<PAGE>
[LOGO OF SMITH BARNEY]
SMITH BARNEY
MID CAP BLEND
Fund
STYLE PURE SERIES
SEMI-ANNUAL REPORT
MAY 31, 2000
[LOGO OF SMITH BARNEY]
Your Serious Money. Professionally Managed.(SM)
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Smith Barney
Mid Cap Blend Fund
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The Smith Barney Mid Cap Blend Fund)("Fund") seeks long-term growth of capital
by investing primarily in the equity securities of medium-sized companies that
fall within the market capitalization range of companies in the Standard &
Poor's MidCap 400 Index* ("S&P MidCap 400").
Smith Barney Mid Cap Blend Fund
Average Annual Total Returns
May 31, 2000
Without Sales Charges(1)
-----------------------------
Class A Class B Class L
================================================================================
Six-Month+ 22.00% 21.52% 21.59%
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One-Year 36.02 34.95 34.95
--------------------------------------------------------------------------------
Since Inception++ 46.96 45.85 45.85
================================================================================
With Sales Charges(2)
-----------------------------
Class A Class B Class L
================================================================================
Six-Month+ 15.92% 16.52% 19.36%
--------------------------------------------------------------------------------
One-Year 29.25 29.95 32.56
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Since Inception++ 42.71 44.12 44.98
================================================================================
(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.
* "S&P(R)" is a trademark of Standard & Poor's, a division of the McGraw
Hill Companies, Inc. The size of the companies in the S&P MidCap 400
changes with market conditions and with the composition of the S&P MidCap
400. As of June 19, 2000, the largest market capitalization of a company in
the Index was approximately $13 billion and the smallest was approximately
$140 million.
** Mid-capitalization companies may be more volatile and susceptible to loss
than large-capitalization companies. Mid-capitalization companies may have
more limited product lines, markets and financial resources than
large-capitalization companies.
+ 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 September 1, 1998.
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FUND HIGHLIGHT
--------------------------------------------------------------------------------
We believe that mid-capitalization stocks still represent one of the best
investment opportunities today. In our opinion, shareholders may be getting the
best of both worlds u potentially less relative risk than small-capitalization
stocks and potentially more relative value than large-capitalization stocks.
Moreover, by investing in the Smith Barney Mid Cap Blend Fund, you are
participating in companies that fall slightly below the radar screen of the
investment community, yet still have established track records. Our objective is
to find companies with solid fundamentals that have yet to be "discovered" by
Wall Street. Please bear in mind that mid-cap stocks may involve more risk than
large-cap stocks.**
--------------------------------------------------------------------------------
NASDAQ SYMBOL
--------------------------------------------------------------------------------
Class A SBMAX
Class B SBMDX
Class L SBMLX
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WHAT'S INSIDE
--------------------------------------------------------------------------------
A Message from the Chairman ................................................. 1
Shareholder Letter .......................................................... 2
Historical Performance ...................................................... 5
Smith Barney Mid Cap Blend Fund
at a Glance .............................................................. 7
Schedule of Investments ..................................................... 8
Statement of Assets and Liabilities ......................................... 12
Statement of Operations ..................................................... 13
Statements of Changes in Net Assets ......................................... 14
Notes to Financial Statements ............................................... 15
Financial Highlights ........................................................ 19
<PAGE>
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A Message from the Chairman
--------------------------------------------------------------------------------
HEATH B.
MCLENDON
[PHOTO OF HEATH B. MCLENDON]
Chairman
Dear Shareholder:
The U.S. economy has continued its rate of historic growth in the new
millennium. However, the U.S. markets have been characterized by record
volatility, leaving many investors with little or no indication of the future
direction of the market.
At SSB Citi Asset Management, Citigroup's asset management division, we remain
firmly committed to our belief that individual company selection should continue
to be the primary focus of any investor in any market. We believe that those
companies with excellent products, strong management and a sound business plan
should be well positioned to deliver continued earnings growth in the evolving
global economy.
We provide some 100 million people, businesses, governments and institutions in
over 100 countries with a broad range of financial products and services. SSB
Citi Asset Management offers you access to a broad range of products including
equities, fixed income and money markets. Our global resources are extensive,
far-reaching and powerful, with a strong presence in the U.S., Europe, Japan,
Latin America, Asia Pacific and Australia.
We invite you to explore our capabilities as a market leader in areas such as
retirement, tax and estate planning. When you invest with SSB Citi Asset
Management, you can do so with the confidence that your interests come first,
your investment success is paramount, and that the ultimate in resources is
being committed to your financial future. Thank you for investing with us.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
June 19, 2000
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Smith Barney Mid Cap Blend Fund 1
<PAGE>
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Shareholder Letter
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[PHOTO OF LAWRENCE WEISSMAN, CFA]
LAWRENCE
WEISSMAN, CFA
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, 2000. In this report, we
summarized the period's prevailing economic and market conditions and outlined
our portfolio strategy.(1) A detailed summary of the Fund's performance can be
found in the appropriate sections that follow. We hope you find this report
useful and informative.
Performance Update(2)
For the six months ended May 31, 2000, the Fund's Class A, B and L shares,
without sales charges, returned 22.00%, 21.52% and 21.59%, respectively. The
Fund's Class A, B and L shares, with sales charges, returned 15.92%, 16.52% and
19.36%, respectively for the same period. In comparison, the Standard & Poor's
MidCap 400 Index ("S&P MidCap 400")(3)posted a gain of 13.78% on a total return
basis for the same period.
Mid-Cap Market Update
Since the Fund's inception on September 1, 1998, we have remained committed to
our investment style to focus on maintaining a quality-oriented portfolio that
we believe should provide higher returns with potentially lower risk over time.
We believe our positive performance during the period was due both to our solid
stock selections and adherence to our disciplined, conservative investment
management style. Of course, past performance is not indicative of future
results.
In seeking to accomplish the Fund's investment objective, we follow an approach
that focuses on companies that we perceive have significant advantages and
excellent competitive positions in the marketplace. In our view, many of these
companies are leaders in their respective fields and are poised to leverage
their leadership positions. We also look for consistent growth, strong
management, positive cash flow and high return on equity ("ROE")(4)as key
factors in determining whether to invest in a prospective company.
From 1995 through the beginning of 1999, large-capitalization stocks
significantly outperformed small-and mid-capitalization companies. However,
beginning early in 1999, this performance disparity began to reverse as earnings
for mid-cap companies relative to large-cap companies began to accelerate.
Historically, these factors have led to the outperformance of mid-cap stocks.
Indeed, since the inception of the Fund, mid-cap stocks, for the most part, have
outperformed large-cap stocks as many highly visible large-cap companies
reported disappointing earnings that resulted in significant share price
declines. Consensus earnings estimates from Wall Street suggest that mid-cap
companies should continue to grow earnings at a faster pace than many large-cap
companies. In our opinion, this should lead to relative outperformance of mid-
cap stocks for the next couple of years.
-----------
1 The information provided represents the opinion of the manager and is not
intended to be a forecast of future events, a guarantee of future results
nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the portfolio.
2 Please note that the fund's holdings are subject to change and any
discussion of holdings is as of May 31, 2000. Please refer to pages 8
through 11 for a complete list and percentage breakdown of the Fund's
holdings.
3 The S&P MidCap 400 consists of 400 domestic stocks chosen for market size,
liquidity and industry group representation. An investor cannot invest
directly in an index.
4 ROE expressed as a percentage, shows the amount earned on a company's
common stock investment for a given period. The percentage indicates to
common shareholders how effectively their investment is being employed.
--------------------------------------------------------------------------------
2 2000 Semi-Annual Report to Shareholders
<PAGE>
In addition to strong company fundamentals, we think the other potential drivers
of mid-cap performance include increasing institutional ownership, greater
coverage by Wall Street analysts and higher merger and acquisition activity
among mid-cap stocks. In fact, we have already seen these trends impact many of
the stocks we own.
Investment Strategy and Portfolio Update
As its name implies, the Mid Cap Blend Fund combines 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 above average
earnings growth and profitability with the expectation of above average return
potential. Value investing attempts to identify companies whose valuation may be
below average relative to earnings and/or assets.)
We define mid-cap companies as companies with market capitalizations in the
range of approximately $140 million to $13 billion, the range represented by the
S&P MidCap 400 as of June 19, 2000. Presently, the companies held in the Fund
have an average market capitalization of approximately $5 billion. We describe
our investment style as one that focuses on companies that are in the middle of
their growth phase. That is, we seek to purchase companies once they have
reached a certain level of success and stability and before they are widely
recognized by investors as high-quality, blue-chip companies.
In addition, we look to form a relationship with the management of those
companies whose stocks we own in the Fund. We find that the more thorough
research we conduct on a particular company, the better chance we have of
finding quality companies with what we deem to be undervalued stock prices.
We plan to be long-term investors in the majority of the companies held in the
Fund. In our view, if we are buying quality companies that continue to grow,
there is really no reason to eliminate them from the portfolio. We generally
have only four reasons for selling a stock:
. The first is a change in the fundamentals. It is possible that the company's
niche is not as protected as it once was, or the company may be heading in a
different direction and diluting the value of its franchise.
. A second reason is that if a stock, in our opinion, is grossly overvalued. We
will either sell or reduce positions that begin to reach extraordinary
valuations.
. Thirdly, we reduce positions if a stock becomes too dominant a holding in the
portfolio.
. Our final reason for selling a stock is that we simply have found another
company that we deem represents a better opportunity for the Fund's
portfolio.
As of May 31, 2000, the Fund's portfolio was comprised of 97 stocks
representing approximately 82% of net assets. We invest most of the remaining
cash in mid-cap futures so that we remain relatively fully invested. We expect
to increase the percentage of the Fund's assets held in stock over time, as we
attempt to take advantage of short-term price swings by purchasing our favored
stocks at opportune times. We also anticipate, over time, that the number of
holdings in the Fund's portfolio should remain approximately at the current
level.
The average price/earnings ("P/E") ratio(5)for the portfolio is approximately
equal to that of the Standard & Poor's 500 Index ("S&P 500")(6)while the growth
rate for the portfolio approximately doubles that for the S&P 500. Currently,
the Fund's largest sector concentrations are in technology, finance, and
consumer. Relative to the S&P MidCap 400, the Fund has a neutral weighting in
the technology sector, the largest sector of the S&P MidCap 400.
-------------
5 The P/E ratio is the current price of a stock divided by its current
earnings per share.
6 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. An investor cannot invest directly in an index.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 3
<PAGE>
In the technology sector, our largest holdings were in companies such as Applied
Micro Circuits, Xilinx, and Maxim Integrated Products. These companies remain
focused on communications, which we believe represents a strong driver for the
technology market. Applied Micro Circuits, for example, is currently benefiting
from a strong demand for optical systems and a broadening of its customer base.
The Fund is presently overweighted in the financial sector, and although this
sector has been under pressure this year due to rising interest rates, we
believe financial services provides the best risk and return tradeoff of any
sector in the market today. As interest rate fears begin to subside, we believe
our investment in financial services companies such as Providian, Ambac
Financial Group, and Capital One Financial should positively contribute to
performance over the near term. Of course, no guarantees can be given that our
expectations will be realized.
The Fund has a neutral weighting in the consumer services sector with our
largest holdings in Imax and Entercom Communications. Imax reported a strong
quarter due in part to the success of the re-release of Fantasia,o the Walt
Disney animated film that has been shown exclusively in Imax theaters. The
success of "Fantasia",o in our view, may validate Imax's giant-screen theater
systems as another outlet for the presentation of major motion pictures.
Entercom Communications remains one of the fastest-growing radio companies,
having established market-leading stations in many of the top markets.
In addition, the Fund's holdings in Sepracor, a specialty pharmaceutical
company; Affymetrix, a genomics company; VERITAS Software, a leading supplier of
storage management software and FactSet Research Systems, a leading provider of
online-integrated database services to the financial services community,
continue to provide highly competitive returns. We also maintain a favorable
outlook on Keebler Foods, which continues to rapidly build on its well-known
franchise.
In closing, while no guarantees can be made, we believe that our investments in
the mid-cap stock arena have solid future growth potential and should continue
to provide competitive returns going forward.
Thank you for investing in the Smith Barney Mid Cap Blend Fund and your
continued confidence in our investment management approach.
Sincerely,
Lawrence Weissman, CFA
Vice President and
Investment Officer
June 19, 2000
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Top Ten Holdings* As of May 31, 2000
--------------------------------------------------------------------------------
1. Sepracor Inc. 2.8%
--------------------------------------------------------------------------------
2. Newfield Exploration Co. 2.1
--------------------------------------------------------------------------------
3. Keebler Foods Co. 2.1
--------------------------------------------------------------------------------
4. Ambac Financial Group, Inc. 2.0
--------------------------------------------------------------------------------
5. ACE Ltd. 2.0
--------------------------------------------------------------------------------
6. Fiserv, Inc. 2.0
--------------------------------------------------------------------------------
7. XL Capital, Ltd., Class A Shares 2.0
--------------------------------------------------------------------------------
8. Providian Financial Corp. 1.8
--------------------------------------------------------------------------------
9. FactSet Research Systems Inc. 1.8
--------------------------------------------------------------------------------
10. Vulcan Materials Co. 1.7
--------------------------------------------------------------------------------
* As a percentage of total common stock.
4 2000 Semi-Annual Report to Shareholders
--------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
================================================================================================
Historical Performance -- Class A Shares
================================================================================================
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>
5/31/00 $17.74 $21.49 $0.00 $0.15 22.00%+
------------------------------------------------------------------------------------------------
11/30/99 13.63 17.74 0.01 0.55 34.36
------------------------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.63 0.00 0.00 19.56+
================================================================================================
Total $0.01 $0.70
================================================================================================
<CAPTION>
================================================================================================
Historical Performance -- Class B Shares
================================================================================================
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>
5/31/00 $17.58 $21.21 $0.00 $0.15 21.52%+
------------------------------------------------------------------------------------------------
11/30/99 13.60 17.58 0.00 0.55 33.43
------------------------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.60 0.00 0.00 19.30+
================================================================================================
Total $0.00 $0.70
================================================================================================
<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>
5/31/00 $17.57 $21.21 $0.00 $0.15 21.59%+
------------------------------------------------------------------------------------------------
11/30/99 13.60 17.57 0.00 0.55 33.35
------------------------------------------------------------------------------------------------
Inception* -- 11/30/98 11.40 13.60 0.00 0.00 19.30+
================================================================================================
Total $0.00 $0.70
================================================================================================
<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>
5/31/00 $17.78 $21.58 $0.00 $0.15 22.23%
------------------------------------------------------------------------------------------------
Inception* -- 11/30/99 13.65 17.78 0.01 0.55 34.49
================================================================================================
Total $0.01 $0.70
================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 5
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
-----------------------------------------
Class A Class B Class L Class Y
================================================================================
Six Months Ended 5/31/00+ 22.00% 21.52% 21.59% 22.23%
--------------------------------------------------------------------------------
Year Ended 5/31/00 36.02 34.95 34.95 36.49
--------------------------------------------------------------------------------
Inception* through 5/31/00 46.96 45.85 45.85 39.50
================================================================================
Without Sales Charges(2)
-----------------------------------------
Class A Class B Class L Class Y
================================================================================
Six Months Ended 5/31/00+ 15.92% 16.52% 19.36% 22.23%
--------------------------------------------------------------------------------
Year Ended 5/31/00 29.25 29.95 32.56 36.49
--------------------------------------------------------------------------------
Inception* through 5/31/00 42.71 44.12 44.98 39.50
================================================================================
--------------------------------------------------------------------------------
Cummulative Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 5/31/00) 95.99%
--------------------------------------------------------------------------------
Class B (Inception* through 5/31/00) 93.43
--------------------------------------------------------------------------------
Class L (Inception* through 5/31/00) 93.43
--------------------------------------------------------------------------------
Class Y (Inception* through 5/31/00) 64.39
================================================================================
(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.
* 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.
--------------------------------------------------------------------------------
6 2000 Semi-Annual Report to Shareholders
<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. Standard & Poor's MidCap 400 Index+
--------------------------------------------------------------------------------
[GRAPH]
September 1998 -- May 2000
Smith Barney Smith Barney Smith Barney
Mid Cap Blend Mid Cap Blend Mid Cap Blend S&P 400
Date Fund-Class A Fund-Class B Fund-Class L Midcap Index
9/1/98 9,500 10,000 9,797 10,000
11/30/98 11,358 11,430 11,706 12,505
5/31/99 13,689 13,833 14,084 14,218
11/30/99 15,261 15,518 15,743 15,178
5/31/00 18,619 18,943 19,141 17,269
+ 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; and the deduction of the maximum 5.00% and 1.00% CDSC for Class
B and L shares, respectively. It also assumes reinvestment of dividends and
capital gains, if any, through May 31, 2000. The Standard & Poor's MidCap
400 Index ("S&P MidCap 400") is a market-value weighted index, consisting of
400 domestic stocks chosen for market size liquidating and industry group
representation. The Index is unmanaged and is not subject to the same
management and trading expenses of a mutual fund. An investor may not invest
directly in an index. 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*
--------------------------------------------------------------------------------
4.7% Commercial Services
4.5% Consumer Durables
3.7% Consumer Non-Durables
6.5% Consumer Services
18.8% Finance
6.4% Health Care -- Drugs
8.2% Industrial Services
3.3% Producer Manufacturing
22.3% Technology
3.6% Telecommunications
18.0% Other
* As a percentage of total common stock.
