<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 11
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 11
THE TRAVELERS SERIES TRUST
(Exact name of Registrant)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (203) 277-0111
ERNEST J. WRIGHT
Assistant Secretary to the Board of Trustees
The Travelers Series Trust
One Tower Square
Hartford, Connecticut 06183
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: _______________________
It is proposed that this filing will become effective (check appropriate box):
_____ immediately upon filing pursuant to paragraph (b)
__X__ on May 1, 1995 pursuant to paragraph (b)
_____
_____ 60 days after filing pursuant to paragraph (a)(i)
_____ on __________ pursuant to paragraph (a)(i)
_____ 75 days after filing pursuant to paragraph (a)(ii)
_____ on __________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
_____ this post-effective amendment designates a new effective date for a
previously filed post-effecting amendment.
AN INDEFINITE NUMBER OF SHARES OF BENEFICIAL INTEREST OF THE REGISTRANT
WERE REGISTERED PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF
1940. A RULE 24F-2 NOTICE FOR REGISTRANT'S FISCAL YEAR ENDED DECEMBER 31,
1994 WAS FILED ON FEBRUARY 27, 1995.
<PAGE>
THE TRAVELERS SERIES TRUST
Cross-Reference Sheet pursuant to Rule 495 under the Securities Act of 1933
ITEM
NO. CAPTION IN PROSPECTUS
- ---- ---------------------
1. Cover Page Cover Page
2. Synopsis Summary
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; The Travelers Series
Trust; Investment Objectives
and Policies
5. Management of the Fund Board of Trustees; Investment
Advisers; Securities
Transactions; Portfolio Turnover
and Expenses; Additional
Information
6. Capital Stock and Other Securities The Travelers Series Trust;
Dividends and Tax Status;
Shares of the Series Trust;
Pricing Shares
7. Purchase of Securities Being Offered How to Buy Shares
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings Legal Proceedings
CAPTION IN STATEMENT OF ADDITIONAL
INFORMATION
----------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Objectives and Policies;
Investment Restrictions
14. Management of the Registrant Trustees and Officers
15. Control Persons and Principal Additional Information
Holders of Securities
16. Investment Advisory and Investment Advisory Services;
Other Services Additional Information
17. Brokerage Allocation Brokerage
18. Capital Stock and Other Declaration of Trust
Securities
19. Purchase, Redemption and Pricing Valuation of Securities
of Securities Being Offered
20. Tax Status Distributions and Taxes
21. Underwriters Not Applicable
22. Calculation of Performance Data Not Applicable
23. Financial Statements Financial Statements
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
<PAGE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TELEPHONE 1-800-842-0125
The Travelers Series Trust (the "Series Trust") is a diversified open-end
management investment company (mutual fund) which currently consists of three
separate series of shares (the "Portfolios"), each with its own investment
objective and policies. The three Portfolios of the Series Trust are the U.S.
Government Securities Portfolio, the Social Awareness Stock Portfolio and the
Utilities Portfolio.
Shares of the Portfolios are currently offered without a sales charge to The
Travelers Fund U for Variable Annuities ("Fund U") and The Travelers Fund UL
for Variable Life Insurance ("Fund UL"), separate accounts of The Travelers
Insurance Company ("the Company" or "Travelers Insurance"). The Portfolios
serve as investment vehicles for variable annuity and variable life insurance
contracts issued by the Company. Funds U and UL invest in shares of the
Portfolios in accordance with allocation instructions received from owners of
the variable annuity and variable life insurance contracts. Such allocation
rights are described further in the accompanying prospectuses for Funds U and
UL. The rights of Funds U and UL as shareholders should be distinguished from
the rights of owners of the variable annuity and variable life insurance
contracts. The term "shareholder" as used herein refers to Fund U and Fund UL
or to any other insurance company separate account that may use shares of the
Portfolios as investment vehicles in the future.
This Prospectus concisely sets forth the information about the Series Trust
and the Portfolios that you should know before investing. Please read it and
retain it for future reference. Additional information about the Series Trust
and the Portfolios is contained in a Statement of Additional Information dated
May 1, 1995 which has been filed with the Securities and Exchange Commission
and is incorporated by reference into this Prospectus. A copy may be obtained,
without charge, by writing to Travelers Insurance, Annuity Services 5 SHS, One
Tower Square, Hartford, Connecticut 06183-5030, or by calling 1-800-842-0125.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE VARIABLE
ANNUITY OR VARIABLE LIFE INSURANCE CONTRACTS ISSUED BY TRAVELERS INSURANCE AND
ITS SEPARATE ACCOUNTS. BOTH THIS PROSPECTUS AND THE CONTRACT PROSPECTUS SHOULD
BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1995.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
TABLE OF CONTENTS
FINANCIAL HIGHLIGHTS--U.S. Government Securities Portfolio.......3
FINANCIAL HIGHLIGHTS--Social Awareness Stock Portfolio...........4
FINANCIAL HIGHLIGHTS--Utilities Portfolio........................5
SUMMARY..........................................................6
THE TRAVELERS SERIES TRUST.......................................6
U.S. GOVERNMENT SECURITIES PORTFOLIO.............................7
SOCIAL AWARENESS STOCK PORTFOLIO.................................8
UTILITIES PORTFOLIO..............................................9
BOARD OF TRUSTEES...............................................11
INVESTMENT ADVISERS.............................................11
TAMIC.......................................................12
Advisory Fees...............................................12
Portfolio Manager...........................................12
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC. ......................12
Advisory Fees...............................................12
Portfolio Manager...........................................12
Advisory Fees...............................................13
Portfolio Manager...........................................13
SECURITIES TRANSACTIONS.........................................13
PORTFOLIO TURNOVER..............................................13
FUND EXPENSES...................................................13
TRANSFER AGENT..................................................14
SHARES OF THE SERIES TRUST......................................14
HOW TO BUY SHARES...............................................14
PRICING SHARES..................................................14
HOW TO REDEEM SHARES............................................15
DIVIDENDS AND TAX STATUS........................................15
LEGAL PROCEEDINGS...............................................15
ADDITIONAL INFORMATION..........................................15
EXHIBIT A.......................................................16
SERIES-2
<PAGE>
FINANCIAL HIGHLIGHTS
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following information on per share data for the U.S. Government Securities
Portfolio for each of the two years in the period ended December 31, 1994
and the period January 24, 1992 (date operations commenced) to December 31,1992
has been audited by Coopers & Lybrand L.L.P., Independent Accountants. Their
report on the per share data for each of the periods ended December 31, 1994
is contained in the 1994 Annual Report to Shareholders. The Annual Report,
which contains additional performance information, is incorporated by
reference into the Statement of Additional Information. A copy of the Annual
Report can be obtained without charge by writing to or calling the Company
at the address and telephone number listed on the cover of this Prospectus.
