000 District of Columbia,
Certificates of
Participation,
6.000% due 1/1/97 NR B-
$ 686,713
250,000 District of Columbia,
General Obligation, Series
A,
5.000% due 6/1/98 Ba B
243,125
1,295,000 District of Columbia,
Metropolitan Area
Transportation, (FGIC
Insured),
6.000% due 7/1/98 Aaa
AAA 1,351,656
FLORIDA -- 2.1%
850,000 Broward County, Florida,
Educational Facilities
Authority Revenue,
5.150% due 4/1/99 NR
AAA 859,563
500,000 Florida Housing Finance
Agency, Adjustable
Multifamily Mortgage,
Series QQ, (FSA Insured),
5.500% due 11/1/07 Aaa
AAA 503,125
GEORGIA -- 2.1%
1,250,000 Municipal Electric
Authority of Georgia,
Special Obligation
Refunding, Second Crossover
Series,
8.125% due 1/1/17 A
A+ 1,371,875
GUAM -- 2.9%
1,800,000 Government of Guam, General
Obligation Bonds,
5.750% due 8/15/99 NR
BBB 1,849,500
IDAHO -- 0.3%
190,000 Idaho Housing Agency,
Single Family Mortgage,
Refunding Bonds,
5.500% due 1/1/97 Aa
NR 191,900
ILLINOIS -- 7.5%
250,000 Hoffman Estates, Illinois,
Tax Increment Revenue,
Junior Lien, (Hoffman
Estates Development
Project),
6.500% due 5/15/01 Baa1
BBB+ 266,563
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<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 Illinois Development
Financing Authority,
Adjustable Demand Revenue
Bonds, (Catholic Charities
Housing), Series A,
5.000% due 1/1/28 Aa2
NR $ 1,007,500
500,000 Illinois Educational
Facilities Authority,
Adjustable Demand Revenue
Bonds, (Museum of Science
and Industry),
5.625% due 10/1/26 Aa3
NR 503,750
Illinois Health Facilities
Authority, Revenue Bonds:
1,040,000 (Children's Memorial
Hospital), (MBIA Insured),
6.000% due 8/15/98 Aaa
AAA 1,077,700
1,045,000 (Delnor Community
Hospital), (FSA Insured),
4.500% due 5/15/98 Aaa
AAA 1,025,406
1,000,000 St. Clair County, Illinois,
General Obilgation, (FGIC
Insured),
4.600% due 10/1/98 Aaa
AAA 990,000
INDIANA -- 2.6%
Indiana Bond Bank, Special
Project:
415,000 Series F,
5.800% due 8/1/97 NR A
423,819
500,000 Guaranteed Revolving,
4.900% due 2/1/99 NR A
501,875
750,000 Warrick County, Indiana,
Environmental Improvement,
(Southern Indiana Gas &
Electric Project), Series
A,
4.650% due 5/1/28 Aa2
AA 750,938
IOWA -- 3.9%
500,000 Iowa State, Certificates of
Participation, Series A,
(AMBAC Insured),
5.400% due 7/1/96 Aaa
AAA 508,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
IOWA -- (CONTINUED)
$ 410,000 Iowa State, Housing Finance
Authority, Single Family
Mortgage, Series F, (AMBAC
Insured),
5.150% due 1/1/98 Aaa
AAA $ 416,150
350,000 Iowa Student Loan Liquidity
Corporation, Student Loan
Revenue, Series A,
6.000% due 3/1/98 Aa1
NR 361,375
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 1,207,850
KENTUCKY -- 1.5%
990,000 University of Louisville,
Kentucky, Series J,
4.875% due 5/1/98 A1
AA- 988,763
LOUISIANA -- 2.1%
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
500,000 Louisiana State, General
Obligation Refunding Bond,
Series A, (CGIC Insured),
6.600% due 8/1/97 Aaa
AAA 521,250
500,000 New Orleans, Louisiana,
Exhibit Hall Authority,
Hotel Occupancy Tax
Revenue, (AMBAC Insured),
5.250% due 1/15/97 Aaa
AAA 509,375
MAINE -- 0.4%
250,000 Maine Health & Higher
Educational Facilities,
Special Obligation Revenue,
Medium Term Facilities,
(FSA Insured),
5.500% due 7/1/97 Aaa
AAA 254,375
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MARYLAND -- 0.5%
$ 320,000 Montgomery County,
Maryland, Housing
Authority, Multifamily
Revenue, Series 85A, (Hunt
Club),
6.000% due 2/1/07++++ Aa
AA+ $ 322,000
MASSACHUSETTS -- 8.6%
750,000 Lowell, Massachusetts,
General Obligation,
5.500% due 8/15/97 Baa1
NR 765,938
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+ 211,663