Investment Breakdown**
--------------------------------------------------------------------------------
[GRAPH]
17.7% Repurchase Agreements
82.3% Common Stock
** As a percentage of total investments.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 7
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 82.3%
Building Materials -- 1.4%
293,100 Vulcan Materials Co. $ 13,702,425
--------------------------------------------------------------------------------
Commercial Services -- 3.9%
148,416 Advent Software, Inc.* 5,584,152
110,600 Convergys Corp.* 4,970,087
540,320 FactSet Research Systems Inc. 13,913,240
374,550 Valassis Communications, Inc.* 12,360,150
--------------------------------------------------------------------------------
36,827,629
--------------------------------------------------------------------------------
Consumer Durables -- 3.7%
207,453 Electronic Arts, Inc.* 13,251,060
274,700 Harley-Davidson, Inc. 10,232,575
109,815 SPX Corp.* 11,564,892
--------------------------------------------------------------------------------
35,048,527
--------------------------------------------------------------------------------
Consumer Non-Durables -- 3.0%
448,640 Keebler Foods Co. 16,263,200
476,050 The Pepsi Bottling Group, Inc.+ 12,436,806
--------------------------------------------------------------------------------
28,700,006
--------------------------------------------------------------------------------
Consumer Services -- 5.3%
166,450 Cablevision Systems Corp., Class A Shares*+ 10,423,931
149,000 Entercom Communications Corp.*+ 6,779,500
517,300 Imax Corp.*+ 11,251,275
470,280 Premier Parks Inc.* 11,198,543
249,640 Spanish Broadcasting System, Inc.* 4,243,880
66,250 Univision Communications Inc.* 6,823,750
--------------------------------------------------------------------------------
50,720,879
--------------------------------------------------------------------------------
Electronics -- Instruments -- 0.3%
77,900 Gemstar International Group Ltd.* 3,305,881
--------------------------------------------------------------------------------
Electronics -- Semiconductors -- 0.9%
82,900 National Semiconductor Corp.* 4,455,875
86,450 Vitesse Semiconductor Corp.* 4,376,531
--------------------------------------------------------------------------------
8,832,406
--------------------------------------------------------------------------------
Energy -- 2.6%
164,400 Anadarko Petroleum Corp. 8,723,475
392,360 Newfield Exploration Co.* 16,430,075
--------------------------------------------------------------------------------
25,153,550
--------------------------------------------------------------------------------
Finance -- 15.5%
586,890 ACE Ltd. 15,735,988
317,010 Ambac Financial Group, Inc.+ 15,969,379
540,250 Annuity and Life Re Holdings, Ltd.+ 13,033,531
224,100 Arthur J. Gallagher & Co. 8,669,869
246,550 Capital One Financial Corp. 11,649,487
211,173 Commerce Bancorp, Inc. 9,687,561
192,800 Countrywide Credit Industries, Inc. 5,928,600
425,015 IndyMac Mortgage Holdings, Inc.* 5,551,758
145,400 Marshall & Ilsley Corp. 7,051,900
See Notes to Financial Statements.
--------------------------------------------------------------------------------
8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited)(continued) May 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Finance -- 15.5% (continued)
434,803 Nationwide Financial Services, Inc.,
Class A Shares+ $ 12,337,535
307,350 North Fork Bancorporation, Inc. 5,090,484
156,850 Providian Financial Corp. 13,949,847
45,900 State Street Corp. 5,117,850
95,350 Waddell & Reed Financial, Inc. 2,616,166
258,050 XL Capital Ltd., Class A Shares 15,353,975
--------------------------------------------------------------------------------
147,743,930
--------------------------------------------------------------------------------
Health Care -- Drugs -- 5.3%
46,025 Affymetrix, Inc.*+ 5,465,469
99,600 Forest Laboratories, Inc.* 8,814,600
45,100 Genentech, Inc.*+ 4,842,612
40,700 MedImmune, Inc. 6,323,762
34,000 Millennium Pharmaceuticals, Inc.* 2,843,250
230,065 Sepracor Inc.+ 21,999,966
--------------------------------------------------------------------------------
50,289,659
--------------------------------------------------------------------------------
Health Care -- Services -- 0.9%
119,720 Wellpoint Health Networks Inc.* 8,694,665
--------------------------------------------------------------------------------
Industrial Services -- 6.7%
117,150 AES Corp.*+ 10,221,338
181,125 BJ Services Co.* 12,973,078
81,300 Calpine Corp.* 8,612,719
194,400 Cooper Cameron Corp.* 13,559,400
322,835 Diamond Offshore Drilling, Inc.+ 13,195,881
120,300 Weatherford International, Inc.* 5,180,419
--------------------------------------------------------------------------------
63,742,835
--------------------------------------------------------------------------------
Process Industries -- 2.3%
255,030 Bowater Inc. 13,181,863
215,701 Ecolab Inc. 8,250,526
--------------------------------------------------------------------------------
21,432,389
--------------------------------------------------------------------------------
Producer Manufacturing -- 2.7%
120,300 Grant Prideco, Inc.* 2,796,975
324,850 Molex Inc., Class A Shares 11,978,844
376,600 Mueller Industries, Inc.* 11,062,625
--------------------------------------------------------------------------------
25,838,444
--------------------------------------------------------------------------------
Retail -- 2.2%
221,500 Bed Bath & Beyond Inc.* 8,153,969
97,801 Best Buy Co., Inc.*+ 6,259,201
105,200 Dollar Tree Stores, Inc.* 6,259,400
--------------------------------------------------------------------------------
20,672,570
--------------------------------------------------------------------------------
Technology -- 18.4%
153,350 ADC Telecommunications, Inc.* 10,303,203
4,665 Aether Systems, Inc.* 641,146
76,000 Applied Micro Circuits Corp.* 7,543,000
126,600 Atmel Corp.* 4,834,538
4,905 Avanex Corp.* 333,540
90,100 Citrix Systems, Inc.* 4,741,513
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited)(continued) May 31, 2000
--------------------------------------------------------------------------------
SHARES SECURITY VALUE
================================================================================
Technology -- 18.4% (continued)
27,600 CMGI, Inc.* $ 1,319,625
13,600 eBay Inc.* 850,850
333,050 Fiserv, Inc.* 15,570,087
24,400 InfoSpace, Inc.* 1,058,350
164,820 Intuit Inc.* 5,974,725
141,200 Jabil Circuit, Inc.* 5,153,800
15,000 Juniper Networks, Inc.* 2,627,812
134,900 L-3 Communications Holdings, Inc.* 7,554,400
84,750 Lexmark International Group, Inc.,
Class A Shares* 5,911,313
192,505 Linear Technology Corp. 11,369,827
139,200 Maxim Integrated Products, Inc.* 8,830,500
101,200 Mercury Interactive Corp.* 8,576,700
77,050 Novellus Systems, Inc.* 3,712,847
78,400 Project Software & Development, Inc.* 1,705,200
137,900 Sanmina Corp.* 8,773,888
94,100 Siebel Systems, Inc.* 11,009,700
78,050 Symbol Technologies, Inc. 3,439,078
94,725 Teradyne, Inc.* 8,146,350
93,190 VERITAS Software Corp.*+ 10,856,635
47,400 VerticalNet, Inc.* 1,519,762
142,350 Waters Corp.* 13,452,075
2,345 webMethods, Inc.* 196,101
119,100 Xilinx, Inc.*+ 9,066,488
--------------------------------------------------------------------------------
175,073,053
--------------------------------------------------------------------------------
Telecommunications -- 2.9%
386,570 CenturyTel, Inc.+ 10,437,390
26,200 COLT Telecom Group PLC, Sponsored ADR* 3,720,400
36,850 Comverse Technology, Inc.* 3,367,169
94,575 Covad Communications Group, Inc.* 2,234,334
121,670 Intermedia Communications Inc.* 3,041,750
90,950 Time Warner Telecom Inc.* 5,093,200
--------------------------------------------------------------------------------
27,894,243
--------------------------------------------------------------------------------
Transportation -- 1.9%
158,589 Kansas City Southern Industries, Inc. 10,665,176
401,100 Knightsbridge Tankers Ltd. 7,570,762
--------------------------------------------------------------------------------
18,235,938
--------------------------------------------------------------------------------
Utilities -- 2.4%
132,600 Coastal Corp. 8,138,325
117,350 Dynegy Inc., Class A Shares 9,050,619
160,550 The Montana Power Co. 6,070,797
--------------------------------------------------------------------------------
23,259,741
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $600,845,927) 785,168,770
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 2000
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 17.7%
$ 64,432,000 Morgan Stanley Dean Witter & Co., 6.330% due 6/1/00;
Proceeds at maturity -- $64,443,329; (Fully collateralized
by U.S. Treasury Notes & Bonds, 6.250% to 9.375% due
5/31/01 to 8/29/15; Market value -- $67,986,949) $ 64,432,000
104,039,000 UBS AG Warburg Dillon Read, 6.350% due 6/1/00;
Proceeds at maturity -- $104,057,295; (Fully collateralized
by U.S. Treasury Notes & Bonds, 6.330% to 8.000% due
5/15/01 to 5/31/01; Market value -- $106,121,861) 104,039,000
----------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $168,471,000) 168,471,000
====================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $769,316,927**) $953,639,770
====================================================================================================
</TABLE>
* Non-income producing security.
+ A portion of this security has been segregated by the custodian for futures
contract commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 11
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (Cost -- $600,845,927) $785,168,770
Repurchase agreements, at value (Cost -- $168,471,000) 168,471,000
Cash 970
Receivable for securities sold 6,448,672
Receivable for Fund shares sold 1,147,515
Dividends and interest receivable 410,968
Receivable from broker -- variation margin 203,400
-----------------------------------------------------------------------------------------------
Total Assets 961,851,295
-----------------------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 626,305
Distribution fees payable 223,767
Payable for Fund shares purchased 46,198
Accrued expenses 132,509
-----------------------------------------------------------------------------------------------
Total Liabilities 1,028,779
-----------------------------------------------------------------------------------------------
Total Net Assets $960,822,516
===============================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 45,050
Capital paid in excess of par value 701,554,516
Accumulated net investment loss (964,207)
Accumulated net realized gain from security transactions
and futures contracts 77,843,278
Net unrealized appreciation of investments and futures contracts 182,343,879
-----------------------------------------------------------------------------------------------
Total Net Assets $960,822,516
===============================================================================================
Shares Outstanding:
Class A 9,984,776
-----------------------------------------------------------------------------------------------
Class B 16,495,732
-----------------------------------------------------------------------------------------------
Class L 11,735,502
-----------------------------------------------------------------------------------------------
Class Y 6,833,905
-----------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $21.49
-----------------------------------------------------------------------------------------------
Class B * $21.21
-----------------------------------------------------------------------------------------------
Class L ** $21.21
-----------------------------------------------------------------------------------------------
Class Y (and redemption price) $21.58
-----------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value per share) $22.62
-----------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $21.42
-----------------------------------------------------------------------------------------------
</TABLE>
* 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.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited) For the Six Months Ended May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest $ 3,722,369
Dividends 1,923,951
--------------------------------------------------------------------------------------------
Total Investment Income 5,646,320
--------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 3,150,470
Distribution fees (Note 2) 2,882,683
Shareholder and system servicing fees 366,509
Registration fees 122,784
Shareholder communications 40,245
Audit and legal 17,343
Custody 15,838
Trustees' fees 12,464
Other 2,191
--------------------------------------------------------------------------------------------
Total Expenses 6,610,527
--------------------------------------------------------------------------------------------
Net Investment Loss (964,207)
--------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 6):
Realized Gain From:
Security transactions (excluding short-term securities) 69,845,103
Futures contracts 13,294,930
--------------------------------------------------------------------------------------------
Net Realized Gain 83,140,033
--------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments and Futures Contracts:
Beginning of period 114,477,543
End of period 182,343,879
--------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 67,866,336
--------------------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 151,006,369
--------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $150,042,162
============================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 13
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000 (unaudited)
and the Year Ended November 30, 1999
<TABLE>
<CAPTION>
2000 1999
====================================================================================================
OPERATIONS:
<S> <C> <C>
Net investment loss $ (964,207) $ (851,149)
Net realized gain 83,140,033 23,724,939
Increase in net unrealized appreciation 67,866,336 92,751,095
----------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 150,042,162 115,624,885
----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (75,601)
Net realized gains (6,446,037) (19,891,914)
----------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (6,446,037) (19,967,515)
----------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 487,261,078 660,011,233
Net asset value of shares issued for reinvestment of dividends 5,193,582 15,814,511
Cost of shares reacquired (330,825,416) (266,843,767)
----------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 161,629,244 408,981,977
----------------------------------------------------------------------------------------------------
Increase in Net Assets 305,225,369 504,639,347
NET ASSETS:
Beginning of period 655,597,147 150,957,800
----------------------------------------------------------------------------------------------------
End of period* $ 960,822,516 $ 655,597,147
====================================================================================================
* Includes accumulated net investment loss of: $ (964,207) --
====================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<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 six 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, Smith Barney S&P
500 Index Fund, Smith Barney U.S. 5000 Index Fund and Smith Barney EAFE Index
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
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, 1999, reclassifications were made to the FundAEs 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 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
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), 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.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the FundAEs transfer agent and PFPC Global Fund Services (oPFPCo) acts as the
FundAEs sub-transfer agent. CFTC receives account fees and asset-based fees that
vary according to the account size and type of account. PFPC is responsible for
shareholder recordkeeping and financial processing for all shareholder accounts
and is paid by CFTC. During the six months ended May 31, 2000, the Fund paid
transfer agent fees of $345,069 to CFTC.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 15
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
CFBDS, Inc. ("CFBDS") acts as the FundAEs 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 are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. 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. In certain cases, 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 not incur an initial sales charge.
For the six months ended May 31, 2000, SSB and CFBDS received sales charges of
approximately $510,000 and $475,000 on sales of the FundAEs Class A and L
shares, respectively. In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
===========================================================================
CDSCs $3,000 $278,000 $34,000
===========================================================================
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, 2000, total Distribution Plan fees were as follows:
Class A Class B Class L
===========================================================================
Distribution Plan Fees $219,646 $1,570,821 $1,092,216
===========================================================================
All officers and one Trustee of the Fund are employees of SSB.
3. Investments
During the six months ended May 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were as follows:
===========================================================================
Purchases $424,463,860
---------------------------------------------------------------------------
Sales 330,012,655
===========================================================================
At May 31, 2000, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
===========================================================================
Gross unrealized appreciation $206,203,579
Gross unrealized depreciation (21,880,736)
---------------------------------------------------------------------------
Net unrealized appreciation $184,322,843
===========================================================================
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, 2000, the Fund had no securities on loan.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to the Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
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 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 FundAEs 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, 2000, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
# of Basis Market Unrealized
Purchased Contracts Contracts Expiration Value Value Loss
=============================================================================================
<S> <C> <C> <C> <C> <C>
MidCap 400 Index 452 6/00 $109,961,764 $107,982,800 $(1,978,964)
=============================================================================================
</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, 2000, 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
written index options are exercised, settlement is made in cash.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 17
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
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, 2000, the Fund did not write any call or put
option contracts.
8. Shares of Beneficial Interest
At May 31, 2000, 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, 2000, total paid-in capital amounted to the following for each class:
<TABLE>
<CAPTION>
Class A Class B Class L Class Y
===========================================================================================
<S> <C> <C> <C> <C>
Total Paid-in Capital $161,144,427 $255,477,397 $185,159,329 $99,818,413
===========================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 2000 November 30, 1999*
-------------------- ---------------------
Shares Amount Shares Amount
======================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 14,384,042 $ 297,847,747 18,175,913 $ 301,643,398
Shares issued on reinvestment 62,084 1,274,514 228,627 3,975,514
Shares reacquired (11,820,167) (245,260,419) (13,743,206) (230,130,201)
----------------------------------------------------------------------------------------------------------------------
Net Increase 2,625,959 $ 53,861,842 4,661,334 $ 75,488,711
======================================================================================================================
Class B
Shares sold 3,594,187 $ 73,049,857 9,971,095 $ 161,741,585
Shares issued on reinvestment 112,734 2,285,116 408,337 7,040,982
Shares reacquired (1,169,425) (23,895,255) (1,505,278) (24,849,310)
----------------------------------------------------------------------------------------------------------------------
Net Increase 2,537,496 $ 51,439,718 8,874,154 $ 143,933,257
======================================================================================================================
Class L
Shares sold 2,837,651 $ 58,115,707 6,669,388 $ 108,143,611
Shares issued on reinvestment 80,606 1,633,886 278,238 4,797,797
Shares reacquired (723,108) (14,757,465) (718,967) (11,864,256)
----------------------------------------------------------------------------------------------------------------------
Net Increase 2,195,149 $ 44,992,128 6,228,659 $ 101,077,152
======================================================================================================================
Class Y
Shares sold 2,740,771 $ 58,247,767 6,301,950 $ 88,482,639
Shares issued on reinvestment 3 66 12 218
Shares reacquired (2,208,831) (46,912,277) -- --
----------------------------------------------------------------------------------------------------------------------
Net Increase 531,943 $ 11,335,556 6,301,962 $ 88,482,857
======================================================================================================================
</TABLE>
* For Class Y shares, transactions are for the period from December 3, 1998
(inception date) to November 30, 1999.
