Filed with the Securities and Exchange Commission on December 29, 1997
Registration Nos.: 33-43446
811-6444
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ___
Post-Effective Amendment No. 16 X
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 16 X
SMITH BARNEY INVESTMENT TRUST
(Exact name of Registrant as specified in Charter)
388 Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)
Christina T. Sydor
Secretary
Smith Barney Investment Trust
388 Greenwich Street
New York, New York 10013
(212) 816-6474
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment becomes effective
It is proposed that this filing will become effective:
immediately upon filing pursuant to Rule 485(b)
X on December 30, 1997 pursuant to Rule 485(b)
Registrant previously registered an indefinite number of its shares pursuant
to Rule 24f-2 of the Investment Company Act of 1940. The Registrants Rule
24f-2 Notice for the fiscal year ended November 30, 1996 was filed on January
28, 1997 as Accession No. 000091155-97-000045.
CONTENTS OF REGISTRATION STATEMENT
Front Cover
Contents Page
Cross Reference Sheet
Part A:
PROSPECTUS
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SMITH BARNEY
S&P 500 Index Fund
PROSPECTUS DECEMBER 30, 1997
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388 Greenwich Street
New York, New York 10013
1-800-451-2010
The Smith Barney S&P 500 Index Fund (the "Fund") seeks to provide investment
results that, before expenses, correspond to the price and yield performance of
the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index"), which
is representative of the U.S. stock market. The Fund will hold a broadly diver-
sified portfolio of common stocks that is comparable to the S&P 500 Index in
terms of economic sector weightings, market capitalization and liquidity.
The Fund is one of a number of funds, each having distinct investment objec-
tives and policies making up the Smith Barney Investment Trust (the "Trust").
The Trust is an open-end management investment company commonly referred to as
a mutual fund.
This Prospectus sets forth concisely certain information about the Fund,
including service fees and expenses, that prospective investors will find help-
ful in making an investment decision. Investors are encouraged to read this
Prospectus carefully and retain it for future reference.
Shares of the other Funds offered by the Trust are described in separate pro-
spectuses that may be obtained by calling the Trust at 1-800-451-2010.
Additional information about the Fund is contained in a Statement of Addi-
tional Information (the "SAI") dated December 30, 1997, as amended or supple-
mented from time to time, that is available upon request and without charge by
calling or writing the Fund at the telephone number or address set forth above
or by contacting a Smith Barney Financial Consultant. The SAI has been filed
with the Securities and Exchange Commission (the "SEC") and is incorporated by
reference into this Prospectus in its entirety.
SMITH BARNEY INC.
Distributor
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Investment Adviser
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Administrator
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY 3
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 6
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VALUATION OF SHARES 11
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DIVIDENDS, DISTRIBUTIONS AND TAXES 11
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PURCHASE OF SHARES 13
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REDEMPTION OF SHARES 14
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EXCHANGE PRIVILEGE 17
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MINIMUM ACCOUNT SIZE 17
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PERFORMANCE 17
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MANAGEMENT OF THE FUND 17
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DISTRIBUTOR 18
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ADDITIONAL INFORMATION 19
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</TABLE>
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No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information or
representations must not be relied upon as having been authorized by the Fund
or the Distributor. This Prospectus does not constitute an offer by the Fund or
the Distributor to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.
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2
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed information
appearing elsewhere in this Prospectus and in the SAI. Cross references in this
summary are to headings in the Prospectus. See "Table of Contents."
INVESTMENT OBJECTIVE The Fund is an open-end, diversified management investment
company whose investment objective is to seek a total return, before expenses,
that is consistent with the return of the aggregate U.S. stock market, as mea-
sured by the S&P 500 Index. The Fund will hold a broadly diversified portfolio
of common stocks that is comparable to the S&P 500 Index in terms of economic
sector weightings, market capitalization and liquidity. See "Investment Objec-
tive and Management Policies."
PURCHASE ARRANGEMENTS The Fund offers two classes of shares, Class A shares and
Class D shares. Both Class A and D shares are sold at net asset value without a
sales charge. Class D Shares are offered to a limited group of investors who
participate in certain investment programs which charge a fee for participa-
tion. In addition, Class D Shares are offered to tax-exempt employee benefit
and retirement plans of Smith Barney Inc. and its affiliates. Class A shares
are subject to an annual service fee of 0.20% of the average daily net assets
of this Class. Class D Shares are not subject to any service fees.
See "Purchase of Shares," "Management of the Fund," "Valuation of Shares,"
and "Dividends, Distributions and Taxes" for other information.
PURCHASE OF SHARES Shares may be purchased through the Fund's distributor,
Smith Barney, a broker that clears securities transactions through Smith Barney
on a fully disclosed basis (an "Introducing Broker") or an investment dealer in
the selling group. In addition, certain investors, including qualified retire-
ment plans and certain other institutional investors may purchase shares
directly from the Fund through the Fund's transfer agent, First Data Investor
Services Group, Inc. ("First Data"). See "Purchase of Shares."
INVESTMENT MINIMUMS Investors may open an account by making an initial invest-
ment of at least $1,000 for each account, or $250 for an individual retirement
account ("IRA") or a self-employed retirement plan. Subsequent investments of
at least $50 may be made. The minimum investment requirements for purchases of
Fund shares through the Systematic Investment Plan are described below. See
"Purchase of Shares."
SYSTEMATIC INVESTMENT PLAN The Fund offers shareholders a Systematic Investment
Plan under which they may authorize the automatic placement of a purchase order
each month or quarter for Fund shares. The minimum initial investment require-
ment and the subsequent investment requirement for share-
3
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PROSPECTUS SUMMARY (CONTINUED)
holders purchasing shares through the Systematic Investment Plan on a monthly
basis is $25 and on a quarterly basis is $50. See "Purchase of Shares."
REDEMPTION OF SHARES Shares may be redeemed on each day the New York Stock
Exchange, Inc. ("NYSE") is open for business. See "Redemption of Shares."
MANAGEMENT OF THE FUND The Travelers Investment Management Company ("TIMCO" or
the Adviser) serves as the Fund's investment adviser. The Adviser provides
investment advisory and management services to certain investment companies
affiliated with Smith Barney Inc. ("Smith Barney") The Adviser is a wholly
owned subsidiary of Salomon Smith Barney Holdings Inc. ("Holdings"). Holdings
is a wholly owned subsidiary of Travelers Group Inc. ("Travelers"), a diversi-
fied financial services holding company engaged, through its subsidiaries,
principally in four business segments: Investment Services, Consumer Finance
Services, Life Insurance Services and Property & Casualty Insurance Services.
Smith Barney Mutual Funds Management Inc. ("SBMFM") serves as the Fund's
administrator. SBMFM is a wholly owned subsidiary of Holdings. SBMFM provides
investment advisory and administration services to investment companies affil-
iated with Smith Barney. See "Management of the Fund."
EXCHANGE PRIVILEGE Shareholders of certain fee based programs and/or employer-
sponsored retirement plans are allowed to exchange Class D shares for other
classes of another Smith Barney Mutual Fund.
VALUATION OF SHARES Net asset value of the Fund for the prior day generally is
quoted daily in the financial section of most newspapers and is also available
from a Smith Barney Financial Consultant. See "Valuation of Shares."
DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income, if any, are
paid annually. Distributions of net realized long and short-term capital
gains, if any, are declared and paid annually. See "Dividends, Distributions
and Taxes."
REINVESTMENT OF DIVIDENDS Dividends and distributions paid on shares will be
reinvested automatically in additional shares at current net asset value
unless otherwise specified by an investor.
RISK FACTORS AND SPECIAL CONSIDERATIONS There can be no assurance that the
Fund's investment objective will be achieved. An investment in the Fund should
be considered a long-term holding and subject to all the risks associated with
investing in equity securities. The market value of the Fund's portfolio
securities and, therefore, the Fund's net asset value per share, will increase
or decrease due to a variety of economic, market or political factors which
cannot be predicted. The Fund operates as a "pure" index fund and will
4
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PROSPECTUS SUMMARY (CONTINUED)
therefore not be actively managed; as such, the adverse performance of a
portfolio security will ordinarily not result in the elimination of the
security from the Fund's portfolio. The Fund may enter into repurchase
agreements, may lend its portfolio securities and may utilize transactions
involving stock index futures which may be considered speculative in nature and
may involve greater risks than those customarily assumed by other investment
companies which do not invest in such instruments. An investment in shares of
the Fund should not be considered a complete investment program and is not
appropriate for all investors. Investors should carefully consider their
ability to assume these risks before making an investment in the Fund.
THE FUND'S EXPENSES The following expense table lists the costs and estimated
expenses that an investor will incur either directly or indirectly as a
shareholder of the Fund based, unless otherwise noted, on the Fund's estimated
operating expenses.
<TABLE>
<CAPTION>
CLASS A CLASS D
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<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of
offering price) None None
Maximum CDSC (as a percentage of redemption proceeds) None None
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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 0.25% 0.25%
12b-1 Fees 0.20 None
Other Expenses 0.14 0.14
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TOTAL FUND OPERATING EXPENSES 0.59% 0.39%
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</TABLE>
Smith Barney receives an annual 12b-1 service fee of 0.20% of the value of
average daily net assets of the Class A shares which it has sold. "Other
expenses" in the above table include fees for shareholder services, custodial
fees, legal and accounting fees, printing costs and registration fees.
5
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PROSPECTUS SUMMARY (CONTINUED)
EXAMPLE
The following example is intended to assist an investor in understanding the
various costs that an investor in the Fund will bear directly or indirectly.
The example assumes payment by the Fund of operating expenses at the levels set
forth in the table above. See "Purchase of Shares," "Redemption of Shares" and
"Management of the Fund."
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5.00% annual return and (2) redemption
at the end of each time period:
Class A shares $6 $19
Class D shares 4 13
An investor would pay the following expenses on the same
investment, assuming the same annual return and no redemption:
Class A shares $6 $19
Class D shares 4 13
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</TABLE>
The example also provides a means for the investor to compare expense levels
of funds with different fee structures over varying investment periods. To
facilitate such comparison, all funds are required to utilize a 5.00% annual
return assumption. However, the Fund's actual return will vary and may be
greater or less than 5.00%. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTA-
TION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN ABOVE.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The Fund seeks to provide investment results that, before expenses, corre-
spond to the price and yield performance of the S&P 500 Index, which is repre-
sentative of the U.S. stock market. The Fund will hold a broadly diversified
portfolio of common stocks that is comparable to the S&P 500 Index in terms of
economic sector weightings, market capitalization and liquidity.
The Fund seeks to achieve its objective by investing, under normal circum-
stances, at least 80% of its total assets in common stocks included in the S&P
500 Index in approximately the same weightings as the S&P 500 Index. The Fund
intends to invest in substantially all of the stocks that comprise the S&P 500
Index. The Fund operates as a "pure" index fund and will not be actively man-
aged; as such, adverse performance of a security will ordinarily not result in
the elimination of the security from the Fund's portfolio. The Fund will remain
invested in common stocks even when stock prices are generally falling. Ordi-
narily, portfolio securities will not be sold except to reflect additions or
deletions of the stocks that comprise the S&P 500 Index, including mergers,
reorganizations and similar transactions, or as may be necessary to satisfy
redemption requests.
6
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
The Fund will be reviewed daily and adjusted, when necessary, to maintain
security weightings as close to those of the S&P 500 Index as possible, given
the amount of assets in the Fund at that time.
No attempt will be made to manage the Fund in the traditional sense using
economic, financial and market analysis, nor will the adverse financial situa-
tion of an issuer necessarily result in the elimination of its securities from
the Fund, unless the securities are removed from the S&P 500 Index. From time
to time, administrative adjustments may be made in the Fund because of changes
in the composition of the S&P 500 Index.
The S&P 500 Index is a market capitalization index composed of 500 widely
held common stocks listed on the NYSE, American Stock Exchange and the over-
the-counter market. The S&P 500 Index is used as the performance benchmark
because it represents approximately 70% of the total market value of all U.S.
common stocks and is well known to investors; because it is unmanaged it is
not subject to the same management and trading expenses as a mutual fund. Over
time, the Fund is expected to exhibit performance volatility that is similar
to that of the S&P 500 Index. Of course, there can be no assurance that the
Fund's total return, before or after expenses, will match or exceed that of
the S&P 500 Index.
Further information about the Fund's investment policies, including a list
of those restrictions on its investment activities that cannot be changed
without shareholder approval, appears in the SAI.