Series E:
100,000 5.100% due 7/1/97 A
BBB+ 101,375
445,000 Massachusetts State Health
and Educational Facilities
Authority, Medical Center
of Central Massachusetts,
Series A,
6.000% due 7/1/97 A A
458,350
500,000 Massachusetts Water
Resources Authority, Series
A,
5.600% due 7/15/96 A A
506,875
New England Educational
Loan Marketing Corporation,
Student Loan:
1,000,000 Series B,
5.000% due 6/1/98 A1 A-
1,000,000
1,000,000 Series C,
4.750% due 7/1/98 A1 A-
992,500
500,000 Plymouth County,
Massachusetts, Certificates
of Participation, Series A,
5.700% due 10/1/96 NR
BBB- 507,500
720,000 Springfield, Massachusetts,
School Project, Series B,
5.300% due 9/1/97 Baa1
NR 732,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MICHIGAN -- 1.6%
$ 750,000 Detroit, Michigan, District
State Aid,
5.625% due 5/1/97 Baa
BBB+ $ 756,563
250,000 Michigan Higher Education
Student Loan, Education
Revenue, Series XIV-A,
5.400% due 10/1/96 A
NR 253,125
NEVADA -- 3.4%
1,000,000 Clark County, Nevada,
Airport Systems Revenue,
(MBIA Insured),
7.500% due 7/1/97 Aaa
AAA 1,058,750
1,000,000 Clark County, Nevada,
General Obligation, (FGIC
Insured),
7.500% due 7/1/04 Aaa
AAA 1,105,000
NEW HAMPSHIRE -- 0.4%
275,000 New Hampshire Higher
Education & Health
Authority Revenue, (Elliot
Hospital of Manchester),
(AMBAC Insured),
5.700% due 10/1/97 Aaa
AAA 283,938
NEW JERSEY -- 3.9%
500,000 Atlantic County, New
Jersey, Utilities
Authority, Solid Waste
Revenue,
6.250% due 3/1/97 Baa
NR 506,250
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+ 440,981
1,075,000 Hudson County, New Jersey,
Improvement Authority,
5.750% due 1/1/98 NR
BBB- 1,065,594
500,000 New Jersey Health Care
Facilities Center,
(Atlantic City Medical
Center), Series C,
5.600% due 7/1/96 A A-
506,875
NEW MEXICO -- 0.6%
390,000 New Mexico Mortgage Finance
Authority, Single Family,
Series A1,
5.500% due 1/1/97 Aa
AA 393,900
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<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 -- 7.7%
$1,450,000 Babylon, New York,
Industrial Development
Authority, Babylon
Community Waste Management,
Series A,
7.650% due 7/1/97 Baa1
NR $ 1,546,062
600,000 Metropolitan Transit
Authority, New York,
Service Contract Transit
Fees, Series 5,
6.100% due 7/1/98 Baa1
BBB 618,000
Metropolitan Transit
Authority, New York,
General Obligation:
500,000 6.600% due 1/1/99 Aaa
AAA 533,750
750,000 Series C,
5.400% due 8/1/97 Baa1 A-
757,500
640,000 New York State Medical Care
Facilities Agency, Mental
Health Service Facilities
Improvement, Series D,
6.300% due 8/15/97 Baa1
BBB+ 658,400
North Country, New York,
Solid Waste Disposal,
Series A:
455,000 5.400% due 7/1/95 Baa
NR 455,000
400,000 6.000% due 7/1/97 Baa1
NR 407,500
OKLAHOMA -- 0.8%
Cleveland County, Oklahoma,
Home Loan Authority, Single
Family Mortgage Revenue:
165,000 6.000% due 8/1/96 A
NR 166,443
145,000 6.100% due 2/1/97 A
NR 146,812
180,000 6.100% due 8/1/97 A
NR 182,925
OREGON -- 0.8%
500,000 Clackamas County, Oregon,
Hospital Facilities
Authority Revenue, (Sisters
of Providence), Series A,
5.300% due 10/1/96 A1
AA- 508,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PENNSYLVANIA -- 7.6%
$ 125,000 Falls Township,
Pennsylvania Hospital
Authority Revenue,
(Delaware Valley Medical),
(FHA Insured),
6.000% due 8/1/01 NR
AAA $ 104,375
500,000 Lehigh County,
Pennsylvania, Industrial
and Community Development
Authority, (Strawbridge
Project),
7.200% due 12/15/01 NR
BBB 533,125
500,000 Pennsylvania State Higher
Education, (Thomas
Jefferson University),
Series A,
5.500% due 8/15/97 Aa
A+ 513,750
1,170,000 Pennsylvania State
Industrial Development
Authority Revenue, (AMBAC