The following information should be read in conjunction with the financial
statements contained in the 1994 Annual Report.
<TABLE>
<CAPTION>
JANUARY 24,*
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
---------------------- ------------
PER SHARE DATA 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period..................................... $ 11.63 $ 10.79 $ 10.00
Income from operations
- ----------------------
Net investment income .................................................. 0.60 0.57 0.53
Net gains on securities (realized and unrealized) ...................... (1.23) 0.44 0.26
------- ------- -------
Total from investment operations ..................................... (0.63) 1.01 0.79
Less distributions
- ------------------
Distributions from net investment income and short-term realized gains.. (0.39) (0.17) --
Distributions from long-term realized gains ............................ (0.03) -- --
------- ------- -------
Total distributions .................................................. $ (0.42) $ (0.17) --
Net asset value, end of period ......................................... $ 10.58 $ 11.63 $ 10.79
======= ======= =======
TOTAL RETURN ** (5.64)% 9.48% 7.90%***
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)................................... $ 24,522 $ 25,520 $ 9,017
Ratio of expenses to average net assets + .............................. 0.71% 0.58% 0.38%***
Ratio of net income to average net assets .............................. 5.56% 5.04% 4.72%***
Portfolio turnover rate ................................................ 16% 51% 25%
<FN>
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of
a share during the period, after reflecting the reinvestment of dividends
declared during the period, by the beginning of period share price. Shares
in the U.S. Government Securities Portfolio are only sold to Travelers
Insurance separate accounts in connection with the issuance of variable
annuity and variable life insurance contracts. Total return does not
reflect the deduction of any contract charges or fees assessed by
Travelers Insurance separate accounts. For the periods less than one year,
total returns are not annualized.
*** Annualized.
+ The ratio of expenses to average net assets reflects an expense
reimbursement by Travelers Insurance in connection with voluntary expense
limitations. Without the expense reimbursement, the ratio of operating
expenses to average net assets would have been 0.77% and 0.72% for the
year ended December 31, 1993 and the period ended December 31, 1992,
respectively. For the year ended December 31, 1994, there was no expense
reimbursement by Travelers Insurance in connection with the voluntary
expense limitations.
</TABLE>
SERIES-3
<PAGE>
FINANCIAL HIGHLIGHTS
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS STOCK PORTFOLIO
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following information on per share data for the Social Awareness Stock
Portfolio for each of the two years in the period ended December 31, 1994 and
the period January 24, 1992 (date operations commenced) to December 31, 1992
has been audited by Coopers & Lybrand L.L.P., Independent Accountants. Their
report on the per share data for each of the periods ended December 31, 1994
is contained in the 1994 Annual Report to Shareholders. The Annual Report,
which contains additional performance information, is incorporated by reference
into the Statement of Additional Information. A copy of the Annual Report can
be obtained without charge by writing to or calling the Company at the address
and telephone number listed on the cover of this Prospectus. The following
information should be read in conjunction with the financial statements
contained in the 1994 Annual Report.
<TABLE>
<CAPTION>
MAY 1,*
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
----------------------- -------------
PER SHARE DATA 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period ................................... $ 11.64 $ 10.95 $ 10.00
Income from operations
- ----------------------
Net investment income .................................................. 0.16 0.17 0.16
Net gains on securities (realized and unrealized) ...................... (0.45) 0.65 0.79
------- ------- -------
Total from investment operations ..................................... (0.29) 0.82 0.95
Less distributions
- ------------------
Distributions from net investment income and short-term realized gains.. (0.24) (0.13) --
Distributions from long-term realized gains............................. (0.06) -- --
------- ------- -------
Total distributions .................................................. (0.30) (0.13) --
Net asset value, end of period ......................................... $ 11.05 $ 11.64 $ 10.95
======= ======= =======
TOTAL RETURN** (2.69)% 7.55% 9.50%***
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands) .................................. $ 3,879 $ 3,361 $ 1,394
Ratio of expenses to average net assets + .............................. 1.25% 1.05% 0.71%***
Ratio of net income to average net assets .............................. 1.43% 1.50% 2.22%***
Portfolio turnover rate ................................................ 137% 60% 56%
<FN>
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of
a share during the period, after reflecting the reinvestment of dividends
declared during the period, by the beginning of period share price. Shares in
the Social Awareness Stock Portfolio are only sold to Travelers Insurance
separate accounts in connection with the issuance of variable annuity contracts.
Total return does not reflect the deduction of any contract charges or fees
assessed by Travelers Insurance separate accounts. For the periods less than
one year, total returns are not annualized.
*** Annualized.
+ The ratio of expenses to average net assets reflects an expense
reimbursement by Travelers Insurance in connection with voluntary expense
limitations. Without the expense reimbursement, the ratio of operating expenses
to average net assets would have been 3.34%, 3.73% and 2.19% for the years
ended December 31, 1994, 1993 and the period ended December 31, 1992,
respectively.