9. Subsequent Event
Effective June 5, 2000, the Board of Trustees of the Fund approved a
Distribution Agreement with SSB, replacing the Distribution Agreement with
CFBDS.
--------------------------------------------------------------------------------
18 2000 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 2000(1)(2) 1999(2) 1998(3)
==============================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.74 $ 13.63 $ 11.40
------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.02 0.04 0.02
Net realized and unrealized gain 3.88 4.63 2.21
------------------------------------------------------------------------------
Total Income From Operations 3.90 4.67 2.23
------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.01) --
Net realized gains (0.15) (0.55) --
------------------------------------------------------------------------------
Total Distributions (0.15) (0.56) --
------------------------------------------------------------------------------
Net Asset Value, End of Period $ 21.49 $ 17.74 $ 13.63
------------------------------------------------------------------------------
Total Return 22.00%++ 34.36% 19.56%++
------------------------------------------------------------------------------
Net Assets, End of Period (000s) $214,566 $130,534 $36,760
------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.14%+ 1.16% 1.27%+
Net investment income 0.19+ 0.21 0.78+
------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 61% 15%
==============================================================================
<CAPTION>
Class B Shares 2000(1)(2) 1999(2) 1998(3)
==============================================================================
Net Asset Value, Beginning of Period $ 17.58 $ 13.60 $ 11.40
------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.05) (0.09) 0.00*
Net realized and unrealized gain 3.83 4.62 2.20
------------------------------------------------------------------------------
Total Income From Operations 3.78 4.53 2.20
------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- --
Net realized gains (0.15) (0.55) --
------------------------------------------------------------------------------
Total Distributions (0.15) (0.55) --
------------------------------------------------------------------------------
Net Asset Value, End of Period $ 21.21 $ 17.58 $ 13.60
------------------------------------------------------------------------------
Total Return 21.52%++ 33.43% 19.30%++
------------------------------------------------------------------------------
Net Assets, End of Period (000s) $349,873 $245,317 $69,153
------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.89%+ 1.90% 2.01%+
Net investment income (loss) (0.55)+ (0.54) 0.02+
------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 61% 15%
==============================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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.
--------------------------------------------------------------------------------
Smith Barney Mid Cap Blend Fund 19
<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 2000(1)(2) 1999(2) 1998(3)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.57 $ 13.60 $ 11.40
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.05) (0.09) 0.00*
Net realized and unrealized gain 3.84 4.61 2.20
--------------------------------------------------------------------------------
Total Income From Operations 3.79 4.52 2.20
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- --
Net realized gains (0.15) (0.55) --
--------------------------------------------------------------------------------
Total Distributions (0.15) (0.55) --
--------------------------------------------------------------------------------
Net Asset Value, End of Period $ 21.21 $ 17.57 $ 13.60
--------------------------------------------------------------------------------
Total Return 21.59%++ 33.35% 19.30%++
--------------------------------------------------------------------------------
Net Assets, End of Period (000s) $248,907 $167,671 $ 45,045
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.89%+ 1.90% 2.01%+
Net investment income (loss) (0.55)+ (0.54) 0.03+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 61% 15%
================================================================================
<CAPTION>
Class Y Shares 2000(1)(2) 1999(2)(4)
=====================================================================
Net Asset Value, Beginning of Period $ 17.78 $ 13.65
---------------------------------------------------------------------
Income From Operations:
Net investment income 0.05 0.08
Net realized and unrealized gain 3.90 4.61
---------------------------------------------------------------------
Total Income From Operations 3.95 4.69
---------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.01)
Net realized gains (0.15) (0.55)
---------------------------------------------------------------------
Total Distributions (0.15) (0.56)
---------------------------------------------------------------------
Net Asset Value, End of Period $ 21.58 $ 17.78
---------------------------------------------------------------------
TotalReturn++ 22.23% 34.49%
---------------------------------------------------------------------
Net Assets, End of Period (000s) $147,477 $112,075
---------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses 0.81% 0.82%
Net investment income 0.52 0.50
---------------------------------------------------------------------
Portfolio Turnover Rate 47% 61%
=====================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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 November 30, 1999.
* Represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<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
President and 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
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney Investment Trust uSmith Barney Mid Cap Blend Fund, but it may also be
used as sales literature when preceded or accompanied by the current Prospectus,
which gives details about charges, expenses, investment objectives and operating
policies of the Fund. If used as sales material after August 31, 2000, this
report must be accompanied by performance information for the most recently
completed calendar quarter.
[LOGO OF SALOMON SMITH BARNEY]
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/mutualfunds
FD01675 7/00
<PAGE>
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
SMITH BARNEY INTERMEDIATE
MATURITY CALIFORNIA
MUNICIPALS Fund
SPECIAL DISCIPLINE SERIES
SEMI-ANNUAL REPORT
MAY 31, 2000
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Smith Barney
Intermediate
Maturity
California
Municipals Fund
[PHOTO] [PHOTO]
HEATH B. JOSEPH P.
MCLENDON DEANE
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney
Intermediate Maturity California Municipals Fund ("Fund") for the period ended
May 31, 2000. In this report, we summarize the periods prevailing economic and
market conditions and outline the portfolio strategy.(1) A detailed summary of
the Funds performance and current holdings can be found in the appropriate
sections that follow.
Performance Update
For the six months ended May 31, 2000, the Fund's Class A shares returned 1.10%,
without sales charges, and negative 0.90% with sales charges, respectively. In
comparison, the Lipper, Inc. ("Lipper") peer group of California intermediate-
term municipal funds returned 1.12% for the same period. (Lipper is an
independent mutual fund-tracking organization.) For additional Fund performance
information, please refer to pages 5 and 6. (Past performance is not indicative
of future results.)
Municipal Bond Market Update and Outlook
On May 16, 2000, the Federal Reserve Board ("Fed") enacted the sixth in a series
of interest rate hikes that began last June 30, 1999 when the federal funds rate
was at 4.75%. (The federal funds rate is the interest rate charged by banks with
excess reserves at a Federal Reserve district bank to banks needing overnight
loans to meet reserve requirements.) With the federal funds rate presently at
6.50%, the cumulative effect of the interest rate increases so far, in our view,
may begin to have a more pronounced effect in reducing inflationary pressures.
In our opinion, changes in the Fed's monetary policy generally take time to be
absorbed into the economy. We believe that the recent market rallies are a
result of monetary changes enacted six to nine months ago. In addition, we think
that,
---------
1 The information provided represents the opinion of the manager and is not
intended to be a forecast of future events, a guarantee of future results nor
investment advice. Further, there is no assurance that certain securities will
remain in or out of the portfolio.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 1
<PAGE>
barring a major change in the economy or the rate of inflation, it is likely
that the Feds monetary policy may be relatively benign for the remainder of
2000.
Over the past several weeks, the performance of the bond market has shown signs
of improvement amid a series of economic reports that suggest the economy is
slowing and that the Fed may be close to completing its series of interest rate
hikes. We also think that any further Fed policy actions may have already been
comfortably priced into the bond market.
The inversion of the yield curve, while making us somewhat cautious, still
indicates to us that the market believes inflation is under control. (The yield
curve is the graphical depiction of the relationship between the yield on bonds
of the same credit quality but different maturities. An inverted yield curve
represents a unique situation whereby short-term interest rates are higher than
long-term rates.) While the fundamentals in the higher-quality tier securities
are still sound and valuations have improved, poor technical conditions, most
notably large pent-up issuance needs, may have created concern among many
investors about the future prospects for municipal bonds. Yet, as we discuss
later in the report, we are optimistic about current municipal bond
opportunities.
The prospect of further Fed tightening may mean modest further increases in
interest rates on securities with shorter maturities. In contrast, long-term
rates are not likely to rise much. Our favorable outlook for inflation, plus the
ongoing reduction in the supply of U.S. Treasuries, may help to contain the rise
in long-term rates and further invert the Treasury yield curve (that is,
long-term yields should fall even further below short-term yields).
In our view, modestly higher U.S. Treasury yields and a further increase in the
inversion of the yield curve are likely as the Fed continues to push up
short-term rates. A decrease in the amount of new issuance and more buybacks of
currently outstanding debt, while already largely discounted by the market, may
likely reinforce the inversion of the yield curve. In addition, we are presently
seeing general positive market sentiment toward bonds of higher credit quality.
We think that the short-end of the curve is racing to stay ahead of short-term
rates. The inversion is not just a factor of the Treasury buyback program, but
rather, it indicates that inflation may be under control and rates on
longer-term paper still represent fair value.
Investment Strategy and Portfolio Update
The Fund seeks to provide California investors with as high a level of current
income exempt from federal income taxes and California state personal income
taxes as is consistent with the preservation of capital.(2)
2 Please note a portion of the income from this Fund may be subject to the
Alternative Minimum Tax ("AMT").
--------------------------------------------------------------------------------
2 2000 Semi-Annual Report to Shareholders
<PAGE>
The Fund invests primarily in investment grade(3) municipal securities issued by
the State of California and certain other municipal issuers, political
subdivisions, agencies and public authorities that pay interest that is exempt
from federal income and California personal income taxes. The Fund maintains an
average portfolio maturity of between three and ten years.
During the reporting period our investment strategy has been 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
gone up to higher levels, 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 Funds portfolio.
During the reporting period, we focused on the following industries: hospitals
(14.3%), general obligations (13.0%) and housing (12.0%) because we believe they
offered good relative values. As of May, the Funds average weighted
maturity(4) was approximately 7.3 years. In addition, as of May 31, 2000, 98.8%
of the Fund's holdings were rated investment grade, with 57.5% of the Fund
invested in AAA bonds, the highest possible rating.
California Economic Highlights(5)
California continues to post record economic growth, evidenced by rising taxable
sales in the fourth quarter of 1999 followed by the rising home sales reported
in February 2000. In addition, job growth remains strong, and the unemployment
rate in California is at 4.6% in December 1999, well below earlier levels and
reportedly at its lowest level in almost 30 years.
Moreover, many of the Golden State's residents continue to benefit from the
stellar performance of the U.S. stock market in recent years. A recent study by
the Federal Reserve Bank of San Francisco estimates that over the last three
years, Californians realized approximately $68 billion of gains on the exercise
of employee stock options from Initial Public Offering ("IPO") activity alone.
California's economic resurgence, driven mainly by the growth of new, more
diversified industries, may have effectively put the state on a more solid
financial footing. In our view, California may likely remain a competitive
3 Investment grade bonds are those rated Aaa, Aa, A and Baa by Moodys Investors
Service, Inc. or AAA, AA, A and BBB by Standard & Poors Ratings Service, or
that have an equivalent rating by any nationally recognized statistical rating
organization, or determined by the manager to be of equivalent quality.
4 Average maturity is the timeframe within the portfolio for which the debt
instruments are due and payable.
5 Source: Fitch IBCA, Inc., Public Finance, State of California, February 18,
2000 and Department of Finance, State of California, Finance Bulletin, April
2000
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 3
<PAGE>
economic force for many years to come due in large part to its strong employment
growth, rising real estate values and an annual state Gross Domestic Product of
roughly $1 trillion.
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 in the new century.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
June 15, 2000
--------------------------------------------------------------------------------
4 2000 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Historical Performance -- Class A Shares
-------------------------------------------------------------------------------------
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>
=====================================================================================
5/31/00 $8.42 $8.32 $0.19 $0.00 1.10%+
-------------------------------------------------------------------------------------
11/30/99 8.85 8.42 0.37 0.00 (0.70)
-------------------------------------------------------------------------------------
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 $3.28 $0.01
=====================================================================================
<CAPTION>
-------------------------------------------------------------------------------------
Historical Performance -- Class L Shares
-------------------------------------------------------------------------------------
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>
5/31/00 $8.42 $8.31 $0.18 $0.00 0.87%+
-------------------------------------------------------------------------------------
11/30/99 8.84 8.42 0.35 0.00 (0.79)
-------------------------------------------------------------------------------------
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 $2.06 $0.00
=====================================================================================
<CAPTION>
-------------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
-------------------------------------------------------------------------------------
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>
5/31/00 $8.44 $8.33 $0.20 $0.00 1.07%+
-------------------------------------------------------------------------------------
11/30/99 8.86 8.44 0.39 0.00 (0.40)
-------------------------------------------------------------------------------------
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 $1.91 $0.00
=====================================================================================
</TABLE>
It is the Funds policy to distribute dividends monthly and capital gains,if any,
annually.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 5
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
-----------------------------------
Class A Class L Class Y
================================================================================
Six Months Ended 5/31/00+ 1.10% 0.87% 1.07%
--------------------------------------------------------------------------------
Year Ended 5/31/00 0.16 (0.06) 0.34
--------------------------------------------------------------------------------
Five Years Ended 5/31/00 4.64 4.40 N/A
--------------------------------------------------------------------------------
Inception* through 5/31/00 5.40 5.74 4.65
================================================================================
With Sales Charges(2)
-----------------------------------
Class A Class L Class Y
================================================================================
Six Months Ended 5/31/00+ (0.90)% (1.17)% 1.07%
--------------------------------------------------------------------------------
Year Ended 5/31/00 (1.87) (2.03) 0.34
--------------------------------------------------------------------------------
Five Years Ended 5/31/00 4.22 4.20 N/A
--------------------------------------------------------------------------------
Inception* through 5/31/00 5.14 5.54 4.65
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 5/31/00) 55.67%
--------------------------------------------------------------------------------
Class L (Inception* through 5/31/00) 36.40
--------------------------------------------------------------------------------
Class Y (Inception* through 5/31/00) 23.98
================================================================================
(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.
--------------------------------------------------------------------------------
6 2000 Semi-Annual Report to Shareholders
<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 California Intermediate Municipal Debt Fund Average+
--------------------------------------------------------------------------------
[GRAPH]
December 1991- May 2000
Smith Barney
Intermediate Lehman Bros. Lipper California
Maturity California 10-Year Municipal Intermediate Municipal
Municipals Fund Bond Index Debt Fund Average
12/91 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
11/99 15,092 16,581 15,180
5/31/00 15,258 16,693 15,350
+ 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, 2000. 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 California Intermediate Municipal Debt Fund
Average is composed of an average of the Fund's peer group of mutual funds
(32 funds as of May 31, 2000) 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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 7
<PAGE>
--------------------------------------------------------------------------------
Portfolio Highlights (unaudited) May 31, 2000
--------------------------------------------------------------------------------
Portfolio Breakdown*
[GRAPH]
5.9% Education
13.0% General Obligation
14.3% Hospital
12.0% Housing
25.8% Miscellaneous
5.0% Solid Waste
5.0% Tax Allocation
10.3% Transportation
8.7% Water & Sewer
Summary of Municipal Bonds and Short-Term Tax Exempt
Investments by Combined Ratings
Standard & Percentage of
Moodys and/or Poors Total Investments
--------------------------------------------------------------------------------
Aaa AAA 57.5%
Aa AA 13.3
A A 14.0
Baa BBB 14.0
NR NR 1.2
-----
100.0%
=====
----------
* As a percentage of total investments.
