[GRAPHIC]
Smith Barney
Intermediate
Maturity New York
Municipals Fund
------------------
SEMI-ANNUAL REPORT
------------------
May 31, 1999
Smith Barney Mutual Funds
<PAGE>
Smith Barney
Intermediate
Maturity New York
Municipals Fund
[PHOTO]
HEATH B. MCLENDON
Chairman
[PHOTO]
JOSEPH P. DEANE
Vice President and Investment Officer
Dear Shareholder:
We are pleased to present the semi-annual report for the Smith Barney
Intermediate Maturity New York Municipals Fund ("Fund") for the period ended May
31, 1999. We hope you find this report to be useful and informative. We are
pleased to announce that Joseph P. Deane assumed management responsibility for
the Fund on February 2, 1999. Mr. Deane has over 28 years of investment
experience and currently manages the Smith Barney Managed Municipals Fund, among
many others.
In this report, we summarize the period's prevailing economic and market
conditions and outline the Fund's investment strategy. A detailed summary of the
Fund's performance and current holdings can be found in the appropriate sections
that follow.
Performance Update
For the six months ended May 31, 1999, the Fund's Class A shares returned 0.06%
versus its Lipper, Inc. New York intermediate-term municipals peer group average
total return of 0.54% over the same period. (Lipper is a major independent
fund-tracking organization.)
Municipal Bond Market Update and Outlook
Through May 1999, the municipal bond market was less volatile compared with U.S.
Treasuries. In our opinion, municipal bonds, which are relatively inexpensive,
currently offer downside protection. In addition, new issuance of municipal
bonds has slowed from 1998 levels. With inflation relatively low, conditions are
still favorable for municipal bonds.
In April, the Consumer Price Index ("CPI") increased 0.70% -- its largest
monthly increase in nine years. With global economic growth picking up,
inflationary fears surfaced. The Federal Reserve Board raised short-term
interest rates 0.25% on June 30, 1999, and yields in the bond market went up.
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Smith Barney Intermediate Maturity New York Municipals Fund 1
<PAGE>
Looking forward, and as we near the end of the millennium and the onset of Y2K,
we believe that fixed-income securities in the U.S. will be in solid demand.
That, in turn, should provide a positive environment for municipal bonds for the
remainder of 1999. We are positioning ourselves for modestly lower rates over
the next six months, and if there is no repeat of a higher CPI number, we stand
an excellent chance of seeing a modest decline in rates as we move toward the
fall.
Investment Strategy and Portfolio Update
The Intermediate Maturity New York Municipals Fund's investment seeks to provide
New York investors with as high a level of current income that is exempt from
federal income taxes* and New York state and New York City personal income taxes
as is consistent with the preservation of principal. The Fund invests primarily
in investment grade municipal securities.
Our investment strategy for the Fund is to seek to maximize our dividend yield.
In our view, the municipal bond market has provided us with excellent
opportunities during the reporting period. Since interest rates have risen, we
have been able to invest our excess cash at higher yields. In addition, we have
also been focusing on adding high-grade bonds to the Fund's portfolio.
(Currently the credit spread between AAA-rated and BBB-rated bonds are near
their narrowest spread levels ever.) At these narrow spread levels, we do not
think it makes sense to buy low-grade bonds and assume additional credit risk.
Because our interest rate forecast remains positive, we believe our current
investment strategy should allow us to maximize dividend yields going forward.
During the past year, the Fund focused on education bonds (21.8%), general
obligation bonds (13.7%) and transportation bonds (14.5%) because we believe
they offered good relative values. At the end of May, the Fund's weighted
average maturity was approximately 9 years. In addition, as of May 31, 1999,
roughly 97% of the Fund's holdings were rated investment grade by either
Standard & Poor's Ratings Service or Moody's Investors Service, Inc., with
approximately 48% of the Fund invested in AAA bonds, the highest rating.
New York Economic Highlights
Moody's Investors Service, Inc. has assigned a rating of "A2" to the general
obligation debt of New York State, which, in their words, "reflects the
short-term strength of the state's credit as indicated by large surpluses, but
also the longer term risks associated with a large debt burden, chronic
structural budget imbalance and a statewide economy that has underperformed the
nation through the national economic recovery."
- ----------
* A portion of the income from this fund may be subject to the Alternative
Minimum Income Tax (AMT).
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2 1999 Semi-Annual Report to Shareholders
<PAGE>
Compared to the national economy, New York's economy, although stronger, faces
challenges. Moreover, the employment picture upstate has been even worse than
the national average. Yet, the outlook for New York State general obligations is
stable and we are positive about the short-term. Over the long term, the
budgetary and financial decisions made in the Empire State over the next few
years should be a crucial determinant of future fiscal health. We intend to
monitor the situation closely for any signs of budget gaps or narrower cash
margins.
In closing, thank you for your investment in the Smith Barney Intermediate
Maturity New York Municipals Fund. We look forward to continuing to help you
achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
July 8, 1999
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Principal Risks of Investing in the Fund
Investors could lose money on their investment in the Fund, or the Fund may not
perform as well as other investments, if:
o Interest rates rise, causing the value of the Fund's portfolio to decline;
o The issuer of a security owned by the Fund defaults on its obligation to
pay principal and/or interest or the security's credit rating is
downgraded;
o New York municipal securities fall out of favor with investors. The Fund
will suffer more than a national municipal fund from adverse events
affecting New York municipal issuers;
o Unfavorable legislation affects the tax-exempt status of municipal bonds;
and
o The manager's judgment about the attractiveness, value or income potential
of a particular security proves to be incorrect.
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Smith Barney Intermediate Maturity New York Municipals Fund 3
<PAGE>
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Historical Performance -- Class A Shares
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Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
================================================================================
5/31/99 $8.76 $8.58 $0.19 $0.00 0.06%+
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11/30/98 8.57 8.76 0.40 0.00 7.01
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11/30/97 8.47 8.57 0.41 0.00 6.23
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11/30/96 8.48 8.47 0.41 0.00 4.85
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11/30/95 7.80 8.48 0.41 0.00 14.31
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11/30/94 8.54 7.80 0.40 0.02 (3.97)
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11/30/93 8.18 8.54 0.40 0.02 9.76
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Inception* - 11/30/92 7.90 8.18 0.38 0.00 8.59+
================================================================================
Total $3.00 $0.04
================================================================================
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Historical Performance -- Class L Shares
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Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
================================================================================
5/31/99 $8.76 $8.58 $0.18 $0.00 (0.04)%+
- --------------------------------------------------------------------------------
11/30/98 8.57 8.76 0.38 0.00 6.79
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11/30/97 8.47 8.57 0.39 0.00 6.00
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11/30/96 8.48 8.47 0.39 0.00 4.64
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Inception* - 11/30/95 7.87 8.48 0.38 0.00 13.01+
================================================================================
Total $1.72 $0.00
================================================================================
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
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4 1999 Semi-Annual Report to Shareholders
<PAGE>
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Average Annual Total Returns
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Without Sales Charges(1)
------------------------
Class A Class L
================================================================================
Six Months Ended 5/31/99+ 0.06% (0.04)%
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Year Ended 5/31/99 3.66 3.46
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Five Years Ended 5/31/99 5.84 N/A
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Inception* through 5/31/99 6.18 6.69
================================================================================
With Sales Charges(2)
----------------------
Class A Class L
================================================================================
Six Months Ended 5/31/99+ (1.96)% (2.02)%
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Year Ended 5/31/99 1.55 1.41
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Five Years Ended 5/31/99 5.41 N/A
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Inception* through 5/31/99 5.89 6.45
================================================================================
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Cumulative Total Returns
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Without Sales Charges(1)
================================================================================
Class A (Inception* through 5/31/99) 56.04%
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Class L (Inception* through 5/31/99) 33.81
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 2.00% and Class L shares reflect
the deduction of a 1.00% CDSC, which applies if shares are redeemed within
one year from initial purchase.
* Inception dates for Class A and L shares are December 31, 1991 and
December 5, 1994, respectively.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
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Smith Barney Intermediate Maturity New York Municipals Fund 5
<PAGE>
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Historical Performance (unaudited)
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Growth of $10,000 Invested in Class A Shares of the
Smith Barney Intermediate Maturity New York Municipals Fund
vs. Lehman Brothers 10 Year Municipal Bond Index
and Lipper Analytical Services, Inc. Peer Group Average+
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December 1991 -- May 1999
[GRAPHIC]
Smith Barney Lehman Brothers
Intermediate Maturity 10 Year Municipal Lipper Peer
New York Municipals Fund Bond Index Group Average
- --------------------------------------------------------------------------------
12/31/91 9,802 10,000 10,000
11/92 10,644 10,767 10,685
11/93 11,683 12,028 11,625
11/94 11,219 11,491 11,230
11/95 12,824 13,623 12,796
11/96 13,447 14,394 13,383
11/97 14,284 15,410 14,134
11/98 15,285 16,660 15,054
5/31/99 15,294 16,918 15,135
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+ Hypothetical illustration of $10,000 invested in Class A shares at
inception on December 31, 1991, assuming deduction of the maximum 2.00%
sales charge at the time of investment and reinvestment of dividends and
capital gains, if any, at net asset value through May 31, 1999. The Lehman
Brothers 10 Year Municipal Bond Index is a broad-based index comprised of
approximately 5,200 bonds totaling approximately $63 billion in market
capitalization. The bonds are all municipal bonds with an average maturity
of 9.8 years, an average yield of 4.93% and a duration of 7.08 years. The
index is unmanaged and is not subject to the same management and trading
expenses of a mutual fund. The Lipper Analytical Services, Inc. Peer Group
Average is an average of the Fund's peer group of mutual funds (17 funds
as of May 31, 1999) investing in intermediate maturity New York tax-exempt
bonds. The performance of the Fund's other class may be greater or less
than the Class A shares' performance indicated on this chart, depending on
whether greater or lesser sales charges and fees were incurred by
shareholders investing in the other class.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
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6 1999 Semi-Annual Report to Shareholders
<PAGE>
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Portfolio Highlights (unaudited) May 31, 1999
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Industry Breakdown
[GRAPHIC]
Education 21.8%
General Obligations 13.7%
Government Facilities 4.3%
Hospitals 11.3%
Industrial Development 7.3%
Other 11.3%
Pollution Control 5.1%
Transportation 14.5%
Finance 2.7%
Water & Sewer 8.0%
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
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Aaa AAA 48.3%
Aa AA 14.2
A A 20.4
Baa BBB 14.3
NR NR 2.8
-----
100.0%
=====
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Smith Barney Intermediate Maturity New York Municipals Fund 7
<PAGE>
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Schedule of Investments (unaudited) May 31, 1999
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<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Education -- 21.8%
$ 400,000 AAA Albany City School District, Series B, MBIA-Insured,
6.000% due 12/15/00 $ 415,000
200,000 AAA Canandaigua City School District, AMBAC-Insured,
6.400% due 6/1/99 200,000
200,000 AAA Central Square Central School District, FGIC-Insured,
6.500% due 6/15/99 200,216
1,000,000 Baa1* City University of New York COP, John Jay College,
6.000% due 8/15/06 1,092,500
465,000 A- Hempstead, NY IDA Civic Facility Revenue,
Adelphi University Civic Facility, 5.250% due 2/1/11 480,694
860,000 Aaa* Huntington Union Free School District, FGIC-Insured,
5.500% due 7/15/11 923,425
Nassau County Industrial Development Agency,
Civic Facility Revenue, Refunded,
(Hofstra University Project), MBIA-Insured:
1,250,000 AAA 5.250% due 7/1/13 1,300,000
2,000,000 AAA 5.250% due 7/1/14 2,065,000
2,000,000 AAA New York Educational Construction Fund, Series A,
MBIA-Insured, 6.500% due 4/1/04 2,207,500
New York State Dormitory Authority, Revenue Bonds:
500,000 AAA College and University Educational Loan,
MBIA-Insured, 6.200% due 7/1/01 (c) 523,125
500,000 AAA Green Chimneys School, Series A, AMBAC-Insured,
4.375% due 7/1/09 488,750
940,000 Aaa* New York Law School, AMBAC-Insured,
5.200% due 7/1/08 988,175
630,000 Aaa* Nyack Union Free School District, FGIC-Insured,
5.250% due 12/15/15 655,200
1,100,000 AA Saint Thomas Aquinas, 5.000% due 7/1/14 1,083,500
State University Educational Facilities:
1,000,000 A- 5.000% due 5/15/10 1,015,000
1,125,000 A- Series B, 5.250% due 5/15/09 1,175,625
100,000 AAA Wappingers Central School District, AMBAC-Insured,
6.250% due 12/1/99 101,499
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14,915,209
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Finance -- 2.7%
City of Troy Municipal Assistance Corp., MBIA-Insured:
1,080,000 AAA Series A, 5.000% due 1/15/08 1,119,150
1,990,000 AAA Series B, zero coupon bond to yield
5.690% due 1/15/19 711,425
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1,830,575
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</TABLE>
See Notes to Financial Statements.
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8 1999 Semi-Annual Report to Shareholders
<PAGE>
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Schedule of Investments (unaudited) (continued) May 31, 1999
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<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
General Obligation -- 13.7%
Buffalo GO:
$ 100,000 AAA FGIC-Insured, 5.800% due 2/1/00 $ 101,669
MBIA-Insured:
205,000 AAA Series A, 5.900% due 4/1/01 212,944
385,000 AAA Series B, 5.900% due 4/1/01 (b) 399,919
250,000 AAA Erie County Public Improvement Project GO,
FGIC-Insured, 5.500% due 1/15/00 253,442
495,000 Baa* Jamestown GO, Series A, 7.000% due 3/15/00 508,004
1,000,000 AA Monroe County Public Improvement Project GO,
Series A, 6.000% due 3/1/18 1,118,750
1,000,000 AAA Nassau County GO, Combined Sewer District, Series E,
MBIA-Insured, 5.400% due 5/1/10 1,058,750
New York City GO:
2,000,000 A- Series A, 7.000% due 8/1/04 (b) 2,250,000
325,000 A- Series B, 6.250% due 10/1/01 341,656
175,000 A- Series B, (Escrowed to maturity with U.S.
government securities), 6.250% due 10/1/01 (d) 184,406
1,000,000 A- Series F, 5.125% due 8/1/13 1,002,500
435,000 AAA Niagara County GO, Environmental Infrastructure,
Series A, MBIA-Insured, 5.250% due 8/15/13 455,662
North Hempstead, NY GO, FGIC-Insured:
575,000 Aaa* 5.000% due 5/15/11 588,656
275,000 Aaa* 5.000% due 5/15/12 280,156
Oyster Bay GO:
425,000 A1* 5.000% due 2/1/14 434,031
150,000 AAA FGIC-Insured, Series C, 6.300% due 10/1/99 151,491
- -------------------------------------------------------------------------------------------
9,342,036
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Government Facilities -- 4.3%
New York State Urban Development, Correctional Facilities:
595,000 BBB+ Series 3, 6.800% due 1/1/00 605,496
1,900,000 BBB+ Series A, 6.500% due 1/1/09 2,151,750
200,000 A-1+ Puerto Rico Commonwealth Government Development
Bank, MBIA-Insured, 3.000% due 12/1/15 (e) 200,000
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2,957,246
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Hospitals -- 11.3%
5,000 B1* Monroe County IDA, Genesee Hospital, Series A,
6.500% due 11/1/99 5,031
New York State Dormitory Authority, Revenue Bonds:
160,000 AA Genessee Valley, Series B, FHA-Insured,
6.300% due 8/1/02 172,000
1,500,000 AA Good Samaritan Hospital, 5.500% due 7/1/10 1,576,875
</TABLE>
See Notes to Financial Statements.
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Smith Barney Intermediate Maturity New York Municipals Fund 9
<PAGE>
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Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Hospitals -- 11.3% (continued)
$ 880,000 AAA Long Beach Medical Center, MBIA/FHA-Insured,
5.550% due 8/1/15 $ 910,800
1,000,000 A- Mental Health Services, 6.000% due 2/15/12 1,096,250
1,000,000 AA New York and Presbyterian Hospital, 5.500% due 8/1/11 1,061,250
500,000 Baa2* Nyack Hospital, Series A, 6.250% due 7/1/13 533,125
1,000,000 AAA Presbyterian Hospital, Series A, AMBAC/FHA-Insured,
Series A, 5.500% due 2/15/02 1,066,250
New York State Medical Care Facilities, Revenue Bonds:
725,000 A- Health Services Facility, 6.100% due 2/15/02 763,063
Methodist Hospital, FHA-Insured:
330,000 AA Series A, 6.000% due 8/15/02 350,625
185,000 AA Series C, 5.900% due 8/15/02 191,244
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7,726,513
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Housing: Multi-Family -- 2.1%
1,000,000 AA New York State Housing Corp., (Battery Park City Project),
6.000% due 11/1/03 1,066,250
350,000 Aa* North Tonawanda Housing Development Corp.,
Mortgage Revenue, Bishop Gibbons, Series B,
FHA-Insured, 6.350% due 12/15/02 370,125
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1,436,375
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Industrial Development -- 7.3%
535,000 A Amherst Industrial Development Agency, Lease Revenue,
Multi-Surface Rink Complex, Series A, LOC Keybank,
5.050% due 10/1/05 541,019
500,000 Baa3* New York City IDA, Civil Facilities Revenue,
(YMCA Greater NY Project), 6.000% due 8/1/07 543,125
Onondaga County, NY IDA:
425,000 AAA Iroquois Nursing Home, Series A, FHA-Insured,
4.500% due 2/1/09 420,219
605,000 A Syracuse Home Association Project, 5.000% due 12/1/13 578,531
1,000,000 A Syracuse Industrial Development Agency,
Civic Facilities Revenue, (Crouse Health Inc. Project),
5.000% due 1/1/10 987,500
Westchester County IDA:
1,000,000 AAA Resource Recovery Revenue, (Westchester Resco Co.
Project), AMBAC-Insured, 6.000% due 7/1/09 (c) 1,098,750
790,000 NR Revenue Bonds, (AGR Realty Co. Project),
5.750% due 1/1/02 807,775
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4,976,919
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</TABLE>
See Notes to Financial Statements.
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10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Life Care Systems -- 2.1%
$ 750,000 AA New York State Dormitory Authority Revenue,
Hebrew Home for the Aged, FHA-Insured,
5.625% due 2/1/17 $ 787,500
610,000 AA Oswego County Industrial Development Agency,
Civic Facility Revenue, (Seneca Hill Project), Series A,
FHA-Insured, 5.550% due 8/1/22 613,813
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1,401,313
- -------------------------------------------------------------------------------------------
Miscellaneous -- 2.8%
500,000 A Capital District Youth Center Lease Revenue,
LOC Key Bank, 6.000% due 2/1/17 516,250
200,000 VMIG 1* New York State Job Development Authority,
State Guaranteed, 3.300% due 3/1/03 (e) 200,000
New York State Municipal Bond Bank Agency,
Special Program Revenue, Series A:
925,000 BBB+ Buffalo, 6.500% due 3/15/00 943,592
250,000 AAA Rochester, 6.300% due 3/15/00 255,778
- -------------------------------------------------------------------------------------------
1,915,620
- -------------------------------------------------------------------------------------------
Pollution Control -- 5.1%
750,000 A3* Essex County Industrial Development Agency, PCR,
5.700% due 7/1/16 775,312
1,300,000 P-1* New York State Energy Research & Development
Authority, PCR, Niagara Mohawk Power Corp.,
Series B, 3.400% due 12/1/25 (e) 1,300,000
New York State Environmental Facilities Corp., PCR:
55,000 Baa1* Resource Recovery Revenue, (Huntington Project),
7.375% due 10/1/99 (c) 55,577
500,000 AAA Series A, 5.950% due 3/15/02 527,500
800,000 Baa3* Oneida-Herkimer Solid Waste Management Authority,
6.300% due 4/1/01 835,000
- -------------------------------------------------------------------------------------------
3,493,389
- -------------------------------------------------------------------------------------------
Pre-Refunded(d) -- 0.4%
240,000 AAA New York, Series D, (Call 2/1/02 @ 101.5),
7.700% due 2/1/11 266,400
- -------------------------------------------------------------------------------------------
Public Facilities -- 0.9%
600,000 AAA Puerto Rico Public Buildings Authority, Public Education
and Health Facilities Refunding, Series K, FGIC-Insured,
6.000% due 7/1/01 627,750
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</TABLE>
See Notes to Financial Statements.
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Smith Barney Intermediate Maturity New York Municipals Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Transportation -- 14.5%
$ 560,000 BBB Guam Transportation Authority Revenue,
Series A, 5.700% due 10/1/01 $ 576,800
670,000 AAA Islip Airport Improvement, Series B, FSA-Insured,
5.000% due 1/15/12 (c) 670,837
2,500,000 AAA Metropolitan Transportation Authority, New York
Dedicated Tax Fund, Series A, FSA-Insured,
5.250% due 4/1/10 2,609,375
200,000 BBB+ Metropolitan Transportation Authority, New York
Service Contract, Transit Facilities, Series 5,
6.250% due 7/1/99 200,448
1,000,000 BBB+ New York State Thruway Authority, Service Contract,
Local Highway and Bridges, 6.000% due 4/1/02 1,050,000
600,000 AAA Niagara Falls Bridge Commission Toll Revenue,
Series B, FGIC-Insured, 5.250% due 10/1/15 621,000
1,820,000 AAA Niagara Frontier Transportation Authority,
Greater Buffalo International Airport, Series B,
AMBAC-Insured, 5.750% due 4/1/04 (c) 1,869,522
1,000,000 NR Port Authority of New York & New Jersey,
Revenue Bonds, 6.750% due 10/1/11 (c) 1,097,500
670,000 Baa1* Syracuse COP, Hancock International Airport,
6.300% due 1/1/02 (c) 704,338
500,000 AAA Triborough Bridge & Tunnel Authority, Special
Obligation Refunding, Series A, MBIA-Insured, 6.100% due
1/1/00 507,730
- -------------------------------------------------------------------------------------------
9,907,550
- -------------------------------------------------------------------------------------------
Utilities -- 3.0%
Long Island Power Authority, Electric System Revenue:
500,000 AAA MBIA-Insured, 5.125% due 4/1/12 510,625
1,300,000 A-1+ Sub-Series 5, 3.300% due 5/1/33 (e) 1,300,000
250,000 AAA New York State Power Authority Revenue & General
Purpose, Series Z, (Escrowed to maturity with
U.S. government securities), 5.850% due 1/1/00 253,640
- -------------------------------------------------------------------------------------------
2,064,265
- -------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
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12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Water & Sewer -- 8.0%
New York City Municipal Water Financing Authority,
Water & Sewer System Revenue:
$2,500,000 AAA Series B, FSA-Insured, 5.250% due 6/15/10 $ 2,609,375
300,000 A-1+ Series G, FGIC-Insured, 3.300% due 6/15/24 (e) 300,000
1,390,000 AAA Suffolk County Southwest Sewer District GO,
MBIA-Insured, 6.000% due 2/1/07 1,527,263
1,000,000 AAA Suffolk County Water Authority, Waterworks Revenue,
MBIA-Insured, 5.100% due 6/1/09 1,043,750
- -------------------------------------------------------------------------------------------
5,480,388
- -------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $66,432,571**) $68,341,548
===========================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*) are rated by Moody's Investors Service, Inc.
(b) Security is segregated by Custodian for open purchase commitment.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(d) Pre-Refunded bonds escrowed with U.S. government securities and bonds
escrowed to maturity with U.S. government securities are considered by the
investment adviser to be triple-A rated even if the issuer has not applied
for new ratings.
(e) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 14 and 15 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 13
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BBB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Moody's Investors Service, Inc. ("Moody's") -- Numerical modifiers 1, 2 and 3
may be applied to each generic rating from "Aa" to "B," where 1 is the highest
and 3 the lowest ranking within its generic category.
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A -- Bonds rated "A" possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to
impairment some time in the future.
Baa -- Bonds rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of
time may be small.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited) (continued)
- --------------------------------------------------------------------------------
Fitch IBCA, Inc. ("Fitch") -- Ratings may be modified by the addition of a
plus (+) or minus (-) sign to show relative standings within the major ratings
categories.
A -- Bonds which are rated "A" are considered to be investment grade
and of high quality. The obligor's ability to pay interest and/or
dividends and repay principal is considered to be strong, but may be
more vulnerable to adverse changes in economic conditions and
circumstances than debt or preferred securities with higher ratings.