</TABLE>
SERIES-4
<PAGE>
FINANCIAL HIGHLIGHTS
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
Per Share Data for a share outstanding throughout each period
The following information on per share data for the Utilities Portfolio for
the period February 4, 1994 (date operations commenced) to December 31, 1994
has been audited by Coopers & Lybrand L.L.P., Independent Accountants. Their
report on the per share data for the period ended December 31, 1994
is contained in the 1994 Annual Report to Shareholders. The Annual Report,
which contains additional performance information, is incorporated by reference
into the Statement of Additional Information. A copy of the Annual Report can
be obtained without charge by writing to or calling the Company at the address
and telephone number listed on the cover of this Prospectus. The following
information should be read in conjunction with the financial statements
contained in the 1994 Annual Report.
<TABLE>
<CAPTION>
FEBRUARY 4*
TO
DECEMBER 31,
------------
1994
-------
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period .................... $ 10.00
Income from operations
Net investment income ................................. 0.35
Net losses on securities (realized and unrealized) .... (0.18)
-------
Total from investment operations .................. 0.17
Net asset value, end of period ........................ $ 10.17
=======
TOTAL RETURN** 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands).................. $ 5,757
Ratio of expenses to average net assets*** ............ 1.25%#
Ratio of net investment income to average net assets... 3.86%#
Portfolio turnover rate ............................... 32%
<FN>
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of
a share during the period, after reflecting the reinvestment of dividends
declared during the period, by the beginning of period share price.
Shares in the Utilities Portfolio are only sold to Travelers Insurance
separate accounts in connection with the issuance of variable annuity
contracts. The total return does not reflect contract charges or fees
assessed by Travelers Insurance separate accounts. For periods less than
one year, total returns are not annualized.
*** The ratio of expenses to average net assets reflects an expense
reimbursement by Travelers Insurance in connection with the voluntary expense
limitations. Without the expense reimbursement, the ratio of operating
expenses to average net assets would have been 3.49% annualized.
# Annualized.
</TABLE>
SERIES-5
<PAGE>
SUMMARY
The Travelers Series Trust (the "Series Trust") is registered with the
Securities and Exchange Commission as an open-end management investment
company. The Series Trust is organized as a business trust under the laws of
the Commonwealth of Massachusetts. An Agreement and Declaration of Trust dated
October 11, 1991 (the "Declaration of Trust") authorizes the shares of the
Series Trust to be divided into two or more series related to separate
portfolios of investments, and further allows the Board of Trustees to
establish additional portfolios at any time.
The Series Trust is currently divided into three series (the "Portfolios"),
each with its own investment objective and policies. The three Portfolios of
the Series Trust are currently the U.S. Government Securities Portfolio, the
Social Awareness Stock Portfolio and the Utilities Portfolio, all of which are
diversified portfolios under the Investment Company Act of 1940.
INVESTMENT OBJECTIVES
The basic investment objectives of each of the Portfolios of the Series Trust
are as follows:
U.S. GOVERNMENT SECURITIES PORTFOLIO--highest credit quality, current income
and total return.
SOCIAL AWARENESS STOCK PORTFOLIO--long-term capital appreciation and
retention of net investment income through the selection of investments,
primarily common stocks, which meet the social criteria established for the
Portfolio.
UTILITIES PORTFOLIO--current income through investment in equity and debt
securities of companies in the utilities industry.
RISK FACTORS
Various levels of risk are involved with each Portfolio. The general risks
inherent in investing in any of the Portfolios are that their net asset value
will fluctuate in response to changes in economic conditions, interest rates
and the market's perception of the underlying securities of the Portfolios.
Please refer to the "Risk Factors" section of each Portfolio's investment
description for a more detailed discussion of specific risks associated with
investing in that Portfolio.
INVESTMENT ADVISERS
Travelers Asset Management International Corporation ("TAMIC") furnishes
investment management and advisory services to the U.S. Government Securities
Portfolio, and receives a fee equivalent to 0.3233%, on an annual basis, of the
average net assets of the U.S. Government Securities Portfolio. Greenwich
Street Advisors, a division of Smith Barney Mutual Funds Management Inc.
("SBMFM") serves as the investment adviser to the Social Awareness Stock
Portfolio and receives a variable fee beginning at a maximum 0.65%, on an
annual basis, of the average daily net assets of the Social Awareness Stock
Portfolio (these fees decrease as assets increase). SBMFM also serves as
investment adviser to the Utilities Portfolio and receives a fee equivalent to
0.65%, on an annual basis, of the average net assets of the Utilities
Portfolio. Prior to December 30, 1994, Travelers Investment Management Company
("TIMCO") furnished investment management and advisory services to the Social
Awareness Stock Portfolio and received a variable fee beginning at a maximum
0.65%, on an annual basis, of the average daily net assets of the Social
Awareness Stock Portfolio. TAMIC, SBMFM and TIMCO are indirect wholly owned
subsidiaries of Travelers Group Inc.
THE TRAVELERS SERIES TRUST
The Travelers Series Trust (the "Series Trust") is registered with the
Securities and Exchange Commission as an open-end management investment
company. The Series Trust was organized as a business trust under the laws of
the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust dated October 11, 1991 (the "Declaration of Trust"). The Declaration of
Trust authorizes the shares of the Series Trust to be divided into two or more
series related to separate portfolios of investments, and further allows the
Board of Trustees to establish additional portfolios at any time.
The Series Trust is currently divided into three series (the "Portfolios"),
each with its own investment objective and policies. These three Portfolios are
the U.S. Government Securities Portfolio, the Social Awareness Stock Portfolio
and the Utilities Portfolio, all of which are diversified portfolios under the
Investment Company Act of 1940.