--------------------------------------------------------------------------------
8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
<S> <C> <C> <C>
Education -- 5.9%
California Educational Facilities Authority Revenue:
$ 945,000 AAA College of Osteopathic Medicine, CONNIE LEE-Insured,
5.550% due 6/1/06 $ 981,619
320,000 A2* Loyola Marymount University, Series B,
(Pre-Refunded Escrowed with U.S. government
securities to 10/1/02 Call @ 102), 6.300% due 10/1/03 (b) 337,200
200,000 A2* Mills College, (Escrowed to maturity with
U.S. government securities), 6.500% due 9/1/02 (b) 207,750
500,000 AA+ University of Southern California, 5.300% due 10/1/04 512,500
---------------------------------------------------------------------------------------------------------
2,039,069
---------------------------------------------------------------------------------------------------------
General Obligation -- 13.0%
California State GO:
200,000 AA- 6.000% due 9/1/03 208,250
1,250,000 AAA Veterans Bonds, Series BL, FSA-Insured,
4.950% due 12/1/08 (c) 1,214,062
285,000 AAA Kern High School District GO, Series C, MBIA-Insured,
(Escrowed to maturity with U.S. government securities),
8.750% due 8/1/03 317,775
475,000 AA Los Angeles GO, Series B, 5.000% due 9/1/10 471,437
Mojave Water Agency Improvement District GO, Morongo Basin:
250,000 AAA Escrowed to maturity with U.S. government securities,
6.250% due 9/1/02 258,438
280,000 AAA Pre-Refunded Escrowed with U.S. government securities
to 9/1/02 Call @ 102, 6.375% due 9/1/03 295,400
300,000 Aa3* Torrance Unified School District GO, Series A,
4.250% due 8/1/11 270,375
1,500,000 AAA Visalia Unified School District GO, Series A, FGIC-Insured,
4.900% due 8/1/12 1,447,500
---------------------------------------------------------------------------------------------------------
4,483,237
---------------------------------------------------------------------------------------------------------
Hospital -- 14.3%
170,000 AAA Arlington Community Hospital Corp. Revenue,
(Escrowed to maturity with U.S. government securities),
8.000% due 6/1/04 176,800
California Health Facilities Financing Authority Revenue:
700,000 AAA Kaiser Permanente, Series B, AMBAC-Insured,
5.250% due 10/1/10 646,625
1,000,000 AAA Mills-Peninsula Hospital, Series B, CONNIE LEE-Insured,
5.300% due 1/15/05 1,020,000
1,000,000 AAA Scripps Health, Series C, MBIA-Insured, 5.000% due 10/1/13 945,000
200,000 AA- Sisters of Providence, 6.200% due 10/1/03 205,500
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
Education -- 5.9%
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hospital -- 14.3% (continued)
$ 400,000 NR St. Elizabeths Community Hospital Project,
(Pre-Refunded Escrowed with U.S. government
securities to 11/5/02 Call @ 102), 5.900% due 11/15/03 (b) $ 418,500
1,200,000 AA California Statewide Communities Development Authority COP,
St. Josephs Health Systems Group, (Pre-Refunded
Escrowed with state and local government securities to
7/1/04 Call @ 102), 5.875% due 7/1/05 1,267,500
250,000 A Riverside County Asset Leasing Corp., Leasehold Revenue,
(Riverside County Hospital Project), Series A,
6.000% due 6/1/04 253,750
---------------------------------------------------------------------------------------------------------
4,933,675
---------------------------------------------------------------------------------------------------------
Housing -- 12.0%
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) 1,251,562
California Housing Finance Agency, Home Mortgage Revenue:
5,000 Aa2* MGIC-Insured, LOC-Citibank N.A., 10.000% due 2/1/02 5,002
225,000 Aa2* Series B-1, FHA-Insured, 5.900% due 8/1/04 (c) 230,906
Series E-1, FHA/VA-Insured:
700,000 Aa2* 5.900% due 2/1/05 (c) 718,375
700,000 Aa2* 5.900% due 8/1/05 (c) 720,125
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) 744,069
170,000 AAA San Luis Obispo Housing Authority, Multi-Family Housing
Revenue, (Parkwood Apartments Project), Series A,
FNMA-Collateralized, 5.500% due 8/1/03 170,000
305,000 AAA Santa Rosa Mortgage Revenue Refunding,
(Marlow Apartments Project), Series A, FHA-Insured,
5.600% due 9/1/05 303,475
---------------------------------------------------------------------------------------------------------
4,143,514
---------------------------------------------------------------------------------------------------------
Miscellaneous -- 25.8%
800,000 A+ California Pollution Control Financing Authority PCR,
San Diego Gas & Electric, Series A, 5.900% due 6/1/14 825,000
1,000,000 A+ California State Public Works Board, Lease Revenue,
(California State University Project), Series B,
5.450% due 9/1/14 986,250
1,470,000 AAA Inglewood Public Financing Authority Revenue, Series A,
AMBAC-Insured, 5.125% due 8/1/13 1,433,250
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 1,105,650
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
<S> <C> <C> <C>
Miscellaneous -- 25.8% (continued)
$ 130,000 Aaa* Montclair Redevelopment Agency, Residential Mortgage
Revenue, (Escrowed to maturity with U.S. government
securities), 7.750% due 10/1/11 $ 143,488
San Francisco Downtown Parking Corp. Revenue:
450,000 A3* 6.000% due 4/1/02 459,000
280,000 A3* 6.150% due 4/1/03 289,100
Santa Barbara COP, (Harbor Refunding Project):
270,000 A2* 6.400% due 10/1/02 279,450
285,000 A2* 6.500% due 10/1/03 299,250
Solano County COP, Capital Improvement Program,
AMBAC-Insured:
1,000,000 AAA 4.875% due 11/15/11 972,500
1,000,000 AAA 5.000% due 11/15/13 962,500
205,000 AAA Upland COP, (Police Building Refunding Project),
AMBAC-Insured, 6.200% due 8/1/02 211,406
1,000,000 BBB- Virgin Islands Public Financing Authority Revenue, Series A,
5.300% due 10/1/11 935,000
---------------------------------------------------------------------------------------------------------
8,901,844
---------------------------------------------------------------------------------------------------------
Solid Waste -- 5.0%
Kings County Waste Management Authority,
Solid Waste Revenue:
375,000 BBB 6.500% due 10/1/03 (c) 388,125
290,000 BBB 6.600% due 10/1/04 (c) 303,412
1,000,000 Baa2* South Napa Waste Management Authority, (Solid Waste
Transfer Facilities Project), 6.000% due 2/15/04 (c) 1,023,750
---------------------------------------------------------------------------------------------------------
1,715,287
---------------------------------------------------------------------------------------------------------
Tax Allocation -- 5.0%
1,000,000 Baa2* Hawthorne Community Redevelopment Agency,
Tax Allocation, (Redevelopment Project, Area No. 2),
(Partially Pre-Refunded Escrowed with U.S. government
securitiesto 9/1/04 Call @ 102), 6.200% due 9/1/05 (b) 1,043,750
665,000 BBB+ Paramount Redevelopment Agency, Tax Allocation Refunding,
(Redevelopment Project, Area No. 1), 5.800% due 8/1/03 688,275
---------------------------------------------------------------------------------------------------------
1,732,025
---------------------------------------------------------------------------------------------------------
Transportation -- 10.3%
500,000 A1* Los Angeles County Transportation Commission COP,
Series B, 6.200% due 7/1/03 520,000
Palm Springs Financing Authority, Regional Airport Revenue,
MBIA-Insured:
200,000 AAA 5.400% due 1/1/03 (c) 203,000
400,000 AAA 5.500% due 1/1/04 (c) 408,500
350,000 A1* Sacramento Regional Transportation District COP, Series A,
6.400% due 3/1/03 364,875
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
<S> <C> <C> <C>
Transportation -- 10.3% (continued)
$ 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 $ 275,400
San Jose Airport Revenue:
800,000 AAA FGIC-Insured, 5.400% due 3/1/04 (c) 815,000
500,000 AAA MBIA-Insured, 5.750% due 3/1/03 514,375
450,000 BBB+ Southern California Rapid Transit Authority, Special Benefit
Assessment, District A-2, 6.100% due 9/1/03 462,938
---------------------------------------------------------------------------------------------------------
3,564,088
---------------------------------------------------------------------------------------------------------
Water and Sewer -- 8.7%
1,000,000 AAA Castaic Lake Water Agency COP, (Water Systems
Improvement Project), AMBAC-Insured, 5.000% due 8/1/12 973,750
1,000,000 AAA El Dorado County Public Agency Financing Authority Revenue,
FGIC-Insured, 5.200% due 2/15/07 1,020,000
1,000,000 AAA Modesto Irrigation District Financing Authority Revenue,
Series A, MBIA-Insured, 5.350% due 10/1/06 1,030,000
---------------------------------------------------------------------------------------------------------
3,023,750
---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $34,041,744**) $34,536,489
=========================================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(b) Pre-Refunded bond escrowed with U.S. government securities and bond
escrowed to maturity with U.S. government securities is 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.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 13 and 14 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Bond Ratings (unaudited)
--------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poors Ratings Service (Standard & Poors) -- 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 &
Poors.
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.
Moodys Investors Service, Inc. ("Moodys") 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.
NR -- Indicates that the bond is not rated by Standard & Poors, Moody's or
Fitch.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 13
<PAGE>
--------------------------------------------------------------------------------
Short-Term Security Ratings (unaudited)
--------------------------------------------------------------------------------
SP-1 -- Standard & Poors 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 & Poors 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 -- Moodys highest rating for issues having a demand feature -- VRDO.
P-1 -- Moodys highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
--------------------------------------------------------------------------------
Security Descriptions (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
ABAG -- Association of Bay Area FSA -- Financial Security Assurance
Governments GIC -- Guaranteed Investment
AIG -- American International Guaranty Contract
AMBAC -- American Municipal Bond GNMA -- Government National Mortgage
Assurance Corporation Association
BIG -- Bond Investors Guaranty GO -- General Obligation
CGIC -- Capital Guaranty Insurance HFA -- Housing Finance Authority
Company IDA -- Industrial Development Authority
CONNIE IDB -- Industrial Development Board
LEE -- College Construction Loan IDR -- Industrial Development Revenue
Insurance Association INFLOS -- Inverse Floaters
COP -- Certificate of Participation LOC -- Letter of Credit
EDA -- Economic Development MBIA -- Municipal Bond Investors
Authority Assurance Corporation
FGIC -- Financial Guaranty Insurance MGIC -- Mortgage Guaranty
Company Insurance Corp.
FHA -- Federal Housing MVRICS -- Municipal Variable Rate Inverse
Administration Coupon Security
FHLMC -- Federal Home Loan Mortgage PCFA -- Pollution Control Financing
Corporation Authority
FLAIRS -- Floating Adjustable Interest PCR -- Pollution Control Revenue
Rate Securities RIBS -- Residual Interest Bonds
FNMA -- Federal National Mortgage VA -- Veterans Administration
Association VRDD -- Variable Rate Daily Demand
</TABLE>
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $34,041,744) $34,536,489
Interest receivable 536,843
Receivable for Fund shares sold 1,350,000
Receivable for securities sold 45,000
-------------------------------------------------------------------------------
Total Assets 36,468,332
-------------------------------------------------------------------------------
LIABILITIES:
Payable to bank 634,555
Investment advisory fees payable 5,755
Administration fees payable 3,776
Distribution fees payable 2,093
Accrued expenses 60,840
-------------------------------------------------------------------------------
Total Liabilities 707,019
-------------------------------------------------------------------------------
Total Net Assets $35,761,313
===============================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 4,301
Capital paid in excess of par value 36,668,898
Undistributed net investment income 20,932
Accumulated net realized loss on securities transactions (1,427,563)
Net unrealized appreciation of investments 494,745
-------------------------------------------------------------------------------
Total Net Assets $35,761,313
===============================================================================
Shares Outstanding:
Class A 3,653,794
-------------------------------------------------------------------------------
Class L 609,065
-------------------------------------------------------------------------------
Class Y 37,768
-------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $8.32
-------------------------------------------------------------------------------
Class L * $8.31
-------------------------------------------------------------------------------
Class Y (and redemption price) $8.33
-------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 2.04% of net asset value per share) $8.49
-------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $8.39
===============================================================================
* 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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 15
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000
INVESTMENT INCOME:
Interest $ 984,367
-------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 54,754
Administration fees (Note 3) 36,502
Distribution fees (Note 3) 32,229
Shareholder communications 15,840
Audit and legal 14,962
Shareholder and system servicing fees 10,695
Registration fees 5,057
Trustees' fees 4,208
Pricing service fees 2,045
Custody 1,685
Other 1,020
-------------------------------------------------------------------------------
Total Expenses 178,997
Less: Investment advisory and administration fee waivers (Note 3) (36,503)
-------------------------------------------------------------------------------
Net Expenses 142,494
-------------------------------------------------------------------------------
Net Investment Income 841,873
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Loss From Securities Transactions
(excluding short-term securities):
Proceeds from sales 2,511,530
Cost of securities sold 2,583,974
-------------------------------------------------------------------------------
Net Realized Loss (72,444)
-------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 884,318
End of period 494,745
-------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (389,573)
-------------------------------------------------------------------------------
Net Loss on Investments (462,017)
-------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 379,856
===============================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000 (unaudited)
and the Year Ended November 30, 1999
<TABLE>
<CAPTION>
2000 1999
===========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 841,873 $ 1,556,221
Net realized loss (72,444) (429,275)
Decrease in net unrealized appreciation (389,573) (1,391,646)
-------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 379,856 (264,700)
-------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 4):
Net investment income (823,967) (1,556,080)
-------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (823,967) (1,556,080)
-------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 7,552,493 12,926,222
Net asset value of shares issued for
reinvestment of dividends 561,737 1,099,677
Cost of shares reacquired (6,885,627) (11,102,994)
-------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,228,603 2,922,905
-------------------------------------------------------------------------------------------
Increase in Net Assets 784,492 1,102,125
NET ASSETS:
Beginning of period 34,976,821 33,874,696
-------------------------------------------------------------------------------------------
End of period* $ 35,761,313 $ 34,976,821
===========================================================================================
* Includes undistributed net investment income of: $ 20,932 $ 3,026
===========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 17
<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 six other separate investment funds: Smith
Barney Intermediate Maturity New York Municipals Fund, Smith Barney Large
Capitalization Growth Fund, Smith Barney Mid Cap Blend Fund, Smith Barney S&P
500 Index Fund, Smith Barney U.S. 5000 Index Fund and Smith Barney EAFE Index
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 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.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
3. Investment Advisory Agreement, Administration
Agreement and Other Transactions
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH") which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment advisor 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 31,2000,SSBC waived investment advisory fees of $21,902.
SSBC also acts as the Funds 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, 2000,
SSBC waived administration fees of $14,601.
Citi Fiduciary Trust Company ("CFTC"), formerly known as Smith Barney Private
Trust Company, another subsidiary of Citigroup, acts as the Fund's transfer
agent and PFPC Global Fund Services ("PFPC") acts as the Funds sub-transfer
agent. CFTC receives account fees and asset-based fees that vary according to
the account size and type of account. PFPC is responsible for shareholder
recordkeeping and financial processing for all shareholder accounts and is paid
by CFTC. For the six months ended May 31, 2000, the Fund paid transfer agent
fees of $3,624 to CFTC.
CFBDS, Inc. ("CFBDS") 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.
There are maximum initial sales charges of 2.00% and 1.00% for Class A and L
shares, respectively. 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, 2000, there were no CDSCs
paid to SSB. In addition, CFBDS and SSB received sales charges of $20,000 and
$1,000 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, 2000, total Distribution Plan fees were:
Class A Class L
================================================================================
Distribution Plan Fees $23,329 $8,900
================================================================================
All officers and one Trustee of the Fund are employees of SSB.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 19
<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
For the six months ended May 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
===============================================================================
Purchases $3,215,983
-------------------------------------------------------------------------------
Sales 2,511,530
===============================================================================
At May 31, 2000, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
===============================================================================
Gross unrealized appreciation $ 783,014
Gross unrealized depreciation (288,269)
-------------------------------------------------------------------------------
Net unrealized appreciation $ 494,745
===============================================================================
6. Capital Loss Carryforwards
At November 30, 1999, the Fund had for Federal tax purposes approximately
$1,142,000 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:
2002 2003 2007
============================================================================
Capital Loss Carryforwards $657,000 $269,000 $216,000
============================================================================
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
7. Shares of Beneficial Interest
At May 31, 2000, 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, 2000, total paid-in capital amounted to the following for each class.