BBB -- Bonds which are rated "BBB" are considered to be investment grade
and of satisfactory credit quality. The obligor's ability to pay
interest or dividends and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these securities
and, therefore, impair timely payment. The likelihood that the
ratings of these bonds or preferred will fall below investment grade
is higher than for securities with higher ratings.
NR -- Indicates that the bond is not rated by Standard & Poor's, Moody's
or Fitch.
- --------------------------------------------------------------------------------
Short-Term Security Ratings (unaudited)
- --------------------------------------------------------------------------------
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG-1 rating.
- --------------------------------------------------------------------------------
Security Descriptions (unaudited)
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
EDA -- Economic Development Authority
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 15
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $66,432,571) $68,341,548
Interest receivable 976,338
Receivable for Fund shares sold 494,590
- --------------------------------------------------------------------------------
Total Assets 69,812,476
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 2,615,450
Dividends payable 242,028
Payable to bank 31,300
Investment advisory fees payable 20,950
Administrative fees payable 13,967
Distribution fees payable 923
Accrued expenses 46,643
- --------------------------------------------------------------------------------
Total Liabilities 2,971,261
- --------------------------------------------------------------------------------
Total Net Assets $66,841,215
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 7,788
Capital paid in excess of par value 66,190,350
Overdistributed net investment income (28,515)
Accumulated net realized loss from security transactions (1,237,385)
Net unrealized appreciation of investments 1,908,977
- --------------------------------------------------------------------------------
Total Net Assets $66,841,215
- --------------------------------------------------------------------------------
Shares Outstanding:
Class A 7,125,697
------------------------------------------------------------------------------
Class L 662,431
------------------------------------------------------------------------------
Net Asset Value:
Class A $8.58
------------------------------------------------------------------------------
Class L* $8.58
------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 2.04% of net asset value per share) $8.76
- --------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $8.67
================================================================================
* Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999
INVESTMENT INCOME:
Interest $1,545,441
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 90,875
Administration fees (Note 2) 60,583
Distribution fees (Note 2) 50,477
Shareholder and system servicing fees 17,184
Trustees' fees 16,038
Registration fees 15,215
Shareholder communications 14,714
Audit and legal 12,262
Pricing service fees 4,708
Custody 1,548
Other 1,808
- --------------------------------------------------------------------------------
Total Expenses 285,412
Less: Investment advisory and administration fee waivers
(Note 2) (48,946)
- --------------------------------------------------------------------------------
Net Expenses 236,466
- --------------------------------------------------------------------------------
Net Investment Income 1,308,975
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 3,855,484
Cost of securities sold 3,823,897
- --------------------------------------------------------------------------------
Net Realized Gain 31,587
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 3,231,584
End of period 1,908,977
- --------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (1,322,607)
- --------------------------------------------------------------------------------
Net Loss on Investments (1,291,020)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $17,955
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 17
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999 (unaudited)
and the Year Ended November 30, 1998
1999 1998
================================================================================
OPERATIONS:
Net investment income $ 1,308,975 $ 2,453,059
Net realized gain 31,587 225,219
Increase (decrease) in net
unrealized appreciation (1,322,607) 913,904
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 17,955 3,592,182
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 3):
Net investment income (1,332,145) (2,444,832)
In excess of net investment income -- (2,540)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,332,145) (2,447,372)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 12,053,659 14,963,416
Net asset value of shares issued for
reinvestment of dividends 746,275 1,698,753
Cost of shares reacquired (3,515,384) (9,977,772)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 9,284,550 6,684,397
- --------------------------------------------------------------------------------
Increase in Net Assets 7,970,360 7,829,207
NET ASSETS:
Beginning of period 58,870,855 51,041,648
- --------------------------------------------------------------------------------
End of period* $66,841,215 $58,870,855
================================================================================
* Includes overdistributed net investment
income of: $(28,515) $(5,345)
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Smith Barney Intermediate Maturity New York Municipals Fund ("Fund") is a
separate non-diversified investment fund of the Smith Barney Investment Trust
("Trust"). The Trust, a Massachusetts business trust, is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company and consists of this Fund and four other separate investment funds:
Smith Barney Intermediate Maturity California Municipals Fund, Smith Barney
Large Capitalization Growth Fund, Smith Barney S&P 500 Index Fund and Smith
Barney Mid Cap Blend Fund. The financial statements and financial highlights for
the other funds are presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on the trade date; (b) securities are
valued at the mean between the quoted bid and ask prices provided by an
independent pricing service that are based on transactions in municipal
obligations, quotations from municipal bond dealers, market transactions in
comparable securities and various relationships between securities; (c)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (d) gains or losses on the
sale of securities are calculated by using the specific identification method;
(e) interest income, adjusted for amortization of premium and accretion of
original issue discount, is recorded on the accrual basis; market discount is
recognized upon the disposition of the security; (f) direct expenses are charged
to the Fund and each class; investment advisory fees and general fund expenses
are allocated on the basis of relative net assets; (g) dividends and
distributions to shareholders are recorded on the ex-dividend date; (h) the Fund
intends to comply with the applicable provisions of the Internal Revenue Code of
1986, as amended, pertaining to regulated investment companies and to make
distributions of taxable income sufficient to relieve it from substantially all
Federal income and excise taxes; (i) the character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. At November 30, 1998,
reclassifications were made to the Fund's capital accounts to reflect permanent
book/tax differences and income and gains available for distributions under
income tax regulations. Accordingly, for a portion of overdistributed net
investment income amounting to $2,540 was reclassified to paid-in capital. Net
investment income, net realized gains and net assets were not affected by this
change; and (j) estimates and assumptions are required to be made regarding
assets, liabilities and changes in net assets resulting from operations when
financial statements are prepared. Changes in the economic environment,
financial markets and any other parameters used in determining these estimates
could cause actual results to differ.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment
adviser to the Fund. The Fund pays SSBC an advisory fee calculated at an annual
rate of 0.30% of the average daily net assets. This fee is calculated daily and
paid monthly. For the six months ended May 31, 1999, SSBC waived $29,368 of its
investment advisory fee.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at the annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly. For the six months ended May 31, 1999,
SSBC waived $19,578 of its administration fee.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as a member of the selling group.
Class L shares are being sold at net asset value plus a maximum initial sales
charge of 1.00%. Class L shares also have a 1.00% contingent deferred sales
charge ("CDSC"), which applies if redemption occurs within the first year of
purchase.
For the six months ended May 31, 1999, SSB received sales charges of $86,000 and
$17,000 on sales of the Fund's Class A and Class L shares, respectively. In
addition, CDSCs paid to SSB were approximately $1,000 for Class A shares.
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A and L shares, calculated at the annual rate of 0.15% of the average
daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to its Class L shares calculated at the annual
rate of 0.20% of the average daily net assets. For the six months ended May 31,
1999, total Distribution Plan fees incurred were:
Class A Class L
================================================================================
Distribution Plan Fees $41,658 $8,819
================================================================================
All officers and one Trustee of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular Federal income tax and from designated
state income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
4. Fund Concentration
Since the Fund invests primarily in obligations of issuers within New York, it
is subject to possible concentration risk, associated with economic, political
or legal developments or industrial or regional matters specifically affecting
New York.
5. Investments
For the six months ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $12,328,881
- --------------------------------------------------------------------------------
Sales 3,855,484
================================================================================
At May 31, 1999, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $2,142,925
Gross unrealized depreciation (233,948)
- --------------------------------------------------------------------------------
Net unrealized appreciation $1,908,977
================================================================================
6. Capital Loss Carryforward
At November 30, 1998, the Fund had, for Federal income tax purposes,
approximately $1,269,000 of loss carryforwards available to offset any future
capital gains. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
The amount and year of the expiration for each carryforward loss is indicated
below:
2002 2003 2004
================================================================================
Carryforward Amounts $856,000 $337,000 $76,000
================================================================================
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 21
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
7. Shares of Beneficial Interest
At May 31, 1999, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct expenses, including those specifically related to the distribution of its
shares. Effective June 12, 1998, the Fund adopted the renaming of existing Class
C shares as Class L shares.
At May 31, 1999, total paid-in capital amounted to the following for each class:
Class A Class L
================================================================================
Total Paid-in Capital $60,496,935 $5,701,203
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1999 November 30, 1998
------------------------- -------------------------
Shares Amount Shares Amount
============================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 1,179,225 $10,273,662 1,430,450 $12,454,137
Shares issued on reinvestment 78,134 681,840 183,973 1,597,366
Shares reacquired (368,907) (3,220,991) (1,065,095) (9,271,847)
- --------------------------------------------------------------------------------------------
Net Increase 888,452 $7,734,511 549,328 $4,779,656
============================================================================================
Class L*
Shares sold 203,861 $1,779,997 288,386 $2,509,279
Shares issued on reinvestment 7,388 64,435 11,668 101,387
Shares reacquired (33,830) (294,393) (81,355) (705,925)
- --------------------------------------------------------------------------------------------
Net Increase 177,419 $1,550,039 218,699 $1,904,741
============================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed as Class L shares.
- --------------------------------------------------------------------------------
22 Smith Barney Intermediate Maturity New York Municipals Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class A Shares 1999(1)(2) 1998 1997 1996 1995 1994
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.76 $8.57 $8.47 $8.48 $7.80 $8.54
- ---------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (3) 0.19 0.40 0.41 0.41 0.41 0.40
Net realized and unrealized
gain (loss) (0.18) 0.19 0.10 (0.01) 0.68 (0.72)
- ---------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.01 0.59 0.51 0.40 1.09 (0.32)
- ---------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.19) (0.40) (0.41) (0.41) (0.41) (0.40)
Net realized gains -- -- -- -- -- (0.02)
- ---------------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.40) (0.41) (0.41) (0.41) (0.42)
- ---------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.58 $8.76 $8.57 $8.47 $8.48 $7.80
- ---------------------------------------------------------------------------------------------------------
Total Return 0.06%++ 7.01% 6.23% 4.85% 14.31% (3.97)%
- ---------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $61,157 $54,624 $48,759 $49,355 $52,568 $62,090
- ---------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.76%+ 0.70% 0.67% 0.66% 0.65% 0.65%
Net investment income 4.33+ 4.59 4.83 4.86 5.01 4.77
- ---------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 6% 53% 52% 67% -- 68%
=========================================================================================================
</TABLE>
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the average shares method.
(3) The investment adviser has waived all or part of its fees for the six
months ended May 31, 1999, and the five years ended November 30, 1998. If
such fees were not waived, the per share effect on net investment income
and the expense ratios would have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
--------------------------------------- ----------------------------------------
1999 1998 1997 1996 1995 1994 1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.02 $0.03 $0.04 $0.03 $0.03 0.93%+ 0.89% 0.98% 1.08% 0.97% 0.98%
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 23
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class L Shares 1999(1)(2) 1998(3) 1997 1996 1995(4)
===================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.76 $8.57 $8.47 $8.48 $7.87
- ---------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (5) 0.18 0.38 0.39 0.39 0.38
Net realized and unrealized
gain (loss) (0.18) 0.19 0.10 (0.01) 0.61
- ---------------------------------------------------------------------------------------------------
Total Income From Operations -- 0.57 0.49 0.38 0.99
- ---------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.18) (0.38) (0.39) (0.39) (0.38)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.18) (0.38) (0.39) (0.39) (0.38)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.58 $8.76 $8.57 $8.47 $8.48
- ---------------------------------------------------------------------------------------------------
Total Return (0.04)%++ 6.79% 6.00% 4.64% 13.01%++
- ---------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $5,684 $4,247 $2,283 $1,192 $393
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (5) 0.96%+ 0.89% 0.89% 0.88% 0.86%+
Net investment income 4.15+ 4.38 4.61 4.64 4.74+
- ---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 6% 53% 52% 67% --
===================================================================================================
</TABLE>
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the average shares method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) For the period from December 5, 1994 (inception date) to November 30,
1995.
(5) The investment adviser has waived all or part of its fees for the six
months ended May 31, 1999, the three years ended November 30, 1998 and the
period ended November 30, 1995. If such fees were not waived, the per
share effect on net investment income and expense ratios would have been
as follows:
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
-------------------------------- ---------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Class L $0.01 $0.01 $0.03 $0.02 $0.03 1.12%+ 1.09% 1.20% 1.30% 1.19%+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
SALOMON SMITH BARNEY
----------------------------
A member of citigroup [LOGO]
Trustees
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser and Administrator
SSBC Fund Management Inc.
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Investment Trust -- Smith Barney Intermediate Maturity New York
Municipals Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by a current Prospectus for the Fund, which
contains information concerning the Fund's investment policies and expenses as
well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Intermediate Maturity
New York Municipals Fund
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD2401 7/99
<PAGE>
[PHOTO]
[PHOTO] Smith Barney
Mid Cap
Blend Fund
----------------------------
SEMI-ANNUAL REPORT
----------------------------
May 31, 1999
Smith Barney Mutual Funds
<PAGE>
Smith Barney
Mid Cap Blend Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Smith Barney Mid Cap Blend Fund seeks long-term growth of capital by
investing, primarily in equity securities of medium-sized companies.
Medium-sized companies are those whose market capitalization is within the
market capitalization range of companies in the S&P Midcap Index at the time of
the Fund's investment.
Smith Barney Mid Cap Blend Fund
Average Annual Total Returns
May 31, 1999
Without Sales Charges(1)
---------------------------------------------
Class A Class B Class L
================================================================================
Six-Month++ 20.52% 20.15% 20.15%
- --------------------------------------------------------------------------------
Since Inception+ ++ 44.09 43.33 43.33
================================================================================
With Sales Charges(2)
---------------------------------------------
Class A Class B Class L
================================================================================
Six-Month++ 14.47% 15.15% 17.92%
- --------------------------------------------------------------------------------
Since Inception+ ++ 36.89 38.33 40.84
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase. All figures represent past
performance and are not a guarantee of future results. Investment returns
and principal value will fluctuate, and redemption value may be more or
less than the original cost.
+ Inception date for Class A, B and L shares is September 1, 1998.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
FUND HIGHLIGHT
- --------------------------------------------------------------------------------
There are a number of ways for mid-cap stocks to be rewarding for investors in
this type of environment. We look for increasing institutional ownership,
greater Wall Street coverage and more merger and acquisition activity to play
key roles in driving mid-cap stock performance going forward. In fact, since the
Fund's inception, we have already seen evidence of these conditions in some of
the portfolio's holdings. There have been new "buy" recommendations on roughly
57 stocks held in the portfolio by over 100 analysts. As of this writing, the
portfolio has also had approximately 11% of its holdings acquired or in the
process of being acquired by larger corporations. We expect these positive
trends for mid-cap stocks to continue for the foreseeable future.
- --------------------------------------------------------------------------------
NASDAQ SYMBOL
- --------------------------------------------------------------------------------
Class A SBMAX
Class B SBMDX
Class L SBMLX
- --------------------------------------------------------------------------------
WHAT'S INSIDE
- --------------------------------------------------------------------------------
Shareholder Letter ............................................................1
Historical Performance.........................................................4
Smith Barney Mid Cap Blend Fund
at a Glance................................................................6
Schedule of Investments........................................................7
Statement of Assets and Liabilities...........................................11
Statement of Operations.......................................................12
Statements of Changes in Net Assets...........................................13
Notes to Financial Statements.................................................14
Financial Highlights..........................................................18
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Letter
- --------------------------------------------------------------------------------
[PHOTO] [PHOTO]
HEATH B. LAWRENCE
MCLENDON WEISSMAN
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Mid Cap
Blend Fund ("Fund") for the period ended May 31, 1999. We hope you find this
report to be useful and informative. In this report we have summarized the
period's prevailing economic and market conditions and outlined our portfolio
strategy. A detailed summary of the Fund's performance can be found in the
appropriate sections that follow.
A Style Pure Fund
The Mid Cap Blend Fund is a Style Pure Fund. Style Pure Series mutual funds are
Smith Barney Mutual Funds that are the basic building blocks of asset
allocation. Other than for responding to extraordinary market conditions, each
Style Pure Fund is fully invested within its designated asset classes and its
designated investment style.
Performance Update
We are proud to report that for the six months ended May 31, 1999, the Class A,
B and L shares of the Mid Cap Blend Fund generated a total return excluding
sales charges of 20.52%, 20.15% and 20.15%, respectively. In comparison, the S&P
400 Midcap Index posted a total return of 12.99% during the same period.
Market Update
The Fund commenced operations on September 1, 1998. Since then, we have
continued to build what we believe is a portfolio of high quality,
well-positioned companies at extremely attractive valuations. Conceptually, we
are trying to take advantage of the tremendous valuation gap between large- and
middle-capitalization companies without taking on a lot of undue risk. To
accomplish this, we have followed an investment approach that focuses on
companies with competitive advantages and excellent market positions. In our
view, many of these companies are leaders in their respective fields and are
poised to leverage and exploit current growth opportunities. In the companies
under consideration, we look for consistency of growth, good management,
positive cash flow and high return on equity ("ROE") as factors in determining
whether or not to invest.
Because large-capitalization stocks have outperformed middle-capitalization
stocks since the beginning of 1994, the relative valuations of
middle-capitalization companies are better than they have been since 1990.
However, the valuation discrepancy between large-caps and mid-caps is now
accompanied by relative earnings momentum for mid-caps that has not been there
in the past. To us, this suggests possible near-term outperformance for many
mid-cap stocks. Indeed, over the last few months, mid-cap stocks have begun to
outperform large-cap ones and we expect this trend to continue in the coming
months.
There are a number of ways for mid-cap stocks to be rewarding for investors
under these types of market conditions. We look for increasing institutional
ownership, greater Wall Street coverage and more merger and acquisition activity
to play key roles in driving mid-cap stock performance going forward. In fact,
since the Fund's inception, we have already seen evidence of these conditions in
some of the
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 1
<PAGE>
portfolio's holdings. Since September 1, 1998 ("inception date"), we have had
new "buy" recommendations on roughly 57 stocks held in the portfolio by more
than 100 analysts. As of this writing, the portfolio has also had approximately
11% of its names acquired or in the process of being acquired by larger
corporations, and more than 8% have been added to the S&P 500 Index. We expect
these positive trends for mid-cap stocks to continue for the foreseeable future.
Recently, the global economy has shown evidence of increasing strength that
caused a shift in investor sentiment toward value stocks and away from growth
stocks. Part of this market rotation occurred in deep value, commodity-sensitive
companies, which are not expected to exhibit sustainable growth. A shift toward
these types of companies tends to be short-lived, occurring during periods of
high valuation divergence. We believe that there may continue to be a focus on
cyclical stocks. We are therefore selectively adding growth companies in
cyclical industries with strong fundamentals and solid management (i.e., Vulcan
Materials, which is positioned to benefit over the next five years from
increased spending on highway construction). Our focus continues to be high
quality growth companies that we believe will exhibit consistent and sustainable
growth over the long term.
Investment Strategy and Portfolio Update
As its name implies, the Mid Cap Blend Fund blends growth and value investment
styles in an effort to provide our shareholders with consistent returns. (Growth
investing typically focuses on the stocks of companies with rapidly rising
earnings and profitability with the expectation of above average long-term
growth. Value investing attempts to identify companies that are perhaps growing
more slowly but whose valuation may be below average relative to earnings and/or
assets.)
We believe that mid-cap stocks present one of the best trade-offs possible. In a
sense, shareholders are getting the best of both worlds -- potentially less
relative risk than small-cap stocks and potentially more relative value than
large-cap stocks. Moreover, by investing in the Fund, you are participating in
companies that fall slightly below the radar screen of the investment community
yet still have established track records. In fact, we make a conscious effort to
find those companies that are about to be discovered by Wall Street.
We look to form a relationship with the management of those companies we are
considering adding to the portfolio. We find that the more research we conduct
on a particular company, the better chance we have of finding quality companies
with undervalued stock prices.
We generally plan to be long-term owners of the majority of the companies we
own. If we are buying quality companies that continue to grow, there is really
no need to sell. We usually have only three reasons for selling a stock. The
first is a change in the fundamentals. It is possible that the company's niche
isn't as protected as it once was, or they are heading in a different direction
and diluting the value of their franchise. A second reason is that a stock, in
our opinion, is grossly overvalued. We will either sell or reduce positions that
begin to reach extraordinary valuations. Our final reason for selling is that we
simply have found another company that we believe is a better value for the
Fund's portfolio.
At this time, the Fund's portfolio is comprised of 85 stocks representing 76% of
the net assets. Roughly 18% of the portfolio is in mid cap stock index futures
and 5% is held temporarily as cash equivalents. We expect to see the percentage
of the Fund's assets held in stock index futures to be reduced over time as we
try to take advantage of short-term price swings by purchasing our favored
stocks at opportune times. We expect that the number of holdings in the Fund's
portfolio will remain at about the current level over time.
The average capitalization of stocks held in the Fund's portfolio is
approximately $5 billion with the
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
top ten names representing about 19.3% of net assets. The average P/E for the
portfolio is approximately equal to that of the S&P 500 Index ("Index").
However, the expected earnings growth rate of the companies in our portfolio is
more than twice that of the index. (A P/E shows the relationship between a
stock's price and the company's earnings for the last four quarters.) As for
sector weightings versus the Index, we are overweighted in commercial services,
consumer services, and health services and underweighted in process industries
and utilities, because these two sectors do not meet our requirements for
growth.
New to our top-ten list are: AES Corp., which is the world's largest independent
power producer; Harley Davidson, a highly respected manufacturers of
motorcycles; and Premier Parks, the number one regional theme park operator that
acquires and improves the cash flow of undercapitalized and under managed
amusement parks. Ambac Financial, a leading bond insurer, Annuity & Life Re, the
first Bermuda-based annuity and life re-insurance company, and Imax Corp., which
designs and distributes advanced movie projection and sound systems to theaters
worldwide, have returned to the top-ten list.
Network Associates, a leading vendor of anti-virus and network management
software fell out of the top ten. We reduced our position in the company due to
extensions in their sales cycle and higher inventory costs.
In closing, thank you for investing in the Smith Barney Mid Cap Blend Fund. We
look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Lawrence Weissman
Heath B. McLendon Lawrence Weissman, CFA
Chairman Vice President and
Investment Officer
July 13, 1999
- --------------------------------------------------------------------------------
Top Ten Holdings+ As of May 31, 1999
- --------------------------------------------------------------------------------
1. Outdoor Systems, Inc. 2.8%
- --------------------------------------------------------------------------------
2. Annuity and Life & Re Holdings, Ltd. 2.8
- --------------------------------------------------------------------------------
3. Premier Parks Inc. 2.7
- --------------------------------------------------------------------------------
4. AES Corp. 2.6
- --------------------------------------------------------------------------------
5. Imax Corp. 2.5
- --------------------------------------------------------------------------------
6. Ambac Financial Group, Inc. 2.5
- --------------------------------------------------------------------------------
7. Valassis Communications, Inc. 2.4
- --------------------------------------------------------------------------------
8. Best Buy Co., Inc. 2.3
- --------------------------------------------------------------------------------
9. Sepracor Inc. 2.3
- --------------------------------------------------------------------------------
10. Harley-Davidson, Inc. 2.3
- --------------------------------------------------------------------------------
+ As a percentage of total common stock.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 3
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)+
================================================================================
5/31/99 $13.63 $16.42 $0.01 $0.00 20.52%
- --------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.63 0.00 0.00 19.56
================================================================================
Total $0.01 $0.00
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class B Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)+
================================================================================
5/31/99 $13.60 $16.34 $0.00 $0.00 20.15%
- --------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.60 0.00 0.00 19.30
================================================================================
Total $0.00 $0.00
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class L Shares
- --------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)+
================================================================================
5/31/99 $13.60 $16.34 $0.00 $0.00 20.15%
- --------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.60 0.00 0.00 19.30
================================================================================
Total $0.00 $0.00
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Return(1)+
================================================================================
Inception* -- 5/31/99 $13.65 $16.43 $0.01 $0.00 20.44%
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
Without Sales Charges(1)
-------------------------------------------
Class A Class B Class L Class Y
================================================================================
Six Months Ended 5/31/99 20.52% 20.15% 20.15% N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/99 44.09 43.33 43.33 20.44%
================================================================================
With Sales Charges(2)
-------------------------------------------
Class A Class B Class L Class Y
================================================================================
Six Months Ended 5/31/99 14.47% 15.15% 17.92% N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/99 36.89 38.33 40.84 20.44%
================================================================================
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Cumulative Total Returns
- --------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 5/31/99) 44.09%
- --------------------------------------------------------------------------------
Class B (Inception* through 5/31/99) 43.33
- --------------------------------------------------------------------------------
Class L (Inception* through 5/31/99) 43.33
- --------------------------------------------------------------------------------
Class Y (Inception* through 5/31/99) 20.44
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charges with respect to Class A and L shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and L
shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase.