Insured),
6.000% due 1/1/99 Aaa
AAA 1,222,650
Philadelphia, Pennsylvania,
Hospitals and Higher
Education Facilities
Authority:
(Albert Einstein Medical
Center):
365,000 6.300% due 10/1/96 A
BBB+ 371,386
390,000 6.500% due 10/1/97 A
BBB+ 399,750
1,000,000 (Graduate Health Systems),
6.500% due 7/1/97 Baa1
BBB+ 1,026,250
750,000 Westmoreland County,
Pennsylvania, Industrial
Development Authority,
(Valley Landfill Project),
4.375% due 5/1/18++++ Aa1
AA 748,125
PUERTO RICO -- 0.7%
420,000 Puerto Rico Medical
Hospital, Series A, (St.
Luke's Hospital),
5.400% due 6/1/97 NR A-
423,675
RHODE ISLAND -- 0.8%
500,000 Rhode Island State, Student
Loan Authority, Series A,
5.700% due 12/1/96 A
NR 508,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<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 -- 0.8%
$ 500,000 South Carolina, State,
Public Service Authority,
(Santee - Cooper Project),
Series D,
5.500% due 7/1/98 A1
A+ $ 515,000
TEXAS -- 11.4%
500,000 Arlington, Texas,
Waterworks & Sewer Revenue,
Refunding and Improvement,
(FGIC Insured),
5.400% due 6/1/97 Aaa
AAA 509,375
2,000,000 Bell County, Texas, Health
Facilities Development
Corporation, Central Texas
Pooled Health, Series A,
4.750% due 10/1/23 NR
AA 1,975,000
1,000,000 Brazos, Texas, Higher
Education Authority, Series
A-1,
5.300% due 12/1/97 Aa
NR 1,016,250
300,000 Dallas-Fort Worth, Texas,
Regional Airport Revenue,
Series A, (FGIC Insured),
5.875% due 11/1/07 Aaa
AAA 309,375
1,000,000 North Texas, Higher
Education Authority,
Student Loan Revenue,
Series B,
4.850% due 4/1/98 Aaa
NR 1,002,500
1,000,000 Port Houston Authority,
Harris, Texas, (MBIA
Insured),
5.700% due 5/1/99 Aaa
AAA 1,037,500
1,000,000 Tarrant County, Texas,
Housing Finance
Corporation, Multifamily
Housing, (Bedford Springs),
4.500% due 9/1/06 NR
AA- 1,000,000
500,000 Texas State Veterans
Housing Assistance, (FHA
Insured),
6.050% due 12/1/12 Aa
AA 509,375
VIRGIN ISLANDS -- 1.0%
635,000 Virgin Islands Public
Financing Authority,
Matching Revenue Funding,
Series A,
6.250% due 10/1/96 NR
NR 647,700
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
VIRGINIA -- 1.6%
$ 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 $ 523,750
500,000 Virginia Educational Loan
Authority, Guaranteed
Revenue, Series C,
4.850% due 3/1/98 Aaa
NR 500,625
WASHINGTON -- 3.1%
445,000 Washington State Housing
Finance, Single Family
Mortgage Revenue, (GNMA and
FNMA Securities Program),
Series D,
5.800% due 7/1/97 NR
AAA 446,668
1,500,000 Washington State Public
Power Supply, Series B,
(Nuclear Project No. 3),
7.000% due 7/1/97 Aa
AA 1,567,500
WISCONSIN -- 5.7%
Wisconsin Housing Economic
Development Authority:
250,000 Series A,
5.400% due 11/1/97 A1 A
253,436
1,045,000 4.500% due 11/1/98 A1 A
1,029,325
2,360,000 Wisconsin, State, Health &
Educational Facilities
Authority, (Aurora Health
Care), (MBIA Insured),
5.500% due 8/15/98 Aaa
AAA 2,424,900
WYOMING -- 2.3%
1,500,000 Platte County, Wyoming,
Pollution Control Revenue,
4.200% due 1/1/99 A2 A
1,468,125
-----------------------------------------------------------
- -----------------
TOTAL MUNICIPAL BONDS AND NOTES
(COST $63,231,620)
63,489,269
-----------------------------------------------------------
- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
PRIVATELY PLACED TAX-EXEMPT MUNICIPAL
LEASE AGREEMENT -- 0.5% (COST $310,941)
TENNESSEE -- 0.5%
$ 308,628 The Health and Educational
Facilities Board of the
Metropolitan Government of
Nashville and Davidson
County, Tennessee, on
behalf of Cooke County,
Baptist Hospital,
7.250% due 9/1/96+++ NR
NR $ 311,713
-----------------------------------------------------------