Class A Class L Class Y
=============================================================================
Total Paid-in Capital $31,169,867 $5,228,711 $274,621
=============================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 2000 November 30, 1999
------------------------ ------------------------
Shares Amount Shares Amount
==============================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 874,616 $ 7,281,959 1,354,473 $ 11,737,460
Shares issued on reinvestment 57,912 483,083 107,682 927,878
Shares reacquired (782,788) (6,527,123) (1,157,437) (9,906,616)
------------------------------------------------------------------------------------------------
Net Increase 149,740 $ 1,237,919 304,718 $ 2,758,722
================================================================================================
Class L
Shares sold 32,290 $ 270,534 135,995 $ 1,188,762
Shares issued on reinvestment 8,551 71,256 18,313 157,924
Shares reacquired (42,879) (358,504) (138,454) (1,196,378)
------------------------------------------------------------------------------------------------
Net Increase (Decrease) (2,038) $ (16,714) 15,854 $ 150,308
================================================================================================
Class Y
Shares issued on reinvestment 886 $ 7,398 1,607 $ 13,875
------------------------------------------------------------------------------------------------
Net Increase 886 $ 7,398 1,607 $ 13,875
================================================================================================
</TABLE>
8. Subsequent Event
Effective June 5, 2000, the Board of Trustees of the Fund approved a
Distribution Agreement with SSB,replacing the Distribution Agreement with CFBDS.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity California Municipals Fund 21
<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 2000(1)(2) 1999(2) 1998 1997 1996 1995
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.42 $8.85 $8.66 $8.55 $8.53 $7.80
------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.19 0.37 0.39 0.40 0.40 0.40
Net realized and
unrealized gain (loss) (0.10) (0.43) 0.19 0.11 0.02 0.73
------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.09 (0.06) 0.58 0.51 0.42 1.13
------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.19) (0.37) (0.39) (0.40) (0.40) (0.40)
------------------------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.37) (0.39) (0.40) (0.40) (0.40)
------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.32 $8.42 $8.85 $8.66 $8.55 $8.53
------------------------------------------------------------------------------------------------------------------
Total Return 1.10%++ (0.70)% 6.78% 6.13% 5.05% 14.84%
------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $30,384 $29,522 $28,303 $25,630 $24,537 $26,211
------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.75%+ 0.84% 0.75% 0.75% 0.77% 0.75%
Net investment income 4.63+ 4.27 4.45 4.65 4.69 4.89
------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 7% 29% 8% 9% 15% 8%
==================================================================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The investment advisor and administrator waived all or part of their fees
for the six months ended May 31, 2000 and each of the five years ended
November 30, 1999. In addition, the investment advisor 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
----------------------------------------- -------------------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.02 $0.02 $0.03 $0.07 $0.03 0.95%+ 1.05% 1.00% 1.12% 1.54% 1.16%
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
22 2000 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 L Shares 2000(1)(2) 1999(2) 1998(3) 1997 1996 1995
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.42 $8.84 $8.65 $8.54 $8.52 $7.80
--------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.18 0.35 0.37 0.38 0.38 0.38
Net realized and
unrealized gain (loss) (0.11) (0.42) 0.19 0.11 0.02 0.72
--------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.07 (0.07) 0.56 0.49 0.40 1.10
--------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.18) (0.35) (0.37) (0.38) (0.38) (0.38)
--------------------------------------------------------------------------------------------------------------------
Total Distributions (0.18) (0.35) (0.37) (0.38) (0.38) (0.38)
--------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.31 $8.42 $8.84 $8.65 $8.54 $8.52
--------------------------------------------------------------------------------------------------------------------
Total Return 0.87%++ (0.79)% 6.57% 5.92% 4.84% 14.36%
--------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $5,063 $5,144 $5,260 $3,419 $2,607 $2,254
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.97%+ 1.01% 0.97% 0.96% 0.98% 0.98%
Net investment income 4.42+ 4.09 4.22 4.44 4.48 4.54
--------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 7% 29% 8% 9% 15% 8%
====================================================================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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) The investment advisor and administrator waived all or part of their fees
for the six months ended May 31, 2000 and each of the five years ended
November 30, 1999. In addition, the investment advisor 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
---------------------------------------------- ----------------------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class L $0.01 $0.02 $0.02 $0.03 $0.07 $0.03 1.17%+ 1.22% 1.21% 1.33% 1.75% 1.39%
</TABLE>
++ 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>
For a share of each class of beneficial interest outstanding throughout each
year ended November 30, except where noted:
<TABLE>
<CAPTION>
Class Y Shares 2000(1)(2) 1999(2) 1998 1997 1996 1995(3)
=====================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.44 $8.86 $8.66 $8.56 $8.54 $8.39
-----------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.20 0.39 0.41 0.41 0.41 0.09
Net realized and
unrealized gain (loss) (0.11) (0.42) 0.19 0.11 0.02 0.15
-----------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.09 (0.03) 0.60 0.52 0.43 0.24
-----------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.20) (0.39) (0.40) (0.42) (0.41) (0.09)
-----------------------------------------------------------------------------------------------------
Total Distributions (0.20) (0.39) (0.40) (0.42) (0.41) (0.09)
-----------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.33 $8.44 $8.86 $8.66 $8.56 $8.54
-----------------------------------------------------------------------------------------------------
Total Return 1.07%++ (0.40)% 7.09% 6.20% 5.22% 2.92%++
-----------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $314 $311 $312 $292 $274 $261
-----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.57%+ 0.65% 0.57% 0.56% 0.59% 0.58%+
Net investment income 4.81+ 4.46 4.62 4.84 4.87 4.74+
-----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 7% 29% 8% 9% 15% 8%
=====================================================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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 advisor and administrator waived all or part of their fees
for the six months ended May 31, 2000, each of the four years ended
November 30, 1999 and the period ended November 30, 1995. In addition, the
advisor 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
---------------------------------------------- ----------------------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class Y $0.01 $0.02 $0.02 $0.03 $0.07 $0.03 0.77%+ 0.86% 0.82% 0.94% 1.36% 0.99%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
24 2000 Semi-Annual Report to Shareholders
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
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 Advisor and
Administrator
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of the shareholders of
Smith Barney Intermediate Maturity California Municipal Fund, but it may also be
used as sales literature when proceeded or accompanied by the current
Prospectus, which gives details about charges, expenses, investment objectives
and operating policies of the Portfolio. If used as sales material after August
31, 2000, this report must be accompanied by performance information for the
most recently completed calendar quarter.
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/mutualfunds
FD2400 7/00
<PAGE>
[LOGO OF SBMF]
SMITH BARNEY INTERMEDIATE
MATURITY NEW YORK
MUNICIPALS Fund
SPECIAL DISCIPLINE SERIES
SEMI-ANNUAL REPORT
MAY 31, 2000
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
Your Serious Money Professionally Managed(SM)
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<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, 2000. In this report, we summarize the period's prevailing economic and
market conditions and outline the Fund's investment strategy.(1) 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, 2000, the Fund's Class A shares returned 0.43%
without sales charges. The Fund's Class A shares returned a negative 1.59% with
sales charges for the same period. In comparison, the Lehman Brothers Municipal
Bond Index(2) and the Lehman Brothers 10-Year Municipal Bond Index(3) returned
1.02% and 0.68%, respectively. For additional Fund performance information
please refer to pages 5 and 6.
Market Update
On May 16,2000,the Federal Reserve Board ("Fed") enacted the sixth in a series
of interest rate hikes that began last June 30,1999 when the federal funds rate
was at 4.75%. (The federal funds rate is the interest rate charged by banks with
excess reserves at a Federal Reserve district bank to banks needing overnight
loans to meet reserve requirements.) With the federal funds rate presently at
6.50%, the cumulative effect of the interest rate increases so far, in our view,
may begin to have a more pronounced effect in reducing inflationary pressures.
----------
1 The information provided represents the opinion of the manager and is not
intended to be a forecast of future events, a guarantee of future results
nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the portfolio.
2 The Lehman Brothers Municipal Bond Index is a broad measure of the municipal
bond market with maturities of at least one year. An investor cannot invest
directly in an index.
3 The Lehman Brothers 10-Year Municipal Bond Index is a broad-based index
comprised of approximately 5,000 bonds totaling approximately $63 billion in
market capitalization. An investor cannot invest directly in an index.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 1
<PAGE>
In our opinion, changes in the Fed's monetary policy generally take time to be
absorbed into the economy. We believe that the recent market rallies are a
result of monetary changes enacted six to nine months ago. In addition, barring
a major change in the economy or the rate of inflation, we think it's likely
that the Fed's monetary policy may be relatively benign for the remainder of
2000.
Over the past several weeks,the performance of the bond market has shown signs
of improvement amid a series of economic reports that suggest the economy is
slowing and that the Fed may be close to completing its series of interest rate
hikes. However, we also think that any further Fed policy actions may have
already been comfortably priced into the bond market.
The inversion of the yield curve, while making us somewhat cautious, still
indicates to us that the market believes inflation is under control. (The yield
curve is the graphical depiction of the relationship between the yield on bonds
of the same credit quality but different maturities. An inverted yield curve
represents a unique situation whereby short-term interest rates are higher than
long-term rates.) While the fundamentals in the higher-quality tier securities
are still sound and valuations have improved,poor technical conditions,most
notably large pent-up issuance needs, may have created concern among many
investors about the future prospects for municipal bonds. Yet, as we discuss
later on in the report, we are optimistic about current municipal bond
opportunities.
Our favorable outlook for inflation, plus the ongoing reduction in the supply of
U.S. Treasuries, may help to contain the rise in long-term rates and further
invert the Treasury yield curve (that is, long-term yields should fall even
further below short-term yields).
In our view, modestly higher U.S. Treasury yields and a further increase in the
inversion of the yield curve are likely as the Fed continues to push up
short-term rates. A decrease in the amount of new issuance and more buybacks of
currently outstanding debt, while already largely discounted by the market, may
likely reinforce the inversion of the yield curve. In addition, we are presently
seeing general positive market sentiment toward bonds of higher credit quality.
We think that the short-end of the curve is racing to stay ahead of short-term
rates. The inversion is not just a factor of the U.S. Treasury buyback program,
but rather, it indicates that inflation may be under control and rates on
longer-term paper still represent fair value.
--------------------------------------------------------------------------------
2 2000 Semi-Annual Report to Shareholders
<PAGE>
Investment Strategy
The Fund seeks to provide New York investors with as high a level of current
income exempt from federal income taxes and New York State and New York City
personal income taxes as is consistent with the preservation of principal.(4)
The Fund invests primarily in investment grade(5) municipal securities.
Our investment strategy during the last year has been to maximize our dividend
yield. In our view, the municipal bond market has provided us with excellent
opportunities throughout the period under review. Since interest rates have gone
up to higher levels, we have been able to invest our excess cash in bonds. In
addition, we have also been focusing on adding high-grade bonds to the Fund's
portfolio.
During the past year, the Fund focused on general obligation bonds (19.1%),
education bonds (19.0%) and transportation bonds (12.0%), because we believed
they offered good relative values. At the end of November, the Fund's average
weighted maturity(6) was approximately 9.3 years. In addition, as of May 31,
2000, 97.0% of the Fund's holdings were rated investment grade, with 51.5% of
the Fund invested in AAA/Aaa bonds, the highest possible rating.
New York Economic Highlights(7)
The Empire State continues to move aggressively to create a top-rate business
climate, and it is clearly having a positive impact on its economy. This
turnaround comes as New York continues to reduce taxes, eliminate red tape and
other bureaucratic obstacles and change questionable state government programs
that may have previously held back New York's economic growth.
The Empire State has a broad and diverse economy, boasting extensive resources
and wealth. With a Gross State Product of roughly $593 million reported in 1999,
New York accounts for nearly 8% of the nation's Gross Domestic Product ("GDP").
The unprecedented growth of the financial services sector during the last few
years has positively affected the New York State economy, as New York City
remains the undisputed financial capital of the world.
In our opinion, changes in New York's economic policy over the last three years
-- primarily lower taxes and sound fiscal practices -- continue to improve New
York's business climate. Moreover, the state continues to reduce
-----------
4 Please note a portion of the income from this Fund may be subject to the
Alternative Minimum Tax ("AMT").
5 Investment-grade bonds are those rated Aaa,Aa,A and Baa by Moody's Investors
Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings Service, or
have an equivalent rating by any nationally recognized statistical ratings
organization, or are determined by the manager to be of equivalent quality.
6 Average maturity is the average timeframe within the portfolio for which the
debt instruments are due and payable.
7 Source: Fitch IBCA, Inc. Public Finance, State of New York, October 14, 1999
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 3
<PAGE>
taxes more than any other state in the nation, and in 1996, taxes were cut more
than the other 49 states combined. Additionally, workers' compensation rates
have been reduced by 30% since 1995, and other business costs have been lowered
as well, which has benefited New York's economy.
Market Outlook
In our judgment, a number of influences remain favorable for the municipal bond
market. The new-issue municipals may be expected to decline this year, boosting
demand for bonds currently outstanding and enhancing interest for the new
municipals expected in 2000.
Fiscal trends may be another major positive. During past economic downturns,
some municipal issuers facing declining tax receipts and were hard-pressed to
repay their bond obligations. Today, many state and local governments have
budget surpluses. We believe these surpluses may make investors more comfortable
holding municipals, even in a downturn. Lastly, recent narrowing of spreads in
the taxable market has made other fixed income alternatives less attractive on a
relative basis. All of these trends help to explain why we remain optimistic
about the long-term prospects for the municipal bond market.
In closing, thank you for investing in the Smith Barney Intermediate Maturity
New York Municipals Fund. We look forward to continuing to help you pursue your
financial goals in the future.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
June 15, 2000
--------------------------------------------------------------------------------
4 2000 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>
5/31/00 $8.28 $8.12 $0.20 $0.00 0.43%+
-----------------------------------------------------------------------------------------
11/30/99 8.76 8.28 0.38 0.00 (1.18)
-----------------------------------------------------------------------------------------
11/30/98 8.57 8.76 0.40 0.00 7.01
-----------------------------------------------------------------------------------------
11/30/97 8.47 8.57 0.41 0.00 6.23
-----------------------------------------------------------------------------------------
11/30/96 8.48 8.47 0.41 0.00 4.85
-----------------------------------------------------------------------------------------
11/30/95 7.80 8.48 0.41 0.00 14.31
-----------------------------------------------------------------------------------------
11/30/94 8.54 7.80 0.40 0.02 (3.97)
-----------------------------------------------------------------------------------------
11/30/93 8.18 8.54 0.40 0.02 9.76
-----------------------------------------------------------------------------------------
Inception* - 11/30/92 7.90 8.18 0.38 0.00 8.59+
=========================================================================================
Total $3.39 $0.04
=========================================================================================
</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>
5/31/00 $8.27 $8.12 $0.19 $0.00 0.46%+
-----------------------------------------------------------------------------------------
11/30/99 8.76 8.27 0.36 0.00 (1.49)
-----------------------------------------------------------------------------------------
11/30/98 8.57 8.76 0.38 0.00 6.79
-----------------------------------------------------------------------------------------
11/30/97 8.47 8.57 0.39 0.00 6.00
-----------------------------------------------------------------------------------------
11/30/96 8.48 8.47 0.39 0.00 4.64
-----------------------------------------------------------------------------------------
Inception* - 11/30/95 7.87 8.48 0.38 0.00 13.01+
=========================================================================================
Total $2.09 $0.00
=========================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 5
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
------------------------
Class A Class L
================================================================================
Six Months Ended 5/31/00+ 0.43% 0.46%
--------------------------------------------------------------------------------
Year Ended 5/31/00 (0.82) (1.00)
--------------------------------------------------------------------------------
Five Years Ended 5/31/00 4.32 4.11
--------------------------------------------------------------------------------
Inception* through 5/31/00 5.32 5.25
================================================================================
With Sales Charges(2)
------------------------
Class A Class L
================================================================================
Six Months Ended 5/31/00+ (1.59)% (1.48)%
--------------------------------------------------------------------------------
Year Ended 5/31/00 (2.86) (2.97)
--------------------------------------------------------------------------------
Five Years Ended 5/31/00 3.90 3.91
--------------------------------------------------------------------------------
Inception* through 5/31/00 5.07 5.05
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Returns
--------------------------------------------------------------------------------
Without Sales Charges(1)
================================================================================
Class A (Inception* through 5/31/00) 54.76%
--------------------------------------------------------------------------------
Class L (Inception* through 5/31/00) 32.47
================================================================================
(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 charge 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 the first year of purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A and L shares are December 31, 1991 and
December 5, 1994, respectively.
--------------------------------------------------------------------------------
6 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
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 New York Intermediate Municipal Debt Fund Average+
--------------------------------------------------------------------------------
December 1991 -- May 2000
[GRAPH]
Smith Barney
Intermediate Lehman Brothers Lipper New York
Maturity 10-Year Intermediate
New York Municipal Municipal Debt
Municipals Fund Bond Index Fund 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
11/99 15,104 16,708 15,351
5/31/00 15,169 16,822 15,439
+ 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, 2000. 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 New York Intermediate Municipal Debt
Fund Average is an average of the Fund's peer group of mutual funds (18
funds as of May 31, 2000) 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. An investor may not invest
directly in an index.
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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 7
<PAGE>
--------------------------------------------------------------------------------
Portfolio Highlights (unaudited) May 31, 2000
--------------------------------------------------------------------------------
Industry Breakdown*
19.0% Education
19.1% General Obligation
3.7% Government Facilities
6.8% Hospitals
7.7% Industrial Development
17.3% Other
3.7% Pollution Control
12.0% Transportation
3.2% Finance
7.5% Water & Sewer
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
--------------------------------------------------------------------------------
Aaa AAA 51.5%
Aa AA 15.0
A A 19.1
Baa BBB 11.4
NR NR 3.0
-----
100.0%
=====
----------
* As a percentage of total investments.