INVESTMENTS AND STRATEGIES
The ability of the Fund to meet its investment objective depends to some
extent on the Adviser's ability to manage cash flows (primarily from purchases
and redemptions and distributions from the Fund's portfolio investments). Gen-
erally, the Adviser will utilize futures to provide liquidity necessary to
meet anticipated redemptions or for day-to-day operating purposes. In addi-
tion, a portion of the Fund's assets not exceeding 20% of its total assets may
be invested in money market instruments. The Adviser will also make investment
changes to the Fund's portfolio to accommodate cash flows while continuing to
seek to replicate the total return of the S&P 500 Index. Investors should also
be aware that the investment performance of the S&P 500 Index is a hypotheti-
cal number which does not take into account brokerage commissions and other
transaction costs, custody and other costs of investing, which will be borne
by the Fund, and any incremental operating costs borne by the Fund. Finally,
since the Fund seeks to provide investment results that, before expenses, cor-
respond to the total return of the S&P 500 Index, the Adviser will generally
not attempt to judge the merits of any particular security as an investment.
7
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
Money Market Instruments. A portion of the Fund's assets, not exceeding 20%
of its total assets, may be invested temporarily in money market instruments
under any one or more of the following circumstances: (a) pending investment
of proceeds of sale of shares of the Fund; (b) pending settlement of purchases
of portfolio securities; or (c) to maintain liquidity for the purpose of
meeting anticipated redemptions. The Fund may invest in short-term money
market instruments, such as: U.S. government securities; certificates of
deposit, time deposits and bankers' acceptances issued by domestic banks
(including their branches located outside the United States and subsidiaries
located in Canada), domestic branches of foreign banks, savings and loan
associations and similar institutions; high grade commercial paper; and
repurchase agreements with respect to such instruments.
Repurchase Agreements. The Fund may enter into repurchase agreements with
banks which are the issuers of instruments acceptable for purchase by the Fund
and with certain dealers on the Federal Reserve Bank of New York's list of
reporting dealers. Under the terms of a typical repurchase agreement, the Fund
would acquire an underlying obligation for a relatively short period (usually
not more than one week) subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time,
thereby determining the yield during the Fund's holding period. This arrange-
ment results in a fixed rate of return that is not subject to market fluctua-
tions during the Fund's holding period. Further information on repurchase
agreements and the risks associated with such investments appears in the SAI.
Futures Contracts. The Fund may enter into futures contracts, options,
options on futures contracts, including stock index futures, for the purpose
of simulating full investment in the underlying index and reducing transaction
costs. The Fund will not use futures or options for speculative purposes. The
Fund will only use futures and options only for bona-fide hedging purposes
while retaining a cash balance for fund management purposes.
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security at a specified
future time and at a specified price. Futures contracts are traded on national
futures exchanges. Assets committed to futures contracts will be segregated at
the Fund's custodian to the extent required by law. An option on a futures
contract, as contrasted with the direct investment in a futures contract,
gives the purchaser the right, in return for the premium paid, to assume a
position in a futures contract at a specified exercise price at any time prior
to the expiration date of the option. A call option gives the purchaser of the
option the right to enter into a futures contract to buy and obliges the
writer to enter into a futures contract to sell the underlying securities. A
put option gives the pur -
8
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
chaser the right to sell and obliges the writer to buy the underlying con-
tract. The Fund may enter into futures contracts to purchase securities when
the Adviser anticipates purchasing the underlying securities and believes that
prices will rise before the purchases will be made. When the Fund enters into
a futures contract to purchase an underlying security, an amount of cash, U.S.
government securities, equity securities and debt securities of any grade so
long as such assets are liquid, unencumbered and marked to market daily, equal
to the market value of the contract, will be deposited in a segregated account
with the Fund's custodian to collateralize the position, thereby insuring that
the use of the contract is unleveraged. The Fund will not enter into futures
contracts for speculation and will only enter into futures contracts that are
traded on a U.S. exchange or board of trade.
The Fund may purchase put options on futures contracts to hedge its portfo-
lio against the risk of a decline in the market value of securities held, and
may purchase call options on futures contracts to hedge against an increase in
the price of securities it is committed to purchase. The Fund may write put
and call options on futures contracts along with a long position in options on
future contracts to increase its ability to hedge against changes in the mar-
ket value of the securities it holds or is committed to purchase. The Fund
will purchase or write put and call options only on futures contracts that are
traded on a domestic exchange or board of trade.
The Fund may purchase or sell stock index futures contracts that are traded
on U.S. commodity exchanges on the S&P 500 Index. As a futures contract pur-
chaser, the Fund incurs an obligation to take delivery of a specified amount
of the securities underlying the contract at a specified time in the future
for a specified price. As a seller of a futures contract, the Fund incurs an
obligation to deliver the specified amount of the underlying securities at a
specified time in return for an agreed upon price.
The Fund will purchase or sell futures for the following reasons: to simu-
late full investment in the S&P 500 Index while retaining a cash balance for
Fund management purposes, to facilitate trading, to reduce transaction costs
or to seek higher investment returns when a futures contract is priced more
attractively than stocks comprising the S&P 500 Index. The Fund may enter into
such instruments provided that not more than 5% of its assets are required as
an initial margin deposit and provided that the contract prices of the stock
index futures contracts do not exceed 20% of its total assets. While such
instruments can be used as leveraged investments, the Fund may not use them to
leverage its assets.
All futures will be traded on exchanges that are licensed and regulated by
the Commodity Futures Trading Commission ("CFTC"). To ensure that its futures
9
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
transactions meet CFTC standards, the Fund will enter into futures contracts
for bona fide hedging purposes only. For a more detailed discussion of finan-
cial futures contracts and associated risks, please see the SAI.
Lending Securities. Consistent with applicable regulatory requirements, the
Fund may lend securities it holds to brokers, dealers and other financial orga-
nizations. The Fund's loans of securities will be collateralized by cash, let-
ters of credit or government securities that are maintained at all times in a
segregated account with the Fund's custodian in an amount at least equal to the
current market value of the loaned securities. By lending its portfolio securi-
ties, the Fund will seek to generate income by continuing to receive interest
on the loaned securities, by investing the cash collateral in short-term
instruments or by obtaining yield in the form of interest paid by the borrower
when government securities are used as collateral. The risks in lending portfo-
lio securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in the recovery of the securities
or possible loss of rights in the collateral should the borrower fail finan-
cially. Loans will be made to firms deemed by the Adviser to be of good stand-
ing and will not be made unless, in the judgment of the Adviser, the considera-
tion to be earned from such loans would justify the risk.
Foreign Securities. The Fund may purchase common stocks, including American
Depository Receipts, of foreign corporations represented in the S&P 500 Index
(such securities are publicly traded on securities exchanges or over-the-
counter in the United States). Investments in foreign securities may be
affected by changes in governmental administration or economic policy (in the
United States and abroad) or changed circumstances in dealings between nations.
Foreign companies may be subject to less governmental regulation that U.S. com-
panies. Securities of foreign companies may be more volatile than securities of
U.S. companies. As noted above, the Fund's investment in common stock of for-
eign corporations represented in the S&P 500 Index may also be in the form of
American Depository Receipts (ADRs). ADRs are receipts typically issued by a
United States bank or trust company evidencing ownership of the underlying
securities and are designated for use in the U.S. securities markets.
Portfolio Transactions and Turnover. The Adviser arranges for the purchase
and sale of the Fund's securities and selects brokers and dealers (including
Smith Barney), which in its best judgment provide prompt and reliable execution
at favorable prices and reasonable commission rates. The Adviser may select
brokers and dealers that provide it with research services and may cause the
Fund to pay such brokers and dealers commissions which exceed those other bro-
kers and dealers may have charged, if it views the commissions as reasonable in
relation to the value of the brokerage and/or research services. In
10
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INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES (CONTINUED)
selecting a broker, including Smith Barney, for a transaction, the primary con-
sideration is prompt and effective execution of orders at the most favorable
prices. Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Adviser to supplement its
own research and analysis.
Although the Fund will use a passive, indexing approach to investing, the
Fund may engage in a substantial number of portfolio transactions. The rate of
portfolio turnover will be a limiting factor when the Adviser considers whether
to purchase or sell securities only to the extent that the Adviser will con-
sider the impact of transaction costs on the Fund's tracking error. Changes in
the securities comprising the Fund's index will tend to increase the portfolio
turnover rate, as the Adviser restructures the Fund's holdings to reflect the
changes in the index. The portfolio turnover rate is, in summary, the percent-
age computed by the average net asset value of the Fund. High portfolio turn-
over involves correspondingly greater brokerage commissions and other transac-
tion costs which are borne directly by the Fund. A high portfolio turnover rate
may also result in the realization of taxable capital gains, including short-
term capital gains taxable at ordinary income rates. While it is impossible to
predict the portfolio turnover rate for the Fund, it is anticipated that the
portfolio turnover rate for the Fund will not exceed 100%.
VALUATION OF SHARES
The Fund's net asset value per share is determined as of the close of regular
trading on the NYSE, on each day that the NYSE is open, by dividing the value
of the Fund's net assets by the total number of shares outstanding.
The Fund's securities that are traded on stock exchanges are valued at the
last sale price as of the close of business on the day the securities are being
valued, or, lacking any sales, at the closing bid price. Portfolio securities
traded on a stock exchange are valued according to the broadest and most repre-
sentative market. Other investments, including futures contracts and related
options, are stated as market value. Securities and assets for which market
quotations are not readily available are valued at fair market value, as deter-
mined in good faith by or under the direction of the Trustees of the Trust.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund's policy is to distribute substantially all its net investment
income and net realized capital gains, if any, once a year, normally at the end
of the year in which earned or at the beginning of the next year.
11
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DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
If a shareholder does not otherwise instruct, dividends and capital gains
distributions will be reinvested automatically in additional shares at net
asset value.
Income dividends and capital gain distributions that are invested are
credited to shareholders' accounts in additional shares at the net asset value
as of the close of business on the payment date. A shareholder may change the
option at any time by notifying a Smith Barney Financial Consultant. Accounts
held directly by First Data should notify First Data in writing at least five
business days prior to the payment date to permit the change to be entered in
the shareholder's account. If a shareholder redeems in full an account between
payment dates, all dividends accrued to the date of liquidation will be paid
with the proceeds from the redemption of shares.
TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Code to be relieved of Federal income tax on that part of
its net investment income and realized capital gains which it pays out to its
shareholders. To qualify, the Fund must meet certain tests, including distrib-
uting at least 90% of its investment company taxable income.
Dividends paid from net investment income and distributions of net realized
short-term capital gains on the sale of securities, whether paid in cash or
automatically invested in additional shares of the Fund, are taxable to share-
holders of the Fund as ordinary income. Distributions out of net long-term cap-
ital gains (i.e., net long-term capital gains in excess of net short-term capi-
tal losses) are taxable to shareholders as long-term capital gains. Information
as to the tax status of dividends paid or deemed paid in each calendar year
including eligibility of long-term capital gains dividends for a reduced maxi-
mum 20% tax rate, will be mailed to shareholders as early in the succeeding
year as practical but not later than January 31.
The Fund is required to withhold and remit to the U.S. Treasury 31% of divi-
dends, distributions and redemption proceeds to shareholders who fail to pro-
vide a correct taxpayer identification number (the Social Security number in
the case of an individual) or to make the required certifications, or who have
been notified by the Internal Revenue Service that they are subject to backup
withholding and who are not otherwise exempt. The 31% withholding tax is not an
additional tax, but is creditable against a shareholder's Federal income tax
liability.
12
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DIVIDENDS, DISTRIBUTIONS AND TAXES (CONTINUED)
Prior to investing in shares of the Fund, investors should consult their tax
advisors concerning the Federal, state and local tax consequences of such an
investment.
PURCHASE OF SHARES
GENERAL
Class A and Class D shares are sold to investors at net asset value with no
initial or deferred sales charge. Class A shares are subject to an ongoing
service fee.
Class D shares are offered to a limited group of investors who participate in
certain investment programs which charge a fee for participation, including the
Smith Barney 401(k) Platform program. In addition, Class D shares are offered
to tax-exempt employee benefit and retirement plans of Smith Barney and its
affiliates. For more information about these programs, contact a Smith Barney
Financial Consultant.
Purchases of Fund shares must be made through a brokerage account maintained
with Smith Barney, with an Introducing Broker or with an investment dealer in
the selling group. In addition, certain investors may purchase shares directly
from the Fund through First Data. Smith Barney and other broker/dealers may
charge their customers an annual account maintenance fee in connection with a
brokerage account through which an investor purchases or holds shares. Accounts
held directly at First Data are not subject to a maintenance fee.