- -----------------
TOTAL INVESTMENTS (COST $63,542,561*)
98.8% 63,800,982
OTHER ASSETS AND LIABILITIES (NET)
1.2 782,718
-----------------------------------------------------------
- -----------------
NET ASSETS
100.0% $64,583,700
-----------------------------------------------------------
- -----------------
<FN>
* Aggregate cost for Federal tax purposes.
+++ Backed by an irrevocable bank letter of credit in the
amount of $308,628.
++++ Put bonds and notes have demand features with
maturities greater than one
year.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost
$63,542,561) (Note 1)
See accompanying schedule
$63,800,982
Interest receivable
1,148,341
Receivable for Fund shares sold
106,894
Unamortized organization costs (Note 7)
19,067
- ------------------------------------------------------------
- ------
TOTAL ASSETS
65,075,284
- ------------------------------------------------------------
- ------
LIABILITIES:
Due to custodian $188,598
Dividends payable 161,409
Investment advisory fee payable (Note
2) 38,899
Payable for Fund shares redeemed 35,937
Administration fee payable (Note 2) 22,228
Service fee payable (Note 3) 8,276
Custodian fees payable (Note 2) 4,700
Transfer agent fees payable (Note 2) 2,515
Distribution fee payable (Note 3) 146
Accrued expenses and other payables 28,876
- ------------------------------------------------------------
- ------
TOTAL LIABILITIES
491,584
- ------------------------------------------------------------
- ------
NET ASSETS
$64,583,700
- ------------------------------------------------------------
- ------
NET ASSETS consist of:
Undistributed net investment income $
8,275
Accumulated net realized loss on
investments sold
(865,643)
Unrealized appreciation of investments
258,421
Par value
7,945
Paid-in capital in excess of par value
65,174,702
- ------------------------------------------------------------
- ------
TOTAL NET ASSETS
$64,583,700
- ------------------------------------------------------------
- ------
NET ASSET VALUE:
CLASS A SHARES:
NET ASSET VALUE per share+
($63,571,508 DIVIDED BY 7,820,975 shares of
beneficial interest outstanding)
$8.13
- ------------------------------------------------------------
- ------
MAXIMUM OFFERING PRICE PER SHARE ($8.13
DIVIDED BY 0.98)
(based on sales charge of 2.00% of the offering
price at May 31, 1995)
$8.30
- ------------------------------------------------------------
- ------
CLASS C SHARES:
NET ASSET VALUE and offering price per share+
($1,012,192 DIVIDED BY 124,514 shares of
beneficial interest outstanding)
$8.13
- ------------------------------------------------------------
- ------
<FN>
+ Redemption price per share is equal to net asset value
less any applicable
contingent deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF OPERATIONS (UNAUDITED)
- ------------------------------------------------------------
- -
FOR THE SIX
MONTHS ENDED MAY 31, 1995
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$1,802,991
- ------------------------------------------------------------
- ---------------
EXPENSES:
Investment advisory fee (Note 2)
$121,709
Administration fee (Note 2)
69,548
Service fee (Note 3)
52,161
Transfer agent fees (Notes 2 and 4)
14,513
Legal and audit fees
13,769
Custodian fees (Note 2)
12,341
Amortization of organization costs (Note 7)
6,021
Trustees' fees and expenses (Note 2)
4,065
Distribution fee (Note 3)
528
Other
40,132
Fees waived by investment adviser and
administrator (Note 2)
(56,203)
- ------------------------------------------------------------
- ---------------
TOTAL EXPENSES
278,584
- ------------------------------------------------------------
- ---------------