--------------------------------------------------------------------------------
8 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================
<S> <C> <C> <C>
Education -- 19.0%
$1,000,000 AAA City University of New York COP, John Jay
College, 6.000% due 8/15/06 $ 1,028,750
860,000 Aaa* Huntington Union Free School District,
FGIC-Insured, 5.500% due 7/15/11 865,375
Nassau County Industrial Development Agency,
Civic Facility Revenue, Refunded, (Hofstra
University Project), MBIA-Insured:
1,250,000 AAA 5.250% due 7/1/13 1,220,313
2,000,000 AAA 5.250% due 7/1/14 1,942,500
2,000,000 AAA New York Educational Construction Fund, Series A,
MBIA-Insured, 6.500% due 4/1/04 2,095,000
New York State Dormitory Authority, Revenue Bonds:
500,000 AAA College and University Educational Loan,
MBIA-Insured, 6.200% due 7/1/01 (b) 507,210
640,000 Aaa* New York Law School, AMBAC-Insured,
5.200% due 7/1/08 636,000
1,100,000 AA Saint Thomas Aquinas, 5.000% due 7/1/14 990,000
1,000,000 A State University Educational Facilities,
5.000% due 5/15/10 942,500
------------------------------------------------------------------------------------------
10,227,648
------------------------------------------------------------------------------------------
Finance -- 3.2%
City of Troy Municipal Assistance Corp., MBIA-Insured:
1,080,000 AAA Series A, 5.000% due 1/15/08 1,061,100
1,990,000 AAA Series B, zero coupon due 1/15/19 644,263
------------------------------------------------------------------------------------------
1,705,363
------------------------------------------------------------------------------------------
General Obligation -- 19.1%
400,000 AAA Albany City School District GO, Series B, MBIA-Insured,
6.000% due 12/15/00 402,776
Buffalo GO:
205,000 AAA Series A, MBIA-Insured, 5.900% due 4/1/01 207,112
1,540,000 AAA Series B, 4.750% due 2/1/16 1,328,250
385,000 AAA Series B, (Escrowed to maturity with U.S. government
securities), MBIA-Insured, 5.900% due 4/1/01 388,966
1,000,000 AAA Erie County Public Improvement Project GO, Series A,
FGIC-Insured, 5.750% due 10/1/11 1,023,750
1,000,000 AA Monroe County Public Improvement Project GO, Series A,
6.000% due 3/1/18 1,027,500
1,000,000 AAA Nassau County GO, Combined Sewer District, Series E,
MBIA-Insured, 5.400% due 5/1/10 988,750
New York City GO:
2,000,000 A- Series A, 7.000% due 8/1/04 2,122,500
325,000 A- Series B, 6.250% due 10/1/01 330,281
175,000 A- Series B, (Escrowed to maturity with U.S. government
securities), 6.250% due 10/1/01 (c) 178,063
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 9
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited)(continued) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================
<S> <C> <C> <C>
General Obligation -- 19.1% (continued)
$ 435,000 AAA Niagara County GO, Environmental Infrastructure,
Series A, MBIA-Insured, 5.250% due 8/15/13 $ 421,950
275,000 Aaa* North Hempstead GO, FGIC-Insured, 5.000% due 5/15/12 259,875
630,000 Aaa* Nyack Unified Free School District GO, FGIC-Insured,
5.250% due 12/15/15 599,287
1,125,000 AAA Yonkers GO, Series A, FGIC-Insured, 5.000% due 9/1/14 1,026,562
------------------------------------------------------------------------------------------
10,305,622
------------------------------------------------------------------------------------------
Government Facilities -- 3.7%
1,900,000 A New York State Urban Development, Correctional
Facilities, Series A, 6.500% due 1/1/09 2,016,375
------------------------------------------------------------------------------------------
Hospitals -- 6.8%
New York State Dormitory Authority, Revenue Bonds:
95,000 AA Genessee Valley, Series B, FHA-Insured, 6.300%
due 8/1/02 97,375
1,000,000 A Mental Health Services Facilities Improvement,
6.000% due 2/15/12 1,027,500
500,000 Baa2* Nyack Hospital, Series A, 6.250% due 7/1/13 481,250
1,000,000 AAA Presbyterian Hospital, Series A, AMBAC/FHA-Insured,
5.500% due 2/15/07 1,008,750
New York State Medical Care Facilities, Revenue Bonds:
725,000 A Mental Health Services Facility, 6.100% due 2/15/02 736,781
Methodist Hospital, FHA-Insured:
200,000 AA Series A, (Escrowed to maturity with U.S. government
securities), 6.000% due 8/15/02 (c) 204,500
95,000 AAA Series C, 5.900% due 8/15/02 94,881
------------------------------------------------------------------------------------------
3,651,037
------------------------------------------------------------------------------------------
Housing: Multi-Family -- 2.4%
1,000,000 AAA New York State Housing Corp., (Battery Park City Project),
6.000% due 11/1/03 1,023,750
270,000 Aa* North Tonawanda Housing Development Corp.,
Mortgage Revenue, Bishop Gibbons, Series B,
FHA-Insured, 6.350% due 12/15/02 275,062
------------------------------------------------------------------------------------------
1,298,812
------------------------------------------------------------------------------------------
Industrial Development -- 7.7%
535,000 A Amherst Industrial Development Agency, Lease Revenue,
Multi-Surface Rink Complex, Series A, (Escrowed to
maturity with U.S. government securities), LOC Keybank,
5.050% due 10/1/05 (c) 532,994
500,000 Baa3* New York City IDA, Civil Facilities Revenue, (YMCA Greater
NY Project), 6.000% due 8/1/07 503,125
605,000 AA- Onondaga County, NY IDA, (Syracuse Home Association
Project), 5.000% due 12/1/13 539,206
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited)(continued) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================
<S> <C> <C> <C>
Industrial Development -- 7.7% (continued)
$1,000,000 A Syracuse Industrial Development Agency, Civic
Facilities Revenue, (Crouse Health Inc. Project),
5.000% due 1/1/10 $ 921,250
Westchester County IDA:
1,000,000 AAA Resource Recovery Revenue, (Westchester Resco Co.
Project), AMBAC-Insured, 6.000% due 7/1/09 (b) 1,036,250
580,000 NR Revenue Bonds, (Escrowed to maturity with
U.S. government securities), (AGR Realty Co. Project),
5.750% due 1/1/02 (c) 587,975
------------------------------------------------------------------------------------------
4,120,800
------------------------------------------------------------------------------------------
Life Care Systems -- 1.2%
690,000 AA New York State Dormitory Authority Revenue, Hebrew
Home for the Aged, FHA-Insured, 5.625% due 2/1/17 664,125
------------------------------------------------------------------------------------------
Miscellaneous -- 9.6%
500,000 A Capital District Youth Center Lease Revenue, LOC Key Bank,
6.000% due 2/1/17 483,750
1,450,000 AA New York City Transitional Finance Authority Revenue,
Future Tax Secured, Series A, 4.750% due 11/15/16 1,257,875
1,000,000 AAA Suffolk County Judicial Facilities Agency Service
Agreement Revenue, John P. Cohalan Complex, AMBAC-
Insured, 5.750% due 10/15/11 1,025,000
Virgin Islands Public Finance Authority Revenue,
Series A:
1,580,000 BBB- 5.300% due 10/1/11 1,477,300
1,000,000 BBB- 5.500% due 10/1/13 923,750
------------------------------------------------------------------------------------------
5,167,675
------------------------------------------------------------------------------------------
Pollution Control -- 3.7%
750,000 BBB+ Essex County Industrial Development Agency, PCR,
5.700% due 7/1/16 (b) 690,000
500,000 AAA New York State Environmental Facilities Corp., PCR,
Series A, 5.950% due 3/15/02 508,750
800,000 BBB Oneida-Herkimer Solid Waste Management Authority,
6.300% due 4/1/01 810,136
------------------------------------------------------------------------------------------
2,008,886
------------------------------------------------------------------------------------------
Public Facilities -- 1.1%
600,000 AAA Puerto Rico Public Buildings Authority, Public
Education and Health Facilities Refunding, Series K,
FGIC-Insured, 6.000% due 7/1/01 608,664
------------------------------------------------------------------------------------------
Transportation -- 12.0%
560,000 BBB Guam Transportation Authority Revenue, Series A,
5.700% due 10/1/01 562,800
1,545,000 AA- New York State Thruway Authority, General Revenue,
Series E, 5.000% due 1/1/16 1,392,431
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited)(continued) May 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================
<S> <C> <C> <C>
Transportation -- 12.0% (continued)
$1,000,000 A New York State Thruway Authority, Service Contract,
Local Highway and Bridges, 6.000% due 4/1/02 $ 1,015,000
600,000 AAA Niagara Falls Bridge Commission Toll Revenue,
Series B, FGIC-Insured, 5.250% due 10/1/15 576,750
1,215,000 AAA Niagara Frontier Transportation Authority, Greater
Buffalo International Airport, Series B, AMBAC-Insured,
5.750% due 4/1/04 (b) 1,220,613
1,000,000 NR Port Authority of New York & New Jersey, Revenue
Bonds, 6.750% due 10/1/11 (b) 1,018,750
670,000 Baa1* Syracuse COP, Hancock International Airport,
6.300% due 1/1/02 (b) 678,375
------------------------------------------------------------------------------------------
6,464,719
------------------------------------------------------------------------------------------
Utilities -- 3.0%
Long Island Power Authority, Electric System Revenue:
1,000,000 AAA FSA-Insured, 5.000% due 12/1/15 901,250
700,000 AA Series 5, 4.300% due 5/1/33 (d) 700,000
------------------------------------------------------------------------------------------
1,601,250
------------------------------------------------------------------------------------------
Water & Sewer -- 7.5%
750,000 AAA New York City Municipal Water Finance Authority,
Series D, MBIA-Insured, 5.000% due 6/15/15 678,750
1,000,000 Aa1* New York State Environmental Facility Corp., Clean
Water & Drinking, Series F, 5.250% due 6/15/14 947,500
1,390,000 AAA Suffolk County Southwest Sewer District GO, MBIA-Insured,
6.000% due 2/1/07 1,447,338
1,000,000 AAA Suffolk County Water Authority, Waterworks Revenue,
MBIA-Insured, 5.100% due 6/1/09 982,500
------------------------------------------------------------------------------------------
4,056,088
------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-- 100%
(Cost-- $54,700,199**) $53,897,064
==========================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except for those
which are identified by an asterisk (*), are rated by Moody's Investors
Service, Inc.
(b) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) 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.
(d) 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 13 and 14 for definitions of ratings and certain security descriptions
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<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.
NR -- Indicates that the bond is not rated by Standard & Poor's or
Moody's.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 13
<PAGE>
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 2000
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (Cost -- $54,700,199) $53,897,064
Cash 7,858
Interest receivable 901,307
Receivable for Fund shares sold 19,611
Receivable from manager 12,518
--------------------------------------------------------------------------------
Total Assets 54,838,358
--------------------------------------------------------------------------------
LIABILITIES:
Administration fees payable 25,267
Investment advisory fees payable 22,425
Distribution fees payable 3,081
Accrued expenses 41,964
--------------------------------------------------------------------------------
Total Liabilities 92,737
--------------------------------------------------------------------------------
Total Net Assets $54,745,621
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 6,740
Capital paid in excess of par value 57,581,124
Undistributed net investment income 11,138
Accumulated net realized loss from security transactions (2,050,246)
Net unrealized depreciation of investments (803,135)
--------------------------------------------------------------------------------
Total Net Assets $54,745,621
================================================================================
Shares Outstanding:
Class A 6,198,141
----------------------------------------------------------------------------
Class L 541,956
----------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption value) $8.12
----------------------------------------------------------------------------
Class L * $8.12
----------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 2.04% of net asset value per share) $8.29
----------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $8.20
================================================================================
</TABLE>
* 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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 15
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000
INVESTMENT INCOME:
Interest $ 1,668,841
-------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 91,411
Administration fees (Note 2) 60,941
Distribution fees (Note 2) 50,349
Shareholder and system servicing fees 20,886
Shareholder communications 14,261
Audit and legal 7,842
Pricing service fees 4,848
Custody 3,155
Registration fees 2,275
Trustees' fees 1,671
Other 5,146
-------------------------------------------------------------------------------
Total Expenses 262,785
Less: Investment advisory and administration fee waivers (Note 2) (42,658)
-------------------------------------------------------------------------------
Net Expenses 220,127
-------------------------------------------------------------------------------
Net Investment Income 1,448,714
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 10,969,511
Cost of securities sold 11,296,620
-------------------------------------------------------------------------------
Net Realized Loss (327,109)
-------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation)
of Investments:
Beginning of period 10,188
End of period (803,135)
-------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (813,323)
-------------------------------------------------------------------------------
Net Loss on Investments (1,140,432)
-------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 308,282
===============================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000 (unaudited)
and the Year Ended November 30, 1999
2000 1999
--------------------------------------------------------------------------------
OPERATIONS:
Net investment income $1,448,714 $2,810,096
Net realized loss (327,109) (454,165)
Increase in net unrealized depreciation (813,323) (3,221,396)
------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 308,282 (865,465)
------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 3):
Net investment income (1,432,497) (2,809,830)
------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,432,497) (2,809,830)
------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 1,472,081 19,640,773
Net asset value of shares issued for
reinvestment of dividends 899,816 1,875,275
Cost of shares reacquired (11,355,473) (11,858,196)
------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (8,983,576) 9,657,852
------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (10,107,791) 5,982,557
NET ASSETS:
Beginning of period 64,853,412 58,870,855
------------------------------------------------------------------------------
End of period* $54,745,621 $64,853,412
==============================================================================
* Includes undistributed (overdistributed)
net investment income of: $11,138 $(5,079)
==============================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 17
<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 six other separate investment funds: Smith
Barney Intermediate Maturity California Municipals Fund, Smith Barney Large
Capitalization Growth Fund, Smith Barney S&P 500 Index Fund, Smith Barney Mid
Cap Blend Fund, Smith Barney U.S. 5000 Index Fund and Smith Barney EAFE Index
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 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; 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.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
2. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), 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, 2000,SSBC waived $25,595 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, 2000,
SSBC waived $17,063 of its administration fee.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Fund's transfer agent and PFPC Global Fund Services ("PFPC") acts as the
Fund's sub-transfer agent. CFTC receives account fees and asset-based fees that
vary according to the account size and type of account. PFPC is responsible for
shareholder recordkeeping and financial processing for all shareholder accounts
and is paid by CFTC. For the six months ended May 31, 2000, the Fund paid
transfer agent fees of $8,299 to CFTC.
CFBDS,Inc. ("CFBDS") 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.
There are maximum initial sales charges of 2.00% and 1.00% for Class A and L
shares, respectively. 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 31,2000,SSB and CFBDS received sales charges of
$13,000 and $1,000 on sales of the Fund's Class A and L shares,respectively.
There were no CDSCs paid to SSB for the six months ended May 31,2000.
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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 19
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
For the six months ended May 31,2000,total Distribution Plan fees incurred were:
Class A Class L
================================================================================
Distribution Plan Fees $42,223 $8,126
================================================================================
All officers and one Trustee of the Fund are employees of SSB.
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, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $ 3,271,809
--------------------------------------------------------------------------------
Sales 10,969,511
================================================================================
At May 31, 2000, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 363,355
Gross unrealized depreciation (1,166,490)
--------------------------------------------------------------------------------
Net unrealized depreciation $ (803,135)
================================================================================
6. Capital Loss Carryforward
At November 30, 1999, the Fund had, for Federal income tax purposes,
approximately $1,723,000 of loss carryforwards available to offset any future
capital gains. To the extent that these carryforward losses are used to offset
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)(continued)
--------------------------------------------------------------------------------
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. Expiration occurs on November 30 of the year indicated:
2002 2003 2004 2007
================================================================================
Carryforward Amounts $856,000 $337,000 $76,000 $454,000
================================================================================
7. Shares of Beneficial Interest
At May 31, 2000, 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, 2000, total paid-in capital amounted to the following for each class:
Class A Class L
================================================================================
Total Paid-in Capital $52,886,876 $4,700,988
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 2000 November 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
==================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 167,925 $ 1,378,104 2,067,594 $ 17,655,669
Shares issued on reinvestment 100,042 817,581 201,079 1,710,081
Shares reacquired (1,305,605) (10,712,809) (1,270,139) (10,724,174)
--------------------------------------------------------------------------------------------------
Net Increase (Decrease) (1,037,638) $ (8,517,124) 998,534 $ 8,641,576
==================================================================================================
Class L
Shares sold 11,464 $93,977 228,446 $ 1,985,104
Shares issued on reinvestment 10,066 82,235 19,436 165,194
Shares reacquired (78,515) (642,664) (133,953) (1,134,022)
--------------------------------------------------------------------------------------------------
Net Increase (Decrease) (56,985) $(466,452) 113,929 $1,016,276
==================================================================================================
</TABLE>
8. Subsequent Event
Effective June 5, 2000, the Board of Trustees of the Fund approved a
Distribution Agreement with SSB, replacing the Distribution Agreement with
CFBDS.
--------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund 21
<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 2000(1)(2) 1999(2) 1998 1997 1996 1995
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.28 $8.76 $8.57 $8.47 $8.48 $7.80
-------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.20 0.38 0.40 0.41 0.41 0.41
Net realized and unrealized
gain (loss) (0.16) (0.48) 0.19 0.10 (0.01) 0.68
-------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.04 (0.10) 0.59 0.51 0.40 1.09
-------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.20) (0.38) (0.40) (0.41) (0.41) (0.41)
-------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.20) (0.38) (0.40) (0.41) (0.41) (0.41)
-------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.12 $8.28 $8.76 $8.57 $8.47 $8.48
-------------------------------------------------------------------------------------------------------------------------------
Total Return 0.43%++ (1.18)% 7.01 6.23% 4.85% 14.31%
-------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $50,345 $59,896 $54,624 $48,759 $49,355 $52,568
-------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.71%+ 0.73% 0.70% 0.67% 0.66% 0.65%
Net investment income 4.76+ 4.47 4.59 4.83 4.86 5.01
-------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 6% 23% 53% 52% 67% --
===============================================================================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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, 2000 and each of the five years ended November 30,
1999. 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
---------------------------------------------- -----------------------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.01 $0.02 $0.03 $0.04 $0.03 0.85%+ 0.88% 0.89% 0.98% 1.08% 0.97%
</TABLE>
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
22 2000 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 L Shares 2000(1)(2) 1999(2) 1998(3) 1997 1996 1995(4)
======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.27 $8.76 $8.57 $8.47 $8.48 $7.87
-----------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.19 0.37 0.38 0.39 0.39 0.38
Net realized and unrealized
gain (loss) (0.15) (0.50) 0.19 0.10 (0.01) 0.61
-----------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From
Operations 0.04 (0.13) 0.57 0.49 0.38 0.99
-----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.19) (0.36) (0.38) (0.39) (0.39) (0.38)
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.36) (0.38) (0.39) (0.39) (0.38)
-----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.12 $8.27 $8.76 $8.57 $8.47 $8.48
-----------------------------------------------------------------------------------------------------------------------
Total Return 0.46%++ (1.49)% 6.79% 6.00% 4.64% 13.01%++
-----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $4,401 $4,957 $4,247 $2,283 $1,192 $393
-----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(5) 0.90%+ 0.92% 0.89% 0.89% 0.88% 0.86%+
Net investment income 4.57+ 4.28 4.38 4.61 4.64 4.74+
-----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 6% 23% 53% 52% 67% --
=======================================================================================================================
</TABLE>
(1) For the six months ended May 31, 2000 (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, 2000, each of the four years ended November 30, 1999
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:
<TABLE>
<CAPTION>
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
--------------------------------------------- ---------------------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class L $0.01 $0.01 $0.01 $0.03 $0.02 $0.03 1.04%+ 1.07% 1.09% 1.20% 1.30% 1.19%+
</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>
(This page intentionally left blank.)