* Inception date for Class A, B and L shares is September 1, 1998 and for
Class Y shares is December 3, 1998.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 5
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund at a Glance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A, B and L Shares of the
Smith Barney Mid Cap Blend Fund vs. S&P 400 Midcap Index+
- --------------------------------------------------------------------------------
September 1998--May 1999
[LINE GRAPH]
Smith Barney Smith Barney Smith Barney
Mid Cap Blend Mid Cap Blend Mid Cap Blend S&P 400
Fund-Class A Fund-Class B Fund-Class L Midcap Index
- --------------------------------------------------------------------------------
9/1/98 9500 10000 9797 10000
9/30/98 9983 10000 10291 10933
10/31/98 10533 10570 10855 11910
11/30/98 11358 11430 11706 12505
12/31/98 13114 13272 13529 14015
1/31/99 13514 13675 13928 13470
2/28/99 12872 13009 13259 12764
3/31/99 13547 13693 13945 13122
4/30/99 14006 14167 14414 14156
5/31/99 13689 13833 14084 14218
+ The above chart represents a hypothetical illustration of $10,000 invested
in Class A, B and L shares at inception on September 1, 1998, assuming
deduction of the maximum 5.00% and 1.00% sales charge at the time of
investment for Class A and L shares, respectively, the deduction of the
maximum 5.00% CDSC for Class B shares and the deduction of the 1.00% CDSC
for Class L shares and reinvestment of dividends and capital gains, if
any, through May 31, 1999. The Standard & Poor's 400 Midcap Index ("S&P
400 Midcap") is a market-value weighted index, consisting of 400 domestic
stocks chosen for market size liquidating and industry group
representation. This index is unmanaged and is not subject to the same
management and trading expenses of a mutual fund. The performance of the
Fund's other class may be greater or less than the Class A, B and L
shares' performance indicated on this chart, depending on whether greater
or lesser sales charges and fees were incurred by shareholders investing
in the other class.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Industry Diversification of Common Stock*
- --------------------------------------------------------------------------------
[BAR GRAPH]
Broadcast Media 7.3
Communications-Equipment 3.6
Computer Software 7.3
Electronics-Instruments 3.4
Foods 3.2
Health Care-Drugs 5.7
Insurance-Life 3.4
Investment Bankers-Brokers 5.5
Manufacturing 4.1
Services-Advertising/Marketing 3.2
Other 53.3
* As a percentage of total common stock.
Investment Breakdown**
- --------------------------------------------------------------------------------
[PIE CHART]
Repurchase Agreement 22.9%
Common Stock 77.1%
** As a percentage of total investments.
- --------------------------------------------------------------------------------
6 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 77.1%
Aerospace/Defense -- 2.2%
45,000 Gulfstream Aerospace, Corp. $ 2,778,750
410,200 Kroll-O'Gara Co.* 8,242,456
- --------------------------------------------------------------------------------
11,021,206
- --------------------------------------------------------------------------------
Airlines -- 0.8%
127,000 Southwest Airlines Co. 4,071,937
- --------------------------------------------------------------------------------
Automobile Parts & Equipment -- 0.4%
40,000 Lear Corp.* 1,967,500
- --------------------------------------------------------------------------------
Automotive Aftermarket -- 1.7%
167,600 Harley-Davidson, Inc. 8,558,075
- --------------------------------------------------------------------------------
Banking -- 1.8%
55,370 Commerce Bancorp, Inc. 2,228,643
122,700 First Tennessee National Corp. 5,053,706
88,300 North Fork Bancorporation, Inc. 1,881,894
- --------------------------------------------------------------------------------
9,164,243
- --------------------------------------------------------------------------------
Broadcast Media -- 5.6%
81,100 Cablevision Systems, Class A Shares* 6,396,763
149,300 Entercom Communications Corp. 4,870,912
436,300 Imax Corp.* 9,598,600
115,900 TCA Cable TV, Inc. 6,562,837
- --------------------------------------------------------------------------------
27,429,112
- --------------------------------------------------------------------------------
Chemicals - Diversified -- 0.3%
65,000 Lyondell Chemical Co. 1,239,062
- --------------------------------------------------------------------------------
Communications - Equipment -- 2.7%
85,100 ADC Telecommunications, Inc.* 4,159,263
263,400 Valassis Communications, Inc.* 9,169,612
- --------------------------------------------------------------------------------
13,328,875
- --------------------------------------------------------------------------------
Computer Hardware -- 1.5%
52,300 Lexmark International Group, Inc., Class A Shares* 7,119,337
- --------------------------------------------------------------------------------
Computer Software -- 5.6%
66,000 Citrix Systems, Inc.* 3,262,875
43,050 Covad Communications Group* 2,190,169
142,000 Electronic Arts Inc.* 6,949,125
223,150 Fiserv, Inc.* 8,368,125
90,400 Mercury Interactive Corp.* 2,971,900
39,800 VERITAS Software Corp.* 3,512,350
- --------------------------------------------------------------------------------
27,254,544
- --------------------------------------------------------------------------------
Consumer Sundries -- 0.4%
65,000 Dial Corp. 2,031,250
- --------------------------------------------------------------------------------
Electronics - Instruments -- 2.6%
200,000 AES Corp.* 9,950,000
100,000 Molex, Inc., Class A Shares 2,681,250
- --------------------------------------------------------------------------------
12,631,250
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 7
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Electronics - Semiconductors -- 1.9%
105,400 Linear Technology Corp. $ 5,586,200
80,000 Xilinx, Inc.* 3,555,000
- --------------------------------------------------------------------------------
9,141,200
- --------------------------------------------------------------------------------
Entertainment -- 2.1%
289,900 Premier Parks Inc.* 10,327,687
- --------------------------------------------------------------------------------
Financial -- 2.0%
164,000 Ambac Financial Group, Inc. 9,563,250
- --------------------------------------------------------------------------------
Foods -- 2.4%
249,600 Keebler Foods Co.* 8,361,600
146,800 Pepsi Bottling Group, Inc. 3,403,925
- --------------------------------------------------------------------------------
11,765,525
- --------------------------------------------------------------------------------
Hardware & Tools -- 0.9%
69,900 Cintas Corp. 4,438,650
- --------------------------------------------------------------------------------
Health Care - Drugs -- 4.4%
108,300 Affymetrix, Inc.* 3,804,038
110,200 ALZA Corp.* 3,932,763
135,000 Sepracor Inc.+ 8,606,250
130,800 Watson Pharmaceuticals, Inc.* 5,011,275
- --------------------------------------------------------------------------------
21,354,326
- --------------------------------------------------------------------------------
Household Furniture & Apparel -- 1.0%
140,100 Bed Bath & Beyond Inc.* 4,789,669
- --------------------------------------------------------------------------------
Insurance - Life -- 2.6%
409,400 Annuity and Life & Re Holdings, Ltd. 10,542,050
47,200 Nationwide Financial Services, Inc., Class A Shares 2,038,450
- --------------------------------------------------------------------------------
12,580,500
- --------------------------------------------------------------------------------
Insurance - Property -- 1.9%
183,100 ACE Ltd. 5,584,550
28,000 Nac Reinsurance Corp. 1,527,750
40,000 XL Capital, Ltd., Class A Shares 2,432,500
- --------------------------------------------------------------------------------
9,544,800
- --------------------------------------------------------------------------------
Internet Services -- 0.3%
7,500 Silknet Software, Inc. 281,250
6,000 TheStreet.Com, Inc. 214,500
15,000 Verticalnet, Inc. 1,200,000
- --------------------------------------------------------------------------------
1,695,750
- --------------------------------------------------------------------------------
Investment Bankers - Brokers -- 4.2%
52,900 Capital One Financial Corp. 7,971,369
134,500 CIT Group, Inc., Class A Shares 3,900,500
57,000 Dun & Bradstreet Corp. 1,995,000
54,000 E*TRADE Group, Inc.* 2,403,000
43,550 Providian Financial Corp. 4,178,078
- --------------------------------------------------------------------------------
20,447,947
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Manufacturing -- 3.1%
81,000 Avery Dennison Corp. $ 4,849,875
87,800 Danaher Corp. 5,306,413
52,200 Waters Corp.* 5,148,225
- --------------------------------------------------------------------------------
15,304,513
- --------------------------------------------------------------------------------
Metals & Mining -- 0.6%
100,000 Mueller Industries, Inc.* 2,900,000
- --------------------------------------------------------------------------------
Office Equipment/Supplies -- 0.7%
165,000 Office Depot, Inc.* 3,444,375
- --------------------------------------------------------------------------------
Oil - Domestic -- 0.9%
119,600 Anadarko Petroleum Corp. 4,485,000
- --------------------------------------------------------------------------------
Oil & Gas Drilling & Equipment -- 1.7%
139,200 Diamond Offshore Drilling, Inc. 3,793,200
178,200 Newfield Exploration Co.* 4,521,825
- --------------------------------------------------------------------------------
8,315,025
- --------------------------------------------------------------------------------
Oil Well Equipment & Services -- 0.5%
71,600 Cooper Cameron Corp.* 2,591,025
- --------------------------------------------------------------------------------
Pharmaceuticals -- 0.8%
72,400 Elan Corp. plc, Sponsored ADR* 3,909,600
- --------------------------------------------------------------------------------
Real Estate Investment Trusts -- 1.1%
379,500 IndyMac Mortgage Holdings, Inc. 5,621,344
- --------------------------------------------------------------------------------
Retail - Apparel -- 2.0%
69,800 Abercrombie & Fitch Co., Class A Shares* 5,871,925
104,400 Children's Place, Inc.* 4,065,075
- --------------------------------------------------------------------------------
9,937,000
- --------------------------------------------------------------------------------
Retail - Drug Stores -- 0.7%
100,600 Duane Reade Inc.* 3,206,625
- --------------------------------------------------------------------------------
Retail - Specialty -- 1.9%
189,400 Best Buy Co., Inc.* 8,617,700
9,800 Etoys, Inc 593,513
- --------------------------------------------------------------------------------
9,211,213
- --------------------------------------------------------------------------------
Savings & Loan -- 1.5%
174,100 Countrywide Credit Industries, Inc.+ 7,159,863
- --------------------------------------------------------------------------------
Services - Advertising/Marketing -- 2.5%
30,000 Coinstar, Inc.* 654,375
5,000 eBay Inc. 885,937
352,800 Outdoor Systems, Inc.* 10,561,950
- --------------------------------------------------------------------------------
12,102,262
- --------------------------------------------------------------------------------
Services - Commercial & Construction -- 1.2%
69,300 Ecolab, Inc. 2,945,250
35,000 SPX Corp.* 2,716,875
- --------------------------------------------------------------------------------
5,662,125
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Services - Computer Systems -- 2.3%
151,650 FactSet Research Systems Inc.* $ 6,483,037
27,400 Intuit, Inc.* 2,229,675
44,700 New Era of Networks, Inc.* 1,989,150
15,000 Xoom.Com, Inc. 690,000
- --------------------------------------------------------------------------------
11,391,862
- --------------------------------------------------------------------------------
Specialized Services -- 1.4%
14,000 CMG Information Services, Inc.* 1,450,750
119,300 Sun International Hotels Ltd.* 5,271,569
- --------------------------------------------------------------------------------
6,722,319
- --------------------------------------------------------------------------------
Telecommunications - Long Distance -- 1.8%
27,500 COLT Telecom Group-Sponsored ADR* 2,365,000
89,500 L-3 Communications Holdings, Inc.* 4,407,875
10,000 Razorfish, Inc. 380,000
56,500 Time Warner Telecom Inc. 1,447,812
- --------------------------------------------------------------------------------
8,600,687
- --------------------------------------------------------------------------------
Telephone -- 1.6%
204,100 Century Telephone Enterprises, Inc. 7,819,581
- --------------------------------------------------------------------------------
Transportation - Railroad -- 0.7%
61,000 Kansas City Southern Industries, Inc. 3,431,250
- --------------------------------------------------------------------------------
Trucking -- 0.8%
222,700 Knightsbridge Tankers Ltd. 4,008,600
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $331,135,119) 377,289,964
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 22.9%
$112,250,000 Morgan Stanley Dean Witter & Co., 4.800% due 6/1/99;
Proceeds at maturity -- $112,309,867; (Fully
collateralized by U.S. Treasury Notes
and Bonds, 5.625% to 7.500% due
6/30/99 to 8/15/22; Market value -- $114,495,000)
(Cost -- $112,250,000) 112,250,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $443,385,119**) $489,539,964
================================================================================
* Non-income producing security.
+ A portion of this security has been segregated by Custodian for futures
contract commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $331,135,119) $377,289,964
Repurchase agreement, at value (Cost -- $112,250,000) 112,250,000
Cash 455
Receivable from broker - variation margin 222,500
Dividends and interest receivable 304,213
Receivable for Fund shares sold 3,870,658
Receivable for securities sold 1,578,461
- --------------------------------------------------------------------------------
Total Assets 495,516,251
- --------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 281,641
Distribution fees payable 70,929
Accrued expenses 139,684
- --------------------------------------------------------------------------------
Total Liabilities 492,254
- --------------------------------------------------------------------------------
Total Net Assets $495,023,997
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 30,238
Capital paid in excess of par value 422,651,164
Accumulated net investment loss (505,864)
Accumulated net realized gain from security transactions
and futures contracts 21,077,338
Net unrealized appreciation of investments and futures
contracts 51,771,121
- --------------------------------------------------------------------------------
Total Net Assets $495,023,997
================================================================================
Shares Outstanding:
Class A 5,754,399
----------------------------------------------------------------------------
Class B 11,103,966
----------------------------------------------------------------------------
Class L 7,292,535
----------------------------------------------------------------------------
Class Y 6,087,210
----------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $16.42
----------------------------------------------------------------------------
Class B * $16.34
----------------------------------------------------------------------------
Class L ** $16.34
----------------------------------------------------------------------------
Class Y (and redemption price) $16.43
----------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $17.28
----------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $16.51
================================================================================
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if
shares are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within one year from initial purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended May 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 1,339,993
Dividends 872,563
- --------------------------------------------------------------------------------
Total Investment Income 2,212,556
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,342,523
Distribution fees (Note 2) 1,101,185
Registration fees 117,000
Shareholder and system servicing fees 78,568
Shareholder communications 25,000
Audit and legal 19,000
Custody 18,557
Trustees' fees 12,500
Other 3,000
- --------------------------------------------------------------------------------
Total Expenses 2,717,333
- --------------------------------------------------------------------------------
Net Investment Loss (504,777)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 6):
Realized Gain From:
Security transactions (excluding short-term securities) 21,685,717
Futures contracts 1,224,215
- --------------------------------------------------------------------------------
Net Realized Gain 22,909,932
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments and
Futures Contracts:
Beginning of period 21,726,448
End of period 51,771,121
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 30,044,673
- --------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 52,954,605
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 52,449,828
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999 (unaudited)
and the Period Ended November 30, 1998
<TABLE>
<CAPTION>
1999 1998(a)
================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (504,777) $ 58,310
Net realized gain (loss) 22,909,932 (1,832,594)
Increase in net unrealized appreciation 30,044,673 21,726,448
- ------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 52,449,828 19,952,164
- ------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (76,688) --
- ------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (76,688) --
- ------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 374,130,955 134,103,020
Net asset value of shares issued for reinvestment of dividends 18,263 --
Cost of shares reacquired (82,456,161) (3,097,384)
- ------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 291,693,057 131,005,636
- ------------------------------------------------------------------------------------------------
Increase in Net Assets 344,066,197 150,957,800
NET ASSETS:
Beginning of period 150,957,800 --
- ------------------------------------------------------------------------------------------------
End of period* 495,023,997 $ 150,957,800
================================================================================================
* Includes (accumulated net investment loss)
undistributed net investment income of: $ (505,864) $ 75,601
================================================================================================
</TABLE>
(a) For the period from September 1, 1998 (commencement of operations) to
November 30, 1998.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 13
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Smith Barney Mid Cap Blend Fund ("Fund") is a separate diversified investment
fund of the Smith Barney Investment Trust ("Trust"). The Trust, a Massachusetts
business trust, is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company and consists of this Fund
and four other separate investment funds: Smith Barney Intermediate Maturity
California Municipals Fund, Smith Barney Intermediate Maturity New York
Municipals Fund, Smith Barney Large Capitalization Growth Fund and Smith Barney
S&P 500 Index Fund. The financial statements and financial highlights for the
other funds are presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets;
securities for which no sales price was reported and U.S. government and agency
obligations are valued at the bid price. Investments in securities for which
market quotations are not available are valued at fair value as determined in
good faith by the Board of Directors; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis; (e) gains or losses on the sale
of securities are calculated by using the specific identification method; (f)
direct expenses are charged to each class; investment advisory fees and general
Fund expenses are allocated on the basis of relative net assets by class; (g)
dividends and distributions to shareholders are recorded on the ex-dividend
date; (h) the Fund intends to comply with the applicable provisions of the
Internal Revenue Code of 1986, as amended, pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; (i) the character of
income and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
November 30, 1998, reclassifications were made to the Fund's capital accounts to
reflect permanent book/tax differences and income and gains available for
distributions under income tax regulations. Accordingly, undistributed net
investment income of $17,291 was reclassified to paid-in capital. Net investment
income, net realized gains and net assets were not affected by this adjustment;
and (j) estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ.
2. Investment Management Agreement and Other Transactions
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment
manager to the Fund. The Fund pays SSBC a management fee calculated at an annual
rate of 0.75% of the average daily net assets. This fee is calculated daily and
paid monthly.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as members of the selling group.
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs within one year from purchase. This CDSC
declines by 1.00% per year until no CDSC is incurred. Class L shares also have a
1.00% CDSC, which applies if redemption occurs within the first year of
purchase.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
For the six months ended May 31, 1999, SSB received sales charges of
approximately $924,000 and $559,000 on sales of the Fund's Class A and Class L
shares, respectively. In addition, CDSCs paid to SSB were approximately:
Class B Class L
================================================================================
CDSCs $117,000 $16,000
================================================================================
Pursuant to a Distribution Plan the Fund pays a service fee with respect to its
Class A, B and L shares calculated at the annual rate of 0.25% of the average
daily net assets of each respective class. The Fund also pays a distribution fee
with respect to Class B and L shares calculated at the annual rate of 0.75% of
the average daily net assets of each class, respectively. For the six months
ended May 31, 1999, total Distribution Plan fees were as follows:
Class A Class B Class L
================================================================================
Distribution Plan Fees $84,283 $612,590 $404,312
================================================================================
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the six months ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $316,543,632
- --------------------------------------------------------------------------------
Sales 110,277,357
================================================================================
At May 31, 1999, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $60,103,630
Gross unrealized depreciation (13,948,785)
- --------------------------------------------------------------------------------
Net unrealized appreciation $46,154,845
================================================================================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value of the collateral in amounts at least equal to
the repurchase price.
5. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account. The Fund maintains exposure for the risk of any losses in
the investment of amounts received as collateral.
At May 31, 1999, the Fund had no securities on loan.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 15
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
by "marking-to-market" on a daily basis to reflect the market value of the
contract at the end of each day's trading. Variation margin payments are made or
received and recognized as assets due from or liabilities due to broker,
depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transactions and
the Fund's basis in the contract. The Fund enters into such contracts to hedge a
portion of its portfolio. The Fund bears the market risk that arises from
changes in the value of the financial instruments and securities indices
(futures contracts) and the credit risk should a counterparty fail to perform
under such contracts.
At May 31, 1999, the Fund had the following open futures contracts.
<TABLE>
<CAPTION>
Expiration # of Basis Market Unrealized
Month/Year Contracts Value Value Gain
==========================================================================================
<S> <C> <C> <C> <C> <C>
Futures Contracts to Buy:
MIDCAP 400 Index 6/99 445 $82,660,599 $88,276,875 $5,616,276
==========================================================================================
</TABLE>
7. Options Contracts
Premiums paid when put or call options are purchased by the Fund represents
investments, which are marked-to-market daily and are included in the schedule
of investments. When a purchased option expires, the Fund will realize a loss in
the amount of the premium paid. When the Fund enters into a closing sales
transaction, the Fund will realize a gain or loss depending on whether the
proceeds from the closing sales transaction are greater or less than the premium
paid for the option. When the Fund exercises a put option, it will realize a
gain or loss from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid. When the Fund exercises a
call option, the cost of the security which the Fund purchases upon exercise
will be increased by the premium originally paid.
At May 31, 1999, the Fund had no open purchased call or put option contracts.
When the Fund writes a covered call or put option, an amount equal to the
premium received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain.
When the Fund enters into a closing purchase transaction, the Fund realizes a
gain or loss depending upon whether the cost of the closing transaction is
greater or less than the premium originally received without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is eliminated. When a written call option is exercised, the cost of
the security sold will be decreased by the premium originally received. When a
put option is exercised, the amount of the premium originally received will
reduce the cost of the security which the Fund purchased upon exercise. When the
written index options are exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Fund enters into options for hedging purposes. The risk in writing a
covered call option is that the Fund gives up the opportunity to participate in
any increase in the price of the underlying security beyond the exercise price.
The risk in writing a put option is that the Fund is exposed to the risk of a
loss if the market price of the underlying security declines.
During the six months ended May 31, 1999, the Fund did not write any options.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
8. Shares of Beneficial Interest
At May 31, 1999, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
expenses, including those specifically related to the distribution of its
shares.
At May 31, 1999, total paid-in capital amounted to the following for each class:
Class A Class B Class L Class Y
================================================================================
Total Paid-in Capital $80,219,184 $155,570,346 $102,028,389 $84,863,483
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Period Ended
May 31, 1999* November 30, 1998**
-------------------------- -------------------------
Shares Amount Shares Amount
=====================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 7,341,404 $ 117,768,863 2,860,539 $ 33,790,943
Shares issued on reinvestment 1,200 18,263 -- --
Shares reacquired (4,285,688) (69,361,816) (163,056) (1,992,806)
- -------------------------------------------------------------------------------------
Net Increase 3,056,916 $ 48,425,310 2,697,483 $ 31,798,137
=====================================================================================
Class B
Shares sold 6,591,598 $ 104,581,821 5,137,470 $ 60,746,323
Shares issued on reinvestment -- -- -- --
Shares reacquired (571,714) (9,115,897) (53,388) (634,079)
- -------------------------------------------------------------------------------------
Net Increase 6,019,884 $ 95,465,924 5,084,082 $ 60,112,244
=====================================================================================
Class L
Shares sold 4,230,344 $ 66,916,788 3,350,388 $ 39,565,754
Shares issued on reinvestment -- -- -- --
Shares reacquired (249,503) (3,978,448) (38,694) (470,499)
- -------------------------------------------------------------------------------------
Net Increase 3,980,841 $ 62,938,340 3,311,694 $ 39,095,255
=====================================================================================
Class Y
Shares sold 6,087,210 $ 84,863,483 -- --
Shares issued on reinvestment -- -- -- --
Shares reacquired -- -- -- --
- -------------------------------------------------------------------------------------
Net Increase 6,087,210 $ 84,863,483 -- --
=====================================================================================
</TABLE>
* For Class Y shares, transactions are for the period from December 3, 1998
(inception date) to May 31, 1999.
** For the period from September 1, 1998 (inception date) to November 30,
1998.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 17
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout the
period ended November 30, except where noted:
Class A Shares 1999(1)(2) 1998(3)
================================================================================
Net Asset Value, Beginning of Period $13.63 $11.40
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.01 0.02
Net realized and unrealized gain 2.79 2.21
- --------------------------------------------------------------------------------
Total Income From Operations 2.80 2.23
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) --
- --------------------------------------------------------------------------------
Total Distributions (0.01) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $16.42 $13.63
- --------------------------------------------------------------------------------
Total Return++ 20.52% 19.56%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $94,481 $36,760
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses 1.16% 1.27%
Net investment income 0.08 0.78
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 37% 15%
================================================================================
Class B Shares 1999(1)(2) 1998(3)
================================================================================
Net Asset Value, Beginning of Period $13.60 $11.40
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.07) 0.00*
Net realized and unrealized gain 2.81 2.20
- --------------------------------------------------------------------------------
Total Income From Operations 2.74 2.20
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- --
- --------------------------------------------------------------------------------
Total Distributions -- --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $16.34 $13.60
- --------------------------------------------------------------------------------
Total Return++ 20.15% 19.30%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $181,387 $69,153
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses 1.90% 2.01%
Net investment income (loss) (0.67) 0.02
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 37% 15%
================================================================================
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from September 1, 1998 (inception date) to November 30,
1998.
* Represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout the
period ended November 30, except where noted:
Class L Shares 1999(1)(2) 1998(3)
================================================================================
Net Asset Value, Beginning of Period $13.60 $11.40
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.06) 0.00*
Net realized and unrealized gain 2.80 2.20
- --------------------------------------------------------------------------------
Total Income From Operations 2.74 2.20
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- --
- --------------------------------------------------------------------------------
Total Distributions -- --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $16.34 $13.60
- --------------------------------------------------------------------------------
Total Return++ 20.15% 19.30%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $119,125 $45,045
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses 1.90% 2.01%
Net investment income (loss) (0.67) 0.03
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 37% 15%
================================================================================
Class Y Shares 1999(2)(4)
================================================================================
Net Asset Value, Beginning of Period $13.65
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.04
Net realized and unrealized gain 2.75
- --------------------------------------------------------------------------------
Total Income From Operations 2.79
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01)
- --------------------------------------------------------------------------------
Total Distributions (0.01)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $16.43
- --------------------------------------------------------------------------------
Total Return++ 20.44%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $100,031
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses 0.82%
Net investment income 0.35
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 37%
================================================================================
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from September 1, 1998 (inception date) to November 30,
1998.
(4) For the period from December 3, 1998 (inception date) to May 31, 1999
(unaudited).
* Represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 19
<PAGE>
Smith Barney
Mid Cap Blend Fund
Trustees
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Lawrence Weissman, CFA
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Manager
SSBC Fund Management Inc.
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of shareholders of the
Smith Barney Investment Trust -- Smith Barney Mid Cap Blend Fund. It is not for
distribution to prospective investors unless accompanied by a current Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
SalomonSmithBarney
- ---------------------------
A member of citigroup[LOGO]
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Mid Cap Blend Fund
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD01675 7/99
<PAGE>
SMITH BARNEY LARGE
CAPITALIZATION GROWTH FUND
- ----------------------
The SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND ("Fund") seeks long-term
growth of capital by investing at least 65% of its assets in equity securities
of companies with large market capitalizations.
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND
AVERAGE ANNUAL TOTAL RETURNS ENDED
MAY 31, 1999
<TABLE>
<CAPTION>
WITHOUT SALES CHARGES(1)
------------------------------------------------
CLASS A CLASS B CLASS L
<S> <C> <C> <C> <C>
- ----------------------------------------------------
Six Months+ 21.02% 20.63% 20.63%
- ----------------------------------------------------
One-Year 40.19 39.17 39.17
- ----------------------------------------------------
Since Inception++ 38.84 37.84 37.84
- ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WITH SALES CHARGES(2)
------------------------------------------------
CLASS A CLASS B CLASS L
<S> <C> <C> <C> <C>
- ----------------------------------------------------
Six Months+ 14.95% 15.63% 18.45%
- ----------------------------------------------------
One-Year 33.19 34.17 36.79
- ----------------------------------------------------
Since Inception++ 34.81 36.04 37.05
- ----------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) Assumes reinvestment of all dividends and capital gain
distributions, if any, at net asset value and does not
reflect the deduction of the applicable sales charges
with respect to Class A and L shares or the applicable
contingent deferred sales charges ("CDSC") with respect
to Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if any, at net asset value. In addition,
Class A and L shares reflect the deduction of the
maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a
5.00% CDSC, which applies if shares are redeemed within
one year from purchase. Thereafter, the CDSC declines
by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC,
which applies if shares are redeemed within the first
year of purchase.
All figures represent past performance and are not a
guarantee of future results. Investment returns and
principal value will fluctuate, and redemption value
may be more or less than the original cost.
+ Total return is not annualized, as it may not be
representative of the total return for the year.
++ Inception date for Class A, B and L shares is August
29, 1997.
</TABLE>
FUND HIGHLIGHT
- ------------------------------------------------
OUR EMPHASIS WITHIN THE LARGE CAPITALIZATION GROWTH FUND CONTINUES TO BE THE
SAME THREE BROAD GENERAL AREAS--CONSUMER, FINANCIAL AND TECHNOLOGY. WORLDWIDE
ECONOMIC GROWTH PLAYS INTO THE STRENGTHS OF THE GLOBAL CONSUMER POWERHOUSES--
AND THEREFORE WE CONTINUE TO FOCUS ON SUCH LEADERS AS COCA-COLA, JOHNSON &
JOHNSON, GILLETTE, AVON, AND PROCTER & GAMBLE.
NASDAQ SYMBOL
- ------------------------------------------------
<TABLE>
<S> <C>
CLASS A SBLGX
CLASS B SBLBX
CLASS L SLCCX
</TABLE>
WHAT'S INSIDE
- ------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER LETTER........................... 1
HISTORICAL PERFORMANCE....................... 3
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND
AT A GLANCE.................................. 5
SCHEDULE OF INVESTMENTS...................... 6
STATEMENT OF ASSETS AND LIABILITIES.......... 8
STATEMENT OF OPERATIONS...................... 9
STATEMENTS OF CHANGES IN NET ASSETS.......... 10
NOTES TO FINANCIAL STATEMENTS................ 11
FINANCIAL HIGHLIGHTS......................... 14
</TABLE>
<PAGE>
SHAREHOLDER LETTER
- ------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] [PHOTO]
HEATH B. ALAN
MCLENDON BLAKE
Chairman Vice President and
Investment Officer
</TABLE>
DEAR SHAREHOLDER:
We are pleased to present the semi-annual report for the Smith Barney Large
Capitalization Growth Fund ("Fund") for the period ended May 31, 1999. In this
report we have summarized the period's prevailing economic and market conditions
and outlined our portfolio strategy. A detailed summary of the Fund's
performance can be found in the appropriate sections that follow. We hope you
find this report to be useful and informative.
PERFORMANCE UPDATE AND STRATEGY
For the six months ended May 31, 1999, the Class A, B and L shares of the Fund
generated total returns without sales charges of 21.02%, 20.63% and 20.63%,
respectively. In comparison, the Standard & Poor's 500 Composite Index ("S&P
500") had a total return of 12.60% over the same period. (The S&P 500 Index is a
market capitalization-weighted measure of 500 widely held common stocks.)
The Fund emphasizes a core of large-capitalization growth stocks that share a
number of characteristics. Chief among them are strong financials (i.e.,
consistent and sustainable earnings growth, significant free cash flow and very
high returns on equity). The second key characteristic centers on the product or
service of a company. We are most interested in companies delivering world-class
products or services in the global marketplace. We are also looking for dominant
companies within growth industries where we perceive the barriers to entry to be
extremely high. Lastly, a third characteristic we look for is a strong
management team. Strong management is just as important as is a company's
financial condition or its products or services. We look for these
characteristics to identify companies that represent outstanding long-term
investment opportunities.
During the reporting period, we remained focused on companies that can, in a low
inflation environment, deliver above average unit growth. We also want our
companies to have the ability, through balance sheet strength, to raise
dividends, buy back their shares and make strategic acquisitions.
Our emphasis within the Fund continues to be the same three broad general areas
- -- consumer, financial, and technology. Worldwide economic growth plays into the
strengths of the global consumer powerhouses -- and therefore we continue to
focus on such leaders as Coca-Cola, Johnson & Johnson, Gillette, Avon, and
Procter & Gamble.
Our commitment to the financial services industry plays off of the same dynamics
powering the consumer names -- i.e., expanding economic growth. In our view,
companies such as American International Group, Morgan Stanley, Wells Fargo and
BankAmerica are well positioned in this regard.
Within technology, our focus remains on those growth areas where we can invest
in dominant market leadership companies. Software, semiconductors,
telecommunications and networking continue to generate high levels of growth.
The franchise names (Intel, Microsoft, Cisco, Texas Instruments, and Lucent)
remain our investment favorites.
MARKET UPDATE AND OUTLOOK
The stock market has spent the first part of 1999 trying to come to grips with
the same issues that made headlines in 1998. The Asian economic situation, Latin
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 1
<PAGE>
America's slowdown, Russia's instability, gridlock in Washington and the crisis
in the Balkans all remain as major issues. Ultimately, as we have stressed
previously, we believe the earnings outlook is the most important factor in
determining how large-capitalization growth stocks perform. As such, we tend to
view much of the political and economic headlines as background noise and
continue our focus on individual company balance sheets, products and
managements. When questions persist about political and economic conditions
worldwide, it seems to always lead investors back to the highest-quality
companies. We think this phenomenon will persist for the remainder of 1999.
In closing, thank you for investing in the Smith Barney Large Capitalization
Growth Fund. We look forward to continuing to help you pursue your financial
goals.
Sincerely,
<TABLE>
<S> <C>
/S/ HEATH B. MCLENDON /S/ ALAN BLAKE
HEATH B. MCLENDON ALAN BLAKE
Chairman Vice President and
Investment Officer
JUNE 23, 1999
</TABLE>
- --------------------------------------------------------------------------------
2 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
HISTORICAL PERFORMANCE -- CLASS A SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
---------------------
BEGINNING END INCOME CAPITAL GAIN TOTAL
PERIOD ENDED OF PERIOD OF PERIOD DIVIDENDS DISTRIBUTIONS RETURNS(1)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
5/31/99 $17.41 $21.07 $0.00 $0.00 21.02%+
- -------------------------------------------------------------------------------------------------------
11/30/98 12.28 17.41 0.02 0.01 42.12
- -------------------------------------------------------------------------------------------------------
Inception* -- 11/30/97 11.88 12.28 0.00 0.00 3.37+
- -------------------------------------------------------------------------------------------------------
TOTAL $0.02 $0.01
- -------------------------------------------------------------------------------------------------------
</TABLE>
HISTORICAL PERFORMANCE -- CLASS B SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
-----------------------
BEGINNING END INCOME CAPITAL GAIN TOTAL
PERIOD ENDED OF PERIOD OF PERIOD DIVIDENDS DISTRIBUTIONS RETURNS(1)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
5/31/99 $17.26 $20.82 $0.00 $0.00 20.63%+
- ---------------------------------------------------------------------------------------------------------
11/30/98 12.26 17.26 0.01 0.01 41.02
- ---------------------------------------------------------------------------------------------------------
Inception* -- 11/30/97 11.88 12.26 0.00 0.00 3.20+
- ---------------------------------------------------------------------------------------------------------
TOTAL $0.01 $0.01
- ---------------------------------------------------------------------------------------------------------
</TABLE>
HISTORICAL PERFORMANCE -- CLASS L SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
---------------------
BEGINNING END INCOME CAPITAL GAIN TOTAL
PERIOD ENDED OF PERIOD OF PERIOD DIVIDENDS DISTRIBUTIONS RETURNS(1)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
5/31/99 $17.26 $20.82 $0.00 $0.00 20.63%+
- -----------------------------------------------------------------------------------------------------
11/30/98 12.26 17.26 0.01 0.01 41.02
- -----------------------------------------------------------------------------------------------------
Inception* -- 11/30/97 11.88 12.26 0.00 0.00 3.20+
- -----------------------------------------------------------------------------------------------------
TOTAL $0.01 $0.01
- -----------------------------------------------------------------------------------------------------
</TABLE>
HISTORICAL PERFORMANCE -- CLASS Y SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
---------------------
BEGINNING END INCOME CAPITAL GAIN TOTAL
PERIOD ENDED OF PERIOD OF PERIOD DIVIDENDS DISTRIBUTIONS RETURNS(1)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
5/31/99 $17.49 $21.20 $0.00 $0.00 21.21%+
- -----------------------------------------------------------------------------------------------------
11/30/98 12.29 17.49 0.02 0.01 42.61
- -----------------------------------------------------------------------------------------------------
Inception* -- 11/30/97 12.66 12.29 0.00 0.00 (2.92)+
- -----------------------------------------------------------------------------------------------------
TOTAL $0.02 $0.01
- -----------------------------------------------------------------------------------------------------
</TABLE>
HISTORICAL PERFORMANCE -- CLASS Z SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
---------------------
BEGINNING END INCOME CAPITAL GAIN TOTAL
PERIOD ENDED OF PERIOD OF PERIOD DIVIDENDS DISTRIBUTIONS RETURNS(1)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Inception* -- 5/31/99 $19.48 $21.10 $0.00 $0.00 8.32%+
- -----------------------------------------------------------------------------------------------------
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS AND CAPITAL GAINS, IF ANY,
ANNUALLY.
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 3
<PAGE>
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WITHOUT SALES CHARGE(1)
-------------------------------------------------
CLASS A CLASS B CLASS L CLASS Y CLASS Z
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Six Months Ended 5/31/99+ 21.02% 20.63% 20.63% 21.21% N/A
- --------------------------------------------------------------------------------------
Year Ended 5/31/99 40.19 39.17 39.17 40.68 N/A
- --------------------------------------------------------------------------------------
Inception* through 5/31/99 38.84 37.84 37.84 37.52 8.32%+
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WITH SALES CHARGE(2)
-------------------------------------------------
CLASS A CLASS B CLASS L CLASS Y CLASS Z
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Six Months Ended 5/31/99+ 14.95% 15.63% 18.45% 21.21% N/A
- --------------------------------------------------------------------------------------
Year Ended 5/31/99 33.19 34.17 36.79 40.68 N/A
- --------------------------------------------------------------------------------------
Inception* through 5/31/99 34.81 36.04 37.05 37.52 8.32%+
- --------------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WITHOUT SALES CHARGE(1)
<S> <C>
- ----------------------------------------------------------------------------------------------------------
Class A (Inception* through 5/31/99) 77.78%
- ----------------------------------------------------------------------------------------------------------
Class B (Inception* through 5/31/99) 75.54
- ----------------------------------------------------------------------------------------------------------
Class L (Inception* through 5/31/99) 75.54
- ----------------------------------------------------------------------------------------------------------
Class Y (Inception* through 5/31/99) 67.81
- ----------------------------------------------------------------------------------------------------------
Class Z (Inception* through 5/31/99) 8.32
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, IF ANY, AT NET ASSET VALUE AND DOES NOT REFLECT
THE DEDUCTION OF THE APPLICABLE SALES CHARGES WITH RESPECT TO CLASS A AND L SHARES OR THE APPLICABLE CONTINGENT
DEFERRED SALES CHARGES ("CDSC") WITH RESPECT TO CLASS B AND L SHARES.
(2) ASSUMES REINVESTMENT OF ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, IF ANY, AT NET ASSET VALUE. IN ADDITION, CLASS
A AND L SHARES REFLECT THE DEDUCTION OF THE MAXIMUM INITIAL SALES CHARGES OF 5.00% AND 1.00%, RESPECTIVELY; CLASS B
SHARES REFLECT THE DEDUCTION OF A 5.00% CDSC, WHICH APPLIES IF SHARES ARE REDEEMED WITHIN ONE YEAR FROM PURCHASE.
THEREAFTER, THE CDSC DECLINES BY 1.00% PER YEAR UNTIL NO CDSC IS INCURRED. CLASS L SHARES REFLECT THE DEDUCTION OF A
1.00% CDSC, WHICH APPLIES IF SHARES ARE REDEEMED WITHIN THE FIRST YEAR OF PURCHASE.
* INCEPTION DATE FOR CLASS A, B AND L SHARES IS AUGUST 29, 1997. INCEPTION DATE FOR CLASS Y AND Z SHARES ARE OCTOBER
15, 1997 AND JANUARY 4, 1999 RESPECTIVELY.
+ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
</TABLE>
- --------------------------------------------------------------------------------
4 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND AT A GLANCE (UNAUDITED)
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN CLASS A, B AND L SHARES OF THE
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND VS. STANDARD & POOR'S 500 INDEX+
- --------------------------------------------------------------------------------
AUGUST 1997 -- MAY 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMITH BARNEY LARGE SMITH BARNEY LARGE SMITH BARNEY LARGE
CAPITALIZATION GROWTH CAPITALIZATION GROWTH CAPITALIZATION GROWTH STANDARD & POORS
FUND-CLASS A SHARES FUND-CLASS B SHARES FUND-CLASS L SHARES 500 INDEX
<S> <C> <C> <C> <C>
Aug-97 $9,496 $10,000 $10,000 $10,000
Nov-97 $9,816 $9,820 $10,117 $10,667
May-98 $12,043 $12,114 $12,388 $12,274
Nov-98 $13,950 $14,153 $14,407 $13,367
May-99 $16,883 $17,155 $17,379 $15,051
</TABLE>
+ The above chart represents a hypothetical illustration of $10,000 invested in
Class A, B and L shares at inception on August 29, 1997, assuming deduction of
the maximum 5.00% sales charge at the time of investment for Class A shares,
the deduction of the maximum 5.00% CDSC for Class B shares and the deduction
of the 1.00% CDSC for Class L shares at the time of investment and
reinvestment of dividends and capital gains, if any, through May 31, 1999. The
Standard & Poor's 500 Index is composed of widely held common stocks listed on
the New York Stock Exchange, American Stock Exchange and over-the-counter
market. Figures for the index include reinvestment of dividends. The Index is
unmanaged and is not subject to the same management and trading expenses as a
mutual fund. The performance of the Fund's other classes may be greater or
less than the Class A, B and L shares' performance indicated on this chart,
depending on whether greater or lesser sales charges and fees were incurred by
shareholders investing in other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and redemption
values may be more or less than the original cost. No adjustment has been made
for shareholder tax liability on dividends or capital gains.
INDUSTRY DIVERSIFICATION OF COMMON STOCK*
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Financial Services 26.6%
Telecommunications 6.6%
Healthcare 14.2%
Capital Goods 2.9%
Consumer Services 8.7%
Consumer Goods 24.7%
Semiconductors 10.1%
Consumer Durables 2.8%
Software/PC's 3.4%
</TABLE>
* As a percentage of total common stock.
TOP TEN HOLDINGS* AS OF MAY 31, 1999
- ------------------------------------------------
<TABLE>
<C> <S> <C>
1. COCA-COLA CO. 5.7%
----------------------------------------------------
2. AMERICAN ONLINE, INC. 5.4
----------------------------------------------------
3. WELLS FARGO & CO. 4.6
----------------------------------------------------
4. GILLETE CO. 4.5
----------------------------------------------------
5. TEXAS INSTRUMENTS INC. 4.4
----------------------------------------------------
6. BERKSHIRE HATHAWAY INC. 4.3
----------------------------------------------------
7. MERRILL LYNCH & CO., INC. 4.0
----------------------------------------------------
8. INTEL CORP. 3.4
----------------------------------------------------
9. PEPSICO, INC. 3.4
----------------------------------------------------
10. MOTOROLA INC. 3.3
----------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
* As a percentage of total common stock.
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 5
<PAGE>
SCHEDULE OF INVESTMENTS (UNAUDITED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
COMMON STOCK -- 100.0%
CAPITAL GOODS -- 2.9%
467,000 General Electric Co. $ 47,488,062
465,000 Schlumberger Ltd. 27,987,187
- ------------------------------------------------------------------------------------------------------------
75,475,249
- ------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES -- 2.8%
1,315,000 Home Depot Inc. 74,790,625
- ------------------------------------------------------------------------------------------------------------
CONSUMER GOODS -- 24.7%
1,580,000 Avon Products Inc. 78,111,250
2,205,000 Coca-Cola Co. 150,629,062
2,315,000 Gillette Co. 118,065,000
1,464,000 McDonald's Corp. 56,364,000
2,540,000 PepsiCo, Inc. 90,963,750
870,000 Procter & Gamble Corp. 81,236,250
911,000 Wm. Wrigley Jr. Co. 79,313,938
- ------------------------------------------------------------------------------------------------------------
654,683,250
- ------------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 8.7%
1,200,000 America Online, Inc.+ 143,250,000
3,015,000 The Walt Disney Co. 87,811,875
- ------------------------------------------------------------------------------------------------------------
231,061,875
- ------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES -- 26.6%
605,000 American International Group Inc. 69,159,063
1,000,000 BankAmerica Corp. 64,687,500
1,600 Berkshire Hathaway Inc.+ 115,200,000
1,000,000 Fannie Mae 68,000,000
1,900,000 Household International Inc. 82,412,500
1,260,000 Merrill Lynch & Co., Inc. 105,840,000
810,000 Morgan Stanley Dean Witter & Co. 78,165,000
3,025,000 Wells Fargo & Co. 121,000,000
- ------------------------------------------------------------------------------------------------------------
704,464,063
- ------------------------------------------------------------------------------------------------------------
HEALTHCARE -- 14.2%
1,000,000 Amgen Inc.+ 63,250,000
1,045,000 Eli Lilly & Co. 74,652,188
760,000 Johnson & Johnson 70,395,000
380,000 Merk & Co., Inc. 25,650,000
550,000 Pfizer Inc. 58,850,000
1,350,000 Warner-Lambert Co. 83,700,000
- ------------------------------------------------------------------------------------------------------------
376,497,188
- ------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS -- 10.1%
1,670,000 Intel Corp. 90,284,375
1,070,000 Texas Instruments Inc. 117,031,250
1,390,000 Xilinx, Inc.+ 61,768,125
- ------------------------------------------------------------------------------------------------------------
269,083,750
- ------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
6 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SOFTWARE/PC'S -- 3.4%
490,000 Microsoft Corp.+ $ 39,536,875
2,190,000 Novell Inc.+ 51,465,000
- ------------------------------------------------------------------------------------------------------------
91,001,875
- ------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 6.6%
320,000 Cisco Systems Inc.+ 34,840,000
920,000 Lucent Technologies Inc. 52,325,000
1,066,000 Motorola Inc. 88,278,125
- ------------------------------------------------------------------------------------------------------------
175,443,125
- ------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $2,152,547,737*) $ 2,652,501,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
+ NON-INCOME PRODUCING SECURITY.
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY THE SAME.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost --
$2,152,547,737) $ 2,652,501,000
Receivable for Fund shares sold 10,516,403
Dividends and interest
receivable 2,145,658
- ----------------------------------------------------
TOTAL ASSETS 2,665,163,061
- ----------------------------------------------------
LIABILITIES:
Payable for securities purchased 5,335,940
Payable to bank 1,585,502
Management fees payable 1,559,761
Distribution fees payable 430,355
Payable for Fund shares
purchased 19,307
Accrued expenses 645,811
- ----------------------------------------------------
TOTAL LIABILITIES 9,576,676
- ----------------------------------------------------
TOTAL NET ASSETS $ 2,655,586,385
- ----------------------------------------------------
NET ASSETS:
Par value of shares of
beneficial interest $ 127,043
Capital paid in excess of par
value 2,110,334,066
Accumulated net investment loss (8,131,212)
Accumulated net realized gain
from security transactions 53,303,225
Net unrealized appreciation of
investments 499,953,263
- ----------------------------------------------------
TOTAL NET ASSETS $ 2,655,586,385
- ----------------------------------------------------
SHARES OUTSTANDING:
Class A 28,542,947
-------------------------------------------------
Class B 64,386,826
-------------------------------------------------
Class L 23,814,114
-------------------------------------------------
Class Y 7,824,110
-------------------------------------------------
Class Z 2,474,541
-------------------------------------------------
NET ASSET VALUE:
Class A (and redemption price) $21.07
-------------------------------------------------
Class B* $20.82
-------------------------------------------------
Class L** $20.82
-------------------------------------------------
Class Y (and redemption price) $21.20
-------------------------------------------------
Class Z (and redemption price) $21.10
-------------------------------------------------
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE:
Class A (net asset value plus
5.26% of net asset value per
share) $22.18
-------------------------------------------------
Class L (net asset value plus
1.01% of net asset value per
share) $21.03
- ----------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
* REDEMPTION PRICE IS NAV OF CLASS B SHARES REDUCED BY A 5.00% CDSC IF SHARES ARE REDEEMED WITHIN ONE YEAR FROM
PURCHASE (SEE NOTE 2).