SERIES-6
<PAGE>
U.S. GOVERNMENT SECURITIES PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The U.S. Government Securities Portfolio's investment objective is the
selection of investments from the point of view of an investor concerned
primarily with highest credit quality, current income and total return. To
achieve this objective, the U.S. Government Securities Portfolio invests
primarily in direct obligations of the United States, obligations of its
instrumentalities supported by its full faith and credit, and obligations
issued or guaranteed by federal agencies which are independent corporations
sponsored by the United States and which are subject to its general
supervision, but which are not supported by the full faith and credit of the
United States. The Portfolio may, from time to time, purchase new-issue or
government or agency securities on a "when-issued" or "to-be-announced" basis.
When market conditions warrant, the U.S. Government Securities Portfolio may
adopt a defensive position to preserve shareholders' capital by investing in
money market instruments. Such instruments, which must mature within one year
of their purchase, consist of U.S. Government securities; certificates of
deposit, demand and time deposits and bankers' acceptances of banks which are
members of the Federal Deposit Insurance Corporation and which have assets of
at least $1 billion, including U.S. branches of foreign banks and foreign
branches of U.S. banks; prime commercial paper, including master demand notes;
and repurchase agreements secured by U.S. Government securities. The
investments of the U.S. Government Securities Portfolio in commercial paper are
limited to those rated A-1 by Standard & Poor's Corporation and Prime-1 by
Moody's Investors Service, Inc. (For a description of these rating systems, see
the Appendix to the Statement of Additional Information.)
Direct obligations of the United States include Treasury Bills which are
issued on a discount basis with a maturity of one year or less, Treasury Notes
which have maturities at issuance of between one and ten years, and Treasury
Bonds which have maturities at issuance of greater than ten years.
Instrumentalities of the United States whose debt obligations are backed by its
full faith and credit include: Government National Mortgage Association,
Federal Housing Administration, Farmers Home Administration, Export-Import Bank
of the United States, Small Business Administration, General Services
Administration, Maritime Administration, District of Columbia Armory Board,
Farm Credit System, Financial Assistance Corporation, Federal Financing Bank
and Washington Metropolitan Area Transit Authority. Federal agencies include:
Farm Credit System, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association and Student Loan Marketing
Association.
The U.S. Government Securities Portfolio may write covered call options on
securities which it owns. Such an option on an underlying security would
obligate the Portfolio to sell, and give the purchaser of the option the right
to buy, that security at a stated exercise price at any time until a stated
expiration date of the option. The Portfolio may also purchase put and call
options for bona fide hedging purposes.
The U.S. Government Securities Portfolio may use exchange-traded futures
contracts as a hedge to protect against changes in interest rates.
A detailed discussion of certain types of investments and investment
techniques utilized by the U.S. Government Securities Portfolio is included in
Exhibit A to this Prospectus.
INVESTMENT RESTRICTIONS
The U.S. Government Securities Portfolio has adopted the following
fundamental investment restrictions which may not be changed without a vote of
a majority of the Portfolio's outstanding voting securities, as defined in the
Investment Company Act of 1940, as amended. These restrictions and certain
other fundamental investment restrictions are fully set forth in the Statement
of Additional Information. Unless otherwise noted, all references to the
Portfolio's assets are in terms of current market value. The U.S. Government
Securities Portfolio will not: (1) invest more than 5% of its assets in the
securities of any one issuer (exclusive of securities of the United States
government, its agencies or instrumentalities, for which there is no limit);
(2) borrow money, except to facilitate redemptions or borrow money for
temporary or emergency purposes and then only from banks and in amounts of up
to 10% of its gross assets computed at cost; assets pledged to secure
borrowings shall be no more than the lesser of the amount borrowed or 10% of
the Portfolio's gross assets computed at cost; (3) invest more than 25% of its
assets in the securities of issuers in any single industry (exclusive of
securities of the United States, its agencies or instrumentalities, for which
there is no limit); and (4) make margin purchases or short sales of securities,
except for short-term credits which are necessary for the clearance of
transactions, and to place not more than 5% of its net asset value in total
margin deposits for positions in futures contracts.
SERIES-7
<PAGE>
The Fund has undertaken to a state insurance authority that so long as the
state authority requires and shares of the Fund are offered for sale to fund
variable life insurance policies in that state, the Fund will comply with
certain foreign security diversification guidelines. These guidelines provide
that (1) as the percentage of the Fund's net asset value invested in foreign
securities increases, a corresponding increase will be made in the number of
countries in whose securities the Fund invests; and (2) the Fund will invest no
more than 20% of its net asset value in the securities of issuers located in
any one country (other than the United States). Notwithstanding the above, the
guidelines permit the Fund to invest any amount in the securities of issuers
located in the United States, and to invest an additional 15% of its net asset
value in the securities of issuers located in Australia, Canada, France, Japan,
the United Kingdom or Germany. The guidelines also require that American
Depository Receipts be treated as if they were foreign securities. This
undertaking is not a fundamental investment restriction or policy and may be
changed without a vote of Shareholders.
RISKS
U.S. Government securities are considered among the safest of fixed-income
investments. As a result, however, their yields are generally lower than the
yields available from corporate debt securities. The value of the portfolio
securities of the Portfolio will fluctuate based on market conditions and
interest rates. Interest rates depend on a number of factors, including
government action in the capital markets, government fiscal and monetary
policy, needs of businesses for capital goods for expansion, and investor
expectations as to future inflation. An increase in interest rates will
generally reduce the value of debt securities, and conversely a decline in
interest rates will generally increase the value of debt securities.
SOCIAL AWARENESS STOCK PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Social Awareness Stock Portfolio (the "Social
Awareness Portfolio") is long-term capital appreciation and retention of net
investment income. The Portfolio seeks to fulfill this objective by selecting
investments, primarily common stocks, that meet certain social criteria, based
on analysis of data supplied by various research services. This principal
objective does not preclude the realization of short-term gains when conditions
suggest the long-term goal is accomplished by such short-term transactions.