Investors may open an account in the Fund by making an initial investment of
at least $1,000 for each account, or $250 for an IRA or a self-employed retire-
ment plan. Subsequent investments of at least $50 may be made. For shareholders
purchasing shares of the Fund through the Systematic Investment Plan, the mini-
mum initial and subsequent investment requirement is $25 for monthly purchases
and $50 for quarterly purchases. The minimum initial investment requirement in
the Fund for an account established under the Uniform Gift to Minors Act is
$250 and the subsequent investment requirement is $50. There are no minimum
investment requirements for employees of Travelers and its subsidiaries,
including Smith Barney, and Directors or Trustees of any of the Smith Barney
Mutual Funds and their spouses and children. The Fund reserves the right to
waive or change minimums, to decline any order to purchase its shares and to
suspend the offering of shares from time to time. Shares purchased will be held
in the shareholder's account by the Fund's transfer agent, First Data. Share
certificates are issued only upon a shareholder's written request to First
Data.
13
<PAGE>
PURCHASE OF SHARES (CONTINUED)
Purchase orders received by the Fund or Smith Barney prior to the close of
regular trading on the NYSE, on any day the Fund calculates its net asset val-
ue, are priced according to the net asset value determined on that day (the
"trade date"). Orders received by dealers or Introducing Brokers prior to the
close of regular trading on the NYSE on any day the Fund calculates its net
asset value, are priced according to the net asset value determined on that
day, provided the order is received by the Fund or Smith Barney prior to Smith
Barney's close of business. For shares purchased through Smith Barney or Intro-
ducing Brokers purchasing through Smith Barney, payment for Fund shares is due
on the third business day (the "settlement date") after the trade date. In all
other cases, payment must be made with the purchase order.
SYSTEMATIC INVESTMENT PLAN
Shareholders may make additions to their accounts at any time by purchasing
shares through a service known as the Systematic Investment Plan. Under the
Systematic Investment Plan, Smith Barney or First Data is authorized through
preauthorized transfers of at least $25 on a monthly basis or at least $50 on a
quarterly basis to charge the regular bank account or other financial institu-
tion indicated by the shareholder, to provide systematic additions to the
shareholder's Fund account. A shareholder who has insufficient funds to com-
plete the transfer will be charged a fee of up to $25 by Smith Barney or First
Data. The Systematic Investment Plan also authorizes Smith Barney to apply cash
held in the shareholder's Smith Barney brokerage account or redeem the share-
holder's shares of a Smith Barney money market fund to make additions to the
account. Additional information is available from the Fund or a Smith Barney
Financial Consultant.
REDEMPTION OF SHARES
The Fund is required to redeem the shares of the Fund tendered to it, as
described below, at a redemption price equal to their net asset value per share
next determined after receipt of a written request in proper form at no charge.
Redemption requests received after the close of regular trading on the NYSE are
priced at the net asset value next determined.
The redemption proceeds will be remitted on or before the third business day
following receipt of proper tender, except on any days on which the NYSE is
closed or as permitted under the Investment Company Act of 1940, as amended,
(the "1940 Act"), in extraordinary circumstances. Generally, if the redemption
proceeds are remitted to a Smith Barney brokerage account, these funds will not
be invested for the shareholder's benefit without specific instruction
14
<PAGE>
REDEMPTION OF SHARES (CONTINUED)
and Smith Barney will benefit from the use of temporarily uninvested funds.
Redemption proceeds for shares purchased by check, other than a certified or
official bank check, will be remitted upon clearance of the check, which may
take up to ten days or more.
Shares held by Smith Barney as custodian must be redeemed by submitting a
written request to a Smith Barney Financial Consultant. Shares other than those
held by Smith Barney as custodian may be redeemed through an investor's Finan-
cial Consultant, Introducing Broker or dealer in the selling group or by sub-
mitting a written request for redemption to:
Smith Barney S&P 500 Index Fund
c/o First Data Investor Services Group, Inc.
P.O. Box 5128
Westborough, Massachusetts 01581-5128
A written redemption request must (a) state the Class and number or dollar
amount of shares to be redeemed, (b) identify the shareholder's account number
and (c) be signed by each registered owner exactly as the shares are regis-
tered. If the shares to be redeemed were issued in certificate form, the cer-
tificates must be endorsed for transfer (or be accompanied by an endorsed stock
power) and must be submitted to First Data together with the redemption
request. Any signature appearing on a written redemption request in excess of
$2,000, or share certificate stock power must be guaranteed by an eligible
guarantor institution, such as a domestic bank, savings and loan institution,
domestic credit union, member bank of the Federal Reserve System or member firm
of a national securities exchange. Written redemption requests of $2,000 or
less do not require a signature guarantee unless more than one such redemption
request is made in any 10-day period. Redemption proceeds will be mailed to an
investor's address of record. First Data may require additional supporting doc-
uments for redemptions made by corporations, executors, administrators, trust-
ees or guardians. A redemption request will not be deemed properly received
until First Data receives all required documents in proper form.
TELEPHONE REDEMPTION AND EXCHANGE PROGRAM
Shareholders who do not have a Smith Barney brokerage account may be eligible
to redeem Fund shares by telephone. To determine if a shareholder is entitled
to participate in this program, he or she should contact First Data at 1-800-
451-2010. Once eligibility is confirmed, the shareholder must complete and
return a Telephone/Wire Authorization Form, along with a signature guarantee
that will be provided by First Data upon request. (Alternatively, an investor
may authorize telephone redemptions on the new account application with the
applicant's signature guarantee when making his/her initial investment in the
Fund.)
15
<PAGE>
REDEMPTION OF SHARES (CONTINUED)
Redemptions. Redemption requests of up to $10,000 of the Fund's shares may be
made by eligible shareholders by calling First Data at 1-800-451-2010. Such
requests may be made between 9:00 a.m. and 5:00 p.m. (New York City time) on
any day the NYSE is open. Redemption requests received after the close of regu-
lar trading on the NYSE are priced at the net asset value next determined.
Redemption of shares (i) by retirement plans or (ii) for which certificates
have been issued are not permitted under this program.
A shareholder will have the option of having the redemption proceeds mailed
to his/her address of record or wired to a bank account predesignated by the
shareholder. Generally, redemption proceeds will be mailed or wired, as the
case may be, on the next business day following the redemption request. In
order to use the wire procedures, the bank receiving the proceeds must be a
member of the Federal Reserve System or have a correspondent relationship with
a member bank. The Fund reserves the right to charge shareholders a nominal fee
for each wire redemption. Such charges, if any, will be assessed against the
shareholder's account from which shares were redeemed. In order to change the
bank account designated to receive redemption proceeds, a shareholder must com-
plete a new Telephone/Wire Authorization Form and, for the protection of the
shareholder's assets, will be required to provide a signature guarantee and
certain other documentation.
Additional Information regarding Telephone Redemption Program. Neither the
Fund nor its agents will be liable for following instructions communicated by
telephone that are reasonably believed to be genuine. The Fund and its agents
will employ procedures designed to verify the identity of the caller and legit-
imacy of instructions (for example, a shareholder's name and account number
will be required and phone calls may be recorded). The Fund reserves the right
to suspend, modify or discontinue the telephone redemption program or impose a
charge for this service at any time following at least seven (7) days' prior
notice to shareholders.
AUTOMATIC CASH WITHDRAWAL PLAN
The Fund offers shareholders an automatic cash withdrawal plan, under which
shareholders who own shares with a value of at least $10,000 may elect to
receive periodic cash payments of at least $50 monthly or quarterly. Retirement
plan accounts are eligible for automatic cash withdrawal plans only where the
shareholder is eligible to receive qualified distributions and has an account
value of at least $5,000. The withdrawal plan will be carried over on exchanges
between funds. For further information regarding the automatic cash withdrawal
plan, shareholders should contact their Smith Barney Financial Consultants.
16
<PAGE>
EXCHANGE PRIVILEGE
Shareholders of certain fee based programs and/or employer-sponsored retire-
ment plans are allowed to exchange Class D shares for other classes of another
Smith Barney Mutual Fund.
MINIMUM ACCOUNT SIZE
The Fund reserves the right to involuntarily liquidate any shareholder's
account in the Fund if the aggregate net asset value of the shares held in the
Fund account is less than $500. (If a shareholder has more than one account in
this Fund, each account must satisfy the minimum account size). The Fund, how-
ever, will not redeem shares based solely on market reductions in net asset
value. Before the Fund exercises such right, shareholders will receive written
notice and will be permitted 60 days to bring accounts up to the minimum to
avoid involuntary liquidation.
PERFORMANCE
From time to time the Fund may include its total return and average annual
total return in advertisements and/or other types of sales literature. These
figures will be based on historical earnings and will not be intended to indi-
cate future performance. Total return is computed for a specified period of
time assuming reinvestment of all income dividends and capital gain distribu-
tions on the reinvestment dates at prices calculated as stated in this Prospec-
tus, then dividing the value of the investment at the end of the period so cal-
culated by the initial amount invested and subtracting 100%. The standard aver-
age annual total return, as prescribed by the SEC, is derived from this total
return, which provides the ending redeemable value. Such standard total return
information may also be accompanied with nonstandard total return information
for differing periods computed in the same manner but without annualizing the
total return. The Fund may also include comparative performance information
when advertising or marketing its shares. Such performance information may
include data from Lipper Analytical Services, Inc. and other financial publica-
tions.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
Overall responsibility for management and supervision of the Fund rests with
the Trust's Board of Trustees. The Trustees approve all significant agreements
between the Trust, on behalf of the Fund, and the companies that furnish serv-
ices to the Fund, including agreements with its distributor, investment advis-
er,
17
<PAGE>
MANAGEMENT OF THE FUND (CONTINUED)
administrator, custodian and transfer agent. The day-to-day operations of the
Fund are delegated to the Fund's investment adviser and administrator. The SAI
contains background information regarding each Trustee of the Trust and the
executive officers of the Fund.
ADVISER -- TIMCO
The Adviser, located at One Tower Square, Hartford, Connecticut 06183-203,
serves as the Fund's investment adviser and manages the day-to-day operations
of the Fund pursuant to an investment advisory agreement entered into by the
Adviser and the Fund. The Adviser, which is a registered investment adviser,
has been in the investment counseling business since 1967 and renders invest-
ment advice to investment companies that had aggregate assets under management
as of October 31, 1997, in excess of $1.6 billion.
Subject to the supervision and direction of the Fund's Board of Trustees, the
Adviser manages the Fund's portfolio in accordance with the Fund's stated
investment objective and policies, makes investment decisions for the Fund,
places orders to purchase and sell securities and employs professional portfo-
lio managers and securities analysts who provide research services to the Fund.
Investment advisory fees are computed daily and paid monthly at the annual
rate of 0.15% of the Fund's average daily net assets.
PORTFOLIO MANAGEMENT
The investment management team of the Fund's Adviser is headed by Sandip
Bhagat, president and chief investment officer, of the Adviser. Messrs. Bhagat
and John Lau, a portfolio manager at the Adviser, are primarily responsible for
the day-to-day operations of the Fund, including making all investment deci-
sions.
ADMINISTRATOR
SBMFM, located at 388 Greenwich Street, New York, New York 10013, serves as
the Fund's administrator and oversees all aspects of the Fund's administration
and operation. Administration fees are computed daily and paid monthly at the
annual rate of 0.10% of the Fund's average daily net assets.
DISTRIBUTOR
Smith Barney distributes shares of the Fund as a principal underwriter and as
such conducts a continuous offering pursuant to a "best efforts" arrangement
requiring Smith Barney to take and pay for only such securities as may be sold
18
<PAGE>
DISTRIBUTOR (CONTINUED)
to the public. Pursuant to a services plan adopted by the Fund under Rule 12b-1
under the 1940 Act (the "Plan"), Smith Barney is paid an annual service fee
with respect to Class A shares of the Fund at the annual rate of 0.20% of the
average daily net assets of that Class. The fees are used by Smith Barney to
pay its Financial Consultants for servicing shareholder accounts.
Payments under the Plan are not tied exclusively to the shareholder service
expenses actually incurred by Smith Barney and the payments may exceed expenses
actually incurred. The Trust's Board of Trustees will evaluate the appropriate-
ness of the Plan and its payment terms on a continuing basis and in so doing
will consider all relevant factors, including expenses borne by Smith Barney
and amounts received under the Plan.
ADDITIONAL INFORMATION
The Trust was organized on October 17, 1991 under the laws of the Common-
wealth of Massachusetts and is a business entity commonly known as a "Massachu-
setts business trust."
PNC Bank, National Association, located at 17th and Chestnut Streets, Phila-
delphia, Pennsylvania 19103, serves as custodian of the Fund's investments.
First Data, located at Exchange Place, Boston, Massachusetts 02109, serves as
the Fund's transfer agent.
The Trust does not hold annual shareholder meetings. There normally will be
no meeting of shareholders for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have
been elected by shareholders. The Trustees will call a meeting for any purpose
upon written request of shareholders holding at least 10% of the Fund's out-
standing shares and the Fund will assist shareholders in calling such a meeting
as required by the 1940 Act. When matters are submitted for shareholder vote,
shareholders will have one vote for each full share owned and a proportionate,
fractional vote for any fractional share held. Generally, shares of the Fund
will be voted on a Fund-wide basis on all matters.