** REDEMPTION PRICE IS NAV OF CLASS L SHARES REDUCED BY A 1.00% CDSC IF SHARES ARE REDEEMED WITHIN THE FIRST YEAR OF
PURCHASE.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 8,273,666
Interest 294,735
- -----------------------------------------------------------------
TOTAL INVESTMENT INCOME 8,568,401
- -----------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 7,722,701
Distribution fees (Note 2) 7,525,204
Shareholder and system servicing fees 936,861
Registration fees 370,000
Shareholder communications 50,000
Trustees' fees 40,000
Custody 30,000
Audit and legal 22,000
Other 2,847
- -----------------------------------------------------------------
TOTAL EXPENSES 16,699,613
- -----------------------------------------------------------------
NET INVESTMENT LOSS (8,131,212)
- -----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE
3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 122,175,791
Cost of securities sold 82,140,369
- -----------------------------------------------------------------
NET REALIZED GAIN 40,035,422
- -----------------------------------------------------------------
Change in Net Unrealized Appreciation of
Investments:
Beginning of period 251,549,848
End of period 499,953,263
- -----------------------------------------------------------------
INCREASE IN NET UNREALIZED APPRECIATION 248,403,415
- -----------------------------------------------------------------
NET GAIN ON INVESTMENTS 288,438,837
- -----------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS $280,307,625
- -----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 9
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
AND THE YEAR ENDED NOVEMBER 30, 1998
<S> <C> <C>
1999 1998
- -------------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (8,131,212) $ (5,737,583)
Net realized gain 40,035,422 19,005,386
Increase in net unrealized appreciation 248,403,415 241,579,261
- -------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS 280,307,625 254,847,064
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (501,086)
Net realized gains -- (347,287)
- -------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (848,373)
- -------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 1,281,521,247 735,324,746
Net asset value of shares issued for
reinvestment of dividends -- 634,590
Cost of shares reacquired (188,666,647) (120,177,084)
- -------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 1,092,854,600 615,782,252
- -------------------------------------------------------------------------------------
INCREASE IN NET ASSETS 1,373,162,225 869,780,943
NET ASSETS:
Beginning of period 1,282,424,160 412,643,217
- -------------------------------------------------------------------------------------
END OF PERIOD* $ 2,655,586,385 $ 1,282,424,160
- -------------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $(8,131,212) --
- -------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Large Capitalization Growth Fund ("Fund") is a separate diversified
investment fund of the Smith Barney Investment Trust ("Trust"). The Trust, a
Massachusetts business trust, is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company and consists of
this Fund and four other separate investment funds: Smith Barney Intermediate
Maturity California Municipals Fund, Smith Barney Intermediate Maturity New York
Municipals Fund, Smith Barney Mid Cap Blend Fund and Smith Barney S&P 500 Index
Fund. The financial statements and financial highlights for the other funds are
presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing price on such markets;
securities for which no sales price was reported and U.S. government and agency
obligations are valued at the mean between bid and ask price; (c) securities
maturing within 60 days are valued at cost plus accreted discount, or minus
amortized premium, which approximates value; (d) dividend income is recorded on
the ex-dividend date; foreign dividends are recorded on the earlier of the
ex-dividend date or as soon as practical after the Fund determines the existence
of a dividend declaration after exercising reasonable due diligence; interest
income is recorded on the accrual basis; (e) realized gains or losses on the
sale of securities are calculated based on the specific identification method;
(f) direct expenses are charged to each class; management fees and general fund
expenses are allocated on the basis of relative net assets by class; (g)
dividends and distributions to shareholders are recorded by the Fund on the
ex-dividend date; (h) the accounting records of the Fund are maintained in U.S.
dollars. All assets and liabilities denominated in foreign currencies are
translated into U.S. dollars based on the rate of exchange of such currencies
against U.S. dollars on the date of valuation; (i) the character of income and
gains to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. At November 30,
1998, reclassifications were made to the Fund's capital accounts to reflect
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Net investment income, net realized gains and net
assets were not affected by this change; (j) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (k) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment financial markets and any other parameters used in determining these
estimates could cause actual results to differ.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as invesment
manager to the Fund. The Fund pays SSBC a management fee calculated at an annual
rate of 0.75% of the average daily net assets. This fee is calculated daily and
paid monthly.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as members of the selling group.
SSB acts as the primary broker for its portfolio agency transactions. For the
six months ended May 31, 1999, SSB received total brokerage commissions of
$58,650.
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
There is a contingent deferred sales charge ("CDSC") of 5.00% on Class B shares,
which applies if redemption occurs within one year from purchase and declines
thereafter by 1.00% per year until no CDSC is incurred. Class L shares also have
a 1.00% CDSC, which applies if redemption occurs within the first year of
purchase. In addition, Class A shares have a 1.00% CDSC, which applies if
redemption occurs within the first year of purchase. This CDSC only applies to
those purchases of Class A shares which, when combined with current holdings of
Class A shares, equal or exceed $500,000 in the aggregate. These purchases do no
incur an initial sales charge.
For the six months ended May 31, 1999, CFBDS received sales charges of
$3,872,000 and $2,528,000 on sales of the Fund's Class A and Class L shares,
respectively. In addition, CDSCs paid to CFBDS were approximately:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS L
- ----------------------------------------------------------
<S> <C> <C> <C>
CDSCs $ 4,000 $ 711,000 $ 70,000
- ----------------------------------------------------------
</TABLE>
Pursuant to the Distribution Plan, the Fund pays a service fee with respect to
its Class A, B and L shares calculated at an annual rate of 0.25% of the average
daily net assets for each respective class. The Fund also pays a distribution
fee with respect to its Class B and L shares calculated at an annual rate of
0.75% of the average daily net assets of each class, respectively. For the six
months ended May 31, 1999, total Distribution Plan fees incurred were:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS L
- ----------------------------------------------------------
<S> <C> <C> <C>
Distribution Plan Fees $614,470 $5,156,424 $1,754,310
- ----------------------------------------------------------
</TABLE>
All officers and one Trustee of the Fund are employees of SSB.
3. INVESTMENTS
During the six months ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<S> <C>
- -------------------------------------------
Purchases $1,216,603,516
- -------------------------------------------
Sales 122,175,791
- -------------------------------------------
</TABLE>
At May 31, 1999, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------
Gross unrealized appreciation $524,955,594
Gross unrealized depreciation (25,002,331)
- ---------------------------------------------------
Net unrealized appreciation $499,953,263
- ---------------------------------------------------
</TABLE>
4. REPURCHASE AGREEMENTS
The Fund purchases, and its custodian takes possession of, U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value of the collateral in amounts at least equal to
the repurchase price.
5. SHARES OF BENEFICIAL INTEREST
At May 31, 1999, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
indentical interest and has the same rights, except that each class bears
certain direct expenses, including those specifically related to the
distribution of its shares.
At May 31, 1999, total paid-in capital amounted to the following for each class:
<TABLE>
<CAPTION>
AMOUNT
- ------------------------------------------------
<S> <C>
Class A $ 459,518,078
- ------------------------------------------------
Class B 1,078,590,604
- ------------------------------------------------
Class L 424,084,566
- ------------------------------------------------
Class Y 97,517,426
- ------------------------------------------------
Class Z 50,750,435
- ------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
12 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1999 NOVEMBER 30, 1998
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 14,171,753 $295,263,963 13,771,364 $209,717,045
Shares issued on reinvestment -- -- 21,312 266,404
Shares reacquired (4,273,442) (90,446,544) (4,189,188) (63,108,524)
- ------------------------------------------------------------------------------------------
Net Increase 9,898,311 $204,817,419 9,603,488 $146,874,925
- ------------------------------------------------------------------------------------------
CLASS B
Shares sold 31,060,162 $639,779,485 25,048,618 $379,750,655
Shares issued on reinvestment -- -- 24,425 304,576
Shares reacquired (3,542,064) (73,698,307) (2,852,373) (42,088,247)
- ------------------------------------------------------------------------------------------
Net Increase 27,518,098 $566,081,178 22,220,670 $337,966,984
- ------------------------------------------------------------------------------------------
CLASS L(1)
Shares sold 14,046,478 $290,291,613 8,853,448 $135,608,815
Shares issued on reinvestment -- -- 5,102 63,610
Shares reacquired (1,107,607) (23,100,349) (1,019,293) (14,978,593)
- ------------------------------------------------------------------------------------------
Net Increase 12,938,871 $267,191,264 7,839,257 $120,693,832
- ------------------------------------------------------------------------------------------
CLASS Y
Shares sold 187,582 $ 4,014,304 740,914 $ 10,248,231
Shares reacquired -- -- (136) (1,720)
- ------------------------------------------------------------------------------------------
Net Increase 187,582 $ 4,014,304 740,778 $ 10,246,511
- ------------------------------------------------------------------------------------------
CLASS Z(2)
Shares sold 2,539,455 $ 52,171,882 -- --
Shares reacquired (64,914) (1,421,447) -- --
- ------------------------------------------------------------------------------------------
Net Increase 2,474,541 $ 50,750,435 -- --
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) ON JUNE 12, 1998, CLASS C SHARES WERE RENAMED CLASS L SHARES.
(2) TRANSACTIONS FOR CLASS Z SHARES ARE FOR THE PERIOD FROM JANUARY 4, 1999 (INCEPTION DATE) TO MAY 31, 1999.
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 13
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR ENDED NOVEMBER 30, EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
CLASS A SHARES 1999(1)(2) 1998(2) 1997(3)
<S> <C> <C> <C>
- --------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $17.41 $12.28 $11.88
- --------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) (0.03) (0.04) 0.01
Net realized and unrealized gain 3.69 5.20 0.39
- --------------------------------------------------------------------------
Total Income From Operations 3.66 5.16 0.40
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- (0.02) --
Net realized gains -- (0.01) --
- --------------------------------------------------------------------------
Total Distributions -- (0.03) --
- --------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $21.07 $17.41 $12.28
- --------------------------------------------------------------------------
TOTAL RETURN 21.02%++ 42.12% 3.37%++
- --------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $ 601,498 $ 324,664 $ 111,063
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.15%+ 1.19% 1.15%+
Net investment income (loss) (0.32)+ (0.38) 0.38+
- --------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 6% 14% 1%
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARES METHOD, RATHER THAN THE UNDISTRIBUTED NET
INVESTMENT INCOME METHOD, BECAUSE IT MORE ACCURATELY REFLECTS THE PER SHARE DATA FOR THE PERIOD.
(3) FOR THE PERIOD FROM AUGUST 29, 1997 (INCEPTION DATE) TO NOVEMBER 30, 1997.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
</TABLE>
- --------------------------------------------------------------------------------
14 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR ENDED NOVEMBER 30, EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
CLASS B SHARES 1999(1)(2) 1998(2) 1997(3)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $17.26 $12.26 $11.88
- ----------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment loss (0.11) (0.17) (0.01)
Net realized and unrealized gain 3.67 5.19 0.39
- ----------------------------------------------------------------------------
Total Income From Operations 3.56 5.02 0.38
- ----------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- (0.01) --
Net realized gains -- (0.01) --
- ----------------------------------------------------------------------------
Total Distributions -- (0.02) --
- ----------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $20.82 $17.26 $12.26
- ----------------------------------------------------------------------------
TOTAL RETURN 20.63%++ 41.02% 3.20%++
- ----------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $ 1,340,275 $ 636,464 $ 179,598
- ----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.89%+ 1.95% 1.90%+
Net investment loss (1.06)+ (1.14) (0.37)+
- ----------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 6% 14% 1%
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARES METHOD, RATHER THAN THE UNDISTRIBUTED NET
INVESTMENT INCOME METHOD, BECAUSE IT MORE ACCURATELY REFLECTS THE PER SHARE DATA FOR THE PERIOD.
(3) FOR THE PERIOD FROM AUGUST 29, 1997 (INCEPTION DATE) TO NOVEMBER 30, 1997.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 15
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR ENDED NOVEMBER 30, EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
CLASS L SHARES 1999(1)(2) 1998(2)(3) 1997(4)
<S> <C> <C> <C>
- -------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $17.26 $12.26 $11.88
- -------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment loss (0.11) (0.17) (0.01)
Net realized and unrealized gain 3.67 5.19 0.39
- -------------------------------------------------------------------------
Total Income From Operations 3.56 5.02 0.38
- -------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- (0.01) --
Net realized gains -- (0.01) --
- -------------------------------------------------------------------------
Total Distributions -- (0.02) --
- -------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $20.82 $17.26 $12.26
- -------------------------------------------------------------------------
TOTAL RETURN 20.63%++ 41.02% 3.20%++
- -------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $ 495,713 $187,741 $ 37,224
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.89%+ 1.96% 1.90%+
Net investment loss (1.06)+ (1.14) (0.38)+
- -------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 6% 14% 1%
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARES METHOD, RATHER THAN THE UNDISTRIBUTED NET
INVESTMENT INCOME METHOD, BECAUSE IT MORE ACCURATELY REFLECTS THE PER SHARE DATA FOR THE PERIOD.
(3) ON JUNE 12, 1998, CLASS C SHARES WERE RENAMED CLASS L SHARES.
(4) FOR THE PERIOD FROM AUGUST 29, 1997 (INCEPTION DATE) TO NOVEMBER 30, 1997.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
</TABLE>
- --------------------------------------------------------------------------------
16 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR ENDED NOVEMBER 30, EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
CLASS Y SHARES 1999(1)(2) 1998(2) 1997(3)
<S> <C> <C> <C>
- -------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $17.49 $12.29 $12.66
- -------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) 0.00* (0.00)* 0.01
Net realized and unrealized gain
(loss) 3.71 5.23 (0.38)
- -------------------------------------------------------------------------
Total Income (Loss) From Operations 3.71 5.23 (0.37)
- -------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- (0.02) --
Net realized gains -- (0.01) --
- -------------------------------------------------------------------------
Total Distributions -- (0.03) --
- -------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $21.20 $17.49 $12.29
- -------------------------------------------------------------------------
TOTAL RETURN 21.21%++ 42.61% (2.92)%++
- -------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $ 165,881 $ 133,556 $ 84,758
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.80%+ 0.83% 0.82%+
Net investment income (loss) 0.04+ (0.02) 0.54+
- -------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 6% 14% 1%
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARES METHOD, RATHER THAN THE UNDISTRIBUTED NET
INVESTMENT INCOME METHOD, BECAUSE IT MORE ACCURATELY REFLECTS THE PER SHARE DATA FOR THE PERIOD.
(3) FOR THE PERIOD FROM OCTOBER 15, 1997 (INCEPTION DATE) TO NOVEMBER 30, 1997.
* AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
</TABLE>
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 17
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR ENDED NOVEMBER 30, EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
CLASS Z SHARES 1999(1)(2)
<S> <C>
- ---------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $19.48
- ---------------------------------------------
INCOME FROM OPERATIONS:
Net investment income 0.00*
Net realized and unrealized gain 1.62
- ---------------------------------------------
Total Income From Operations 1.62
- ---------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income --
Net realized gains --
- ---------------------------------------------
Total Distributions --
- ---------------------------------------------
NET ASSET VALUE, END OF PERIOD $21.10
- ---------------------------------------------
TOTAL RETURN 8.32%++
- ---------------------------------------------
NET ASSETS, END OF PERIOD (000S) $ 52,219
- ---------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.81%+
Net investment income 0.00+
- ---------------------------------------------
PORTFOLIO TURNOVER RATE 6%
- ---------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) FOR THE PERIOD FROM JANUARY 4, 1999 (INCEPTION DATE) TO MAY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARES METHOD.
* AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE OF THE TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
</TABLE>
- --------------------------------------------------------------------------------
18 1999 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
SMITH BARNEY
LARGE CAPITALIZATION
GROWTH FUND
TRUSTEES
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, CHAIRMAN
Cornelius C. Rose, Jr.
James J. Crisona, EMERITUS
OFFICERS
Heath B. McLendon
CHIEF EXECUTIVE OFFICER
Lewis E. Daidone
SENIOR VICE PRESIDENT
AND TREASURER
Alan Blake
VICE PRESIDENT AND
INVESTMENT OFFICER
Paul A. Brook
CONTROLLER
Christina T. Sydor
SECRETARY
INVESTMENT ADVISER AND ADMINISTRATOR
SSBC Fund Management Inc.
DISTRIBUTOR
CFBDS, Inc.
CUSTODIAN
PNC Bank, N.A.
SHAREHOLDER SERVICING AGENT
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is for the information of shareholders of Smith Barney Investment
Trust--Smith Barney Large Capitalization Growth Fund. It is not authorized for
distribution to prospective investors unless accompanied by a current Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
[LOGO]
SALOMON SMITH BARNEY IS A SERVICE MARK OF SALOMON SMITH BARNEY, INC.
SMITH BARNEY
LARGE CAPITALIZATION
GROWTH FUND
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
WWW.SMITHBARNEY.COM
FD01520 7/99
<PAGE>
(This page has been left blank intentionally.)
[GRAPHIC OMITTED]
Smith Barney
S&P 500
Index Fund
------------------
SEMI-ANNUAL REPORT
------------------
May 31, 1999
Smith Barney Mutual Funds
<PAGE>
Smith Barney
S&P 500
Index Fund
[PHOTO OMITTED]
Heath B. McLendon
Chairman
[PHOTO OMITTED]
Sandip A. Bhagat, CFA
Vice President and Investment Officer
[PHOTO OMITTED]
John Lau
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report of the Smith Barney S&P 500
Index* Fund ("Fund") for the period ended May 31, 1999. In this report we
summarize the period's prevailing economic and market conditions. A detailed
summary of performance and current holdings in the Fund can be found in the
appropriate sections that follow.
Investment Objective and Performance Update
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 S&P 500 Index is a broad-based measurement of changes in stock market
conditions based on the average performance of 500 widely held common stocks.)
The Fund holds a broadly diversified portfolio of common stocks that is
comparable to the S&P 500 Index in terms of sector weightings and market
capitalization. The average annual total return for the period ended March
31,1999 for Class A and Class D shares was 17.75% and 4.75%, respectively.** For
the six months ended May 31, 1999, the Fund returned 12.11% and 12.27% for Class
A and Class D shares, respectively, compared with the 12.61% for the S&P 500
Index over the same period.
- ----------
* Standard & Poor's, "S&P(R)" and "S&P 500(R)" are trademarks of Standard &
Poor's, a division of the McGraw Hill Companies, Inc. and have been
licensed for use by the Fund. The Fund is not sponsored, endorsed or
promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the Fund.
** The inception date for Class D shares was August 4, 1998, therefore the
total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 1
<PAGE>
Financial Markets Overview
A proactive and aggressive move by the Federal Reserve Board ("Fed") halted the
stock market slide early in the fourth quarter of 1998 and sent stock prices
soaring in November and December. The fourth quarter rally erased losses from
the third quarter and most market measures reached new all-time highs.
The market was also helped by economic reports in the fourth quarter of 1998
that were well ahead of expectations. Fourth quarter Gross Domestic Product
("GDP") growth was eventually reported at 6.0% but interest rates remained low
mainly as a result of low inflation.
Stock market volatility remained high in early 1999 as a new threat for global
financial markets emerged in Latin America in January and then interest rate
concerns dominated market psychology during February. The devaluation of the
Brazilian currency raised concerns for U.S. companies with exposure to Latin
America and took a temporary toll on the stock market in the middle of January.
First quarter 1999 GDP growth was well above the consensus forecast of 3.5%.
Despite low inflation, interest rates moved higher amid fears of Fed tightening
in response to the strong U.S. economy. In February, the yield on the 30-year
Treasury bond moved from 5.18% to 5.55%.
Evidence of stronger-than-expected economic growth prompted hopes of a
meaningful earnings recovery and, at the same time, triggered concerns about
further increases in interest rates. Both implications led to furious rally in
value stocks and, to a lesser extent, in small-cap stocks during the month of
April.
Interest rates continued to climb in May 1999 as investors worried about
inflation concerns on the heels of continued economic strength. The stock market
sagged during May under the burden of lofty valuations and higher rates.
Small-cap stocks and value stocks continued their resurgence from the prior
month as they led their large-cap and growth counterparts by about 200 to 300
basis points in May.
The increase in interest rates has seen significant contraction in the lofty P/E
ratios of growth stocks. Economically sensitive stocks, which make up the bulk
of the value universe, have risen sharply at the expense of growth stocks. Based
on the severe disparity of relative performance in favor of growth stocks over
the last couple of years, the recent reversal into value stocks could persist
well into the rest of the year.
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
We thank you for your participation in the Smith Barney S&P 500 Index Fund.
Sincerely,
/s/ Heath B. McLendon /s/ Sandip A. Bhagat
Heath B. McLendon Sandip A. Bhagat, CFA
Chairman Vice President
and Investment Officer
/s/ John Lau
John Lau
Investment Officer
June 24, 1999
- --------------------------------------------------------------------------------
Some Risks to Remember about the Smith Barney
S&P 500 Index Fund
Please note that the net asset value of the Fund's shares will fluctuate and
these shares may be worth more or less than their original cost upon redemption.
There can be no assurances given that the Fund will achieve its investment
objective. Moreover, the investment performance of the S&P 500 Index does not
factor in sales charges, brokerage commissions, management fees and other fund
costs assumed by the Fund. Therefore, the Fund cannot exactly replicate the
performance of the S&P 500 Index.
Moreover, when the stock market goes down, as defined by the S&P 500 Index, the
Fund's net asset value will decline as well. Since the Fund tries to mirror,
before expenses, the performance of the S&P 500 Index, the investment management
team will usually not try and judge the merits of any one particular security,
and the poor performance of any one single security will not necessarily mean
the security will be removed from the Fund.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 3
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividend Distribution Returns+++
================================================================================
5/31/99 $11.98 $13.37 $0.06 $0.00 12.11%
- --------------------------------------------------------------------------------
Inception*-11/30/98 10.00 11.98 0.00 0.00 19.80
================================================================================
Total $0.06 $0.00
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class D Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividend Distribution Returns+++
================================================================================
5/31/99 $11.99 $13.39 $0.07 $0.00 12.27%
- --------------------------------------------------------------------------------
Inception*-11/30/98 11.00 11.99 0.00 0.00 9.00
================================================================================
Total $0.07 $0.00
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
Class A Class D
================================================================================
Six Months Ended 5/31/99++ 12.11% 12.27%
- --------------------------------------------------------------------------------
Inception* through 5/31/99++ 23.45 22.37
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Returns
- --------------------------------------------------------------------------------
================================================================================
Class A (Inception* through 5/31/99) 34.31%
- --------------------------------------------------------------------------------
Class D (Inception* through 5/31/99) 22.37
================================================================================
* Inception dates for Class A and D shares are January 5, 1998 and August 4,
1998, respectively.