The assets of the Social Awareness Portfolio generally will be invested in a
portfolio of equity securities, primarily common stocks, diversified across
industries and companies. However, when it is determined that investments of
other types may be advantageous for defensive purposes or for temporary
investment of cash flows, investments may be made in bonds, notes or other
evidence of indebtedness, issued publicly or placed privately, deemed to be of
suitable credit quality, including obligations of the United States government.
The Social Awareness Portfolio utilizes certain social criteria to define a
universe of common stocks that are acceptable investment vehicles for the
Portfolio. Companies will not meet the social criteria established for the
Portfolio if a significant portion of their revenues, as determined by SBMFM,
are derived from: (a) the production of tobacco, tobacco products, alcohol, or
military defense systems; or (b) the provision of military defense related
services, or gambling services. These investment restrictions are not
fundamental and may be changed without shareholder approval.
Based upon SBMFM's analysis of information supplied by research services, the
Social Awareness Portfolio will not invest in the securities of a company if
SBMFM determines that the company fails to meet the social criteria outlined
above. SBMFM will review the available universe of common stocks on a quarterly
basis, and will determine which securities are acceptable investments for
assets of the Portfolio. SBMFM will select securities for the Portfolio from
the universe of appropriate investments, seeking companies which appear
attractive based upon quantitative and/or qualitative analysis.
If a company fails a social criteria restriction after the Social Awareness
Portfolio has purchased its common stock, or should the Portfolio inadvertently
acquire a security which is not an acceptable investment, SBMFM will eliminate
the securities of such company from the Social Awareness Portfolio's portfolio
in an orderly manner within a reasonable period of time.
The Social Awareness Portfolio may use exchange-traded financial futures
contracts as a hedge to protect against changes in stock prices or interest
rates. The use of stock futures contracts by the Portfolio is intended
primarily to limit transaction and borrowing costs. The Social Awareness
Portfolio may also purchase and sell interest rate futures to hedge against
changes in interest rates that might otherwise have an adverse effect on the
value of the Portfolio's securities. The Portfolio may also write covered call
options on securities which it owns, and may purchase index or individual
equity
SERIES-8
<PAGE>
call or put options. When market conditions warrant, the Social Awareness
Portfolio may adopt a defensive position to preserve shareholders' capital by
investing in money market instruments. Such instruments, which must mature
within one year of their purchase, consist of U.S. government securities;
instruments of banks which are members of the Federal Deposit Insurance
Corporation and have assets of at least $1 billion, such as certificates of
deposit, demand and time deposits and bankers' acceptances; prime commercial
paper, including master demand notes; and repurchase agreements secured by U.S.
government securities.
INVESTMENT RESTRICTIONS
In addition to the social criteria listed above, the Social Awareness Stock
Portfolio has adopted the following fundamental investment restrictions which
may not be changed without a vote of a majority of the Portfolio's outstanding
voting securities, as defined in the Investment Company Act of 1940, as
amended. These restrictions and certain other fundamental investment
restrictions are fully set forth in the Statement of Additional Information.
Unless otherwise noted, all references to the Portfolio's assets are in terms
of current market value. The Social Awareness Stock Portfolio will not (1)
invest more than 5% of its assets in the securities of any one issuer, except
obligations of the United States government and its instrumentalities; (2)
borrow money, except for extraordinary or emergency purposes, including meeting
redemptions or settling securities transactions and then only from banks and in
amounts of up to 10% of its total assets; the Portfolio will not purchase
securities while borrowings exceed 5% of its total assets, except to honor
prior commitments; (3) purchase interests in real estate, except as may be
represented by securities for which there is an established market; (4) make
loans, except through the acquisition of a portion of a privately placed issue
of bonds, debentures or other evidences of indebtedness of a type customarily
purchased by institutional investors; (5) acquire more than 10% of the voting
securities of any one issuer; (6) make purchases on margin, except for
short-term credits which are necessary for the clearance of transactions, and
for the placement of not more than 5% of its net asset value in total margin
deposits for positions in futures contracts; and (7) invest more than 5% of its
assets in restricted securities.
RISKS
The investment experience of equity investments over time will tend to
reflect levels of stock market prices and dividend payouts. Both are affected
by diverse factors, including not only business conditions and investor
confidence in the economy, but current conditions in a particular industry or
company. The yield on a common stock is not contractually determined. Equity
securities are subject to financial risks relating to the earning stability and
overall financial soundness of an issue. They are also subject to market risks
relating to the effect of general changes in the securities market on the price
of a security.
UTILITIES PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The primary investment objective of the Utilities Portfolio (the "Portfolio")
is to provide current income. Long-term capital appreciation is a secondary
objective. The Portfolio's investment objectives may be changed only with the
approval of a majority of the Portfolio's outstanding shares. There can be no
assurance that the Portfolio will achieve its investment objectives.
The Portfolio seeks to achieve its objectives by investing in equity and debt
securities of companies in the utility industries. For purposes of this
Prospectus, the utility industries are deemed to be comprised of companies
principally engaged (that is, at least 50% of a company's assets, gross income
or net profits results from utility operations or the company is regulated as a
utility by a government agency or authority) in the manufacture, production,
generation, transmission and sale of electric and gas energy and companies
principally engaged in the communications field, including entities such as
telephone, telegraph, satellite, microwave and other companies regulated by
governmental agencies as utilities that provide communication facilities for
the public benefit, but not including those in public broadcasting. The
Portfolio will invest primarily in utility equity and debt securities that have
a high expected rate of return, as determined by the investment adviser. Under
normal market conditions, the Portfolio will invest at least 65% of its assets
in such securities. The Portfolio may invest up to 35% of its assets in equity
and debt securities of non-utility companies believed to afford a reasonable
opportunity for achieving the Portfolio's investment objectives. When the
investment adviser believes that market conditions warrant, the Portfolio may
adopt a temporary defensive posture and may invest, without limit, in debt
securities (whether or not they are utility securities) such as rated or
unrated bonds, debentures and commercial paper, United States government
securities and money market instruments. The Portfolio may invest up to 10% of
its assets in securities rated BB or B by Standard & Poor's Corporation ("S&P")
or Ba or B by
SERIES-9
<PAGE>
Moody's Investors Service, Inc. ("Moody's") whenever the investment adviser
believes that the incremental yield on such securities is advantageous to the
Portfolio in comparison to the additional risk involved (such lower-rated
securities are commonly known as "junk bonds"). The yields on lower-rated
fixed-income securities generally are higher than the yields available on
higher-rated securities. However, investments in lower-rated securities may be
subject to greater market fluctuations and greater risks of loss of income or
principal (including the possibility of default by, or bankruptcy of, the
issuers of such securities) than higher-rated securities. Lower-rated
securities also may have speculative characteristics. In addition, the
Portfolio may enter into repurchase agreements. (For a description of the
rating systems identified above, see the Appendix to the Statement of
Additional Information.)