The Fund sends its shareholders a semi-annual report and an audited annual
report, each of which includes a list of the investment securities held by the
Fund at the end of the reporting period. In an effort to reduce the Fund's
printing and mailing costs, the Fund plans to consolidate the mailing of its
semi-annual and annual reports by household. This consolidation means that a
household having multiple accounts with the identical address of record will
receive a single copy of each report. In addition, the Fund plans to consoli-
date the mailing of its Prospectuses so that a shareholder having multiple
accounts (that is, individual, IRA and/or Self-Employed Retirement Plan
accounts) will receive a
19
<PAGE>
ADDITIONAL INFORMATION (CONTINUED)
single Prospectus annually. When the Fund's annual report is combined with the
Prospectus into a single document, the Fund will mail the combined document to
each shareholder to comply with legal requirements. Shareholders who do not
want this consolidation to apply to their accounts should contact their Smith
Barney Financial Consultant or the Fund's transfer agent.
"S&P 500(R)" is a trademark of The McGraw-Hill Companies, Inc. and has been
licensed for use by Smith Barney. The Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"). S&P makes no representation or warranty, express or implied, to the
shareholders of the Fund or any member of the public regarding the advisability
of investing in securities generally or in the Fund particularly or the ability
of the S&P 500 Index to track general stock market performance. S&P's only
relationship to Smith Barney is the licensing of certain trademarks and trade
names of S&P and the S&P 500 Index which is determined, composed and calculated
by S&P without regard to Smith Barney or the Fund. S&P has no obligation to
take the needs of Smith Barney or the shareholders of the Fund into considera-
tion in determining, composing or calculating the S&P 500 Index. S&P is not
responsible for and has not participated in the determination of the prices and
amount of the Fund's shares or the timing of the issuance or sale of the Fund's
shares or in the determination or calculation of the equation by which Fund
shares are to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of Fund shares.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE FUND, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMIT-
ING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPE-
CIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
20
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney
S&P 500
Index
Fund
388 Greenwich Street
New York, NY 10013
FD01362
Part B:
STATEMENT OF ADDITIONAL INFORMATION
Smith Barney
S&P 500 Index Fund
388 Greenwich Street
New York, New York 10013
1-800-451-2010
Statement of Additional
Information
December 30, 1997
This Statement of Additional Information (SAI") expands upon and supplements
the information contained in the current Prospectus of Smith Barney S&P 500
Index Fund (the "Fund") dated December 30, 1997, as amended or supplemented
from time to time, and should be read in conjunction with the Fund's
Prospectus. The Fund is a sub-trust of Smith Barney Investment Trust (the
Trust""Trust"). The Fund's Prospectus may be obtained from a Smith Barney
Financial Consultant PFS Investments"or by writing or calling the Fund at the
address or telephone number set forth above. This SAI, although not in itself
a prospectus, is incorporated by reference into the Prospectus in its
entirety.
CONTENTS
For ease of reference, the same section headings are used in both the
Prospectus and this SAI, except where shown below:
Management of the Fund
.........................................................
..............................
1
Investment Objective and Management Policies
...................................................
44
Purchase of Shares
........................................................
........................................
11
0
Redemption of Shares
........................................................
...................................
111
Distributor
........................................................
.....................................................
12
2
Valuation of Shares
........................................................
.......................................
1
22
Performance Data (See in the Prospectus
Performance""Performance")
...................................
13
3
Taxes (See in the Prospectus
"Dividends, Distributions and Taxes
"") ..................
1
43
Additional Information
.........................................................
.................................
15
MANAGEMENT OF THE FUND
The executive officers of the Fund are employees of certain of the
organizations that provide services to the Fund. These organizations are the
following:
Name
Service
Smith Barney Inc. (Smith
Barney")...................................
Distributor
Travelers Investment Management Company (
TIMCO""TIMCO")
Investment Adviser
Smith Barney Mutual Funds Management Inc.
(
SBMFM""SBMFM")
............................................
...................
Administrator
PNC Bank, National Association (
PNC Bank""PNC Bank") ..........
Custodian
First Data Investor Services Group, Inc. (
TSSG""First Data"),
Transfer Agent
These organizations and the functions they perform for the Fund are discussed
in the Prospectus and in this SAI.
Trustees and Executive Officers of the Fund
The Trustees and executive officers of the Fund, together with information as
to their principal business occupations during the past five years, are shown
below. Each Trustee who is an "interested person" of the Fund, as defined in
the Investment Company Act of 1940, as amended (the "1940 Act"), is indicated
by an asterisk.
Herbert Barg, Trustee (Age 74). Private Investor. His address is 273
Montgomery Avenue, Bala Cynwyd, Pennsylvania 19004.
*Alfred J. Bianchetti, Trustee (Age 74). Retired; formerly Senior
Consultant to Dean Witter Reynolds Inc. His address is 19 Circle End Drive,
Ramsey, New Jersey 07466.
Martin Brody, Trustee (Age 76). Consultant, HMK Associates; Retired
Vice Chairman of the Board of Restaurant Associates Corp. His address is c/o
HMK Associates, 30 Columbia Turnpike, Florham Park, New Jersey 07932.
Dwight B. Crane, Trustee (Age 59). Professor, Harvard Business School.
His address is c/o Harvard Business School, Soldiers Field Road, Boston,
Massachusetts 02163.
Burt N. Dorsett, Trustee (Age 66). Managing Partner of Dorsett McCabe
Management. Inc., an investment counseling firm; Director of Research
Corporation Technologies, Inc., a nonprofit patent clearing and licensing
firm. His address is 201 East 62nd Street, New York, New York 10021.
Elliot S. Jaffe, Trustee (Age 71). Chairman of the Board and President
of The Dress Barn, Inc. His address is 30 Dunnigan Drive, Suffern, New York
10901.
Stephen E. Kaufman, Trustee (Age 65). Attorney. His address is 277
Park Avenue, New York, New York 10172.
Joseph J. McCann, Trustee (Age 67). Financial Consultant; Retired
Financial Executive, Ryan Homes, Inc. His address is 200 Oak Park Place,
Pittsburgh, Pennsylvania 15243.
*Heath B. McLendon, Chairman of the Board and Investment Officer (Age
64). Managing Director of Smith Barney, Chairman of the Board of Smith Barney
Strategy Advisers Inc. and President of SBMFM and Travelers Investment
Adviser, Inc. ("TIA"); prior to July 1993, Senior Executive Vice President of
Shearson Lehman Brothers Inc., Vice Chairman of Shearson Asset Management.
Mr. McLendon is Chairman of the Board of 42 Smith Barney Mutual Funds. His
address is 388 Greenwich Street, New York, New York 10013.
Cornelius C. Rose, Jr., Trustee (Age 63). President, Cornelius C. Rose
Associates, Inc., financial consultants, and Chairman and Director of
Performance Learning Systems, an educational consultant. His address is Fair
Oaks, Enfield, New Hampshire 03748.
James J. Crisona, Director Emeritus. Attorney; formerly Justice of the
Supreme Court of the State of New York. His address is 118 East 60th Street,
New York, New York 10022
Lewis E. Daidone, Senior Vice President and Treasurer (Age 40).
Managing Director of Smith Barney, Chief Financial Officer of the Smith Barney
Mutual Funds; Director and Senior Vice President of SBMFM and TIA. His address
is 388 Greenwich Street, New York, New York 10013.
Sandip Bhagat, Vice President and Investment Officer (Age 37). President
of TIMCO, prior to 1995, Senior Portfolio Manager of TIMCO. His address is
One Tower Square, Hartford, Connecticut, 06183-2030.
John Lau, Assistant Vice President and Investment Officer (Age 32).
Portfolio Manager of TIMCO; prior to 1995, Lead Engineer of knowledge-based
engineering projects at United Technologies, Pratt and Whitney Aircraft Engine
Division. His address is One Tower Square, Hartford, Connecticut, 06183-2030.
Christina T. Sydor, Secretary (Age 46). Managing Director of Smith
Barney; General Counsel and Secretary of SBMFM and TIA. Her address is 388
Greenwich Street, New York, New York 10013.
No officer, director or employee of Smith Barney or any parent or subsidiary
of Smith Barney receives any compensation from the Fund for serving as an
officer or Trustee of the Fund. The Trust pays each Trustee who is not an
officer, director or employee of Smith Barney or any of their affiliates a fee
of $4,000 per annum plus $500 per meeting attended and each Trustee Emeritus
$2,000 per annum plus $250 per meeting attended. All Trustees are reimbursed
for travel and out-of-pocket expenses incurred to attend such meetings.
For the calendar year ended November 30, 1997, the Trustees of the Fund were
paid the following compensation.
Total
Pension or Compensation Number of
Retirement from Fund Funds for
Aggregate Benefits Accrued and Fund Which
Director
Compensation as part of Complex Serves Within
Name of Person from Fund Fund Expenses Paid to Directors Fund Complex
Herbert Berg $0 $0 $105,175
18
Alfred Bianchetti 0 0 51,000
13
Martin Brody 0 0 124,286
21
Dwight B. Crane 0 0 140,375
24
Burt N. Dorsett* 0 0 47,400
13
Elliot S. Jaffe 0 0 51,100
13
Stephen E. Kaufman 0 0 92,336
15
Joseph J. McCann 0 0 52,700
13
Heath B. McLendon ** - - -
42
Cornelius C. Rose, Jr. 0 0 51,400
13
James J. Crisona*** 0 0 20,575
12
* Pursuant to the Fund's deferred compensation plan, Mr. Dorsett elected to
defer the compensation due to him from the Fund. As of January 1, 1997,
Mr. Dorsett elected not to defer his future compensation.
** Designates an "interested" Director.
*** Upon attainment of age 80, Fund Trustees are required to change to
emeritus status. Trustees Emeritus are entitled to serve
in emeritus status for a maximum of 10 years, during which time they are
paid 50% of the annual retainer fee and meeting fees otherwise applicable
to Fund Trustees, together with reasonable out-of-pocket expenses for each
meeting attended. Mr. Crisona is a Director Emeritus and as such may
attend meetings but has no voting rights.
Investment Adviser-TIMCO
TIMCO serves as investment adviser to the Fund pursuant to a written agreement
(the "Advisory Agreement") dated "). The services provided by the Investment
Adviser under the Advisory Agreement are described in the Prospectus under
"Management of the Fund." The Investment Adviser will pay the salary of any
officer and employee who is employed by both it and the Fund. The Investment
Adviser will bear all expenses in connection with the performance of its
services. The Investment Adviser is a wholly owned subsidiary of Travelers
Group, Inc. ("Travelers"). As compensation for the Investment Adviser's
investment advisory services rendered to the Fund, the Fund will pay a fee
computed daily and paid monthly at the annual rate of 0.15% of the Fund's
average daily net assets.
Administrator-SBMFM
SBMFM serves as administrator to the Fund pursuant to a written agreement (the
"Administration Agreement"). The services provided by the Administrator under
the Administration Agreement are described in the Prospectus under "Management
of the Fund." The Administrator will pay the salary of any officer and
employee who is employed by both it and the Fund and bears all expenses in
connection with the performance of its services.
As compensation for administrative services rendered to the Fund, the
Administrator will receive a fee computed daily and paid monthly at the annual
rate of 0.10% of the value of the Fund's average daily net assets.
The Fund bears expenses incurred in its operation, including: taxes, interest,
brokerage fees and commissions, if any; fees of Trustees who are not officers,
directors, shareholders or employees of the Investment Adviser or the
Administrator or their affiliates; SEC fees and state Blue Sky qualification
fees; charges of custodians; transfer and dividend disbursing agent's fees;
certain insurance premiums; outside auditing and legal expenses; costs of
maintaining corporate existence; investor services (including allocated
telephone and personnel expenses); costs of preparation and printing of
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and shareholder meetings; and meetings of the officers or Board of Trustees of
the Fund.
Counsel and Auditors
Willkie Farr & Gallagher serves as counsel to the Trust. The Trustees who are
not "interested persons" of the Fund have selected Stroock & Stroock & Lavan
LLP to serve as their legal counsel.
KPMG Peat Marwick LLP, independent accountants, 345 Park Avenue, New York, New
York 10154, serve as auditors of the Trust and will render an opinion on the
Trust's financial statements annually beginning with the fiscal period ending
November 30, 1998.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The Prospectus discusse discusses the Fund's investment objective and the
policies it employs to achieve its objective. This section contains
supplemental information concerning the types of securities and other
instruments in which the Fund may invest, the investment policies and
portfolio strategies that the Fund may utilize and certain risks attendant to
such investments, policies and strategies.