+ Assumes reinvestment of all dividends and capital gain distributions.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 99.4%
Auto & Transportation -- 2.6%
2,632 AMR Corp.* $ 171,245
6,762 Burlington Northern Santa Fe Corp. 209,622
1,087 Cooper Tire & Rubber Co. 25,816
3,144 CSX Corp. 147,572
611 Cummins Engine Co., Inc. 30,932
2,393 Dana Corp. 123,539
6,615 Delphi Automotive Systems 129,827
2,055 Delta Air Lines, Inc. 117,906
1,037 Eaton Corp. 90,413
4,273 FDX Corp.* 235,282
480 Fleetwood Enterprises, Inc. 12,210
17,482 Ford Motor Co. 997,567
9,465 General Motors Corp. 653,085
2,620 Genuine Parts Co. 88,261
2,263 Goodyear Tire & Rubber Co. 135,073
1,332 ITT Industries, Inc. 50,283
1,238 Johnson Controls Inc. 78,071
1,587 Kansas City Southern Industries, Inc. 89,269
949 Navistar International Corp.* 46,857
5,459 Norfolk Southern Corp. 178,782
1,121 Paccar, Inc. 63,126
1,032 Ryder Systems, Inc. 24,768
952 Snap-On, Inc. 34,451
4,882 Southwest Airlines Co. 156,529
866 The Timken Corp. 17,807
3,642 Union Pacific Resources 50,760
1,267 US Airways Group, Inc.* 61,529
- --------------------------------------------------------------------------------
4,020,582
- --------------------------------------------------------------------------------
Consumer Discretionary -- 14.8%
848 Alberto Culver Co., Class B Shares 22,419
3,559 Albertsons, Inc. 190,407
1,016 American Greetings Corp., Class A Shares 29,083
3,989 American Stores Co. 131,637
2,190 Autozone, Inc.* 63,373
3,804 Avon Products, Inc. 188,060
1,315 Brunswick Corp. 31,560
10,195 CBS Corp.* 425,641
8,869 Carnival Corp. 363,629
11,074 Cendant Corp.* 204,177
1,444 Circuit City Stores 103,697
4,677 Clear Channel Communications Inc.* 308,974
1,696 Clorox Co. 171,190
4,233 Colgate Palmolive Co. 422,771
10,689 Comcast Corp., Class A Shares 411,527
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 5
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Consumer Discretionary -- 14.8% (continued)
1,574 Consolidated Stores Corp.* $ 54,106
3,148 Costco Cos., Inc.* 228,230
5,646 CVS Corp. 259,716
1,981 Darden Restaurants, Inc. 42,220
6,381 Dayton-Hudson Corp. 402,003
1,168 Deluxe Corp. 42,121
1,557 Dillard, Inc., Class A Shares 54,690
3,198 Dollar General Corp. 84,967
1,349 Dow Jones & Co., Inc. 70,823
2,385 Dun & Bradstreet Corp. 83,475
4,679 Eastman Kodak Co. 316,417
3,043 Federated Department Stores, Inc.* 165,844
985 Fruit Of The Loom Inc.* 10,158
4,073 Gannett Co. 294,274
8,233 Gap, Inc. 515,077
16,040 Gillette Co. 818,040
563 The Great Atlantic & Pacific Tea Co., Inc. 18,438
1,023 Harcourt General, Inc. 50,319
1,808 Harrah's Entertainment, Inc.* 39,098
2,834 Hasbro, Inc. 81,123
3,799 Hilton Hotels Corp. 52,236
21,311 Home Depot, Inc. 1,212,063
2,089 Ikon Office Solutions Inc. 29,115
1,521 International Flavors & Fragrances, Inc. 62,551
2,011 The Interpublic Group of Cos., Inc. 152,333
3,815 J.C. Penney Corp. 197,188
512 Jostens Inc. 10,816
7,169 K Mart Corp.* 110,223
7,823 Kimberly-Clark Corp. 459,112
1,044 King World Productions, Inc.* 34,844
1,128 Knight Ridder, Inc. 59,432
2,294 Kohl's Corp.* 156,422
5,941 Kroger Co. 347,920
3,273 Limited Inc. 159,968
927 Liz Claiborne, Inc. 33,372
1,652 Loews Corp. 134,328
545 Longs Drug Stores Corp. 18,973
3,498 Marriott International Inc., Class A Shares 133,143
5,999 Mattel, Inc. 158,599
5,072 May Department Stores Co. 219,681
1,300 Maytag Corp. 91,731
19,539 McDonald's Corp. 752,252
2,840 McGraw Hill, Inc. 147,325
8,776 MediaOne Group, Inc.* 648,327
756 Meredith Corp. 26,413
2,807 Mirage Resorts, Inc.* 57,544
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Consumer Discretionary -- 14.8% (continued)
1,277 Moore Corp. Ltd. $ 11,254
613 National Service Industries, Inc. 22,566
2,649 New York Times Co., Class A Shares 90,397
4,065 Newell Rubbermaid Co. 164,633
4,072 Nike Inc., Class B Shares 248,138
2,047 Nordstrom, Inc. 72,669
2,448 Omnicom Group, Inc. 171,360
746 Pep Boys - Manny, Moe & Jack & Co. 14,081
619 Polaroid Corp. 13,076
19,195 Procter & Gamble Corp. 1,792,333
835 Reebok International Ltd.* 16,596
3,729 Rite Aid Corp. 93,225
1,947 R.R. Donnelley & Sons Co. 70,579
514 Russell Corp. 12,047
5,546 Sears Roebuck & Co. 265,168
3,959 Service Corp. 75,963
253 Spring Industries Inc. 10,025
6,645 Staples, Inc.* 191,044
1,739 Supervalu Inc. 42,171
1,425 Tandy Corp. 117,563
17,741 Time Warner, Inc. 1,207,497
1,056 Times Mirror Corp., Class A Shares 62,238
4,656 TJX Cos., Inc. 139,680
3,636 Toys 'R' Us, Inc.* 83,855
1,713 Tribune Co. 135,220
2,217 Tricon Global Resturants, Inc.* 129,140
823 Tupperware Corp. 18,312
8,251 Unilever NV 538,894
7,274 U.S. West Media Group, Inc. 393,305
1,725 VF Corp. 79,350
10,035 Viacom Inc., Class B Shares* 386,348
14,434 Walgreen Co. 335,591
64,268 Wal-Mart Stores, Inc. 2,739,424
29,718 Walt Disney Co. 865,537
1,795 Wendy's International, Inc. 48,914
1,090 Whirlpool Corp. 70,305
2,139 Winn-Dixie Stores Inc. 76,603
- --------------------------------------------------------------------------------
22,970,296
- --------------------------------------------------------------------------------
Consumer Staples -- 5.9%
539 Adolph Coors Co., Class B Shares 25,603
6,916 Anheuser-Busch Co., Inc. 505,300
8,562 Archer-Daniels-Midland Co. 128,430
4,117 Bestfoods 205,850
995 Brown-Forman Corp., Class B Shares 66,354
6,415 Campbell Soup Co. 283,062
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 7
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Consumer Staples -- 5.9% (continued)
35,622 Coca-Cola Co. $ 2,433,428
6,117 Coca-Cola Enterprises 221,741
7,054 Conagra Inc. 183,845
2,466 Fortune Brands, Inc. 100,798
2,208 General Mills, Inc. 177,468
2,082 Hershey Foods Corp. 112,949
5,226 HJ Heinz & Co. 252,481
5,839 Kellogg Co. 202,540
5,376 Loews Corp. 279,216
21,198 PepsiCo, Inc. 759,153
35,170 Philip Morris Cos., Inc. 1,356,243
3,462 Pioneer Hi-Bred International, Inc. 129,825
1,959 Quaker Oats Corp. 129,416
4,756 Ralston-Purina Group 129,601
4,696 RJR Nabisco Holdings, Corp. 145,283
7,024 Safeway, Inc.* 326,616
13,210 Sara Lee Corp.* 317,040
5,780 Seagram Co., Ltd. 300,199
4,817 Sysco Corp. 143,005
2,665 UST, Inc. 81,283
1,685 William Wrigley Jr. Co. 146,700
- --------------------------------------------------------------------------------
9,143,429
- --------------------------------------------------------------------------------
Finance -- 15.9%
11,863 Allstate Corp. 432,258
6,545 American Express Co. 793,172
3,641 American General Corp. 263,062
17,751 American International Group, Inc. 2,029,161
2,581 Amsouth Bancorporation 73,250
3,694 Aon Corp. 158,864
10,527 Associates First Capital Corp. 431,607
4,289 Bank of Boston Corp. 203,191
11,001 Bank of New York, Inc. 393,286
16,999 Bank One Corp. 961,506
25,019 BankAmerica, Corp. 1,618,481
1,379 Bankers Trust Corp. 127,644
4,500 BB&T Corp. 164,250
1,627 Bear Stearns Cos., Inc. 72,198
950 Capital One Financial Corp. 143,153
5,798 Charles Schwab Corp.* 613,501
12,223 Chase Manhattan Corp. 886,168
2,345 Chubb Corp. 164,297
2,976 CIGNA Corp. 277,512
2,428 Cincinnati Financial Corp. 100,003
32,634 Citigroup, Inc. 2,162,003
2,257 Comerica, Inc. 136,407
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Finance -- 15.9% (continued)
4,626 Conseco, Inc. $ 141,382
1,646 Countrywide Credit Industries, Inc. 67,692
2,149 Equifax, Inc. 77,364
14,991 Fannie Mae 1,019,388
3,845 Fifth Third Bancorp 262,181
14,319 First Union Corp. 659,569
9,998 Firstar, Corp. 288,067
8,219 Fleet Financial Group, Inc. 338,006
3,664 Franklin Resources, Inc. 159,384
9,812 Freddie Mac 572,162
829 Golden West Financial Corp. 78,651
1,421 H & R Block, Inc. 68,474
3,363 Hartford Financial Services, Inc. 212,710
6,964 Household International, Inc. 302,064
3,026 Huntington Bancshares Inc. 104,775
2,531 J.P. Morgan & Co., Inc. 352,600
1,537 Jefferson Pilot Corp. 104,036
6,585 Keycorp 228,829
1,643 Lehman Brothers Holdings, Inc. 89,749
1,468 Lincoln National Corp. 149,369
3,721 Marsh & McLennan Cos., Inc. 270,703
1,427 MBIA, Inc. 97,482
11,560 MBNA Corp. 319,345
7,551 Mellon Bank Corp. 269,476
2,287 Mercantile Bancorp, Inc. 133,647
5,133 Merrill Lynch & Co., Inc. 431,172
1,580 MGIC Investment Corp. 76,038
8,345 Morgan Stanley Dean Witter & Co. 805,293
4,712 National City Corp. 311,876
1,610 Northern Trust Corp. 145,504
3,426 Paycheck, Inc. 101,510
4,351 PNC Bank Corp. 249,095
1,046 Progressive Corp. 146,832
1,964 Provident Cos., Inc. 76,719
2,046 Providian Financial Corp. 196,288
3,184 Regions Financial Corp. 120,594
1,561 Republic of New York Corp. 106,050
1,985 SAFECO Corp. 87,216
2,409 SLM Holding Corp. 99,974
2,380 SouthTrust Corp. 92,671
3,391 St. Paul Cos.* 120,593
2,315 State Street Corp. 176,519
2,496 Summit Bancorp 102,180
4,637 Suntrust Banks Inc. 312,998
3,862 Synovus Financial Corp. 77,723
2,035 Torchmark Corp. 67,918
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Finance -- 15.9% (continued)
1,808 Transamerica Corp. $ 132,662
2,003 Union Planters Corp. 82,749
1,996 UNUM Corp. 107,410
10,545 U.S. Bancorp. 342,713
2,930 Wachovia Corp. 258,573
8,556 Washington Mutual, Inc. 326,732
23,746 Wells Fargo & Co. 949,840
- --------------------------------------------------------------------------------
24,677,521
- --------------------------------------------------------------------------------
Health Care -- 10.9%
21,944 Abbott Labs, Inc. 991,595
2,061 AETNA, Inc. 187,165
950 Allergan, Inc. 88,350
1,447 Alza Corp.* 51,640
19,036 American Home Products Corp. 1,096,950
7,349 Amgen, Inc.* 464,824
806 Bausch & Lomb, Inc. 61,558
4,139 Baxter International, Inc. 267,224
3,580 Becton Dickinson & Co. 138,725
1,637 Biomet, Inc. 65,378
5,685 Boston Scientific Corp.* 215,675
28,728 Bristol-Myers Squibb & Co. 1,971,459
3,922 Cardinal Health, Inc. 236,791
9,359 Columbia/HCA Healthcare Corp. 220,521
788 C.R. Bard, Inc. 36,002
15,891 Eli Lilly & Co. 1,135,213
4,357 Guidant Corp.* 217,850
1,578 HCR Manor Care, Inc.* 42,212
6,063 HealthSouth Corp.* 81,093
2,398 Humana Inc.* 30,125
19,432 Johnson & Johnson 1,799,889
1,022 Mallinckrodt, Inc. 35,387
4,016 McKesson HBOC, Inc. 136,795
8,449 Medtronic, Inc. 599,879
34,431 Merck & Co., Inc. 2,324,093
18,759 Pfizer, Inc. 2,007,213
7,336 Pharmacia & Upjohn, Inc. 406,690
21,224 Schering Plough Corp.* 956,407
1,224 St. Jude Medical, Inc.* 41,387
4,497 Tenet Healthcare Corp.* 110,177
2,698 United Healthcare Corp. 157,159
1,382 Watson Pharmaceuticals* 52,948
11,862 Warner-Lambert Co. 735,444
- --------------------------------------------------------------------------------
16,963,818
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Integrated Oil -- 5.4%
1,306 Amerada Hess Corp. $ 78,278
1,066 Ashland, Inc. 43,440
4,713 Atlantic Richfield Co. 394,419
9,433 Chevron Corp. 874,321
35,131 Exxon Corp. 2,806,089
1,248 Kerr McGee Corp. 58,032
11,264 Mobil Oil Corp. 1,140,480
4,977 Occidental Petroleum Corp. 105,139
3,668 Phillips Petroleum Co. 192,341
30,982 Royal Dutch Petroleum Co. 1,752,419
1,343 Sunoco, Inc. 40,878
7,736 Texaco, Inc. 506,708
3,496 Unocal Corp. 138,966
4,450 USX Marathon Group, Inc. 133,222
- --------------------------------------------------------------------------------
8,264,732
- --------------------------------------------------------------------------------
Materials & Processing -- 3.9%
3,305 Air Products and Chemicals, Inc. 135,505
3,308 Alcan Aluminium Ltd. 92,624
5,305 ALCOA, Inc. 291,775
2,870 Allegheny Teledyne, Inc. 58,656
569 Armstrong World Industries, Inc. 33,144
540 Asarco, Inc. 8,674
1,674 Avery Dennison Corp. 100,231
455 Ball Corp. 22,153
5,371 Barrick Gold Corp. 92,650
3,071 Battle Mountain Gold Corp. 7,486
737 Bemis, Inc. 27,822
1,924 Bethlehem Steel Corp.* 15,993
1,256 Black & Decker Corp. 71,514
825 Boise Cascade Corp. 32,691
1,386 Champion International Corp. 71,033
3,340 Corning, Inc. 182,448
1,771 Crown Cork & Seal Co., Inc. 55,565
1,271 Cyprus Amax Minerals Co. 15,967
1,939 Danaher Corp. 117,188
3,193 Dow Chemical Corp. 387,950
16,281 E.I. du Pont de Nemours & Co. 1,065,388
1,156 Eastman Chemical Co. 58,523
1,878 Ecolab, Inc. 79,815
2,092 Engelhard Corp. 42,363
473 FMC Corp.* 31,307
3,197 Fort James Corp. 117,090
2,437 Freeport-McMoRan Copper & Gold, Inc.* 34,423
1,265 Georgia Pacific Corp. 109,343
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Materials & Processing -- 3.9% (continued)
867 Great Lakes Chemical Corp. $ 39,178
1,456 Hercules, Inc. 50,869
3,816 Homestake Mining Co. 29,813
2,583 INCO Ltd.* 36,808
5,923 International Paper Co. 296,150
1,588 Louisiana Pacific Corp. 32,157
4,928 Masco Corp. 140,756
1,466 Mead Corp. 54,792
9,045 Monsanto Co. 375,368
1,764 Morton International Inc. 68,796
941 Nalco Chemical Co. 31,524
2,426 Newmont Mining Corp. 43,213
1,266 Nucor Corp. 63,221
777 Owens-Corning* 30,594
2,270 Owens-Illinois, Inc. 69,235
841 Phelps Dodge Corp. 43,574
3,578 Placer Dome, Inc. 39,805
404 Potlatch Corp. 15,908
2,546 PPG Industries, Inc. 154,510
2,268 Praxair, Inc. 110,707
931 Reynolds Metals Co. 49,518
2,415 Rohm & Haas Co. 96,902
1,206 Sealed Air Corp.* 74,923
2,473 Scherwin-Williams Co. 76,199
1,455 Sigma Aldrich Corp. 46,560
1,299 Stanley Works 42,299
812 Temple-Inland, Inc. 54,404
2,473 Tenneco, Inc. 57,652
1,911 Union Carbide Corp. 98,058
1,267 USX-U.S. Steel Group, Inc. 34,130
1,469 Westvaco Corp. 41,958
2,878 Weyerhaeuser Co. 178,616
1,607 Willamette Industries, Inc. 68,097
1,297 Worthington Industries, Inc. 16,618
1,198 W. R. Grace & Co.* 21,339
- --------------------------------------------------------------------------------
6,043,572
- --------------------------------------------------------------------------------
Other Energy -- 0.9%
1,822 Anadarko Petroleum Corp. 68,325
1,582 Apache Corp. 56,952
4,734 Baker Hughes, Inc. 147,346
2,570 Burlington Resources Inc. 110,349
6,371 Halliburton Co. 263,600
723 Helmerich & Payne, Inc. 16,855
883 McDermott International, Inc. 22,627
122 NACCO Industries, Inc. 9,104
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Other Energy -- 0.9% (continued)
1,195 Rowan Cos., Inc.* $ 20,166
7,887 Schlumberger Ltd.* 474,699
3,570 Union Pacific Corp. 203,713
- --------------------------------------------------------------------------------
1,393,736
- --------------------------------------------------------------------------------
Producer Durables -- 7.6%
8,050 Allied Signal, Inc. 467,403
1,076 The B.F. Goodrich Co. 43,578
13,555 Boeing Co. 572,699
344 Briggs & Stratton Corp. 21,500
2,286 Browning Ferris Industries, Inc. 94,869
1,065 Case Corp. 50,055
5,174 Caterpillar Inc. 283,923
876 Centex Corp. 32,467
1,377 Cooper Industries Inc. 68,248
975 Crane Co. 29,311
3,463 Deere & Co. 131,810
3,235 Dover Corp. 121,919
657 EG&G, Inc. 19,505
6,319 Emerson Electric Co. 403,626
1,112 Fluor Corp. 41,422
555 Foster Wheeler Corp. 7,631
1,826 General Dynanics Corp. 120,060
47,358 General Electric Co. 4,815,717
700 Harnischfeger Industries, Inc. 5,031
1,827 Honeywell, Inc. 172,880
3,622 Illinois Tool Works, Inc. 277,989
2,374 Ingersoll-Rand Co. 151,194
661 Kaufman & Broad Home Corp. 15,947
4,709 Laidlaw, Inc. 32,963
5,685 Lockheed Martin Corp. 229,887
560 Milacron, Inc. 11,935
658 Millipore Corp. 21,961
5,805 Minnesota Mining & Manufacturing Co. 497,779
988 Northrop Grumman Corp. 66,690
1,812 Pall Corp. 36,353
1,552 Parker-Hannifin Corp. 67,803
609 Pulte Corp. 14,502
1,134 Raychem Corp. 39,407
4,861 Raytheon Co., Class B Shares 330,852
2,741 Rockwell International Corp. 151,269
2,297 Textron, Inc. 204,577
2,326 Thermo Electron Corp.* 44,485
819 Thomas & Betts Corp. 35,063
1,744 TRW, Inc. 87,309
11,799 Tyco International Ltd. 1,030,938
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 13
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Producer Durables -- 7.6% (continued)
6,529 United Technologies Corp. $ 405,206
8,661 Waste Management, Inc. 457,950
1,364 W.W. Grainger, Inc. 72,377
- --------------------------------------------------------------------------------
11,788,090
- --------------------------------------------------------------------------------
Technology -- 19.9%
874 Adobe Systems, Inc. 64,785
2,073 Advanced Micro Devices, Inc.* 38,351
14,851 America Online Inc.* 1,772,838
1,185 Andrew Corp.* 18,368
1,970 Apple Computer, Inc.* 86,803
5,338 Applied Materials, Inc.* 293,256
3,131 Ascend Communications, Inc.* 290,205
851 Autodesk, Inc. 23,509
8,907 Automatic Data Processing, Inc. 366,857
3,394 BMC Software Inc.* 167,791
2,457 Cabletron Systems, Inc.* 36,548
2,062 Ceridian Corp.* 68,046
22,821 Cisco Systems, Inc.* 2,484,636
24,366 Compaq Computer Corp. 577,183
7,776 Computer Associates International, Inc.* 367,902
2,292 Computer Sciences Corp.* 148,264
5,290 Compuware* 164,321
684 Data General Corp.* 8,978
36,785 Dell Computer Corp.* 1,266,749
7,114 Electronic Data Systems Corp. 400,163
7,254 EMC Corp.* 722,680
6,410 First Data Corp. 288,049
2,259 Gateway 2000, Inc.* 137,375
2,408 General Instrument Corp.* 93,160
1,134 Harris Corp. 42,879
14,671 Hewlett-Packard Co. 1,383,659
4,605 IMS Health, Inc. 113,398
48,186 Intel Corp. 2,605,002
26,672 International Business Machine Corp. 3,102,287
1,278 KLA-Tencor Corp.* 58,149
2,036 LSI Logic Corp. 75,459
38,199 Lucent Technologies, Inc. 2,172,568
3,586 Micron Technology, Inc. 136,044
72,932 Microsoft Corp.* 5,884,667
8,669 Motorola, Inc. 717,902
2,447 National Semiconductor Corp.* 47,411
8,604 Nortel Networks, Corp. 645,300
4,858 Novell, Inc.* 114,163
20,782 Oracle Systems Corp.* 515,653
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Technology -- 19.9% (continued)
3,819 Parametric Technology, Inc.* $ 52,989
715 PE Corp. - PE Biosystems Group 79,857
3,403 Peoplesoft, Inc.* 55,086
3,935 Pitney Bowes, Inc. 250,856
1,106 Scientific-Atlanta Corp.* 39,056
3,532 Seagate Technology, Inc.* 106,622
378 Shared Medical Systems Corp. 24,854
2,665 Silicon Graphics Co.* 32,979
3,647 Solectron Corp.* 199,673
11,140 Sun Microsystems, Inc.* 665,615
658 Tektronix, Inc. 15,257
5,625 Tellabs, Inc.* 329,063
5,641 Texas Instruments, Inc. 616,984
5,186 3Com Corp.* 142,615
3,771 UNISYS Corp.* 143,062
9,467 Xerox Corp. 531,927
- --------------------------------------------------------------------------------
30,787,853
- --------------------------------------------------------------------------------
Utilities -- 11.6%
2,765 AES Corp.* 137,559
8,269 Airtouch Communications, Inc., Class A Shares* 831,035
3,964 ALLTEL Corp. 284,169
2,001 Ameren Corp. 81,916
2,778 American Electric Power, Inc. 120,496
45,469 American Telephone & Telegraph Corp. 2,523,474
15,875 Ameritech Corp. 1,044,773
22,432 Bell Atlantic Corp. 1,228,152
28,183 Bellsouth Corp. 1,329,885
1,688 CMS Energy Corp. 78,492
2,185 Carolina Power & Light Co. 95,594
3,064 Central & Southwest Corp. 78,898
1,778 CenturyTel, Inc. 68,120
2,311 Cinergy Corp. 78,863
3,060 Coastal Corp. 118,001
1,210 Columbia Energy Group 64,735
3,373 Consolidated Edison, Inc. 163,801
1,388 Consolidated Natural Gas Co. 82,499
2,154 Constellation Energy Group 67,178
2,827 Dominion Resources, Inc. 122,091
2,080 DTE Energy Co. 90,610
5,226 Duke Energy Corp. 315,193
311 Eastern Enterprises 10,788
5,104 Edison International 140,360
5,067 Enron Corp. 361,657
3,556 Entergy Corp. 115,348
3,432 FirstEnergy Corp. 109,181
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 15
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Utilities -- 11.6% (continued)
2,612 FPL Group, Inc. $ 151,986
2,478 Frontier Corp. 130,405
1,864 GPU, Inc. 81,201
13,945 GTE Corp. 879,407
26,501 MCI Worldcom, Inc.* 2,288,938
1,671 New Century Energies, Inc. 67,571
4,146 Nextel Communications Inc.* 152,884
2,751 Niagara Mohawk Power Co.* 40,921
704 NICOR, Inc.* 26,488
2,211 Northern States Power Co. 57,624
479 ONEOK, Inc. 14,370
4,302 Pacificorp 78,243
3,245 Peco Energy Co. 158,802
2,183 Pennsylvania Power & Light 65,490
523 Peoples Energy Corp. 20,136
5,543 PG&E Corp. 187,076
3,229 Public Service Enterprise Group, Inc. 135,416
4,129 Reliant Energy, Inc. 125,935
28,274 SBC Communications, Inc. 1,445,457
3,494 Sempra Energy 75,121
1,580 Sonat Inc. 55,991
10,051 Southern Co. 285,197
6,452 Sprint Corp. FON Group 727,463
6,372 Sprint Corp. PCS Group* 286,740
4,072 Texas Utilities Co.* 183,240
3,148 Unicom Corp. 133,200
6,183 Williams Cos., Inc. 320,357
- --------------------------------------------------------------------------------
17,918,527
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $141,549,031) 153,972,156
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
U.S. Treasury Bills - 0.6%
$975,000 U.S. Treasury Bills, due 6/17/99 (Cost -- $972,761) 972,761
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $142,521,792**) $154,944,917
================================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $142,521,792) $154,944,917
Receivable for Fund shares sold 2,975,089
Dividends and interest receivable 243,592
Receivable from administrator 30,024
Receivable from broker - variation margin 28,000
- --------------------------------------------------------------------------------
Total Assets 158,221,622
- --------------------------------------------------------------------------------
LIABILITIES:
Payable to bank 792,920
Distribution fees payable 5,978
Accrued expenses 80,000
- --------------------------------------------------------------------------------
Total Liabilities 878,898
- --------------------------------------------------------------------------------
Total Net Assets $157,342,724
================================================================================
NET ASSETS
Par value of shares of beneficial interest $ 11,763
Capital paid in excess of par value 144,395,886
Undistributed net investment income 497,207
Accumulated net realized gain on investments and
futures contracts 40,078
Net unrealized appreciation of investments and
futures contracts 12,397,790
- --------------------------------------------------------------------------------
Total Net Assets $157,342,724
================================================================================
Shares Outstanding:
Class A 11,323,916
-----------------------------------------------------------------------------
Class D 439,439
-----------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $13.37
-----------------------------------------------------------------------------
Class D (and redemption price) $13.39
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 17
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999
INVESTMENT INCOME:
Dividends $ 730,933
Interest 133,961
- --------------------------------------------------------------------------------
Total Investment Income 864,894
- --------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 2) 103,819
Investment advisory fees (Note 2) 80,559
Administration fees (Note 2) 53,706
Custody 47,852
Shareholder and system servicing fees 26,447
Registration fees 22,747
Audit and legal 13,177
Shareholder communications 11,152
Trustees' fees 6,152
Other 7,833
- --------------------------------------------------------------------------------
Total Expenses 373,444
Less: Administration fee waiver and expense reimbursement (Note 2) (60,891)
- --------------------------------------------------------------------------------
Net Expenses 312,553
- --------------------------------------------------------------------------------
Net Investment Income 552,341
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES AND 6):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) 119,230
Futures contracts (162,997)
- --------------------------------------------------------------------------------
Net Realized Loss (43,767)
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments
and Futures Contracts:
Beginning of period 3,647,032
End of period 12,397,790
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 8,750,758
- --------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 8,706,991
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 9,259,332
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999 (unaudited)
and the Period Ended November 30, 1998(a)
1999 1998
================================================================================
OPERATIONS:
Net investment income $ 552,341 $ 256,578
Net realized gain (loss) (43,767) 83,845
Increase in net unrealized appreciation 8,750,758 3,647,032
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 9,259,332 3,987,455
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (314,888) --
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (314,888) --
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 113,114,365 74,919,867
Net asset value of shares issued
for reinvestment of dividends 302,038 --
Cost of shares reacquired (22,015,081) (21,910,364)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 91,401,322 53,009,503
- --------------------------------------------------------------------------------
Increase in Net Assets 100,345,766 56,996, 958
NET ASSETS:
Beginning of period 56,996,958 --
- --------------------------------------------------------------------------------
End of period* $157,342,724 $ 56,996,958
================================================================================
* Includes undistributed net investment income of: $ 497,207 $ 259,754
================================================================================
(a) For the period from January 5, 1998 (commencement of operations) to
November 30, 1998.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney S&P 500 Index Fund ("Fund") is a separate investment fund of
the Smith Barney Investment Trust ("Trust"). The Trust, a Massachusetts business
trust, is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Trust consists of this
Fund and four other funds: the Smith Barney Intermediate Maturity California
Municipals Fund, the Smith Barney Intermediate Maturity New York Municipals
Fund, Smith Barney Large Capitalization Growth Fund and Smith Barney Mid Cap
Blend Fund. The financial statements and financial highlights for the other
funds are presented in separate shareholder reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
a national securities exchange are valued at the last sale price on that
exchange or, if there were no sales, at the current quoted bid price;
over-the-counter securities and listed securities are valued at the bid price at
the close of business on each day; U.S. government securities are valued at the
quoted bid price in the over-the-counter market; investment in securities for
which market quotations are not available are valued at fair value as determined
by the Board of Trustees; (c) securities for which market quotations are not
available will be valued in good faith at fair value by or under the direction
of the Board of Trustees; (d) securities maturing within 60 days are valued at
cost plus accreted discount, or minus amortized premium, which approximates
value; (e) interest income is recorded on an accrual basis and dividend income
is recorded on the ex-dividend date; (f) the accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities, and income and expenses are translated at the rate of
exchange quoted on the respective date that such transactions are recorded.