The Utilities Portfolio has the ability to engage in a number of specialized
investment strategies and techniques designed to enable the Portfolio to
achieve its investment objectives. Included among these strategies are lending
its portfolio securities, selling securities "short against the box," writing
covered call and secured put options, as well as purchasing options on
securities, purchasing and selling interest rate futures contracts, options on
futures contracts, stock index put and call options and stock index futures
contracts, each of which are discussed in Exhibit A to this Prospectus.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental and may not be
changed without a vote of a majority of the outstanding voting securities of
the Portfolio, as defined in the Investment Company Act of 1940, as amended.
The Utilities Portfolio will not:
1. purchase the securities of any issuer (other than U.S. government
securities) if as a result more than 5% of the value of the Portfolio's total
assets would be invested in the securities of the issuer, except that up to 25%
of the value of the Portfolio's total assets may be invested without regard to
this 5% limitation;
2. purchase more than 10% of the voting securities of any one issuer,
provided that this limitation shall not apply to investments in U.S. government
securities;
3. purchase securities on margin, except that the Portfolio may obtain any
short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of initial
or variation margin in connection with futures contracts or related options
will not be deemed to be a purchase of securities on margin by the Portfolio;
4. make short sales of securities or maintain a short position, except to the
extent of 5% of the Portfolio's net assets and except that the Portfolio may
engage in such activities without limit if, at all times when a short position
is open, the Portfolio owns an equal amount of the securities or securities
convertible into or exchangeable, without payment of any further consideration,
for securities of the same issuer as, and at least equal in amount to, the
securities sold short;
5. borrow money, including reverse repurchase agreements, except that the
Portfolio may borrow from banks for temporary or emergency (not leveraging)
purposes including the meeting of redemption requests that might otherwise
require the untimely disposition of securities, in an amount not exceeding 20%
of the value of the Portfolio's total assets (including the amount borrowed)
valued at market less liabilities (not including the amount borrowed) at the
time the borrowing is made. Whenever borrowings exceed 5% of the value of the
Portfolio's total assets, the Portfolio will not make any additional
investments;
6. pledge, hypothecate, mortgage or otherwise encumber more than 10% of the
value of the Portfolio's total assets as security for any indebtedness. For
purposes of this restriction (a) the deposit of assets in escrow in connection
with the writing of covered put or call options and the purchase of securities
on a when-issued or delayed-delivery basis and (b) collateral arrangements with
respect to (i) the purchase and sale of stock options, options on foreign
currencies and options on stock indexes and (ii) initial or variation margin
for futures contracts will not be deemed to be pledges of the Portfolio's
assets;
7. invest in commodities, except that the Portfolio may purchase or write
futures contracts and options on futures contracts as described in this
Prospectus;
8. make loans to others, except through the purchase of qualified debt
obligations, loans of portfolio securities and the entry into repurchase
agreements; and
9. concentrate in any industry, except that the Portfolio will concentrate in
excess of 25% of its assets in the securities of companies within the utility
industries.
In addition, the Portfolio will not purchase restricted securities, illiquid
securities (such as repurchase agreements with maturities in excess of seven
days) or other securities that are not readily marketable if more than 10% of
the total assets of the Portfolio would be invested in such securities.
SERIES-10
<PAGE>
The Fund has undertaken to a state insurance authority that so long as the
state authority requires and shares of the Fund are offered for sale to fund
variable life insurance policies in that state, the Fund will comply with
certain foreign security diversification guidelines. These guidelines provide
that (1) as the percentage of the Fund's net asset value invested in foreign
securities increases, a corresponding increase will be made in the number of
countries in whose securities the Fund invests; and (2) the Fund will invest no
more than 20% of its net asset value in the securities of issuers located in
any one country (other than the United States). Notwithstanding the above, the
guidelines permit the Fund to invest any amount in the securities of issuers
located in the United States, and to invest an additional 15% of its net asset
value in the securities of issuers located in Australia, Canada, France, Japan,
the United Kingdom or Germany. The guidelines also require that American
Depository Receipts be treated as if they were foreign securities. This
undertaking is not a fundamental investment restriction or policy and may be
changed without a vote of Shareholders.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Investment in the Utilities Portfolio may involve above-average risk of loss
because of, among other things, the Portfolio's use of strategies and
techniques that may be considered to be speculative. The strategy followed by
the Portfolio and certain of the strategies and techniques used by the
Portfolio depend on forecasts made by Greenwich Street Advisors that may or may
not prove to be correct.