<PAGE>
[LOGO OF SALOMONSMITHBARNEY]
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
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney Investment Trust -- Smith Barney Intermediate Maturity New York
Municipals Fund, but it may also be used as sales literature when preceded or
accompanied by the current Prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the Fund. If used as
sales material after August 31, 2000, this report must be accompanied by
performance information for the most recently completed calendar quarter.
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/mutualfunds
FD2401 7/00
<PAGE>
[LOGO]
SMITH BARNEY
LARGE CAPITALIZATION GROWTH FUND
STYLE PURE SERIES
SEMI-ANNUAL REPORT
MAY 31, 2000
[LOGO]SMITH BARNEY
MUTUAL FUNDS
Your Serious Money. Professionally Managed.-SM-
NOT FDIC INSURED - NOT BANK GUARANTEED - MAY LOSE VALUE
<PAGE>
SMITH BARNEY LARGE
CAPITALIZATION GROWTH FUND
----------------------
The SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND ("Fund") seeks long-term
growth of capital by investing primarily in equity securities of companies with
large market capitalizations.
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND
AVERAGE ANNUAL TOTAL RETURNS ENDED
MAY 31, 2000
WITHOUT SALES CHARGES(1)
----------------------------------------
CLASS A CLASS B CLASS L
----------------------------------------------------------------
Six-Month++ 7.25% 6.82% 6.82%
----------------------------------------------------------------
One-Year 23.63 22.65 22.65
----------------------------------------------------------------
Since Inception+ 33.07 32.08 32.08
----------------------------------------------------------------
WITH SALES CHARGES(2)
----------------------------------------
CLASS A CLASS B CLASS L
----------------------------------------------------------------
Six-Month++ 1.89% 1.82% 4.74%
----------------------------------------------------------------
One-Year 17.44 17.65 20.43
----------------------------------------------------------------
Since Inception+ 30.60 31.41 31.60
----------------------------------------------------------------
(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.
FUND HIGHLIGHT
------------------------------------------------
INDIVIDUAL COMPANY SELECTION, IN OUR VIEW, SHOULD CONTINUE TO BE THE PRIMARY
FOCUS OF MOST INVESTORS. DURING PERIODS OF WHAT WE DEEM TO BE SPECULATIVE
EXCESS, THIS INVESTMENT APPROACH MAY APPEAR DATED, BUT WE BELIEVE IT IS A
TRIED-AND-TRUE PROCESS THAT HAS SERVED INVESTORS WELL FOR DECADES.
NASDAQ SYMBOL
------------------------------------------------
CLASS A SBLGX
CLASS B SBLBX
CLASS L SLCCX
WHAT'S INSIDE
------------------------------------------------
A MESSAGE FROM THE CHAIRMAN.............. 1
SHAREHOLDER LETTER....................... 2
HISTORICAL PERFORMANCE................... 4
SMITH BARNEY LARGE CAPITALIZATION GROWTH
FUND AT A GLANCE....................... 6
SCHEDULE OF INVESTMENTS.................. 7
STATEMENT OF ASSETS AND LIABILITIES...... 9
STATEMENT OF OPERATIONS.................. 10
STATEMENTS OF CHANGES IN NET ASSETS...... 11
NOTES TO FINANCIAL STATEMENTS............ 12
FINANCIAL HIGHLIGHTS..................... 15
<PAGE>
A MESSAGE FROM THE CHAIRMAN
------------------------------------------------
DEAR SHAREHOLDER:
The U.S. economy has continued its rate of historic growth in the new
millennium. However, in recent weeks, the U.S. markets have been characterized
by record volatility, leaving many investors with little or no clear indication
of the future direction of the market.
[PHOTO]
HEATH B. MCLENDON
Chairman
At SSB Citi Asset Management, Citigroup's assetmanagement division, we remain
firmly committed to our belief that individual company selection should continue
to be the primary focus of any investors in any market. We believe that those
companies with excellent products, strong management and a sound business plan
should be well-positioned to deliver continued earnings growth in an evolving
global economy.
We provide some 100 million people, businesses, governments and institutions in
over 100 countries with a broad range of financial products and services. SSB
Citi Asset Management, offers you access to a broad range of products including
equities, fixed income and money markets. Our global resources are extensive,
far-reaching and powerful, with a strong presence in the U.S., Europe, Japan,
Latin America, Asia Pacific and Australia.
We invite you to explore our capabilities as a market leader in areas such as
retirement, tax and estate planning. When you invest with SSB Citi Asset
Management, you can do so with the confidence that your interests come first,
your investment success is paramount, and that the ultimate in resources is
being committed to your financial future. Thank you for investing with us.
Sincerely,
/s/ HEATH B. MCLENDON
HEATH B. MCLENDON
Chairman
JUNE 12, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 1
<PAGE>
SHAREHOLDER LETTER
------------------------------------------------
DEAR SHAREHOLDER:
[PHOTO]
ALAN J. BLAKE
Vice President and
Investment Officer
We are pleased to provide the semi-annual report for the Smith Barney Large
Capitalization Growth Fund ("Fund") for the period ended May 31, 2000. In this
report we have summarized the period's prevailing economic and market conditions
and outlined our portfolio strategy.(1) 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
As previously noted, the Fund seeks long-term growth of capital by investing
primarily in equity securities of companies with large market capitalizations.
For the six months ended May 31, 2000, the Class A, B and L shares of the Fund,
without sales charges, returned 7.25%, 6.82% and 6.82%, respectively. For the
same period the Fund's Class A, B and L shares, with sales charges, returned
1.89%, 1.82% and 4.74%, respectively. In comparison, the Standard & Poor's 500
Index ("S&P 500 Index")(2) returned 2.90% for the same period.
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), companies delivering world-class products or services
into the global marketplace, dominant companies within growth industries where
we think the barriers to entry are extremely high and companies with strong
management teams. In our view, strong management is just as important as a
company's financial condition or the quality of its products or services.
MARKET OVERVIEW AND FUND UPDATE(3)
We believe corporate earnings outlook is the most important factor in
determining the behavior of large-capitalization growth stocks. As such, we tend
to view short-term political and economic events as background noise and
continue our long-term focus on individual company balance sheets, products and
management. When questions exist about the political and economic situation
worldwide, it always seems to lead many investors back to the highest-quality
companies.
Since our last report, the Fund has experienced broad gains, in large part due
to its technology holdings. At the Fund's inception on August 1997, we stated
that our investment emphasis was to invest in companies that may, over time, in
a low inflation environment, deliver above-average unit growth. Our focus has
remained constant. We continue to invest in companies with the financial
strength to raise dividends where applicable, buy back shares and make strategic
acquisitions.
Within the technology sector, we have concentrated in the areas of software,
semiconductors, telecommunications and networking. Recognized leaders in these
areas such as Microsoft, Cisco, Texas Instruments, Lucent, Motorola and Intel,
positively contributed to the performance of the Fund during the period.
During the reporting period, we added Dell to the portfolio at what was deemed
to be a compelling price. Dell, a market leader in the computer hardware
industry, is in our view, well positioned to remain a dominant global franchise
in the years ahead.
------------
1 THE INFORMATION PROVIDED REPRESENTS THE OPINION OF THE MANAGER AND IS NOT
INTENDED TO BE A FORECAST OF FUTURE EVENTS, A GUARANTEE OF FUTURE RESULTS NOR
INVESTMENT ADVICE. FURTHER, THERE IS NO ASSURANCE THAT CERTAIN SECURITIES
WILL REMAIN IN OR OUT OF THE PORTFOLIO.
------------
2 THE S&P 500 INDEX IS A MARKET CAPITALIZATION-WEIGHTED MEASURE OF 500 WIDELY
HELD COMMON STOCKS. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
3 PLEASE NOTE THAT THE FUND'S HOLDINGS ARE SUBJECT TO CHANGE AND DISCUSSION OF
HOLDINGS IS AS OF MAY 31, 2000. PLEASE REFER TO PAGES 7 AND 8 FOR A COMPLETE
LIST AND PERCENTAGE BREAKDOWN OF THE FUND'S HOLDINGS.
--------------------------------------------------------------------------------
2 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
We also eliminated a portion of the Fund's position in Pfizer, using the
proceeds from the sale to initiate a position in Amazon.com, a leading Internet
retailer. We believe Amazon.com is not only in a good position to remain a
dominant force on the Internet, but may also become a truly outstanding global
franchise. The recently announced merger of Warner-Lambert and Pfizer led us to
eliminate the Fund's holding in Pfizer. Warner-Lambert, remains one of the
Fund's largest holdings and we believe that the new Warner/Pfizer combination
should prove to be a dominant player in the pharmaceutical sector.
During the period, we also remained committed to the financial services sector.
In our view, the underlying fundamentals of the financial services industry are
still strong, which is why we owned American International Group, Morgan Stanley
Dean Witter, Wells Fargo, Fannie Mae and Household International.
We are planning to add to our positions in Coca-Cola, Gillette, Johnson &
Johnson, Merck, and Proctor & Gamble, as we believe the worldwide economic
recovery that is now underway should ultimately benefit these global, brand-name
companies.
Thank you for investing in the Smith Barney Large Capitalization Growth Fund. We
look forward to continuing to help you pursue your financial goals in the new
century.
Sincerely,
/s/ ALAN J. BLAKE
ALAN J. BLAKE
Vice President and
Investment Officer
JUNE 12, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 3
<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>
---------------------------------------------------------------------------------------------------------------------------
5/31/00 $23.94 $25.64 $0.00 $0.04 7.25%+
---------------------------------------------------------------------------------------------------------------------------
11/30/99 17.41 23.94 0.00 0.33 39.50
---------------------------------------------------------------------------------------------------------------------------
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 $0.38
---------------------------------------------------------------------------------------------------------------------------
</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>
---------------------------------------------------------------------------------------------------------------------------
5/31/00 $23.56 $25.13 $0.00 $0.04 6.82%+
---------------------------------------------------------------------------------------------------------------------------
11/30/99 17.26 23.56 0.00 0.33 38.51
---------------------------------------------------------------------------------------------------------------------------
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 $0.38
---------------------------------------------------------------------------------------------------------------------------
</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>
---------------------------------------------------------------------------------------------------------------------------
5/31/00 $23.56 $25.13 $0.00 $0.04 6.82%+
---------------------------------------------------------------------------------------------------------------------------
11/30/99 17.26 23.56 0.00 0.33 38.51
---------------------------------------------------------------------------------------------------------------------------
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 $0.38
---------------------------------------------------------------------------------------------------------------------------
</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>
---------------------------------------------------------------------------------------------------------------------------
5/31/00 $24.14 $25.90 $0.00 $0.04 7.44%+
---------------------------------------------------------------------------------------------------------------------------
11/30/99 17.49 24.14 0.00 0.33 40.00
---------------------------------------------------------------------------------------------------------------------------
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 $0.38
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
4 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
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>
---------------------------------------------------------------------------------------------------------------------------
5/31/00 $24.02 $25.77 $0.00 $0.04 7.44%
---------------------------------------------------------------------------------------------------------------------------
Inception* -- 11/30/99 19.48 24.02 0.00 0.33 25.08
---------------------------------------------------------------------------------------------------------------------------
TOTAL $0.00 $0.37
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS AND CAPITAL GAINS, IF ANY,
ANNUALLY.
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WITHOUT SALES CHARGES(1)
----------------------------------------------------------------------------
CLASS A CLASS B CLASS L CLASS Y CLASS Z
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
Six Months Ended 5/31/00+ 7.25% 6.82% 6.82% 7.44% 7.44%
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31/00 23.63 22.65 22.65 24.10 24.07
--------------------------------------------------------------------------------------------------------------------------------
Inception* through 5/31/00 33.07 32.08 32.08 32.21 23.40
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WITH SALES CHARGES(2)
----------------------------------------------------------------------------
CLASS A CLASS B CLASS L CLASS Y CLASS Z
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
Six Months Ended 5/31/00+ 1.89% 1.82% 4.74% 7.44% 7.44%
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31/00 17.44 17.65 20.43 24.10 24.07
--------------------------------------------------------------------------------------------------------------------------------
Inception* through 5/31/00 30.60 31.41 31.60 32.21 23.40
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WITHOUT SALES CHARGES(1)
<S> <C>
---------------------------------------------------------------------------------------------
Class A (Inception* through 5/31/00) 119.79%
---------------------------------------------------------------------------------------------
Class B (Inception* through 5/31/00) 115.31
---------------------------------------------------------------------------------------------
Class L (Inception* through 5/31/00) 115.31
---------------------------------------------------------------------------------------------
Class Y (Inception* through 5/31/00) 108.25
---------------------------------------------------------------------------------------------
Class Z (Inception* through 5/31/00) 34.39
---------------------------------------------------------------------------------------------
</TABLE>
(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.
* INCEPTION DATE FOR CLASS A, B AND L SHARES IS AUGUST 29,
1997. INCEPTION DATES 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.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 5
<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 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMITH BARNEY SMITH BARNEY SMITH BARNEY
LARGE CAPITALIZATION GROWTH LARGE CAPITALIZATION GROWTH LARGE CAPITALIZATION GROWTH
FUND - CLASS A SHARES FUND - CLASS B SHARES FUND - CLASS L SHARES STANDARD & POOR'S 500 INDEX
<S> <C> <C> <C> <C>
Aug 29, 1997 $ 9,496 $10,000 $10,000 $10,000
Nov 1997 $ 9,816 $ 9,820 $10,117 $10,667
May 1998 $12,043 $12,114 $12,388 $12,274
Nov 1998 $13,950 $14,153 $14,407 $13,367
May 1999 $16,883 $17,155 $17,379 $15,051
Nov 1999 $19,460 $19,857 $19,955 $16,159
May 31, 2000 $20,872 $21,231 $21,316 $16,527
</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, 2000. 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
Capital Goods 3.8%
Consumer Durables 2.4%
Consumer Goods 16.5%
Consumer Services 8.3%
Financial Services 24.0%
Health Care 16.1%
Semiconductors 18.1%
Software/PC's 3.9%
Telecommunications 6.9%
* As a percentage of total common stock.