Money Market Instruments. The Fund may invest in corporate and government
bonds and notes and money market instruments. Money market instruments in
which the Fund may invest include: obligations issued or guaranteed by the
United States government, its agencies or instrumentalities ("U.S. government
securities"); certificates of deposit, time deposits and bankers' acceptances
issued by domestic banks (including their branches located outside the United
States and subsidiaries located in Canada), domestic branches of foreign
banks, savings and loan associations and similar institutions; high grade
commercial paper; and repurchase agreements with respect to the foregoing
types of instruments. The following is a more detailed description of such
money market instruments.
Certificates of deposit ("CDs") are short-term, negotiable obligations of
commercial banks. Time deposits ("TDs") are non-negotiable deposits maintained
in banking institutions for specified periods of time at stated interest
rates. Bankers' acceptances are time drafts drawn on commercial banks by
borrowers, usually in connection with international transactions.
Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members of
the Federal Reserve System and to be insured by the Federal Deposit Insurance
Corporation (the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. Most state banks are
insured by the FDIC (although such insurance may not be of material benefit to
the Fund, depending upon the principal amount of CDs of each bank held by the
Fund) and are subject to Federal examination and to a substantial body of
Federal law and regulation. As a result of governmental regulations, domestic
branches of domestic banks are, among other things, generally required to
maintain specified levels of reserves, and are subject to other supervision
and regulation designed to promote financial soundness.
Obligations of foreign branches of domestic banks, such as CDs and TDs, may be
general obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and governmental
regulation. Such obligations are subject to different risks than are those of
domestic banks or domestic branches of foreign banks. These risks include
foreign economic and political developments, foreign governmental restrictions
that may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding and other taxes
on interest income. Foreign branches of domestic banks are not necessarily
subject to the same or similar regulatory requirements that apply to domestic
banks, such as mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements. In addition,
less information may be publicly available about a foreign branch of a
domestic bank than about a domestic bank. CDs issued by wholly owned Canadian
subsidiaries of domestic banks are guaranteed as to repayment of principal and
interest (but not as to sovereign risk) by the domestic parent bank.
Obligations of domestic branches of foreign banks may be general obligations
of the parent bank in addition to the issuing branch, or may be limited by the
terms of a specific obligation and by Federal and state regulation as well as
governmental action in the country in which the foreign bank has its head
office. A domestic branch of a foreign bank with assets in excess of $1
billion may or may not be subject to reserve requirements imposed by the
Federal Reserve System or by the state in which the branch is located if the
branch is licensed in that state. In addition, branches licensed by the
Comptroller of the Currency and branches licensed by certain states ("State
Branches") may or may not be required: (a) to pledge to the regulator by
depositing assets with a designated bank within the state, an amount of its
assets equal to 5% of its total liabilities; and (b) to maintain assets within
the state in an amount equal to a specified percentage of the aggregate
amount of liabilities of the foreign bank payable at or through all of its
agencies or branches within the state. The deposits of State Branches may not
necessarily be insured by the FDIC. In addition, there may be less publicly
available information about a domestic branch of a foreign bank than about a
domestic bank.
In view of the foregoing factors associated with the purchase of CDs and TDs
issued by foreign branches of domestic banks or by domestic branches of
foreign banks, the Investment Adviser will carefully evaluate such
investments on a case-by-case basis.
Savings and loan associations whose CDs may be purchased by the Fund are
supervised by the Office of Thrift Supervision and are insured by the Savings
Association Insurance Fund which is administered by the FDIC and is backed by
the full faith and credit of the United States government. As a result, such
savings and loan associations are subject to regulation and examination.
Lending of Portfolio Securities. Consistent with applicable regulatory
requirements, the Fund may lend securities from its portfolio to brokers,
dealers and other financial organizations. The Fund may not lend its
portfolio securities to the Investment Adviser or the Administrator or
itstheir affiliates unless it hasthey have applied for and received specific
authority from the SEC. Loans of portfolio securities by the Fund will be
collateralized by cash, letters of credit or U.S. government securities that
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities.
In lending its portfolio securities, the Fund can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in short-term instruments or obtaining yield in
the form of interest paid by the borrower when U.S. government securities are
used as collateral. Requirements of the SEC, which may be subject to future
modifications, currently provide that the following conditions must be met
whenever the Fund's portfolio securities are loaned: (a) the Fund must receive
at least 100% cash collateral or equivalent securities from the borrower; (b)
the borrower must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (c) the Fund must be able
to terminate the loan at any time; (d) the Fund must receive reasonable
interest on the loan, as well as an amount equal to any dividends, interest or
other distributions on the loaned securities, and any increase in market
value; (e) the Fund may pay only reasonable custodian fees in connection with
the loan; and (f) voting rights on the loaned securities may pass to the
borrower; however, if a material event adversely affecting the investment
occurs, the Trust's Board of Trustees must terminate the loan and regain the
right to vote the securities. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delay in
receiving additional collateral or in the recovery of the securities or
possible loss of rights in the collateral should the borrower fail
financially. Loans will be made to firms deemed by the Investment Adviser to
be of good standing and will not be made unless, in the judgment of the
Investment Adviser, the consideration to be earned from such loans would
justify the risk. From time to time, the Fund may return a part of the
interest earned from the investment of collateral received for securities
loaned to: (a) the borrower; and/or (b) a third party, which is unaffiliated
with the Fund, the Investment Adviser or Administrator and which is acting as
a "finder."
Futures. The Fund may enter into stock index futures contracts and related
options that are traded thereon. A stock index futures agreement is a contract
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of
the last trading day of the contract and the price at which the index contract
was originally written. No physical delivery of the underlying securities in
the index is made.
No consideration will be paid or received by the Fund upon entering into a
futures contract. Initially, the Fund will be required to deposit with the
broker an amount of cash or cash equivalents equal to approximately 1% to 10%
of the contract amount (this amount is subject to change by the board of trade
on which the contract is traded and members of such board of trade may charge
a higher amount). This amount, known as "initial margin," is in the nature of
a performance bond or good faith deposit on the contract and is returned to
the Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, known as "variation
margin," to and from the broker will be made daily as the price of the index
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known as
"marking-to-market." At any time prior to expiration of a futures contract,
the Fund may elect to close the position by taking an opposite position, which
will operate to terminate the Fund's existing position in the contract.
Several risks are associated with the use of futures contracts as a hedging
device. Successful use of futures contracts by the Fund will be subject to
the ability of the Investment Adviser to predict correctly changes in market
conditions. These predictions involve skills and techniques that may be
different from those involved in the management of the Fund being hedged. In
addition, there can be no assurance that there will be a correlation between
movements in the price of the underlying index and movements in the price of
the securities that isare the subject of a hedge. A decision of whether,
when and how to hedge involves the exercise of skill and judgment, and even a
well-conceived hedge may be unsuccessful to some degree because of market
behavior or unexpected trends in interest rates or currency values.
Although the Fund intends to enter into futures contracts only if there is an
active market for such contracts, there is no assurance that an active market
will exist for the contracts at any particular time. Most U.S. futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a
price beyond that limit. It is possible that futures contract prices could
move to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
subjecting some futures traders to substantial losses. In such event, and in
the event of adverse price movements, the Fund would be required to make daily
cash payments of variation margin, and an increase in the value of the portion
of the Fund being hedged, if any, may partially or completely offset losses on
the futures contract. As described above, however, there is no guarantee that
the price of the securities being hedged will, in fact, correlate with the
price movements in a futures contract and thus provide an offset to losses on
the futures contract.
If the Fund hedges against the possibility of a change in market conditions
adversely affecting the value of securities held in its portfolio and market
conditions move in a direction opposite to that which has been anticipated,
the Fund will lose part or all of the benefit of the increased value of
securities that it has hedged because it will have offsetting losses in its
futures positions. In addition, in such situations, if the Fund had
insufficient cash, it may have to sell securities to meet daily variation
margin requirements at a time when it may be disadvantageous to do so. These
sales of securities may, but will not necessarily, be at increased prices that
reflect the change in interest rates, market conditions or currency values, as
the case may be.
Options on Futures Contracts. An option on a futures contract, as contrasted
with the direct investment in such a contract, gives the purchaser the right,
in return for the premium paid, to assume a position in the underlying futures
contract at a specified exercise price at any time prior to the expiration
date of the option. Upon exercise of an option, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's futures
margin account, which represents the amount by which the market price of the
futures contract exceeds, in the case of a call, or is less than, in the case
of put, the exercise price of the option on the futures contract. The
potential for loss related to the purchase of an option on a futures contract
is limited to the premium paid for the option plus transaction costs. Because
the value of the option is fixed at the point of sale, there are no daily cash
payments to reflect changes in the value of the underlying contract; however,
the value of the option does change daily and that change would be reflected
in the net asset value of the Fund.
The Fund may purchase and write put and call options on futures contracts that
are traded on a U.S. exchange or board of trade as a hedge against changes in
the value of its portfolio securities, or in anticipation of the purchase of
securities, and may enter into closing transactions with respect to such
options to terminate existing positions. There is no guarantee that such
closing transactions can be effected.
Several risks are associated with options on futures contracts. The ability
to establish and close out positions on such options will be subject to the
existence of a liquid market. In addition, the purchase of put or call
options will be based upon predictions by an the Investment Adviser as to
anticipated trends, which predictions could prove to be incorrect. Even if
the expectations of an the Investment Adviser are correct, there may be an
imperfect correlation between the change in the value of the options and of
the portfolio securities being hedged.
Foreign Securities and American Depository Receipt The Fund may purchase
common stocks, including American Depository Receipts, of foreign
corporations represented in the S&P 500 Index (such securities are publicly
traded on securities exchanges or over-the-counter in the United States). the
Funds investment in common stock of foreign corporations represented in the
S&P 500 Index may also be in the form of American Depository Receipts (ADRs).
ADRs are receipts typically issued by a United States bank or trust company
evidencing ownership of the underlying securities and are designed for use in
the U.S securities markets.
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies.
These include differences in accounting, auditing and financial reporting
standards, the possibility of expropriation or confiscatory taxation,
adverse changes in investment or exchange control regulations, political
instability which could affect U.S. investments in foreign countries, and
potential restrictions on the flow of international capital. Moreover,
individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payment positions.
Investment Restrictions
The Fund has adopted the following investment restrictions for the protection
of shareholders. Restrictions 1 through 7 below cannot be changed without
approval by the holders of a majority of the outstanding shares of the Fund,
defined as the lesser of (a) 67% or more of the Fund's shares present at a
meeting, if the holders of more than 50% of the outstanding shares are present
in person or by proxy or (b) more than 50% of the Fund's outstanding shares.
The remaining restrictions may be changed by the Fund's Board of Trustees at
any time. In accordance with these restrictions, the Fund will not:
1. Invest in a manner that would cause it to fail to be a diversified
company" under the 1940 Act and the rules, regulations and orders thereunder.
2. Issue senior securities" as defined in the 1940 Act, and the rules,
regulations and orders thereunder, except as permitted under the 1940 Act and
the rules, regulations and orders thereunder.
3. Invest more than 25% of its total assets in securities, the
issuers of which conduct their principal business activities in the same
industry. For purposes of this limitation, securities of the U.S. government
(including its agencies and instumentalities) and securities of state or
municipal governments and their political subdivisions are not considered to
be issued by members of any industry.
4. Borrow money, except that (a) the Fund may borrow from banks for
temporary or emergency (not leveraging) purposes, including the meeting of
redemption requests which might otherwise require the untimely disposition of
securities, and (b) the Fund may, to the extent consistent with its
investment policies, enter into reverse repurchase agreements, forward roll
transactions and similar investment strategies and techniques. To the extent
that it engages in transactions described in (a) and (b), the Fund will be
limited so that no more than 33 1/3% of the value of its total assets
(including the amount borrowed), valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) valued at the time the
borrowing is made, is derived from such transactions.
5. Make loans. This restriction does not apply to: (a) the purchase of
debt obligations in which the Fund may invest consistent with its investment
objective and policies; (b) repurchase agreements; and (c) loans of its
portfolio securities, to the fullest extent permitted under the 1940 Act.
6. Engage in the business of underwriting securities issued by other
persons, except to the extent that the Fund may technically be deemed to be an
underwriter under the Securities Act of 1933, as amended, in disposing of
portfolio securities.
7. Purchase or sell real estate, real estate mortgages, commodities or
commodity contracts, but this restriction shall not prevent the Fund from: (a)
investing in securities of issuers engaged in the real estate business or the
business of investing in real estate (including interests in limited
partnerships owning or otherwise engaging in the real estate business or the
business of investing in real estate) and securities which are secured by real
estate or interests therein; (b) holding or selling real estate received in
connection with securities it holds or held; (c) trading in futures contracts
and options on futures contracts (including options on currencies to the
extent consistent with the Funds investment objective and policies); or (d)
investing in real estate investment trust securities.