NET INVESTMENT INCOME
1,524,407
- ------------------------------------------------------------
- ---------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTES 1
AND 5):
Net realized loss on investments during the
period
(203,850)
Net unrealized appreciation of investments
during the period
1,861,899
- ------------------------------------------------------------
- ---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
1,658,049
- ------------------------------------------------------------
- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$3,182,456
- ------------------------------------------------------------
- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
5/31/95 ENDED
(UNAUDITED) 11/30/94
<S> <C>
<C>
Net investment income $
1,524,407 $ 3,882,663
Net realized loss on investments sold during the period
(203,850) (616,478)
Net unrealized appreciation/(depreciation) of
investments during the period
1,861,899 (3,140,215)
- ------------------------------------------------------------
- -------------------------
Net increase in net assets resulting from operations
3,182,456 125,970
Distributions to shareholders from net investment
income:
Class A
(1,514,009) (3,882,660)
Class C
(10,398) (3)
Distribution to shareholders from net realized gain on
investments:
Class A
- -- (8,764)
Net increase/(decrease) in net assets from Fund share
transactions (Note 6):
Class A
(14,311,352) (16,418,251)
Class C
894,053 106,015
- ------------------------------------------------------------
- -------------------------
Net decrease in net assets
(11,759,250) (20,077,693)
NET ASSETS:
Beginning of period
76,342,950 96,420,643
- ------------------------------------------------------------
- -------------------------
End of period $
64,583,700 $ 76,342,950
- ------------------------------------------------------------
- -------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR YEAR PERIOD
5/31/95
ENDED ENDED ENDED
(UNAUDITED)
11/30/94* 11/30/93 11/30/92*
<S> <C>
<C> <C> <C>
Net asset value, beginning of period $ 7.94
$ 8.26 $ 8.07 $ 7.90
- ------------------------------------------------------------
- -------------------------
Income from investment operations:
Net investment income+ 0.18
0.34 0.36 0.36
Net realized and unrealized gain/(loss) on
investments 0.19
(0.32) 0.19 0.17
- ------------------------------------------------------------
- -------------------------
Total from investment operations 0.37
0.02 0.55 0.53
Less distributions:
Dividends from net investment income (0.18)
(0.34) (0.36) (0.36)
Distributions from net realized capital
gains --
(0.00)** (0.00)** --
- ------------------------------------------------------------
- -------------------------
Total distributions (0.18)
(0.34) (0.36) (0.36)
- ------------------------------------------------------------
- -------------------------
Net Asset Value, end of period $ 8.13
$ 7.94 $ 8.26 $ 8.07
- ------------------------------------------------------------
- -------------------------
Total return++ 4.66%
0.23% 6.98% 6.88%
- ------------------------------------------------------------
- -------------------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $63,572
$76,237 $96,421 $36,379
Ratio of operating expenses to average net
assets+++ 0.80%***
0.80% 0.75% 0.65%***
Ratio of net investment income to average
net assets 4.39%***
4.15% 4.24% 4.74%***
Portfolio turnover rate 0%
28% 4% 22%
- ------------------------------------------------------------
- -------------------------
<FN>
* The Fund commenced operations on December 31, 1991.
Those shares in existence
prior to November 7, 1994 were designated Class A
shares.