TOP TEN HOLDINGS* AS OF MAY 31, 2000
------------------------------------------------
1. INTEL CORP. 7.2%
----------------------------------------------------------------------------
2. TEXAS INSTRUMENTS INC. 7.0
----------------------------------------------------------------------------
3. WARNER-LAMBERT CO. 4.4
----------------------------------------------------------------------------
4. THE WALT DISNEY CO. 4.2
----------------------------------------------------------------------------
5. AMERICA ONLINE, INC. 4.1
----------------------------------------------------------------------------
6. MERRILL LYNCH & CO., INC. 4.1
----------------------------------------------------------------------------
7. XILINX, INC. 3.9
----------------------------------------------------------------------------
8. AMGEN INC. 3.8
----------------------------------------------------------------------------
9. THE COCA-COLA CO. 3.8
----------------------------------------------------------------------------
10. WELLS FARGO & CO. 3.5
----------------------------------------------------------------------------
--------------------------------------------------------------------------------
6 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
SCHEDULE OF INVESTMENTS (UNAUDITED) MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 99.6%
CAPITAL GOODS -- 3.7%
1,950,000 General Electric Co. $ 102,618,750
1,100,000 Tyco International Ltd. 51,768,750
-------------------------------------------------------------------------------------------------------
154,387,500
-------------------------------------------------------------------------------------------------------
CONSUMER DURABLES -- 2.3%
2,000,000 The Home Depot, Inc. 97,625,000
-------------------------------------------------------------------------------------------------------
CONSUMER GOODS -- 16.5%
1,400,000 Amazon.com, Inc.+ 67,637,500
2,900,000 The Coca-Cola Co. 154,787,500
4,150,000 The Gillette Co. 138,506,250
1,800,000 McDonald's Corp. 64,462,500
2,100,000 PepsiCo, Inc. 85,443,750
1,025,000 The Procter & Gamble Co. 68,162,500
1,250,000 Wm. Wrigley Jr. Co. 100,078,125
-------------------------------------------------------------------------------------------------------
679,078,125
-------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 8.3%
3,200,000 America Online, Inc.+ 169,600,000
4,100,000 The Walt Disney Co. 172,968,750
-------------------------------------------------------------------------------------------------------
342,568,750
-------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES -- 23.9%
850,000 American International Group Inc. 95,678,125
2,500,000 Bank One Corp. 82,656,250
2,300 Berkshire Hathaway Inc.+ 134,780,000
1,480,000 Fannie Mae 88,985,000
3,000,000 Household International Inc. 141,000,000
1,700,000 Merrill Lynch & Co., Inc. 167,662,500
1,800,000 Morgan Stanley Dean Witter & Co. 129,487,500
3,200,000 Wells Fargo & Co. 144,800,000
-------------------------------------------------------------------------------------------------------
985,049,375
-------------------------------------------------------------------------------------------------------
HEALTH CARE -- 16.0%
2,440,000 Amgen Inc.+ 155,245,000
1,500,000 Eli Lilly & Co. 114,187,500
900,000 Johnson & Johnson 80,550,000
800,000 Merck & Co., Inc. 59,700,000
1,600,000 Pfizer Inc. 71,300,000
1,470,000 Warner-Lambert Co. 179,523,750
-------------------------------------------------------------------------------------------------------
660,506,250
-------------------------------------------------------------------------------------------------------
SEMICONDUCTORS -- 18.1%
2,380,000 Intel Corp. 296,756,250
4,000,000 Texas Instruments Inc. 289,000,000
2,100,000 Xilinx, Inc.+ 159,862,500
-------------------------------------------------------------------------------------------------------
745,618,750
-------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 7
<PAGE>
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) MAY 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
SOFTWARE/PC'S -- 3.9%
1,100,000 Dell Computer Corp.+ $ 47,437,500
1,200,000 Microsoft Corp.+ 75,075,000
4,700,000 Novell Inc.+ 39,068,750
-------------------------------------------------------------------------------------------------------
161,581,250
-------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 6.9%
1,320,000 Cisco Systems, Inc.+ 75,240,000
2,000,000 Lucent Technologies Inc. 114,750,000
1,000,000 Motorola Inc. 93,750,000
-------------------------------------------------------------------------------------------------------
283,740,000
-------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $2,930,515,520) 4,110,155,000
-------------------------------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT SECURITY VALUE
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.4%
$16,645,000 Morgan Stanley Dean Witter & Co., 6.330% due 6/1/00;
Proceeds at maturity -- $16,647,927; (Fully collateralized
by U.S. Treasury Notes and Bonds, 6.250% to 9.375% due
5/31/01
to 8/29/15; Market value -- $17,563,366) (Cost --
$16,645,000) 16,645,000
-------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $2,947,160,520*) $4,126,800,000
-------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME PRODUCING SECURITY.
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS
SUBSTANTIALLY THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
8 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) MAY 31, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost --
$2,947,160,520) $4,126,800,000
Cash 261
Receivable for Fund shares sold 5,841,089
Dividends and interest
receivable 2,589,202
---------------------------------------------------
TOTAL ASSETS 4,135,230,552
---------------------------------------------------
LIABILITIES:
Management fees payable 2,764,860
Distribution fees payable 1,080,825
Payable for Fund shares
purchased 201,471
Accrued expenses 435,636
---------------------------------------------------
TOTAL LIABILITIES 4,482,792
---------------------------------------------------
TOTAL NET ASSETS $4,130,747,760
---------------------------------------------------
NET ASSETS:
Par value of shares of
beneficial interest $ 163,283
Capital paid in excess of par
value 2,946,176,439
Accumulated net investment loss (18,018,198)
Accumulated net realized gain
from security transactions 22,786,756
Net unrealized appreciation of
investments 1,179,639,480
---------------------------------------------------
TOTAL NET ASSETS $4,130,747,760
---------------------------------------------------
SHARES OUTSTANDING:
Class A 36,079,713
------------------------------------------------
Class B 79,316,582
------------------------------------------------
Class L 35,535,233
------------------------------------------------
Class Y 8,266,342
------------------------------------------------
Class Z 4,085,290
------------------------------------------------
NET ASSET VALUE:
Class A (and redemption price) $ 25.64
------------------------------------------------
Class B * $ 25.13
------------------------------------------------
Class L ** $ 25.13
------------------------------------------------
Class Y (and redemption price) $ 25.90
------------------------------------------------
Class Z (and redemption price) $ 25.77
------------------------------------------------
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE:
Class A (net asset value plus
5.26% of net asset value per
share) $ 26.99
------------------------------------------------
Class L (net asset value plus
1.01% of net asset value per
share) $ 25.38
---------------------------------------------------
* 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.
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 9
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED MAY 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 13,162,445
Interest 271,886
----------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 13,434,331
----------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 2) 14,733,648
Management fees (Note 2) 14,644,537
Shareholder and system servicing fees 1,779,047
Shareholder communications 177,160
Custody 43,169
Trustees' fees 30,100
Audit and legal 15,541
Registration fees 10,060
Other 19,267
----------------------------------------------------------------------------
TOTAL EXPENSES 31,452,529
----------------------------------------------------------------------------
NET INVESTMENT LOSS (18,018,198)
----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 184,380,865
Cost of securities sold 161,541,268
----------------------------------------------------------------------------
NET REALIZED GAIN 22,839,597
----------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 938,508,951
End of period 1,179,639,480
----------------------------------------------------------------------------
INCREASE IN NET UNREALIZED APPRECIATION 241,130,529
----------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 263,970,126
----------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS $ 245,951,928
----------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
10 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED)
AND THE YEAR ENDED NOVEMBER 30, 1999
2000 1999
--------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (18,018,198) $ (18,864,046)
Net realized gain 22,839,597 38,286,757
Increase in net unrealized appreciation 241,130,529 686,959,103
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS 245,951,928 706,381,814
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains (5,788,956) (45,818,445)
--------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (5,788,956) (45,818,445)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 885,732,727 1,909,438,955
Net asset value of shares issued for
reinvestment of dividends 5,274,638 41,731,562
Cost of shares reacquired (419,465,362) (475,115,261)
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS 471,542,003 1,476,055,256
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS 711,704,975 2,136,618,625
NET ASSETS:
Beginning of period 3,419,042,785 1,282,424,160
--------------------------------------------------------------------------------
END OF PERIOD* $4,130,747,760 $3,419,042,785
--------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $ (18,018,198) --
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 11
<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 six 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, Smith Barney S&P 500 Index
Fund, Smith Barney U.S. 5000 Index Fund and Smith Barney EAFE Index 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 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,
1999, 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, accumulated net investment loss
amounting to $18,864,046 was reclassified to paid-in capital. 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
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), 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.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Fund's transfer agent and PFPC Global Fund Services ("PFPC") acts as the
Fund's sub-transfer agent. CFTC receives fees and asset-based fees that vary
according to the account size and
--------------------------------------------------------------------------------
12 2000 SEMI-ANNUAL REPORT TO SHAREHOLDERS
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
type of account. PFPC is responsible for shareholder recordkeeping and financial
processing for all shareholder accounts and is paid by CFTC. During the six
months ended May 31, 2000, the Fund paid transfer agent fees of $1,671,467 to
CFTC.
CFBDS, Inc. ("CFBDS") 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.
SSB acts as the primary broker for its portfolio agency transactions. For the
six months ended May 31, 2000, SSB received total brokerage commissions of
$23,375.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. 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 not incur an initial sales charge.
For the six months ended May 31, 2000, CFBDS and SSB received sales charges of
approximately $2,000,000 and $2,151,000 on sales of the Fund's Class A and L
shares, respectively. In addition, CDSCs paid to SSB were approximately:
CLASS A CLASS B CLASS L
-----------------------------------------------------------------------
CDSCs $19,000 $1,681,000 $178,000
-----------------------------------------------------------------------
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, 2000, total Distribution Plan fees incurred were:
CLASS A CLASS B CLASS L
-----------------------------------------------------------------------
Distribution Plan Fees $1,101,094 $9,584,019 $4,048,535
-----------------------------------------------------------------------
All officers and one Trustee of the Fund are employees of SSB.
3. INVESTMENTS
During the six months ended May 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were as follows:
-----------------------------------------
Purchases $620,851,551
-----------------------------------------
Sales 184,380,865
-----------------------------------------
At May 31, 2000, the aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
------------------------------------ -------------
Gross unrealized appreciation $1,376,006,847
Gross unrealized depreciation (196,367,367)
---------------------------------------------------
Net unrealized appreciation $1,179,639,480
---------------------------------------------------
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.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
5. SHARES OF BENEFICIAL INTEREST
At May 31, 2000, 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, 2000, total paid-in capital amounted to the following for each class:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS L CLASS Y CLASS Z
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Total Paid-in Capital $637,327,310 $1,413,288,586 $696,513,452 $109,201,897 $90,008,477
----------------------------------------------------------------------------------------------------------
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 2000 NOVEMBER 30, 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
CLASS A
Shares sold 10,616,009 $ 268,892,775 23,731,239 $ 505,854,149
Shares issued on reinvestment 49,590 1,228,836 431,103 9,948,950
Shares reacquired (6,761,405) (171,316,490) (10,631,459) (230,412,224)
-------------------------------------------------------------------------------------------
Net Increase 3,904,194 $ 98,805,121 13,530,883 $ 285,390,875
-------------------------------------------------------------------------------------------
CLASS B
Shares sold 13,408,303 $ 332,602,937 42,889,477 $ 899,051,446
Shares issued on reinvestment 110,935 2,694,506 976,603 22,200,016
Shares reacquired (6,794,386) (169,720,250) (8,143,078) (173,222,099)
-------------------------------------------------------------------------------------------
Net Increase 6,724,852 $ 165,577,193 35,723,002 $ 748,029,363
-------------------------------------------------------------------------------------------
CLASS L
Shares sold 9,737,492 $ 242,448,513 20,331,362 $ 427,811,707
Shares issued on reinvestment 49,716 1,207,611 378,887 8,620,818
Shares reacquired (3,024,821) (75,566,122) (2,812,646) (60,235,428)
-------------------------------------------------------------------------------------------
Net Increase 6,762,387 $ 168,090,002 17,897,603 $ 376,197,097
-------------------------------------------------------------------------------------------
CLASS Y
Shares sold 546,333 $ 13,906,965 404,218 $ 8,664,910
Shares issued on reinvestment -- -- 1 23
Shares reacquired (924) (24,045) (319,814) (7,000,000)
-------------------------------------------------------------------------------------------
Net Increase 545,409 $ 13,882,920 84,405 $ 1,664,933
-------------------------------------------------------------------------------------------
CLASS Z*
Shares sold 1,088,715 $ 27,881,537 3,251,720 $ 68,056,743
Shares issued on reinvestment 5,771 143,685 41,505 961,755
Shares reacquired (109,673) (2,838,455) (192,748) (4,245,510)
-------------------------------------------------------------------------------------------
Net Increase 984,813 $ 25,186,767 3,100,477 $ 64,772,988
-------------------------------------------------------------------------------------------
</TABLE>
* FOR CLASS Z SHARES, TRANSACTIONS ARE FOR THE PERIOD FROM
JANUARY 4, 1999 (INCEPTION DATE) TO NOVEMBER 30, 1999.
6. SUBSEQUENT EVENT
Effective June 5, 2000, the Board of Trustees of the Fund has approved a
Distribution Agreement with SSB, replacing the Distribution Agreement with
CFBDS.
--------------------------------------------------------------------------------
14 2000 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 2000(1)(2) 1999(2) 1998(2) 1997(3)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $23.94 $17.41 $12.28 $11.88
-------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) (0.05) (0.06) (0.04) 0.01
Net realized and unrealized gain 1.79 6.92 5.20 0.39
-------------------------------------------------------------------------------------------------
Total Income From Operations 1.74 6.86 5.16 0.40
-------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- (0.02) --
Net realized gains (0.04) (0.33) (0.01) --
-------------------------------------------------------------------------------------------------
Total Distributions (0.04) (0.33) (0.03) --
-------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $25.64 $23.94 $17.41 $12.28
-------------------------------------------------------------------------------------------------
TOTAL RETURN 7.25%++ 39.50% 42.12% 3.37%++
-------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $925,070 $770,392 $324,664 $111,063
-------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.11%+ 1.15% 1.19% 1.15%+
Net investment income (loss) (0.43)+ (0.27) (0.38) 0.38+
-------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 5% 9% 14% 1%
-------------------------------------------------------------------------------------------------
</TABLE>
(1) FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES METHOD.
(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.
--------------------------------------------------------------------------------
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 B SHARES 2000(1)(2) 1999(2) 1998(2) 1997(3)
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $23.56 $17.26 $12.26 $11.88
------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment loss (0.14) (0.22) (0.17) (0.01)
Net realized and unrealized gain 1.75 6.85 5.19 0.39
------------------------------------------------------------------------------------
Total Income From Operations 1.61 6.63 5.02 0.38
------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- (0.01) --
Net realized gains (0.04) (0.33) (0.01) --
------------------------------------------------------------------------------------
Total Distributions (0.04) (0.33) (0.02) --
------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $25.13 $23.56 $17.26 $12.26
------------------------------------------------------------------------------------
TOTAL RETURN 6.82%++ 38.51% 41.02% 3.20%++
------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) 1$,993,286 $1,710,004 $636,464 $179,598
------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.86%+ 1.89% 1.95% 1.90%+
Net investment loss (1.17)+ (1.01) (1.14) (0.37)+
------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 5% 9% 14% 1%
------------------------------------------------------------------------------------
</TABLE>
(1) FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES METHOD.
(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.
--------------------------------------------------------------------------------
16 2000 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 L SHARES 2000(1)(2) 1999(2) 1998(2)(3) 1997(4)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $23.56 $17.26 $12.26 $11.88
--------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment loss (0.14) (0.22) (0.17) (0.01)
Net realized and unrealized gain 1.75 6.85 5.19 0.39
--------------------------------------------------------------------------------------
Total Income From Operations 1.61 6.63 5.02 0.38
--------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- (0.01) --
Net realized gains (0.04) (0.33) (0.01) --
--------------------------------------------------------------------------------------
Total Distributions (0.04) (0.33) (0.02) --
--------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $25.13 $23.56 $17.26 $12.26
--------------------------------------------------------------------------------------
TOTAL RETURN 6.82%++ 38.51% 41.02% 3.20%++
--------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $893,037 $677,792 $187,741 $ 37,224
--------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.86%+ 1.89% 1.96% 1.90%+
Net investment loss (1.17)+ (1.01) (1.14) (0.38)+
--------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 5% 9% 14% 1%
--------------------------------------------------------------------------------------
</TABLE>
(1) FOR THE SIX MONTHS ENDED MAY 31, 2000 (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 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.
--------------------------------------------------------------------------------
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 Y SHARES 2000(1)(2) 1999(2) 1998(2) 1997(3)
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $24.14 $17.49 $12.29 $12.66
------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) (0.00)* 0.02 (0.00)* 0.01
Net realized and unrealized gain
(loss) 1.80 6.96 5.23 (0.38)
------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.80 6.98 5.23 (0.37)
------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- (0.02) --
Net realized gains (0.04) (0.33) (0.01) --
------------------------------------------------------------------------------------
Total Distributions (0.04) (0.33) (0.03) --
------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $25.90 $24.14 $17.49 $12.29
------------------------------------------------------------------------------------
TOTAL RETURN 7.44%++ 40.00% 42.61% (2.92)%++
------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $214,065 $186,369 $133,556 $ 84,758
------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.75%+ 0.78% 0.83% 0.82%+
Net investment income (loss) (0.07)+ 0.09 (0.02) 0.54+
------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 5% 9% 14% 1%
------------------------------------------------------------------------------------
</TABLE>
(1) FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES METHOD.
(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.
--------------------------------------------------------------------------------
18 2000 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 Z SHARES 2000(1)(2) 1999(2)(3)
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $24.02 $19.48
-----------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss) (0.00)* 0.02
Net realized and unrealized gain 1.79 4.85
-----------------------------------------------------------
Total Income From Operations 1.79 4.87
-----------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income -- --
Net realized gains (0.04) (0.33)
-----------------------------------------------------------
Total Distributions (0.04) (0.33)
-----------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $25.77 $24.02
-----------------------------------------------------------
TOTAL RETURN++ 7.44% 25.08%
-----------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $105,290 $74,486
-----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS+:
Expenses 0.75% 0.78%
Net investment income (loss) (0.06) 0.11
-----------------------------------------------------------
PORTFOLIO TURNOVER RATE 5% 9%
-----------------------------------------------------------
(1) FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES METHOD.
(3) FOR THE PERIOD FROM JANUARY 4, 1999 (INCEPTION DATE) TO
NOVEMBER 30, 1999.
* 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.
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH FUND 19
<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 J. Blake
VICE PRESIDENT AND
INVESTMENT OFFICER
Paul A. Brook
CONTROLLER
Christina T. Sydor
SECRETARY
INVESTMENT MANAGER
SSB Citi Fund Management LLC
DISTRIBUTOR
CFBDS, Inc.
CUSTODIAN
PFPC Trust Company
TRANSFER AGENT
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
SUB-TRANSFER AGENT
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of the shareholders of
Smith Barney Investment Trust -- Smith Barney Large Capitalization Growth Fund,
but it may also be used as sales literature when preceeded or accompanied by the
current Prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the Fund. If used as sales material after
August 31, 2000, this report must be accompanied by performance information for
the most recently completed calendar quarter.
[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/mutualfunds
FD01520 7/00