8. Purchase any securities on margin (except for such short-term credits
as are necessary for the clearance of purchases and sales of portfolio
securities) or sell any securities short (except against the box"). For
purposes of this restriction, the deposit or payment by the Fund of underlying
securities and other assets in escrow and collateral agreements with respect
to initial or maintenance margin in connection with futures contracts and
related options and options on securities, indexes or similar items is not
considered to be the purchase of a security on margin.
9. Invest in oil, gas or other mineral exploration or development
programs.
10. Purchase or otherwise acquire any security if, as a result, more
than 15% of its net assets would be invested in securities that are illiquid.
11. Purchase the securities of any other open-end investment company,
except through a purchase on the open market involving no commission or profit
to a sponsor or dealer (other than the customary stock exchange or over-the-
counter brokerage commission) and except as part of a merger, consolidation or
acquisition of assets.
12. Invest for the purpose of exercising control of management.
If any percentage restriction described above is complied with at the time of
an investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
Certain Investment Activities
While the Fund is authorized to borrow money from banks for purposes of
investment (leveraging) and to invest in securities of foreign issuers, it has
no current intention of engaging in these investment activities and will do so
only when the Trust's Board of Trustees determines that either or both of
these activities aresuch activity is in the best interests of shareholders.
Portfolio Turnover
Generally, an index fund sells securities only to respond to redemption
requests or to adjust the number of shares held to reflect a change in the
Funds target index. Because of this, the turnover rate for the Fund will be
relatively low.
Portfolio Transactions
Decisions to buy and sell securities for the Fund are made by the Investment
Adviser, subject to the overall supervision and review of the Trust's Board of
Trustees. Portfolio securities transactions for the Fund are effected by or
under the supervision of the Investment Adviser.
Transactions on stock exchanges involve the payment of negotiated brokerage
commissions. There is generally no stated commission in the case of securities
traded in the over-the-counter market, but the price of those securities
includes an undisclosed commission or mark-up. Over-the-counter purchases and
sales are transacted directly with principal market makers except in those
cases in which better prices and executions may
be obtained elsewhere. The cost of securities purchased from underwriters
includes an underwriting commission or concession, and the prices at which
securities are purchased from and sold to dealers include a dealer's mark-up
or mark-down.
In executing portfolio transactions and selecting brokers or dealers, it is
the Fund's policy to seek the best overall terms available. The Investment
Adviser, in seeking the most favorable price and execution, considers all
factors it deems relevant, including, for example, the price, the size of the
transaction, the reputation, experience and financial stability of the broker-
dealer involved and the quality of service rendered by the broker-dealer in
other transactions. The Investment Adviser receives research, statistical and
quotation services from several broker-dealers with which it places the Fund's
portfolio transactions. It is possible that certain of the services received
primarily will benefit one or more other accounts for which the Investment
Adviser exercises investment discretion. Conversely, the Fund may be the
primary beneficiary of services received as a result of portfolio transactions
effected for other accounts. The Investment Adviser's fee under the Advisory
Agreement is not reduced by reason of its receiving such brokerage and
research services. The Trust's Board of Trustees, in its discretion, may
authorize the Investment Adviser to cause the Fund to pay a broker that
provides brokerage and research services to the Investment Adviser a
commission in excess of that which another qualified broker would have charged
for effecting the same transaction. Smith Barney will not participate in
commissions from brokerage given by the Fund to other brokers or dealers and
will not receive any reciprocal brokerage business resulting therefrom.
In accordance with Section 17(e) of the 1940 Act and Rule 17e-1 thereunder,
the Fund's Board of Trustees has determined that any portfolio transaction for
the Fund may be executed through Smith Barney or an affiliate of Smith Barney
if, in the Investment Adviser's judgment, the use of Smith Barney or an
affiliate is likely to result in price and execution at least as favorable as
those of other qualified brokers and if, in the transaction, Smith Barney or
the affiliate charges the Fund a commission rate consistent with those charged
by Smith Barney or an affiliate to comparable unaffiliated customers in
similar transactions. In addition, under SEC rules Smith Barney may directly
execute such transactions for the Fund on the floor of any national securities
exchange, provided: (a) the Board of Trustees has expressly authorized Smith
Barney to effect such transactions; and (b) Smith Barney annually advises the
Fund of the aggregate compensation it earned on such transactions.
Even though investment decisions for the Fund are made independently from
those of the other accounts managed by the Investment Adviser, investments of
the kind made by the Fund also may be made by those other accounts. When the
Fund and one or more accounts managed by the Investment Adviser are prepared
to invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner believed
by the Investment Adviser to be equitable. In some cases, this procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtained for or disposed of by the Fund.
PURCHASE OF SHARES
Determination of Public Offering Price
The Fund offers its shares to the public on a continuous basis. The public
offering price for shares of the Fund is equal to the net asset value per
share at the time of purchase. The method of computation of the public
offering price is shown in the Fund's financial statements incorporated by
reference in their entirety into this SAI.
REDEMPTION OF SHARES
The right of redemption may be suspended or the date of payment postponed (a)
for any period during which the NYSE is closed (other than for customary
weekend or holiday closings), (b) when trading in markets the Fund normally
utilizes is restricted, or an emergency, as determined by the SEC, exists so
that disposal of the Fund's investments or determination of net asset value is
not reasonably practicable or (c) for such other periods as the SEC by order
may permit for the protection of the Fund's shareholders.
Distributions in Kind
If the Board of Trustees of the Trust determines that it would be detrimental
to the best interests of the Fund's remaining shareholders to make a
redemption payment wholly in cash, the Trust may pay in respect of the Fund,
in accordance with SEC rules, any portion of a redemption in excess of the
lesser of $250,000 or 1% of the Fund's net assets by distribution in kind of
portfolio securities in lieu of cash. Securities issued as a distribution in
kind may incur brokerage commissions when shareholders subsequently sell those
securities.
Automatic Cash Withdrawal Plan
An automatic cash withdrawal plan (the "Withdrawal Plan") is available to
shareholders who own shares with a value of at least $10,000 ($5,000 for
retirement plan accounts) and who wish to receive specific amounts of cash
monthly or quarterly. Withdrawals of at least $50 may be made under the
Withdrawal Plan by redeeming as many shares of the Fund as may be necessary to
cover the stipulated withdrawal payment. To the extent withdrawals exceed
dividends, distributions and appreciation of a shareholder's investment in the
Fund, there will be a reduction in the value of the shareholder's investment
and continued withdrawal payments will reduce the shareholder's investment and
ultimately may exhaust it. Withdrawal payments should not be considered as
income from investment in the Fund. Furthermore, as it generally would not be
advantageous to a shareholder to make additional investments in the Fund at
the same time he or she is participating in the Withdrawal Plan, purchases by
such shareholders in amounts of less than $5,000 ordinarily will not be
permitted.
Shareholders who wish to participate in the Withdrawal Plan and who hold their
shares in certificate form must deposit their share certificates with First
Data as agent for Withdrawal Plan members. All dividends and distributions on
shares in the Withdrawal Plan are reinvested automatically at net asset value
in additional shares of the Fund. Withdrawal Plans should be set up with a
Smith Barney Financial Consultant. Applications for participation in the
Withdrawal Plan must be received by First Data no later than the eighth day of
the month to be eligible for participation beginning with that month's
withdrawal. For additional information, shareholders should contact a PFS
Investments Representativefinancial consultant.
DISTRIBUTOR
Smith Barney serves as a distributor for the Fund on a best efforts basis
pursuant to a written agreement.
When payment is made by the investor, unless otherwise noted by the investor,
the funds will be held as a free credit balance in the investor's brokerage
account and Smith Barney may benefit from the temporary use of the funds. The
investor may designate another use for the funds prior to settlement date,
such as an investment in a money market fund (other than Smith Barney Exchange
Reserve Fund) of the Smith Barney Mutual Funds. If the investor instructs
Smith Barney to invest the funds in a Smith Barney money market fund, the
amount of the investment will be included as part of the average daily net
assets of both the Fund and the Smith Barney money market fund, and affiliates
of Smith Barney that serve the funds in an investment advisory or
administrative capacity will benefit from the fact they are receiving fees
from both such investment companies for managing these assets computed on the
basis of their average daily net assets. The Trust's Board of Trustees has
been advised of the benefits to Smith Barney resulting from these settlement
procedures and will take such benefits into consideration when reviewing the
Distribution Agreementdistribution agreements for continuance.
Shareholding Servicing Arrangements
To compensate PFS for the service it provides and for the expense it bears
under the Distribution AgreementSmith Barneys Financial Consultants for the
services they provide to Fund shareholders, the Fund has adopted a services
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan,
the Fund pays a service fee, for Class A shares accrued daily and paid
monthly, calculated at the annual rate of 0.20% of the value of the Fund's
average daily net assets attributable to Class A Bshares. Class D shares are
not subject to a service fee.
Under its terms, the Plan continues from year to year, provided such
continuance is approved annually by vote of the Trust's Board of Trustees,
including a majority of the Trustees who are not interested persons of the
Fund and who have no direct or indirect financial interest in the operation of
the Plan or in the Distribution Agreementdistribution agreement (the
"Independent Trustees"). The Plan may not be amended to increase the amount of
the service fees without shareholder approval, and all amendments of the Plan
also must be approved by the Trustees and Independent Trustees in the manner
described above. The Plan may be terminated at any time, without penalty, by
vote of a majority of the Independent Trustees or by vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities. Pursuant to
the Plan, the Fund's distributor will provide the Board of Trustees with
periodic reports of amounts expended under the Plan and the purpose for which
such expenditures were made.
VALUATION OF SHARES
The net asset value per share is calculated on each day, Monday through
Friday, except days on which the NYSE is closed. The NYSE currently is
scheduled to be closed on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday, respectively. The following is a
description of the procedures used by the Fund in valuing its assets.
Securities that are traded on a national securities exchange will be valued at
the last sale price as of the close of business on the day the securities are
being valued, or, lacking any sales, at the closing bid price. Over-the-
counter securities will be valued on the basis of the bid price at the close
of business on each day, or, if market quotations for those securities are not
readily available, at fair value, as determined in good faith by the Trust's
Board of Trustees. Short-term obligations with maturities of 60 days or less
are valued at amortized cost, which constitutes fair value as determined by
the Trust's Board of Trustees. Amortized cost involves valuing an instrument
at its original cost to the Fund and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the effect
of fluctuating interest rates on the market value of the instrument.
Securities and other assets for which market quotations are not readily
available are valued at fair market value, as determined in good faith by or
under the direction of the Trustee of the Trust.
PERFORMANCE DATA
From time to time, the Fund may quote its total return in advertisements or in
reports and other communications to shareholders. The Fund may include
comparative performance information in advertising or marketing the Fund's
shares. Such performance information may include the following industry and
financial publications: Barron's, Business Week, CDA Investment Technologies,
Inc., Changing Times, Forbes, Fortune, Institutional Investor, Investors
Daily, Money, Morningstar Mutual Fund Values, The New York Times, USA Today
and The Wall Street Journal.
Average Annual Total Return
"Average annual total return" figures are computed according to a formula
prescribed by the SEC. The formula can be expressed as follows:
P (1 + T)n =
ERV
Where:
P
=
a hypothetical initial payment of $1,000.
T
=
average annual total return.
n
=
number of years.
ERV
=
Ending Redeemable Value of a hypothetical $1,000
investment made at the beginning of a 1-, 5- or
10-year period at the end of the 1-, 5- or 10-year
period (or fractional portion thereof), assuming
reinvestment of all dividends and distributions.
Aggregate Total Return
"Aggregate total return" figures represent the cumulative change in the value
of an investment in the Fund for the specified period and are computed by the
following formula:
ERV-P
P
Where:
P
=
a hypothetical initial payment of $10,000.
ERV
=
Ending Redeemable Value of a hypothetical $10,000
investment made at the beginning of a 1-, 5- or
10-year period at the end of the 1-, 5- or 10-year
period (or fractional portion thereof), assuming
reinvestment of all dividends and distributions.
Performance will vary from time to time depending on market conditions, the
composition of the Fund's portfolio and operating expenses. Consequently, any
given performance quotation should not be considered representative of the
Funds performance for any specified period in the future. Because performance
will vary, it may not provide a basis for comparing an investment in the Fund
with certain bank deposits or other investments that pay a fixed yield for a
stated period of time.
TAXES
The following is a summary of certain Federal income tax considerations that
may affect the Fund and its shareholders. The summary is not intended as a
substitute for individual tax advice and investors are urged to consult their
own tax advisors as to the tax consequences of an investment in the Fund.