** Amount represents less than $0.01 per share.
*** Annualized.
+ Net investment income per share before waiver of fees
by investment adviser
and administrator for the six months ended May 31, 1995
and years ended
November 30, 1994 and 1993 and waiver of fees by
investment adviser,
sub-investment adviser and administrator, and/or
custodian and distributor
for the period ended November 30, 1992 were $0.17,
$0.33, $0.33 and $0.31,
respectively.
++ Total return represents aggregate total return for the
period 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, 1995 and years
ended November 30, 1994 and 1993 and waiver of fees by
investment adviser,
sub-investment adviser and administrator, and/or
custodian and distributor
for the period ended November 30, 1992 were 0.96%,
0.94%, 1.07% and 1.28%,
respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
FINANCIAL HIGHLIGHTS
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
PERIOD
5/31/95
ENDED
(UNAUDITED)
11/30/94*
<S> <C>
<C>
Net asset value, beginning of period $ 7.94
$7.92
- ------------------------------------------------------------
- -----
Income from investment operations:
Net investment income+ 0.16
0.00**
Net realized and unrealized gain on
investments 0.19
0.02#
- ------------------------------------------------------------
- -----
Total from investment operations 0.35
0.02
Less distributions:
Distributions from net investment income (0.16)
0.00**
- ------------------------------------------------------------
- -----
Total distributions (0.16)
0.00
- ------------------------------------------------------------
- -----
Net asset value, end of period $ 8.13
$7.94
- ------------------------------------------------------------
- -----
Total return++ 4.55%
0.31%
- ------------------------------------------------------------
- -----
Ratios/supplemental data:
Net assets, end of period (in 000's) $1,012 $
106
Ratio of operating expenses to average net
assets+++ 0.98%***
1.00%***
Ratio of net investment income to average
net assets 4.21%***
3.94%***
Portfolio turnover rate 0%
28%
- ------------------------------------------------------------
- -----
<FN>
* The Fund commenced selling Class C shares on November
17, 1994.
** Amount represents less than $0.01 per share.
*** Annualized.
+ Net investment income per share before waiver of fees
by investment adviser
and administrator for the six months ended May 31, 1995
and period ended
November 30, 1994 were $0.16 and less than $0.01,
respectively.
++ Total return represents aggregate total return for the
period indicated and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratio before waiver of
fees by investment
adviser and administrator for the six months ended May
31, 1995 and period
ended November 30, 1994 were 1.14% and 1.14%,
respectively.
# The amount in this caption for each share outstanding
throughout the period
may not accord with the change in aggregate gains and
losses in portfolio
securities for the period because of the timing of
purchases and withdrawals
of shares in relation to the fluctuating market values
of the portfolio.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- ---------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney 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 Limited Maturity Treasury Fund, Smith
Barney Limited
Maturity Municipals Fund (the "Fund"), Smith Barney
Intermediate Maturity
California Municipals Fund and Smith Barney Intermediate
Maturity New York
Municipals Fund. Effective November 7, 1994, the Fund began
offering Class C and
Class Y shares and all existing shares were designated Class
A shares. As of May
31, 1995, no Class Y shares have been sold. Class A shares
are sold with a
front-end sales charge. Class C shares may be subject to a
contingent deferred
sales charge ("CDSC") upon redemption. Class Y shares are
available to investors
making an initial investment of at least $5 million and are
not subject to any
sales charges, distribution or service fees. All classes of
shares have
identical rights and privileges except with respect to the
effect of the
respective sales charges, the distribution and/or service
fees borne by each
class, expenses allocable exclusively to each class, voting
rights on matters
affecting a single class and the exchange privilege of each.
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 at the closing of
trading on the New
York Stock Exchange, Inc. by The Boston Company Advisors,
Inc. ("Boston
Advisors"), an indirect wholly owned subsidiary of Mellon
Bank Corporation
("Mellon"), 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;
20
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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. 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 recorded on the accrual basis. Realized
gains and losses from
securities sold are recorded on the identified cost basis.
Investment income and
realized and unrealized gains and losses are allocated based
upon the relative
net assets of each class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from
net investment
income are determined on a class level. It is the policy of
the Fund to declare
dividends from net investment income daily and to pay such
dividends on the last
business day of the Smith Barney Inc. ("Smith Barney")
statement month.