Because the Portfolio concentrates its investments in one sector, its
portfolio may be subject to greater risk and market fluctuations than a
portfolio of securities representing a broader range of investment
alternatives. The Portfolio is particularly subject to risks that are inherent
to the utility industries that make up this sector, including difficulty in
obtaining an adequate return on invested capital, difficulty in financing large
construction programs during an inflationary period, restriction on operations
and increased cost and delays attributable to environmental consideration and
regulation, difficulty in raising capital in adequate amounts on reasonable
terms in periods of high inflation and unsettled capital markets, increased
costs and reduced availability of certain types of fuel, occasional reduced
availability and high costs of natural gas for resale, the effects of energy
conservation, the effects of a national energy policy and lengthy delays and
greatly increased costs and other problems associated with the design,
construction, licensing, regulation and operation of nuclear facilities for
electric generation, including, among other considerations, the problems
associated with the use of radioactive materials and disposal of radioactive
wastes. There are substantial differences between the regulatory practices and
policies of various jurisdictions, and any given regulatory agency may make
major shifts in policy from time to time. There is no assurance that regulatory
authorities will grant rate increases in the future or that such increases will
be adequate to permit the payment of dividends on common stocks. Additionally,
existing and possible future regulatory legislation may make it even more
difficult for these utilities to obtain adequate relief. Certain of the issuers
of securities held by the Portfolio may own or operate nuclear generating
facilities. Governmental authorities may from time to time review existing
policies, and impose additional requirements governing the licensing,
construction and operation of nuclear power plants.
Each of the risks referred to above could adversely affect the ability and
inclination of public utilities to declare or pay dividends and the ability of
holders of common stock to realize any value from the assets of the issuer upon
liquidation or bankruptcy. All of the utilities which are issuers of the
securities held by the Portfolio have been experiencing one or more of these
problems in varying degrees. Moreover, price disparities within selected
utility groups and discrepancies in relation to averages and indices have
occurred frequently for reasons not directly related to the general movements
or price trends of utility common stocks. Causes of these discrepancies include
changes in the overall demand for and supply of various securities (including
the potentially depressing effect of new stock offerings), and changes in
investment objectives, market expectations or cash requirements of other
purchasers and sellers of securities.
BOARD OF TRUSTEES
Under Massachusetts law, the Series Trust's Board of Trustees has absolute
and exclusive control over the management and disposition of all assets of the
Series Trust. Subject to the provisions of the Declaration of Trust, the
business and affairs of the Series Trust shall be managed by the Trustees or
other parties so designated by the Trustees. Information relating to the Board
of Trustees, including its members and their compensation, is contained in the
Statement of Additional Information.
INVESTMENT ADVISERS
As described above, the Board of Trustees monitors the activities of those
entities which provide investment advisory services to the Portfolios.
Travelers Asset Management International Corporation (TAMIC) and Smith Barney
Mutual
SERIES-11
<PAGE>
Funds Management Inc. (SBMFM) (collectively, the "investment advisers")
provide investment advice and, in general, supervise the management and
investment program of the U.S. Government Securities Portfolio, and the Social
Awareness Stock Portfolio and Utilities Portfolio, respectively.
TAMIC
TAMIC is a registered investment adviser which has provided investment
advisory services since its incorporation in 1978. TAMIC is an indirect wholly
owned subsidiary of Travelers Group Inc., and its principal offices are located
at One Tower Square, Hartford, Connecticut 06183. In addition to serving as the
investment adviser for the U.S. Government Securities Portfolio, TAMIC also
acts as investment adviser for other investment companies used to fund variable
products, including The Travelers Timed Bond Account for Variable Annuities,
The Travelers Money Market Account for Variable Annuities, The Travelers
Quality Bond Account for Variable Annuities, Cash Income Trust, High Yield Bond
Trust and Managed Assets Trust; as well as for individual and pooled pension
and profit-sharing accounts and for offshore insurance companies affiliated
with Travelers Insurance.
ADVISORY FEES
Under its Advisory Agreement with the U.S. Government Securities Portfolio,
TAMIC is paid an amount equivalent to 0.3233%, on an annual basis, of the
average daily net assets of the Portfolio. The fee is computed daily and paid
weekly.
PORTFOLIO MANAGER
The U.S. Government Securities Portfolio has been managed by Frank D.
Campbell, CFA, since February 1994. Mr. Campbell is a Second Vice President in
the Portfolio Management Division of the Company's Securities Department. Mr.
Campbell joined the Company in 1976. For the past six years, he has managed
investment portfolios backing various insurance company products, and is
currently responsible for managing the portfolios backing guaranteed investment
contracts and general account pension products. Mr. Campbell is also the
portfolio manager for Travelers Quality Bond Account, Timed Bond Account, and
the American Odyssey Intermediate-Term Bond Fund. He currently serves on the
Interest Rate Forecasting Committee and provides economic input to the
Securities Department's investment process.
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
Smith Barney Mutual Funds Management Inc. manages the day-to-day operations
of the Social Awareness Stock Portfolio pursuant to an Investment Advisory
Agreement entered into by the Series Trust on behalf of the Portfolios. Under
the Advisory Agreements, SBMFM is responsible for furnishing or causing to be
furnished to the Portfolios advice and assistance with respect to the
acquisition, holding or disposal of securities and recommendations with respect
to other aspects and affairs of the Portfolios.
SBMFM is located at 388 Greenwich Street, New York, New York and has been in
the investment counseling business since 1968. SBMFM renders investment advice
to a wide variety of individual, institutional and investment company clients
with aggregate assets under management in excess of $54 billion. SBMFM is a
wholly owned subsidiary of Travelers Group.
ADVISORY FEES
Under its Advisory Agreement with the Social Awareness Stock Portfolio, SBMFM
is paid an amount equivalent on an annual basis to the advisory fee schedule
set forth in the table below. The fee is computed daily and paid weekly.