The Trust intends to qualify each year as a regulated investment company under
the Code. If the Fund (a) qualifies as a regulated investment company and (b)
distributes to its shareholders at least 90% of its net investment income
(including, for this purpose, its net realized short-term capital gains), the
Fund will not be liable for Federal income taxes to the extent that its net
investment income and its net realized long- and short-term capital gains, if
any, are distributed to its shareholders.
As described above, the Fund may invest in futures contracts and options on
futures contracts that are traded on a U.S exchange or board of trade. As a
general rule, these investment activities will increase or decrease the
amount of long-term and short-term capital gains or losses realized by the
Fund and, thus, will affect the amount of capital gains distributed to the
Funds shareholder.
For federal income tax purposes, gain or loss on the futures and options
described above (collectively referred to as Section 1256 Contracts") would,
as a general rule, be taxed pursuant to a special mark-to-market system."
Under the mark-to-market system, the Fund may be treated as realizing a
greater or lesser amount of gains or losses than actually realized. As a
general rule, gain or loss on Section 1256 Contracts is treated as 60% long-
term capital gain or loss and 40% short-term capital gain or loss, and as a
result, the mark-to market will generally affect the amount of capital gains
or losses taxable to the Fund and the amount of distributions taxable to a
shareholder. Moreover, if the Fund invests in both Section 1256 and
offsetting positions in those contracts, then the Fund may not be able to
receive the benefit of certain realized losses for an indeterminate period of
time. The Fund expects that its activities with respect to Section 1256
Contracts and offsetting position in those Contracts (1) will not cause it or
its shareholders to be treated as receiving a materially greater amount of
capital gains or distributions than actually realized or received and (2) will
permit it to use substantially all of its losses for the fiscal years in which
the losses actually occur.
Gains or losses on the sales of stock or securities by the Fund generally will
be long-term capital gains or losses if the Fund has held the stock or
securities for more than one year. Gains or losses on sales of stock or
securities held for not more than one year generally will be short-term
capital gains or losses.
Foreign countries may impose withholding and other taxes on dividends and
interest paid to the Fund with respect to investments in foreign securities.
However, certain foreign countries have entered into tax conventions with the
United States to reduce or eliminate such taxes. Distributions of long-term
capital gains will be taxable to shareholders as such, whether paid in cash or
reinvested in additional shares and regardless of the length of time that the
shareholder has held his or her interest in the Fund. If a shareholder
receives a distribution taxable as long-term capital gain with respect to his
or her investment in the Fund and redeems or exchanges the shares before he or
she has held them for more than six months, any loss on the redemption or
exchange that is less than or equal to the amount of the distribution will be
treated as a long-term capital loss.
Any net long-term capital gains realized by the Fund will be distributed
annually as described in the Prospectus. Such distributions ("capital gain
dividends") will be taxable to shareholders as long-term capital gains,
regardless of how long a shareholder has held Fund shares, and will be
designated as capital gain dividends in a written notice mailed by the Fund to
shareholders after the close of the Fund's prior taxable year. If a
shareholder receives a capital gain dividend with respect to any share and if
the share has been held by the shareholder for six months or less, then any
loss on the sale or exchange of such share will be treated as a long-term
capital loss to the extent of the capital gain dividend.
Investors considering buying shares of the Fund on or just prior to a record
date for a taxable dividend or capital gain distribution should be aware that,
regardless of whether the price of the Fund shares to be purchased reflects
the amount of the forthcoming dividend or distribution payment, any such
payment will be a taxable dividend or distribution payment.
If a shareholder fails to furnish a correct taxpayer identification number,
fails fully to report dividend and interest income, or fails to certify that
he or she has provided a correct taxpayer identification number and that he or
she is not subject to "backup withholding," then the shareholder may be
subject to a 31% backup withholding tax with respect to (a) any taxable
dividends and distributions and (b) the proceeds of any redemptions of Fund
shares. An individual's taxpayer identification number is his or her social
security number. The backup withholding tax is not an additional tax and may
be credited against a shareholder's regular Federal income tax liability.
The foregoing is only a summary of certain tax considerations generally
affecting the Fund and its shareholders and is not intended as a substitute
for careful tax planning. Shareholders are urged to consult their tax advisors
with specific reference to their own tax situations, including their state and
local tax liabilities.
ADDITIONAL INFORMATION
PNC Bank, located at 17th and Chestnut Streets, Philadelphia, Pennsylvania
19103, serves as the custodian of the Fund. Under its agreement with the
Trust on behalf of the Fund, PNC Bank holds the Fund's portfolio securities
and keeps all necessary accounts and records. For its services, PNC Bank
receives a monthly fee based upon the month-end market value of securities
held in custody and also receives securities transaction charges. The assets
of the Fund are held under bank custodianship in compliance with the 1940 Act.
First Data, located at Exchange Place, Boston, Massachusetts 02109, serves as
the Trust's transfer agent. Under the transfer agency agreement, First Data
maintains the shareholder account records for the Trust, handles certain
communications between shareholders and the Trust and distributes dividends
and distributions payable by the Trust. For these services, First Data
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Trust during the month and is reimbursed for
out-of-pocket expenses
Smith Barney
S&P 500 Index Fund
Statement of
Additional
Information
December 30, 1997
Smith Barney
S&P 500 Index Fund
388 Greenwich Street
New York, NY 10013
SMITH BARNEY
A Member of Travelers Group
27
u:\legal\boards\wed\1997\misc\S&PSAI.5
Part C: Other Information
SMITH BARNEY INVESTMENT TRUST
FORM N-1A
CROSS-REFERENCE SHEET
PURSUANT TO RULE 495(b)
Part A Item No.
Prospectus Caption
1. Cover Page
Cover Page
2. Synopsis
Prospectus Summary
3. Financial Highlights
Financial Highlights
4. General Description of
Registrant
Cover Page; Prospectus Summary;
Investment
Objective and Management Policies;
Additional Information
5. Management of the Fund
Management of the Trust and the
Fund; Distributor; Additional
Information; Annual Report
6. Capital Stock and Other
Securities
Investment Objective and
Management Policies; Dividends,
Distributions and Taxes;
Additional Information
7. Purchase of Securities Being
Offered
Purchase of Shares; Valuation of
Shares; Exchange Privilege;
Redemption of Shares; Minimum
Account Size; Distributor;
Additional Information
8. Redemption or Repurchase
Purchase of Shares; Redemption of
Shares; Exchange Privilege
9. Pending Legal Proceedings
Not applicable
Part B Item No.
Statement of Additional
Information Caption
10. Cover Page
Cover Page
11. Table of Contents
Table of Contents
12. General Information and
History
Distributor; Additional
Information
13. Investment Objective and
Policies
Investment Objectives and
Management Policies
14. Management of the Fund
Management of the Trust and the
Funds; Distributor
15. Control Persons and Principal
Holders of
Securities
Management of the Trust and the
Funds
16. Investment Advisory and Other
Services
Management of the Trust and the
Funds; Distributor
17. Brokerage Allocation and Other
Services
Investment Objectives and
Management Policies; Distributor
18. Capital Stock and Other
Securities
Investment Objectives and
Management Policies; Purchase of
Shares; Redemption of Shares;
Taxes
19. Purchase, Redemption and
Pricing of Securities Being Offered
Purchase of Shares; Redemption of
Shares; Valuation of Shares;
Distributor; Exchange Privilege
20. Tax Status
Taxes
21. Underwriters
Distributor
22. Calculation of Performance
Data
Performance Data
23. Financial Statements
Financial Statements
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
Financial Highlights
Included in Part B:
Smith Barney Intermediate Maturity New York Municipals Fund Semi
Annual Report for the six month period ended May 31, 1997, together with Smith
Barney
Intermediate Maturity California Municipals Fund Semi Annual Report for the
six month period ended May 31, 1997 are incorporated by reference to the
Rule 30(b)2-1 filings made on July 29, 1997 as Accession No. 91155-97-000341.
Included in Part C:
Consent of Independent Accountants to be filed by
Amendment
(b) Exhibits
Unless otherwise noted, all references are to the Registrants
Registration Statement on Form N-1A (the Registration Statement") as filed
with the Securities and Exchange Commission ("SEC") on October 21,
1991 (File Nos. 33-43446 and 811-6444).
(1)(a) Registrants Master Trust Agreement dated October 17, 1991 and
Amendments to the Master Trust Agreement dated November 21, 1991 and July 30,
1993, respectively, are incorporated by reference to Post-Effective Amendment
No. 4 to the Registration Statement filed on January 28, 1994 (Post-Effective
Amendment No. 4").
(b) Amendments to the Master Trust Agreement dated October 14, 1994 and
November 7, 1994, respectively, are incorporated by reference to a
Registration Statement filed on Form N-14 on January 6, 1995 (the N-14").
(c) Amendments to the Master Trust Agreement dated July 20, 1995 and
August 10, 1995 are incorporated by reference to Post-Effective Amendment No.
9 to the Registration Statement filed on August 29, 1995 ("Post-Effective
Amendment No. 9").
(2) Registrants By-Laws are incorporated by reference to the
Registration Statement.
(3) Not Applicable.
(4) (a) Registrants form of stock certificate for Smith Barney
S&P 500 Index Fund is filed herewith.
(4) (b) Registrants form of stock certificate for Smith Barney
Large Capitalization Growth Fund is to be filed by Amendment.
(5)(a) Investment Advisory Agreement between the Registrant and
Greenwich Street Advisors dated July 30, 1993 is incorporated by reference to
Post-Effective Amendment No. 3 to the Registration Statement filed on December
1, 1993 (Post-Effective Amendment No. 3").
(b) Transfer of Investment Advisory Agreement dated November 7, 1994
between the Registrant on behalf of Smith Barney Intermediate Maturity
California Municipals Fund, Greenwich Street Advisors and Smith Barney Mutual
Funds Management Inc. is incorporated by reference to the N-14.
(c) Form of Transfer of Investment Advisory Agreement for Smith Barney
Limited Maturity Municipals Fund, Smith Barney Intermediate Maturity New York
Municipals Fund and Smith Barney Limited Maturity Treasury Fund is
incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement filed on January 27, 1995 (Post-Effective Amendment No.
6").
(d) Form of Investment Advisory Agreement between the Registrant on
behalf of Smith Barney S&P 500 Index Fund and Travelers Investment
Management Company dated December 11, 1997 is incorporated by
reference to Post Effective Amendment No. 15 to the Registration Statement
filed on December 12, 1997.
(e) Form of Investment Advisory Agreement between the Registrant on
behalf of Smith Barney Large Capitalization Growth Fund and Smith Barney
Mutual Funds Management Inc. is to be filed by Amendment.
(6)(a) Distribution Agreement between Registrant and Smith Barney
Shearson Inc. dated July 30, 1993 is incorporated by reference to Post-
Effective Amendment No. 3.
(b) Form of Distribution Agreement between the Registrant on behalf of
Smith Barney S&P 500 Index Fund and PFS Distributors is incorporated
by reference to Post-Effective Amendment No. 10.
(7) Not Applicable.
(8) Form of Custody Agreement with PNC Bank, National Association, is
incorporated by reference to Post-Effective Amendment No. 9.
(9)(a) Administration Agreement between the Registrant on behalf of
Smith Barney Intermediate Maturity California Municipals Fund and Smith,
Barney Advisers, Inc. (SBA") is incorporated by reference to the N-14.
(b) Form of Administration Agreement between the Registrant on behalf
of Smith Barney Limited Maturity Municipals Fund and Smith Barney Intermediate
Maturity New York Municipals Fund and SBA is incorporated by reference to
Post-Effective Amendment No. 6.
(c) Form of Administration Agreement between the Registrant on behalf
of Smith Barney S&P 500 Index Fund and Smith Barney Mutual Funds
Management Inc. is incorporated by reference to Post Effective
Amendment No. 15.
(d) Transfer Agency Agreement with First Data Investor Services
Group, Inc.(formerly known as "The Shareholder Services Group Inc.")
is incorporated by reference to Post-Effective Amendment No. 3.
(e) Form of Sub-Transfer Agency Agreement between the Registrant on
behalf of Smith Barney S&P 500 Index Fund and PFS Shareholder Services is
incorporated by reference to Post-Effective Amendment No. 10.
(10) Opinion of counsel regarding legality of shares being
registered is incorporated by reference to Pre-Effective Amendment No. 1 to
the Registration Statement filed on December 6, 1991.
(11) Consent of Independent Accountants is to be filed by
Amendment.
(12) Not Applicable.
(13) Purchase Agreement between the Registrant and Shearson Lehman
Brothers Inc. is incorporated by reference to Pre-Effective Amendment No. 1.
(14) Not Applicable.