Differences between income or expense amounts recorded and collected or paid are
adjusted when reported by the custodian bank; (g) gains or losses on the sale of
securities are calculated by using the specific identification method; (h)
dividends and distributions to shareholders are recorded by the Fund on the
ex-dividend date; (i) the character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At November 30, 1998 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Accordingly, a portion of accumulated net investment loss amounting
to $3,176 has been reclassified to paid-in capital. Net investment income, net
realized gains and net assets were
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
not affected by this adjustment; (j) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (k) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Investment Advisory Agreement,
Administration Agreement and Other Transactions
Travelers Investment Management Company, ("TIMCO"), a wholly owned subsidiary of
Citigroup Inc., acts as investment adviser to the Fund. The Fund pays TIMCO an
advisory fee calculated at an annual rate of 0.15% of the average daily net
assets. This fee is calculated daily and paid monthly.
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp.,
another subsidiary of Citigroup Inc., acts as administrator to the Fund. The
Fund pays SSBC an administration fee calculated at an annual rate of 0.10% of
the average daily net assets. This fee is calculated daily and paid monthly. For
the six months ended May 31, 1999, SSBC waived all of its administration fees
and agreed to reimburse expenses of $7,185 to the fund.
CFBDS, Inc. ("CFBDS") acts as the Fund's distributor. Salomon Smith Barney Inc.
("SSB"), another subsidiary of Citigroup Inc., as well as certain other
broker-dealers, continues to sell Fund shares to the public as members of that
selling group.
Pursuant to a Distribution Plan, the Fund pays CFBDS a service fee calculated at
an annual rate of 0.20% of the average daily net assets for Class A shares.
All officers and one Trustee of the Trust are employees of SSB.
3. Investments
During the six months ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $94,093,199
- --------------------------------------------------------------------------------
Sales 1,174,491
================================================================================
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 21
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
At May 31, 1999, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 15,570,661
Gross unrealized depreciation (3,147,536)
- --------------------------------------------------------------------------------
Net unrealized appreciation $ 12,423,125
================================================================================
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of) U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day) at
an agreed-upon higher repurchase price. The Fund requires continual maintenance
of the market value of the collateral in amounts at least equal to the
repurchase price.
5. Option Contracts
Premiums paid when put or call options are purchased by the Fund represent
investments, which are marked-to-market daily. When a purchased option expires,
the Fund will realize a loss in the amount of the premium paid. When the Fund
enters into a closing sales transaction, the Fund will realize a gain or loss
depending on whether the proceeds from the closing sales transaction are greater
or less than the premium paid for the option. When the Fund exercises a put
option, they will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When the Fund exercises a call option, the cost of the security
which the Fund purchases upon exercise will be increased by the premium
originally paid.
At May 31, 1999, the Fund held no purchased call or put options.
When the Fund writes a call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium received. When the Fund enters into a closing
purchase transaction, the Fund realizes a gain (or loss if the cost of the
closing purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is eliminated. When a written call
option is exercised the cost of the security sold will be decreased by the
premium originally received. When a written put option is exercised, the amount
of the premium originally received will reduce the cost of the security which
the
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Fund purchased upon exercise. When written index options are exercised,
settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Fund enters into options for hedging purposes. The risk in writing a
call option is that the Fund gives up the opportunity to participate in any
increase in the price of the underlying security beyond the exercise price. The
risk in writing a put option is that the Fund is exposed to the risk of loss if
the market price of the underlying security declines.
During the six months ended May 31, 1999, the Fund did not write any call or put
options.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transactions and the Fund's basis in the contract. The Fund enters into such
contracts to hedge a portion of its portfolio. The Fund bears the market risk
that arises from changes in the value of the financial instruments and
securities indices (futures contracts).
At May 31, 1999, the Fund had the following open futures contracts:
# of Basis Market Unrealized
Contracts to Buy Contracts Expiration Value Value Loss
================================================================================
S&P 500 future 10 6/99 $3,268,335 $3,243,000 $(25,335)
================================================================================
7. Lending of Portfolio Securities
The Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by cash,
U.S. gov-
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 23
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
ernment securities or high quality money market instruments that are maintained
at all times in an amount at least equal to the current market value of the
loaned securities, plus a margin depending on the type of securities loaned. The
custodian establishes and maintains the collateral in a segregated account. The
Fund maintains exposure for the risk of any losses in the investment of amounts
received as collateral.
At May 31, 1999, the Fund had no securities on loan.
8. Shares of Beneficial Interest
At May 31,1999, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct expenses, including those specifically related to the distribution of its
shares.
At May 31, 1999, total paid-in capital amounted to the following for each class:
Class A Class D
================================================================================
Total Paid-In Capital $138,986,427 $5,421,222
================================================================================
Transactions in shares of the Fund were as follows:
Six Months Ended Period Ended
May 31, 1999 November 30, 1998
================================================================================
Class A(1)
Shares sold 8,315,829 6,596,036
Shares issued on reinvestment 22,974 --
Shares reacquired (1,622,889) (1,988,034)
- --------------------------------------------------------------------------------
Net Increase 6,715,914 4,608,002
================================================================================
Class D(2)
Shares sold 335,989 175,689
Shares issued on reinvestment 940 --
Shares reacquired (48,451) (24,728)
- --------------------------------------------------------------------------------
Net Increase 288,478 150,961
================================================================================
(1) For the period from January 5, 1998 (inception date) to November 30, 1998.
(2) For the period from August 4, 1998 (inception date) to November 30, 1998.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout the
period ended November 30, except where noted:
Class A Class D
--------------------- ---------------------
1999 (1)(2) 1998 (3) 1999 (1)(2) 1998 (4)
================================================================================
Net Asset Value, Beginning of Period $11.98 $10.00 $11.99 $11.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income (5) 0.07 0.05 0.08 0.03
Net realized and unrealized gain 1.38 1.93 1.39 0.96
- --------------------------------------------------------------------------------
Total Income From Operations 1.45 1.98 1.47 0.99
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.06) -- (0.07) --
- --------------------------------------------------------------------------------
Total Distributions (0.06) -- (0.07) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $13.37 $11.98 $13.39 $11.99
- --------------------------------------------------------------------------------
Total Return++ 12.11% 19.80% 12.27% 9.00%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $151,457 $55,187 $5,886 $1,810
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses (5)(6) 0.58% 0.59% 0.34% 0.36%
Net investment income 0.99 1.05 1.23 1.33
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 4% 1% 4%
================================================================================
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from January 5, 1998 (inception date) to November 30, 1998.
(4) For the period from August 4, 1998 (inception date) to November 30, 1998.
(5) The administrator agreed to waive all of its fees for the six months ended
May 31, 1999 and for the period ended November 30, 1998. In addition, the
administrator agreed to reimburse expenses of $7,185 and $177,520 for the
six months ended May 31, 1999 and for the period ended November 30, 1998,
respectively. If these expenses were not waived and reimbursed, the per
share effect on net investment income and the expense ratio would have
been as follows:
Per Share Decreases to Expense Ratios Without
Net Investment Income Waiver and Reimbursement
---------------------- ------------------------
Class A Class D Class A+ Class D+
------- ------- -------- --------
1999 $0.01 $0.01 0.69% 0.46%
1998 0.04 0.02 1.42 1.18
(6) As a result of voluntary expense limitations, the ratio of expenses to
average net assets will not exceed 0.60% and 0.40% for Class A and Class D
shares, respectively.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney S&P 500 Index Fund 25
<PAGE>
Salomon Smith Barney
--------------------
A member of citigroup[LOGO]
Trustees
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Sandip A. Bhagat
Vice President and
Investment Officer
John Lau
Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser
Travelers Investment
Management Co.
Administrator
SSBC Fund Management Inc.
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder
Service Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney S&P 500 Index Fund. It is not authorized for distribution to
prospective investors unless accompanied or preceded by a current Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
S&P 500 Index Fund
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD01525 7/99
<PAGE>
[GRAPHIC]
Smith Barney
Intermediate
Maturity
California
Municipals Fund
------------------
SEMI-ANNUAL REPORT
------------------
May 31, 1999
Smith Barney Mutual Funds
<PAGE>
Smith Barney
Intermediate
Maturity
California
Municipals Fund
[PHOTO] [PHOTO]
HEATH B. MCLENDON JOSEPH P. DEANE
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to present the semiannual report for the Smith Barney
Intermediate Maturity California Municipals Fund ("Fund") for the period ended
May 31, 1999. We hope you find this report to be useful and informative. In this
report, we summarize the period's prevailing economic and market conditions and
outline the Fund's investment strategy. A detailed summary of the Fund's
performance and current holdings can be found in the appropriate sections that
follow.
Performance Update
For the six months ended May 31, 1999, the Fund's Class A shares returned 0.23%,
without sales charges, versus its Lipper, Inc. California intermediate-term
municipals peer group average total return of 0.36% over the same period.
(Lipper is a major independent fund-tracking organization.)
Municipal Bond Market Update and Outlook
In April, the Consumer Price Index ("CPI") increased 0.7% -- its largest monthly
increase in nine years. With global economic growth picking up, inflationary
fears surfaced. The Federal Reserve Board raised short-term interest rates 0.25%
on June 30, 1999 and yields in the bond market went up.
Looking forward, and as we near the end of the millennium and the onset of Y2K,
we believe that fixed-income securities in the U.S. will be in solid demand.
That, in turn, should provide a positive environment for municipal bonds for the
remainder of 1999. We are positioning ourselves for modestly lower rates over
the next six months, and if there is no repeat of a higher CPI number, we stand
an excellent chance of seeing a modest decline in rates as we move toward the
fall.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 1
<PAGE>
Investment Strategy and Portfolio Update
The Fund's investment seeks to provide California investors with as high a level
of current income that is exempt from federal income taxes* and California state
personal income taxes as is consistent with the preservation of principal. The
Fund invests primarily in investment grade municipal securities issued by the
State of California and certain other municipal issuers, political subdivisions,
agencies and public authorities that pay interest and are exempt from federal
income and California personal income taxes. The Fund maintains an average
portfolio maturity of between three and ten years.
Our investment strategy for the Fund is to seek to maximize our dividend yield.
In our view, the municipal bond market has provided us with excellent
opportunities during the reporting period. Since interest rates have risen, we
have been able to invest our excess cash at higher yields. In addition, we have
also been focusing on adding high-grade bonds to the Fund's portfolio.
(Currently the credit spread between AAA-rated and BBB-rated bonds are near
their narrowest spread levels ever.) At these narrow spread levels, we do not
think it makes sense to buy low-grade bonds and assume additional credit risk.
Because our interest rate forecast remains positive, we believe our current
investment strategy should allow us to maximize dividend yields going forward.
During the past year, the Fund focused on transportation bonds (12.8%), water
and sewer bonds (12.8%) and housing bonds (11.8%) because we believe they
offered good relative values. At the end of May, the Fund's weighted average
maturity was approximately 7.5 years. In addition, as of May 31, 1999, roughly
98% of the Fund's holdings were rated investment grade by either Standard &
Poor's Ratings Group or Moody's Investors Services Inc., with 67% of the Fund
invested in AAA bonds, the highest rating.
California Economic Highlights
Moody's Investors Services, Inc. has assigned a rating of "Aa3" to the State of
California's general obligation bonds and refunding bonds. According to Moody's,
"The rating reflects the state's deep and diverse economic financial condition,
including the rebuilding of cash and budget reserves, improved prospects of
continued structural budget balance, even under assumptions of slowing economic
growth."
- ----------
* A portion of the income from this fund may be subject to the Alternative
Minimum Income Tax (AMT).
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
California's economy continues to perform better than that of the national
economy with respect to employment and personal income growth. Yet, the
lingering effects of Asia's recession has taken a toll on high-tech
manufacturing and related industries, an important driver of the Golden State's
economic growth.
In closing, thank you for your investment in the Smith Barney Intermediate
Maturity California Municipals Fund. We look forward to continuing to help you
achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
June 8, 1999
- --------------------------------------------------------------------------------
Principal Risks of Investing in the Fund
Investors could lose money on their investment in the Fund, or the Fund may not
perform as well as other investments, if:
o Interest rates rise, causing the value of the Fund's portfolio to decline;
o The issuer of a security owned by the Fund defaults on its obligation to
pay principal and/or interest or the security's credit rating is
downgraded;
o California municipal securities fall out of favor with investors. The Fund
will suffer more than a national municipal fund from adverse events
affecting California municipal issuers;
o Unfavorable legislation affects the tax-exempt status of municipal bonds;
o The manager's judgment about the attractiveness, value or income potential
of a particular security proves to be incorrect.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 3
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
5/31/99 $8.85 $8.69 $0.18 $0.00 0.23%+
- --------------------------------------------------------------------------------
11/30/98 8.66 8.85 0.39 0.00 6.78
- --------------------------------------------------------------------------------
11/30/97 8.55 8.66 0.40 0.00 6.13
- --------------------------------------------------------------------------------
11/30/96 8.53 8.55 0.40 0.00 5.05
- --------------------------------------------------------------------------------
11/30/95 7.80 8.53 0.40 0.00 14.84
- --------------------------------------------------------------------------------
11/30/94 8.50 7.80 0.39 0.01 (3.65)
- --------------------------------------------------------------------------------
11/30/93 8.04 8.50 0.39 0.00 10.70
- --------------------------------------------------------------------------------
Inception* - 11/30/92 7.90 8.04 0.35 0.00 6.33+
================================================================================
Total $2.90 $0.01
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class L Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
5/31/99 $8.84 $8.68 $0.17 $0.00 0.13%+
- --------------------------------------------------------------------------------
11/30/98 8.65 8.84 0.37 0.00 6.57
- --------------------------------------------------------------------------------
11/30/97 8.54 8.65 0.38 0.00 5.92
- --------------------------------------------------------------------------------
11/30/96 8.52 8.54 0.38 0.00 4.84
- --------------------------------------------------------------------------------
11/30/95 7.80 8.52 0.38 0.00 14.36
- --------------------------------------------------------------------------------
Inception* - 11/30/94 7.76 7.80 0.02 0.00 0.72+
================================================================================
Total $1.70 $0.00
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
5/31/99 $8.86 $8.70 $0.19 $0.00 0.32%+
- --------------------------------------------------------------------------------
11/30/98 8.66 8.86 0.40 0.00 7.09
- --------------------------------------------------------------------------------
11/30/97 8.56 8.66 0.42 0.00 6.20
- --------------------------------------------------------------------------------
11/30/96 8.54 8.56 0.41 0.00 5.22
- --------------------------------------------------------------------------------
Inception* - 11/30/95 8.39 8.54 0.09 0.00 2.92+
================================================================================
Total $1.51 $0.00
================================================================================
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
Without Sales Charge(1)
--------------------------------
Class A Class L Class Y
================================================================================
Six Months Ended 5/31/99+ 0.23% 0.13% 0.32%
- --------------------------------------------------------------------------------
Year Ended 5/31/99 4.09 3.89 4.28
- --------------------------------------------------------------------------------
Five Years Ended 5/31/99 6.04 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/99 6.12 7.06 5.84
================================================================================
With Sales Charge(2)
--------------------------------
Class A Class L Class Y
================================================================================
Six Months Ended 5/31/99+ (1.77)% (1.85)% 0.32%
- --------------------------------------------------------------------------------
Year Ended 5/31/99 1.99 1.83 4.28
- --------------------------------------------------------------------------------
Five Years Ended 5/31/99 5.60 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/99 5.84 6.82 5.84
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return
- --------------------------------------------------------------------------------
Without Sales Charge(1)
================================================================================
Class A (Inception* through 5/31/99) 55.42%
- --------------------------------------------------------------------------------
Class L (Inception* through 5/31/99) 36.48
- --------------------------------------------------------------------------------
Class Y (Inception* through 5/31/99) 23.56
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 2.00% and 1.00%,
respectively. Class L shares also reflect the deduction of a 1.00% CDSC,
which applies if shares are redeemed within one year from purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, L and Y shares are December 31, 1991,
November 8, 1994 and September 8, 1995, respectively.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 5
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A Shares of the
Smith Barney Intermediate Maturity California Municipals Fund
vs. Lehman Brothers 10-Year Municipal Bond Index
and Lipper Analytical Services, Inc. Peer Group Average+
- --------------------------------------------------------------------------------
December 1991 -- May 1999
[LINE GRAPH]
Smith Barney Lehman Brothers Lipper Analytical
Intermediate Maturity 10-Year Municipal Services, Inc.