Distributions of any net realized capital gains are declared
and paid annually,
after the end of the fiscal year. Additional distributions
of net investment
income and capital gains for the Fund may be made at the
discretion of the Board
of Trustees in order to avoid the application of a 4.00%
nondeductible excise
tax on certain undistributed amounts of net investment
income and capital gains.
To the extent net realized capital gains can be offset by
capital losses and
loss carryforwards, it is the policy of the Fund not to
distribute such gains.
Income distributions and capital gain distributions on a
Fund level 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 as a whole.
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
21
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement
(the "Advisory
Agreement") with Smith Barney Mutual Funds Management Inc.
("SBMFM"). SBMFM
(formerly known as Smith Barney Advisers, Inc.), is a wholly
owned subsidiary of
Smith Barney Holdings Inc. ("Holdings"), which in turn is a
wholly owned
subsidiary of Travelers Group 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.
The Fund has entered into an administration agreement (the
"Administration
Agreement") with SBMFM. Under the Administration Agreement,
the Fund pays a
monthly fee at the annual rate of 0.20% of the value of its
average daily net
assets.
The Fund and SBMFM have also entered into a sub-
administration agreement (the
"Sub-Administration Agreement") with Boston Advisors. Under
the
Sub-Administration Agreement, SBMFM pays Boston Advisors a
portion of its
administration fee at a rate agreed upon from time to time
between SBMFM and
Boston Advisors.
From time to time SBMFM may voluntarily waive a portion of
its advisory and/or
administrative fees otherwise payable to it. For the six
months ended May 31,
1995, SBMFM voluntarily waived advisory fees of $35,766 and
administration fees
of $20,437, respectively.
For the six months ended May 31, 1995, Smith Barney Inc.
("Smith Barney")
received $23,258 from investors representing commissions
(sales charges) on
sales of Class A shares.
22
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
A CDSC is generally payable by Class C shareholders and may
be payable by
certain Class A shareholders in connection with the
redemption of shares within
one year after the date of purchase. For the six months
ended May 31, 1995,
$5,962 in CDSC were paid to Smith Barney by Class A
shareholders.
No officer, trustee or employee of Smith Barney or any of
its affiliates
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 each Trustee emeritus who is not an
officer, director or
employee of Smith Barney or any of its affiliates $2,000 per
annum plus $250 per
meeting attended. The Trust reimburses each Trustee for
travel and out-of-pocket
expenses incurred in attending such meetings.
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
Smith Barney acts as distributor of the Fund's shares
pursuant to a distribution
agreement with the Trust and sells shares of the Fund
through Smith Barney or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust has
adopted a service and
distribution plan (the "Plan"). Under this Plan, the Fund
compensates Smith
Barney for servicing shareholder accounts for Class A and
Class C shareholders,
and covers expenses incurred in distributing Class C shares.
Smith Barney is
paid an annual service fee with respect to Class A and Class
C shares of the
Fund at the annual rate of 0.15% of the value of the average
daily net assets of
each respective class of shares. Smith Barney is also paid
an annual
distribution fee with respect to Class C shares at the
annual rate of 0.20% of
the value of the average daily net assets attributable to
those shares. For the
six months ended May 31, 1995, the Fund incurred
23
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
$51,765 and $396 in service fees for Class A and Class C
shares, respectively.
For the six months ended May 31, 1995, the Fund incurred
$528 in distribution
fees for Class C 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. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the
operations of any class of
shares are prorated among the classes based upon the
relative net assets of each
class. Operating expenses directly attributable to a class
of shares are charged
to that class' operations. In addition to the above
servicing and distribution
fees, class specific operating expenses for the six months
ended May 31, 1995
included transfer agent fees of $14,462 and $51 for Class A
and Class C shares,
respectively.
5. SECURITIES TRANSACTIONS
Proceeds from sales of securities, excluding short-term
investments, for the six
months ended May 31, 1995 was $12,868,435. There were no
purchases, excluding
short-term investments for the six months ended May 31,
1995.
At May 31, 1995, aggregate gross unrealized appreciation for
all securities in
which there was an excess of value over tax cost was
$584,388, and aggregate
gross unrealized depreciation for all securities in which
there was an excess of
tax cost over value was $325,967.