(15)(a) Amended Service and Distribution Plan pursuant to Rule 12b-1
between the Registrant on behalf of Smith Barney Intermediate Maturity
California Municipals Fund and Smith Barney Inc. is incorporated by reference
to the N-14.
(b) Form of Amended Service and Distribution Plan pursuant to Rule 12b-1
between the Registrant on behalf of Smith Barney Limited Maturity Municipals
Fund and Smith Barney Intermediate Maturity New York Municipals Fund and Smith
Barney Inc. is incorporated by reference to Post-Effective Amendment No. 6.
(c) Form of Shareholder Services and Distribution Plan pursuant to Rule
12b-1 between the Registrant on behalf of Smith Barney S&P 500 Index Fund
is incorporated by reference to Post Effective Amendment No. 15.
(d) Form of Service and Distribution Plan pursuant to Rule 12b-1
between the Registrant on behalf of Fund and Smith Barney
Large Capitalization Growth Fund is to be filed by Amendment.
(16) Performance Data is incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement as filed on April 1, 1993.
(17) Financial Data Schedule is filed herewith.
(18) Plan adopted pursuant to Rule 18f-3(d) of the Investment Company
Act of 1940, as amended, is incorporated by reference to Post-Effective
Amendment No. 10.
Item 25. Persons Controlled by or under Common Control with Registrant
None
Item 26. Number of Holders of Securities
(1) (2)
Title of Class
Beneficial Interest par value Number of Record Holders
$0.001 per share as of November 30, 1997
Intermediate Maturity California
Municipals Fund 550
Intermediate Maturity New York
Municipals Fund 1,192
Smith Barney S&P 500
Index Fund None
Large Capitalization Growth Fund 25,432
Item 27. Indemnification
The response to this item is incorporated by reference to Pre-Effective
Amendment No. 1.
Item 28(a). Business and Other Connections of Investment Adviser
Investment Adviser -- Travelers Investment Management Company. ("TIMCO").
TIMCO serves as the investment adviser for the Fund pursuant to a written
agreement (the "Advisory Agreement"). TIMCO was incorporated on August 31,
1967
under the laws of the State of Connecticut. TIMCO is a wholly owned
subsidiary
of Salomon Smith Barney Holdings Inc. (formerly known as Smith Barney
Holdings Inc.), which in turn is a wholly owned subsidiary of
Travelers Group Inc. (formerly known as Primerica Corporation) ("Travelers").
TIMCO is registered as an investment adviser under the Investment
Advisers Act of 1940 (the "Advisers Act") since 1971 and has, through its
predecessors, been in the investment counseling business since 1967.
The list required by this Item 28 of the officers and directors of TIMCO
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two fiscal years, is incorporated by reference to Schedules A
and D of FORM ADV filed by SBA pursuant to the Advisers Act (SEC File No.
801-07212).
Item 29. Principal Underwriters
Consulting Group Capital Markets Funds; Global Horizons Investment Series
(Cayman Islands); Greenwich Street California Municipal Fund Inc.; Greenwich
Street Municipal Fund Inc.; Greenwich Street Series Fund; High Income
Opportunity Fund Inc.; The Italy Fund Inc.; Managed High Income Portfolio
Inc.; Managed Municipals Portfolio II Inc.; Managed Municipals Portfolio Inc.;
Municipal High Income Fund Inc.; Puerto Rico Daily Liquidity Fund Inc.; Smith
Barney Adjustable Rate Government Income Fund; Smith Barney Aggressive Growth
Fund Inc.; Smith Barney Appreciation Fund Inc.; Smith Barney Arizona
Municipals Fund Inc.; Smith Barney California Municipals Fund Inc.; Smith
Barney Concert Series Inc.; Smith Barney Disciplined Small Cap Fund, Inc.;
Smith Barney Equity Funds; Smith Barney Fundamental Value Fund Inc.; Smith
Barney Funds, Inc.; Smith Barney Income Funds; Smith Barney Income Trust;
Smith Barney Institutional Cash Management Fund, Inc.; Smith Barney
Intermediate Municipal Fund, Inc.; Smith Barney Investment Funds Inc.; Smith
Barney Investment Trust; Smith Barney Large Capitalization Growth Fund; Smith
Barney Managed Governments Fund Inc.; Smith Barney Managed Municipals Fund
Inc.; Smith Barney Massachusetts Municipals Fund; Smith Barney Money Funds,
Inc.; Smith Barney Muni Funds; Smith Barney Municipal Fund, Inc.; Smith Barney
Municipal Money Market Fund, Inc.; Smith Barney Natural Resources Fund Inc.;
Smith Barney New Jersey Municipals Fund Inc.; Smith Barney Oregon Municipals
Fund Inc.; Smith Barney Principal Return Fund; Smith Barney Telecommunications
Trust; Smith Barney Variable Account Funds; Smith Barney World Funds, Inc.;
Smith Barney Worldwide Special Fund N.V. (Netherlands Antilles); Travelers
Series Fund Inc.; The USA High Yield Fund N.V.; Worldwide Securities Limited
(Bermuda); Zenix Income Fund Inc. and various series of unit investment
trusts.
Smith Barney is a wholly owned subsidiary of Salomon Smith Barney
Holdings Inc.( formerly known as Smith Barney Holdings Inc.). The
information required by this Item 29 with respect to each director, officer
and partner of Smith Barney is incorporated by reference to Schedule A of Form
BD filed by Smith Barney pursuant to the Securities Exchange Act of 1934 (SEC
File No. 812-8510).
Item 30. Location of Accounts and Records
(1) Smith Barney Investment Trust
388 Greenwich Street
New York, New York 10013
(2) Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, New York 10013
(Records relating to its function as investment adviser to certain
of the Funds and administrator to all of the Funds)
(3) Travelers Investment Management Company
One Tower Square
Hartford, CT 06183-2030
(Records relating to its function as investment adviser to Smith
Barney S&P 500 Index Fund)
(4) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, PA 19103
(Records relating to its function as custodian)
(5) First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(Records relating to its function as Transfer Agent and Dividend
Paying Agent)
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Registrant undertakes to call a meeting of its shareholders of the
Series for the purpose of voting upon the question of removal of a trustee or
trustees of Registrant when requested in writing to do so by the holders of at
least 10% of Registrants outstanding shares. Registrant undertakes further,
in connection with the meeting, to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940, as amended, relating to communications
with the shareholders of certain common-law trusts.
485(b) Registrant undertakes to file a post-effective amendment, with
respect to the Fund, containing reasonably current financial statements that
need
not be certified, within four to six months from the effective date of this
Registration
Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant, SMITH BARNEY INVESTMENT TRUST,
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereto duly authorized in the City of New York, in the State of
New York on the 29th day of December, 1997.
SMITH BARNEY
INVESTMENT TRUST
/s/Heath B. McLendon
Heath B. McLendon, Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature
Title
Date
/s/Heath B. McLendon
Heath B. McLendon
Chairman of the Board
(Chief Executive
Officer)
December 29, 1997
/s/Lewis E. Daidone
Lewis E. Daidone
Treasurer
(Chief Financial and
Accounting Officer)
December 29, 1997
/s/Herbert Barg*
Herbert Barg
Trustee
December 29, 1997
/s/Alfred J.
Bianchetti*
Alfred J. Bianchetti
Trustee
December 29, 1997
/s/Martin Brody*
Martin Brody
Trustee
December 29, 1997
/s/Dwight B. Crane*
Dwight B. Crane
Trustee
December 29, 1997
/s/Burt N. Dorsett*
Burt N. Dorsett
Trustee
December 29, 1997
/s/Elliot S. Jaffe*
Elliot S. Jaffe
Trustee
December 29, 1997
/s/Stephen E. Kaufman*
Stephen E. Kaufman
Trustee
December 29, 1997
/s/Joseph J. McCann*
Joseph J. McCann
Trustee
December 29, 1997
/s/Cornelius C. Rose, *
Jr.
Cornelius C. Rose, Jr.
Trustee
December 29, 1997
_________________________________________________________________________
* Signed by Heath B. McLendon, their duly authorized attorney-in-fact,
pursuant to power
of attorney dated January 27, 1995.
/s/ Heath B. McLendon
Heath B. McLendon
u:\legal\funds\slit\1997\secdocs\pea16.ltr
SMITH BARNEY INVESTMENT TRUST
SMITH BARNEY S&P 500 INDEX FUND
CLASS [ ]SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF
MASSACHUSETTS
ACCOUNT NO. CUSIP
THIS IS TO CERTIFY THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE CLASS A SHARES OF
BENEFICIAL INTEREST
OF THE PAR VALUE OF $0.1 EACH OF SMITH BARNEY S&P 500
INDEX FUND
("the Trust") transferable on the books of the Trust
by the holder hereof in person or by duly authorized
attorney, upon surrender of this ccrtificate properly
endorsed. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile Seal of the Trust and the
facsimile signatures of its duly authorized officers.
DATED
___________________ ____________________
CHAIRMAN SECRETARY
Countersigned and Registered:
FIRST DATA INVESTORS SERVICES
GROUP, INC.
a subsidiary of First Data
Corporation Transfer Agent
(Boston, Massachusetts)
BY _________________________
AUTHORIZED SIGNATURE
The following abbreviations, when used in the
inscription on the face of this certificate, shall be
construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF
GIFT MIN ACT - ...........Custodian...............
(Cust) (Minor)
TEN ENT - as tenants by the entireties
under Uniform Gifts to
Minors
JT TEN - as joint tenants with right
Act.....................................
of survivorship and not as
(State)
tenants in common
Additional abbreviations may also be used
though not in the above list.
For value received,
________________________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
Class A Shares
of the beneficial interest represented by the within
Certificate, and do hereby irrevocable constitute and
appoint
Attorney
to transfer the said shares on the books of the
within-named Trust with full power of substitution in
the premises.
Dated:
NOTICE: The
signature to this assignment must
correspond with the name
as written
upon the face of the Certificate, in
every
particular, without alteration or
enlargement, or any
change whatever.
The Trust is authorized to issue two or more classes
of beneficial interest. The Trust will furnish to any
stockholder on request and without charge a full
statement of the designation and any preferences,
conversion and other rights, voting powers,
restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption
of the beneficial interest of each class which the
Trust is authorized to issue and, if the Trust is
authorized to issue any preferred or special class in
series, of the differences in the relative rights and
preferences between the shares of each series to the
extent they have been set and the authority of the
Board of Directors to set the relative rights and
preferences of subsequent series.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> 6
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<NAME> SMITH BARNEY INVESTMENT TRUST
<SERIES>
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<NAME> INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS FUND, CLASS A
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 26,129,345
<INVESTMENTS-AT-VALUE> 27,192,712
<RECEIVABLES> 694,112
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,886,824
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 184,511
<TOTAL-LIABILITIES> 184,511
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,627,765
<SHARES-COMMON-STOCK> 2,921,228
<SHARES-COMMON-PRIOR> 2,870,090
<ACCUMULATED-NII-CURRENT> 1,592
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (990,348)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,063,367
<NET-ASSETS> 27,702,313
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 750,059
<OTHER-INCOME> 0
<EXPENSES-NET> 105,322
<NET-INVESTMENT-INCOME> 644,737
<REALIZED-GAINS-CURRENT> (4,186)
<APPREC-INCREASE-CURRENT> (236,254)
<NET-CHANGE-FROM-OPS> 404,297
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 579,095
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 180,540
<NUMBER-OF-SHARES-REDEEMED> 168,202
<SHARES-REINVESTED> 38,800
<NET-CHANGE-IN-ASSETS> 284,157
<ACCUMULATED-NII-PRIOR> 1,289
<ACCUMULATED-GAINS-PRIOR> (986,162)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 68,570
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 154,692
<AVERAGE-NET-ASSETS> 24,645,359
<PER-SHARE-NAV-BEGIN> 8.55
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> (0.08)
<PER-SHARE-DIVIDEND> 0.20
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.47
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> 6
<CIK> 0000880366
<NAME> SMITH BARNEY INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS FUND, CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 26,129,345
<INVESTMENTS-AT-VALUE> 27,192,712
<RECEIVABLES> 694,112
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,886,824
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 184,511
<TOTAL-LIABILITIES> 184,511
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,627,765
<SHARES-COMMON-STOCK> 315,390
<SHARES-COMMON-PRIOR> 305,236
<ACCUMULATED-NII-CURRENT> 1,592
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (990,348)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,063,367
<NET-ASSETS> 27,702,313
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 750,059
<OTHER-INCOME> 0
<EXPENSES-NET> 105,322
<NET-INVESTMENT-INCOME> 644,737
<REALIZED-GAINS-CURRENT> (4,186)
<APPREC-INCREASE-CURRENT> (236,254)
<NET-CHANGE-FROM-OPS> 404,297
<EQUALIZATION> 0
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