California Municipals Fund Bond Index Peer Group Average
- --------------------------------------------------------------------------------
12/31/91 9,802 10,000 10,000
11/92 10,422 10,767 10,623
11/93 11,537 12,028 11,682
11/94 11,116 11,491 11,246
11/95 12,766 13,623 12,910
11/96 13,411 14,394 13,566
11/97 14,233 15,410 14,307
11/98 15,199 16,651 15,261
5/31/99 15,233 16,725 15,316
- --------------------------------------------------------------------------------
+ Hypothetical illustration of $10,000 invested in Class A shares at
inception on December 31, 1991, assuming deduction of the maximum 2.00%
sales charge at the time of investment and reinvestment of dividends and
capital gains, if any, at net asset value through May 31, 1999. The Lehman
Brothers 10-Year Municipal Bond Index ("Index") is a broad-based index
which includes about 5,200 bonds totaling approximately $63 billion in
market capitalization. The Lipper Analytical Services, Inc. Peer Group
Average is composed of an average of the Fund's peer group of mutual funds
(27 funds as of May 31, 1999) investing in intermediate maturity
California tax-exempt bonds. The index is unmanaged and is not subject to
the same management and trading expenses as a mutual fund. The performance
of the Fund's other classes may be greater or less than the Class A
shares' performance indicated on this chart, depending on whether greater
or lesser sales charges and fees were incurred by shareholders investing
in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
- --------------------------------------------------------------------------------
6 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Portfolio Highlights (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
Portfolio Breakdown
[PIE CHART]
Education 5.7%
General Obligation 7.2%
Hospital 11.3%
Housing 11.8%
Miscellaneous 28.8%
Solid Waste 4.8%
Tax Allocation 4.8%
Transportation 12.8%
Water & Sewer 12.8%
Summary of Municipal Bonds And Short-Term Tax Exempt
Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
Aaa AAA 67.0%
Aa AA 11.5
A A 8.4
Baa BBB 10.9
NR NR 1.1
P-1/VMIG 1 A-1/SP-1 1.1
-----
100.0%
=====
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 7
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Education -- 5.7%
California Educational Facilities Authority Revenue:
$ 945,000 AAA College of Osteopathic Medicine, CONNIE LEE-Insured,
5.550% due 6/1/06 $ 1,021,781
320,000 A1* Loyola Marymount University, Series B,
(Pre-Refunded -- Escrowed to Maturity with
U.S. government securities to 10/1/02
Call @ 102), 6.300% due 10/1/03(b) 350,400
200,000 A2* Mills College, (Escrowed to Maturity with
U.S. government securities), 6.500% due 9/1/02(b) 216,250
500,000 AA University of Southern California, 5.300% due 10/1/04 533,750
- -------------------------------------------------------------------------------------------
2,122,181
- -------------------------------------------------------------------------------------------
General Obligation -- 7.2%
200,000 Aa3* California State GO, 6.000% due 9/1/03 216,500
1,250,000 AAA California State GO, Veteran's Bonds, Series BL,
FSA-Insured, 4.950% due 12/1/08(c) 1,273,438
285,000 AAA Kern High School District GO, Series C, MBIA-Insured,
(Escrowed to Maturity with U.S. government
securities), 8.750% due 8/1/03 337,725
Mojave Water Agency Improvement District GO, Morongo Basin:
250,000 AAA Escrowed to Maturity with U.S. government securities,
6.250% due 9/1/02 269,063
280,000 AAA Pre-Refunded -- Escrowed with U.S. government
securities to 9/1/02 Call @ 102, 6.375% due 9/1/03 307,300
300,000 Aa3* Torrance Unified School District GO, Series A,
4.250% due 8/1/11 294,000
- -------------------------------------------------------------------------------------------
2,698,026
- -------------------------------------------------------------------------------------------
Hospital -- 11.3%
215,000 AAA Arlington Community Hospital Corp. Revenue,
(Escrowed to Maturity with U.S. government
securities), 8.000% due 6/1/04 234,887
California Health Facilities Financing Authority Revenue:
1,000,000 AAA Mills-Peninsula Hospital, Series B, CONNIE LEE-Insured,
5.300% due 1/15/05 1,057,500
700,000 AAA Kaiser Permanente, Series B, AMBAC-Insured,
5.250% due 10/1/10 722,750
400,000 NR St. Elizabeth's Community Hospital Project,
(Pre-Refunded -- Escrowed with U.S. government
securities to 11/5/02 Call @ 102),
5.900% due 11/15/03(b) 434,000
200,000 AA- Sisters of Providence, 6.200% due 10/1/03 216,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Hospital -- 11.3% (continued)
$1,200,000 AA California Statewide Communities Development
Authority, COP, St. Joseph's Health Systems Group,
(Pre-Refunded -- Escrowed with state and local
government securities to 7/1/04 Call @ 102),
5.875% due 7/1/05 $ 1,321,500
250,000 A Riverside County Asset Leasing Corp., Leasehold
Revenue, (Riverside County Hospital Project),
Series A, 6.000% due 6/1/04 269,375
- -------------------------------------------------------------------------------------------
4,256,762
- -------------------------------------------------------------------------------------------
Housing -- 11.8%
1,250,000 AAA ABAG Finance Authority for Non-Profit Corporations,
Multi-Family Housing Revenue, (Edgewood Apartments
Project), Series A, FNMA-Collateralized,
5.700% mandatory put 11/1/06(c)(d) 1,306,250
California Housing Finance Agency, Home Mortgage Revenue:
5,000 Aa2* MGIC-Insured, LOC-Citibank N.A., 10.000% due 2/1/02 5,001
255,000 Aa2* Series B-1, FHA-Insured, 5.900% due 8/1/04(c) 266,475
700,000 Aa2* Series E-1, FHA/VA-Insured, 5.900% due 2/1/05(c) 736,750
700,000 Aa2* Series E-1, FHA/VA-Insured, 5.900% due 8/1/05(c) 738,500
745,000 AAA Riverside County Housing Authority, Multi-Family
Housing Revenue, (Brandon Place Apartments
Project), Series B, FNMA-Collateralized,
5.625% mandatory put 7/1/09(c) 779,456
210,000 AAA San Luis Obispo Housing Authority, Multi-Family
Housing Revenue, (Parkwood Apartments Project),
Series A, FNMA-Collateralized, 5.500% due 8/1/03 217,087
360,000 AAA Santa Rosa Mortgage Revenue Refunding,
(Marlow Apartments Project), Series A,
FHA-Insured, 5.600% due 9/1/05 373,050
- -------------------------------------------------------------------------------------------
4,422,569
- -------------------------------------------------------------------------------------------
Miscellaneous -- 28.8%
1,115,000 AAA Corona Public Financing Authority Revenue, Superior
Lien, Series A, FSA-Insured, 4.500% due 9/1/10 1,106,638
1,020,000 AAA El Monte Department of Public Social Services Facility,
COP, AMBAC-Insured, 4.500% due 6/1/12 991,950
1,080,000 AAA Los Angeles County Community Facilities District
No. 3, Special Tax Refunding, Series A,
FSA-Insured, 5.250% due 9/1/07 1,152,900
140,000 Aaa* Montclair Redevelopment Agency, Residential
Mortgage Revenue, (Escrowed to Maturity with
U.S. government securities), 7.750% due 10/1/11 163,800
1,250,000 AAA Oakland State Building Authority, Lease Revenue,
Elihu M. Harris, Series A, AMBAC-Insured,
4.250% due 4/1/07 1,248,438
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Miscellaneous -- 28.8% (continued)
$1,000,000 AAA Roseville Community Facilities District No.1, Special
Tax Refunding, FSA-Insured, 4.625% due 9/1/10 $ 1,002,500
Sacramento County Public Facilities COP,
(Gas to Energy Project), MBIA Insured:
850,000 AAA 4.250% due 12/1/09 836,188
650,000 AAA 4.375% due 12/1/10 634,562
1,000,000 AAA San Diego COP, Central Jail Refunding, AMBAC-Insured,
4.800% due 10/1/08 1,026,250
San Francisco Downtown Parking Corp. Revenue:
450,000 A3* 6.000% due 4/1/02 475,313
280,000 A3* 6.150% due 4/1/03 301,350
Santa Barbara COP, (Harbor Refunding Project):
270,000 A* 6.400% due 10/1/02 291,262
285,000 A* 6.500% due 10/1/03 312,431
1,000,000 Aaa* Tulare County COP, MBIA-Insured, 5.000% due 8/15/10 1,032,500
205,000 AAA Upland COP, (Police Building Refunding Project),
AMBAC-Insured, 6.200% due 8/1/02 219,606
- -------------------------------------------------------------------------------------------
10,795,688
- -------------------------------------------------------------------------------------------
Solid Waste -- 4.8%
Kings County Waste Management Authority, Solid Waste Revenue:
375,000 BBB 6.500% due 10/1/03(c) 407,344
290,000 BBB 6.600% due 10/1/04(c) 320,088
1,000,000 Baa1* South Napa Waste Management Authority, (Solid Waste
Transfer Facilities Project), 6.000% due 2/15/04(c) 1,062,500
- -------------------------------------------------------------------------------------------
1,789,932
- -------------------------------------------------------------------------------------------
Tax Allocation -- 4.8%
1,000,000 Baa* Hawthorne Community Redevelopment Agency, Tax Allocation,
(Redevelopment Project, Area 2), (Pre-Refunded --
Escrowed with U.S. government securities to 9/1/04
Call @ 102), 6.200% due 9/1/05(b)(d) 1,093,750
665,000 BBB+ Paramount Redevelopment Agency, Tax Allocation Refunding,
(Redevelopment Project, Area No. 1), 5.800% due 8/1/03 714,044
- -------------------------------------------------------------------------------------------
1,807,794
- -------------------------------------------------------------------------------------------
Transportation -- 12.8%
500,000 A1* Los Angeles County Transportation Commission, COP,
Series B, 6.200% due 7/1/03 541,875
1,000,000 AAA Orange County Local Transportation Authority,
Sales Tax Revenue, Series A, MBIA-Insured,
5.500% due 2/15/09 1,082,500
Palm Springs Financing Authority, Regional Airport
Revenue, MBIA-Insured:
200,000 AAA 5.400% due 1/1/03(c) 209,750
400,000 AAA 5.500% due 1/1/04(c) 422,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Transportation -- 12.8% (continued)
$ 350,000 A1* Sacramento Regional Transportation District COP,
Series A, 6.400% due 3/1/03 $ 379,312
240,000 AAA San Francisco Airport Improvement Authority, Lease
Revenue, United Airlines Inc., (Escrowed to Maturity
with U.S. government securities), 8.000% due 7/1/13 293,700
San Jose, Airport Revenue:
800,000 AAA FGIC-Insured, 5.400% due 3/1/04(c) 845,000
500,000 AAA MBIA-Insured, 5.750% due 3/1/03 533,125
450,000 BBB+ Southern California Rapid Transit District, Special
Benefit Assessment, District A-2, 6.100% due 9/1/03 482,063
- -------------------------------------------------------------------------------------------
4,789,325
- -------------------------------------------------------------------------------------------
Water and Sewer -- 12.8%
1,000,000 AAA El Dorado County Public Agency Financing Authority
Revenue, FGIC-Insured, 5.200% due 2/15/07 1,060,000
1,000,000 AAA Modesto Irrigation District Financing Authority
Revenue, Series A, MBIA-Insured, 5.350% due 10/1/06 1,073,750
Morgan Hill COP, (Water Systems Improvement Projects),
FSA-Insured:
225,000 AAA 4.500% due 6/1/11 222,187
235,000 AAA 4.600% due 6/1/12 231,769
250,000 AAA 4.700% due 6/1/13 246,250
400,000 A-1+ Orange County Sanitation District Revenue, COP,
Series C, FGIC-Insured, 3.250% due 8/1/17(e) 400,000
1,500,000 AAA San Diego Public Facilities Financing Authority, Sewer
Revenue, Series A, FGIC-Insured, 5.125% due 5/15/2011 1,560,000
- -------------------------------------------------------------------------------------------
4,793,956
- -------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $35,859,530**) $37,476,233
===========================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Rating Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(b) Pre-Refunded bonds escrowed with U.S. government securities and bonds
escrowed to maturity with U.S. government securities are considered by the
investment advisor to be triple-A rated even if issuer has not applied for
new ratings.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(d) Security segregated by Custodian for open purchase commitments.
(e) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
** Aggregate cost for Federal income tax purpose is substantially the same.
See pages 12 and 13 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BBB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher rated categories.
Moody's Investor Service, Inc. ("Moody's") -- Numerical modifiers 1, 2 and 3 may
be applied to each generic rating from "Aa" to "Baa," where 1 is the highest and
3 the lowest ranking within its generic category.
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large in "Aaa"
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.
A -- Bonds rated "A" possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds rated "Baa" are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Fitch Investor Services, Inc. ("Fitch") -- Ratings may be modified by the
addition of a plus (+) or minus (-) sign to show relative standings within the
major ratings categories.
A -- Bonds rated "A" are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and/or
dividends and repay principal is considered to be strong, but may be
more vulnerable to adverse changes in economic conditions and
circumstances than securities with higher ratings.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited) (continued)
- --------------------------------------------------------------------------------
BBB -- Bonds rated "BBB" are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest
or dividends and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these securities and,
therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for
securities with higher ratings.
NR -- Indicates that the bond is not rated by Standard & Poor's, Moody's
or Fitch.
- --------------------------------------------------------------------------------
Short-Term Securities Ratings (unaudited)
- --------------------------------------------------------------------------------
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong;
those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG 1 rating.
- --------------------------------------------------------------------------------
Security Descriptions (unaudited)
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CONNIE
LEE -- College Construction Loan Insurance Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
FLAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MGIC -- Mortgage Guaranty Insurance Corp.
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCFA -- Pollution Control Financing Authority
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 13
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $35,859,530) $37,476,233
Interest receivable 524,651
Receivable for Fund shares sold 9,897
Receivable for securities sold 85,491
- -------------------------------------------------------------------------------
Total Assets 38,096,272
- -------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,107,162
Dividends payable 129,204
Investment advisory fees payable 30,598
Administration fees payable 20,268
Payable to bank 1,855
Distribution fees payable 1,179
Accrued expenses 36,574
- -------------------------------------------------------------------------------
Total Liabilities 1,326,840
- -------------------------------------------------------------------------------
Total Net Assets $36,769,432
===============================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 4,234
Capital paid in excess of par value 36,091,692
Overdistributed net investment income (9,102)
Accumulated net realized loss from security transactions (934,095)
Net unrealized appreciation of investments 1,616,703
- -------------------------------------------------------------------------------
Total Net Assets $36,769,432
===============================================================================
Shares Outstanding:
Class A 3,559,944
-----------------------------------------------------------------------------
Class L 637,716
-----------------------------------------------------------------------------
Class Y 35,907
-----------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $8.69
-----------------------------------------------------------------------------
Class L* $8.68
-----------------------------------------------------------------------------
Class Y (and redemption price) $8.70
-----------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 2.04% of net asset value per share) $8.87
-----------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $8.77
===============================================================================
* Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase (See Note 3).
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999
INVESTMENT INCOME:
Interest $ 887,631
- -------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 53,182
Administration fees (Note 3) 35,454
Distribution fees (Note 3) 31,841
Audit and legal 20,045
Shareholder communications 12,109
Shareholder and system servicing fees 11,764
Registration fees 6,750
Trustees' fees 5,106
Pricing service fees 3,329
Custody 1,560
Other 1,131
- -------------------------------------------------------------------------------
Total Expenses 182,271
Less: Investment advisory and administration fee waivers (Note 3) (20,080)
- -------------------------------------------------------------------------------
Net Expenses 162,191
- -------------------------------------------------------------------------------
Net Investment Income 725,440
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Gain (Loss) From Security Transactions
(excluding short-term securities):
Proceeds from sales 1,342,952
Cost of securities sold 1,351,203
- -------------------------------------------------------------------------------
Net Realized Loss (8,251)
- -------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 2,275,964
End of period 1,616,703
- -------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (659,261)
- -------------------------------------------------------------------------------
Net Loss on Investments (667,512)
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 57,928
===============================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 15
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1999 (unaudited)
and the Year Ended November 30, 1998
1999 1998
===============================================================================
OPERATIONS:
Net investment income $ 725,440 $ 1,377,748
Net realized gain (loss) (8,251) 40,605
Increase (decrease) in net unrealized appreciation (659,261) 626,274
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 57,928 2,044,627
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 4):
Net investment income (737,427) (1,369,680)
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (737,427) (1,369,680)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 6,845,668 7,542,952
Net asset value of shares issued for
reinvestment of dividends 424,464 948,174
Cost of shares reacquired (3,695,897) (4,632,497)
- -------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 3,574,235 3,858,629
- -------------------------------------------------------------------------------
Increase in Net Assets 2,894,736 4,533,576
NET ASSETS:
Beginning of period 33,874,696 29,341,120
- -------------------------------------------------------------------------------
End of period* $36,769,432 $33,874,696
===============================================================================
* Includes undistributed (overdistributed)
net investment income of: $(9,102) $2,885
===============================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Smith Barney Intermediate Maturity California Municipals Fund ("Fund") is a
separate, non-diversified, investment fund of the Smith Barney Investment Trust
("Trust"). The Trust, a Massachusetts business trust, is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company and consists of this Fund and four other separate investment funds:
Smith Barney Intermediate Maturity New York Municipals Fund, Smith Barney Large
Capitalization Growth Fund, Smith Barney Mid Cap Blend Fund and Smith Barney S&P
500 Index Fund. The financial statements and financial highlights for the other
funds are presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on the trade date; (b) securities are
valued at the mean between the quoted bid and asked prices provided by an
independent pricing service that are based on transactions in municipal
obligations, quotations from municipal bond dealers, market transactions in
comparable securities and various relationships between securities; (c)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (d) gains or losses on the
sale of securities are calculated by using the specific identification method;
(e) interest income, adjusted for amortization of premium and accretion of
original issue discount, is recorded on the accrual basis; market discount is
recognized upon the disposition of the security; (f) direct expenses are charged
to the Fund and each class; management fees and general fund expenses are
allocated on the basis of relative net assets; (g) dividends and distributions
to shareholders are recorded on the ex-dividend date; (h) the Fund intends to
comply with the applicable provisions of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (i) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Portfolio Concentration
Since the Fund invests primarily in obligations of issuers within California, it
is subject to possible concentration risks associated with economic, political,
or legal developments or industrial or regional matters specifically affecting
California.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 17
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSBC Fund Management Inc., ("SSBC") formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment
adviser to the Fund. The Fund pays SSBC an investment advisory fee calculated at
an annual rate of 0.30% of the average daily net assets. This fee is calculated
daily and paid monthly. For the six months ended May 31, 1999, SSBC waived
investment advisory fees of $12,048.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at the annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly. For the six months ended May 31, 1999,
SSBC waived administration fees of $8,032.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as members of the selling group.
There is a contingent deferred sales charge ("CDSC") of 1.00% on Class L shares,
which applies if redemption occurs within the first year of purchase. For the
six months ended May 31, 1999, CDSCs paid to CFBDS for Class L shares were
approximately $1,000. In addition CFBDS received sales charges of $48,000 and
$9,000 on sales of the Fund's Class A and L shares, respectively.
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A and L shares, calculated at the annual rate of 0.15% of the average
daily net assets for each class. In addition, the Fund pays a distribution fee
with respect to its Class L shares calculated at the annual rate of 0.20%. For
the six months ended May 31, 1999, total Distribution Plan fees were:
Class A Class L
================================================================================
Distribution Plan Fees $22,248 $9,593
================================================================================
All officers and one Trustee of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
4. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular Federal income tax and from designated
state income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
5. Investments
During the six months ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $6,331,556
- --------------------------------------------------------------------------------
Sales 1,342,952
================================================================================
At May 31, 1999, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
===============================================================================
Gross unrealized appreciation $1,746,293
Gross unrealized depreciation (129,590)
- -------------------------------------------------------------------------------
Net unrealized appreciation $1,616,703
===============================================================================
6. Capital Loss Carryforwards
At November 30, 1998, the Fund had for Federal tax purposes approximately
$926,000 of capital loss carryforwards available, subject to certain
limitations, to offset future capital gains. To the extent that these
carryforward losses are used to offset capital gains, it is probable that the
gains so offset will not be distributed.
The amount and year of expiration for each carryforward loss is indicated below:
11/30/02 11/30/03
================================================================================
Capital Loss Carryforwards $657,000 $269,000
================================================================================
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) continued)
- --------------------------------------------------------------------------------
7. Shares of Beneficial Interest
At May 31, 1999, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct expenses, including those specifically related to the distribution of its
shares.
At May 31, 1999, total paid-in capital amounted to the following for each class.
Class A Class L Class Y
================================================================================
Total Paid-in Capital $30,365,202 $5,471,796 $258,928
================================================================================
Transactions in shares of each class were as follows:
Six Months Ended Year Ended
May 31, 1999 November 30, 1998
----------------------- -----------------------
Shares Amount Shares Amount
===============================================================================
Class A
Shares sold 673,820 $ 5,950,964 571,108 $ 5,019,763
Shares issued on
reinvestment 39,976 352,722 91,477 800,601
Shares reacquired (353,188) (3,111,710) (424,495) (3,722,275)
- -------------------------------------------------------------------------------
Net Increase 360,608 $ 3,191,976 238,090 $ 2,098,089
===============================================================================
Class L+
Shares sold 101,296 $ 894,704 288,836 $ 2,523,189
Shares issued on
reinvestment 7,508 66,162 15,296 133,771
Shares reacquired (66,337) (584,187) (104,394) (910,222)
- -------------------------------------------------------------------------------
Net Increase 42,467 $ 376,679 199,738 $ 1,746,738
===============================================================================
Class Y
Shares issued on
reinvestment 632 $ 5,580 1,575 $ 13,802
- -------------------------------------------------------------------------------
Net Increase 632 $ 5,580 1,575 $ 13,802
===============================================================================
+ On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class A Shares 1999(1)(2) 1998 1997 1996 1995 1994
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.85 $8.66 $8.55 $8.53 $7.80 $8.50
- ------------------------------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income (3) 0.18 0.39 0.40 0.40 0.40 0.39
Net realized and
unrealized gain (loss) (0.16) 0.19 0.11 0.02 0.73 (0.69)
- ------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.02 0.58 0.51 0.42 1.13 (0.30)
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.18) (0.39) (0.40) (0.40) (0.40) (0.39)
Net realized gains -- -- -- -- -- (0.01)
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.18) (0.39) (0.40) (0.40) (0.40) (0.40)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.69 $8.85 $8.66 $8.55 $8.53 $7.80
- ------------------------------------------------------------------------------------------------------------------------
Total Return 0.23%++ 6.78% 6.13% 5.05% 14.84% (3.65)%
- ------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $30,924 $28,303 $25,630 $24,537 $26,211 $25,359
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses (3) 0.88%+ 0.75% 0.75% 0.77% 0.75% 0.75%
Net investment income 4.12+ 4.45 4.65 4.69 4.89 4.73
- ------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 4% 8% 9% 15% 8% 39%
========================================================================================================================
</TABLE>
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1999 and each of the five years ended
November 30, 1998. In addition, the investment adviser reimbursed the Fund
for $75,189 in expenses for the year ended November 30, 1996. If such fees
were not waived and expenses were not reimbursed, the per share effect on
net investment income and the expense ratios would have been as follows:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases to Without Fee Waivers
Net Investment Income and Reimbursements
----------------------------------------- ------------------------------------------
1999(1) 1998 1997 1996 1995 1994 1999(1) 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ---- ------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.02 $0.03 $0.07 $0.03 $0.04 1.02%+ 1.00% 1.12% 1.54% 1.16% 1.24%
</TABLE>
++ Total return is not annualized, as it may not be representavive of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 21
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class L Shares 1999(1)(2) 1998(2)(3) 1997 1996 1995 1994(4)
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.84 $8.65 $8.54 $8.52 $7.80 $7.76
- -----------------------------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income (5) 0.17 0.37 0.38 0.38 0.38 0.01
Net realized and
unrealized gain (loss) (0.16) 0.19 0.11 0.02 0.72 0.05*
- -----------------------------------------------------------------------------------------------------------------------
Total Income From
Operations 0.01 0.56 0.49 0.40 1.10 0.06
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.17) (0.37) (0.38) (0.38) (0.38) (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.17) (0.37) (0.38) (0.38) (0.38) (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.68 $8.84 $8.65 $8.54 $8.52 $7.80
- -----------------------------------------------------------------------------------------------------------------------
Total Return 0.13%++ 6.57% 5.92% 4.84% 14.36% 0.72%++
- -----------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $5,533 $5,260 $3,419 $2,607 $2,254 $45
- -----------------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses (5) 1.09%+ 0.97% 0.96% 0.98% 0.98% 0.95%+
Net investment income 3.91+ 4.22 4.44 4.48 4.54 4.53+
- -----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 4% 8% 9% 15% 8% 39%
=======================================================================================================================
</TABLE>
(1) For the six months ended May 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) For the period from November 8, 1994 (inception date) to November 30,
1994.
(5) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1999, each of the four years ended
November 30, 1998 and the period ended November 30, 1994. In addition, the
investment adviser reimbursed the Fund for $75,189 in expenses for the
year ended November 30, 1996. If such fees were not waived and expenses
were not reimbursed, the per share effect on net investment income and the
expense ratios would have been as follows:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases to Without Fee Waivers
Net Investment Income and Reimbursements
----------------------------------------- -----------------------------------------
1999(1) 1998 1997 1996 1995 1994 1999(1) 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ---- ------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class L $0.01 $0.02 $0.03 $0.07 $0.03 $0.00* 1.23%+ 1.21% 1.33% 1.75% 1.39% 1.44%+
</TABLE>
* The amount in this caption for each share outstanding throughout the
period may not accord with the change in aggregate gains and losses in the
portfolio securities for the period because of the timing of purchases and
withdrawals of shares in relation to the fluctuating market values of the
portfolio.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class Y Shares 1999(1)(2) 1998 1997 1996 1995(3)
==================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.86 $8.66 $8.56 $8.54 $8.39
- --------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (4) 0.19 0.41 0.41 0.41 0.09
Net realized and
unrealized gain (loss) (0.16) 0.19 0.11 0.02 0.15
- --------------------------------------------------------------------------------------------------
Total Income From Operations 0.03 0.60 0.52 0.43 0.24
- --------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.19) (0.40) (0.42) (0.41) (0.09)
- --------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.40) (0.42) (0.41) (0.09)
- --------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.70 $8.86 $8.66 $8.56 $8.54
- --------------------------------------------------------------------------------------------------
Total Return 0.32%++ 7.09% 6.20% 5.22% 2.92%++
- --------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $312 $312 $292 $274 $261
- --------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (4) 0.70%+ 0.57% 0.56% 0.59% 0.58%+
Net investment income 4.31+ 4.62 4.84 4.87 4.74+
- --------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 4% 8% 9% 15% 8%
==================================================================================================
</TABLE>
(1) For the six months ended May 31, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from September 8, 1995 (inception date) to November 30,
1995.
(4) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1999, each of the three years ended
November 30, 1998 and the period ended November 30, 1995. In addition, the
investment adviser reimbursed the Fund for $75,189 in expenses for the
year ended November 30, 1996. If such fees were not waived and expenses
were not reimbursed, the per share effect on net investment income and the
expense ratios would have been as follows:
Expense Ratios
Per Share Decrease to Without Fee Waivers
Net Investment Income and Reimbursements
---------------------------------- ---------------------------------
1999(1) 1998 1997 1996 1995 1999(1) 1998 1997 1996 1995
------- ---- ---- ---- ---- ------- ---- ---- ---- ----
Class Y $0.01 $0.02 $0.03 $0.07 $0.03 0.84%+ 0.82% 0.94% 1.36% 0.99%+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 23
<PAGE>
[This page intentionally left blank]
<PAGE>
SalomonSmithBarney
----------------------------
A member of citigroup[LOGO]
Trustees
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser and Administrator
SSBC Fund Management Inc.
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Intermediate Maturity California Municipals Fund. It is not
authorized for distribution to prospective investors unless accompanied or
preceded by a current Prospectus for the Fund, which contains information
concerning the Fund's investment policies and expenses as well as other
pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Intermediate Maturity
California Municipals Fund
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD2400 7/99