24
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of
beneficial interest which
are divided into three class (Class A, Class C and Class Y)
with a $.001 par
value. Changes in shares of beneficial interest in the Fund
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
5/31/95* 11/30/94
<S> <C>
<C> <C> <C>
CLASS A SHARES: Shares
Amount Shares Amount
- ------------------------------------------------------------
- -------------------------
Sold 546,201 $
4,374,347 3,175,899 $ 26,079,012
Issued as reinvestment of dividends 128,078
1,027,683 353,609 2,875,739
Redeemed (2,458,321)
(19,713,382) (5,604,134) (45,373,002)
- ------------------------------------------------------------
- -------------------------
Net decrease (1,784,042)
$(14,311,352) (2,074,626) $(16,418,251)
- ------------------------------------------------------------
- -------------------------
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
5/31/95* 11/30/94*
CLASS C SHARES: Shares
Amount Shares Amount
<S> <C>
<C> <C> <C>
- ------------------------------------------------------------
- -------------------------
Sold 111,231 $
894,633 13,354 $ 106,015
Issued as reinvestment of dividends 654
5,280 -- --
Redeemed (725)
(5,860) -- --
- ------------------------------------------------------------
- -------------------------
Net increase 111,160 $
894,053 13,354 $ 106,015
- ------------------------------------------------------------
- -------------------------
<FN>
* The Fund began offering Class C and Class Y shares on
November 7, 1994. Those
shares in existence prior to November 7, 1994 were
designated Class A shares.
</TABLE>
As of May 31, 1995, no Class Y shares had been sold.
7. 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
25
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
8. CAPITAL LOSS CARRYFORWARD
As of November 30, 1994, the Fund had available for Federal
tax purposes an
unused capital loss carryforward of $483,118 expiring in the
year 2002.
- ------------------------------------------------------------
- --------
ADDITIONAL INFORMATION
On March 20, 1995, a special meeting of shareholders of the
Trust was held for
the following purposes:
1. To elect the following ten (10) trustees to the Trust's
Board of Trustees:
<TABLE>
<CAPTION>
% OF
OUTSTANDING
SHARES
NOMINEE VOTES RECEIVED
VOTED
<S> <C>
<C>
- ------------------------------------------------------------
- ---------
Herbert Barg 15,237,202.665
96.182%
Alfred J. Bianchetti* 15,239,787.601
96.198
Martin Brody 15,239,506.357
96.196
Dwight B. Crane 15,262,039.293
96.338
Burt N. Dorsett 15,249,442.272
96.259
Elliot S. Jaffe 15,253,001.145
96.281
Stephen E. Kaufman 15,256,593.968
96.304
Joseph J. McCann 15,258,212.162
96.314
Heath B. McLendon* 15,246,700.983
96.241
Cornelius C. Rose, Jr. 15,249,666.535
96.260
- ------------------------------------------------------------
- ---------
<FN>
* Each Trustee who is an "interested person" of the
Trust, as defined by the
Investment Company Act of 1940, as amended, is
indicated by an asterisk.
</TABLE>
26
<PAGE>
Smith Barney
Limited Maturity Municipals Fund
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PARTICIPANTS
DISTRIBUTOR
Smith Barney, Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER AND
ADMINISTRATOR
Smith Barney Mutual Funds
Management Inc.
388 Greenwich Street
New York, New York 10013
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
COUNSEL
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
27
<PAGE>
Smith Barney
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. 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.
28
<PAGE>
LIMITED
MATURITY
MUNICIPALS
FUND
TRUSTEES
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD
AND INVESTMENT OFFICER
Jessica M. Bibliowicz
PRESIDENT
Lewis E. Daidone
SENIOR VICE PRESIDENT
AND TREASURER
Lawrence T. McDermott
VICE PRESIDENT AND
INVESTMENT OFFICER
Christina T. Sydor
SECRETARY
[LOGO]
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE
SHAREHOLDERS OF
SMITH BARNEY 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 AND EXPENSES AS WELL AS OTHER
PERTINENT INFORMATION.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 163, 482, 498
[LOGO]
FD2233 7/95
