Smith Barney Investment Trust
on behalf of the
Smith Barney Large Capitalization Growth Fund
Supplement Dated April 27, 1998 to
Prospectus Dated March 30. 1998
The following information supplements the information in the
Prospectus under "Investment Objectives and Management Policies"
Futures Contracts and Options on Futures Contracts. The Fund may
enter into transactions in futures contracts and options on futures
only (i) for bona fide hedging purposes (as defined in Commodities
Futures Trading Commission regulations), or (ii) for non-hedging
purposes, provided that the aggregate initial margin and premiums on
such non-hedging positions do not exceed 5% of the liquidation value
of the Fund's assets.
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. The
primary purpose of entering into a futures contract by the Fund is to
protect the Fund from fluctuations in the value of securities without
actually buying or selling the securities. The Fund may enter into
futures contracts and options on futures to seek higher investment
returns when a futures contract is priced more attractively than
stocks comprising a benchmark index, to facilitate trading or to
reduce transaction costs. The Fund will only enter into futures
contracts and options on futures contracts that are traded on a
domestic exchange and board of trade. Assets committed to futures
contracts will be segregated at the Fund's custodian to the extent
required by law.
Among the several risks accompanying the utilization of futures
contracts and options on futures contracts are: First, the successful
use of futures and options is dependent upon the ability of the
Manager to predict correctly movements in the stock market or in the
direction of interest rates. These predictions involve skills and
techniques that may be different from those involved in the
management of investments in securities. If the prices of the
underlying commodities move in an unanticipated manner, the Fund may
lose the expected benefit of these futures or options transactions
and may incur losses. Second, positions in futures contracts and
options on futures contracts may only be closed out by entering into
offsetting transactions on the exchange where the position was
entered into (or through a linked exchange), and as a result of daily
price fluctuations limits there can be no assurance the offsetting
transaction could be entered into at an advantageous price at a
particular time. Consequently, the Fund may realize a loss on a
futures contract or option that is not offset by an increase in the
value of its portfolio securities that are being hedged or the fund
may not be able to close a futures or options position without
incurring a loss in the event of adverse price movements.
Options on Securities, Securities Indexes and Currencies. The Fund
may write (sell) covered put and call options on securities,
securities indexes and currencies ("Options") and purchase put and
call Options that are traded on foreign or U.S. securities exchanges
and over the counter. The Fund will write such Options for the
purpose of increasing its return and/or protecting the value of its
portfolio. In particular, where the Fund writes an Option that
expires unexercised or is closed out by the Fund at a profit, it will
retain the premium paid for the Option, which will increase its gross
income and will offset in part the reduced value of a portfolio
security in connection with which the Option may have been written or
the increased cost of portfolio securities to be acquired. However,
the writing of Options constitutes only a partial hedge, up to the
amount of the premium, less any transaction costs. In contrast, if
the price of the security underlying the Option moves adversely to
the Fund's position, the Option may be exercised and the Fund will be
required to purchase or sell the security at a disadvantageous price,
resulting in losses that may only be partially offset by the amount
of the premium. The Fund may also write combinations of put and call
Options on the same security, known as "straddles." Such
transactions generate additional premium income but also present
increased risk.
The Fund may purchase put and call Options in anticipation of
declines in the value of portfolio securities or increases in the
value of securities to be acquired. In the event that the expected
changes occur, the Fund may be able to offset the resulting adverse
effect on its portfolio, in whole or in part, through the Options
purchased. The risk assumed by the Fund in connection with such
transactions is limited to the amount of the premium and related
transaction costs associated with the Option, although the Fund may
be required to forfeit such amounts in the event that the prices of
securities underlying the Options do not move in the direction or to
the extent anticipated.
FD01449