<TABLE>
<CAPTION>
AGGREGATE NET ASSET
ANNUAL MANAGEMENT FEE VALUE OF THE FUND
--------------------- -------------------
<S> <C> <C>
0.65% of the first $ 50,000,000, plus
0.55% of the next $ 50,000,000, plus
0.45% of the next $ 100,000,000, plus
0.40% of amounts over $ 200,000,000
</TABLE>
PORTFOLIO MANAGER
The Social Awareness Stock Portfolio is managed by a team of investment
professionals from Greenwich Street Advisors, a division of SBMFM. Greenwich
Street Advisors uses a disciplined stock selection process to review a broad
universe of equity securities and identify those that appear most attractive in
terms of relative valuation and earnings
SERIES-12
<PAGE>
momentum. A group of experienced investment professionals work as a team to
select specific holdings and manage the portfolio according to specific
diversification guidelines. Douglas E. Salvati is a Director of Greenwich
Street Advisors and Senior Portfolio Manager for Socially Responsible
Investments. He is a member of the Social Investment Forum. Prior to joining
the Firm in 1987, Mr. Salvati performed investment analysis for Carroll McEntee
& McGinley Securities, and investment analysis and portfolio management for
First Fidelity Bank where he began his investment career in 1980. His education
includes a B.S. in Business Management from West Virginia University and M.B.A.
in Finance from Seton Hall University.
Smith Barney Mutual Funds Management Inc. also manages the day-to-day
operations of the Utilities Portfolio pursuant to an Investment Advisory
Agreement entered into by the Series Trust on behalf of the Portfolio.
ADVISORY FEES
For the services provided under the Advisory Agreement, the Portfolio pays
SBMFM a management fee equivalent on an annual basis to 0.65% of the Utilities
Portfolio's average daily net assets. The fee is calculated daily and paid
monthly.
PORTFOLIO MANAGER
The Utilities Portfolio is managed by a team of investment professionals from
Greenwich Street Advisors, a division of SBMFM. Jack S. Levande is a Managing
Director and Portfolio Manager for Greenwich Street Advisors. Prior to joining
Greenwich Street Advisors in 1987, Mr. Levande worked at E.F. Hutton as Product
Manager for convertible securities. In addition to managing the Utilities
Portfolio, Mr. Levande also manages the SB Convertible Bond Fund and serves as
a member of the Greenwich Street Advisors Investment Policy Committee. George
Mueller is a Senior Vice President of Taxable Fixed-Income Management at
Greenwich Street Advisors, specializing in corporate bond portfolios. Prior to
joining the firm in 1985, he was a Portfolio Manager for pension and charitable
foundation accounts at Chase Manhattan Bank. In addition to his
responsibilities associated with the Utilities Portfolio, Mr. Mueller is the
Portfolio Manager for the SB Investment Grade Bond Fund, and serves as a member
of the Greenwich Street Advisors Investment Policy Committee.
SECURITIES TRANSACTIONS
Under policies established by the Board of Trustees, the investment advisers
select broker-dealers to execute transactions subject to the receipt of best
execution. When selecting broker-dealers to execute portfolio transactions for
the Portfolios, the investment advisers may follow a policy of considering as a
factor the number of shares of a Portfolio sold by such broker-dealers. In
addition, broker-dealers may from time to time be affiliated with the Series
Trust, the investment advisers or their affiliates.
The Portfolios may pay higher commissions to broker-dealers which provide
research services. The investment advisers may use these services in advising
the Portfolios, as well as in advising their other clients.
PORTFOLIO TURNOVER
The portfolio turnover rates for the U.S. Government Securities Portfolio for
the period ended December 31, 1992 and for the year ended December 31, 1993 and
1994 were 25%, 51% and 16%, respectively. The portfolio turnover rates for the
Social Awareness Stock Portfolio for the period ended December 31, 1992 and for
the years ended December 31, 1993 and 1994 were 56%, 60% and 137%,
respectively. The portfolio turnover rate for the Utilities Portfolio for the
period ended December 31, 1994 was 32%. High portfolio turnover may involve
correspondingly greater brokerage commissions and other transaction costs,
which will be borne directly by the Portfolios, as well as additional gains
and/or losses to shareholders.
FUND EXPENSES
In addition to the investment advisory fees discussed above, the other
principal expenses of the Series Trust and the Portfolios include the charges
and expenses of the transfer agent, the custodian, the independent auditors,
and any outside legal counsel employed by either the Series Trust or the Board
of Trustees; the compensation for the unaffiliated members of the Board of
Trustees; the costs of printing and mailing the Series Trust's prospectus,
proxy solicitation materials, and annual, semiannual and periodic reports;
brokerage commissions, interest charges and taxes; and any registration, filing
and other fees payable to government agencies in connection with the
registration of the Series Trust and its shares under federal and state
securities laws.
SERIES-13
<PAGE>
Pursuant to a Management Agreement dated May 1, 1993 between the Series Trust
and the Company, the Company agreed to reimburse the Series Trust for the
amount by which each Portfolio's aggregate annual expenses, including
investment advisory fees but excluding brokerage commissions, interest charges
and taxes, exceed 1.25% of each Portfolio's average net assets for any fiscal
year.
For the fiscal year ended December 31, 1994, the U.S. Government Securities
Portfolio, the Social Awareness Stock Portfolio and the Utilities Portfolio
paid .71%, 1.25% and 1.25%, respectively, of their average net assets in
expenses. For the Social Awareness Stock Portfolio and the Utilities Portfolio,
these expenses would have been 3.34% and 3.49% (annualized), respectively, of
the Portfolios' average net assets if the Company had not paid for any of their
expenses.
TRANSFER AGENT
Travelers Insurance, One Tower Square, Hartford, Connecticut 06183, serves
as the Series Trust's transfer agent and dividend disbursing agent.
SHARES OF THE SERIES TRUST
The Series Trust currently issues one class of shares divided into three
separate series. Under the Declaration of Trust, the Board of Trustees is
authorized to create new series of shares without the necessity of a vote of
shareholders of the Series Trust. All shares of each series of the Series Trust
have equal voting, dividend and liquidation rights. When issued and paid for,
the shares will be fully paid and nonassessable by the Series Trust and will
have no preference, conversion, exchange or preemptive rights.
Shareholders are entitled to one vote for each full share owned and
fractional votes for fractional shares. Shares of each series are entitled to
vote separately to approve investment advisory agreements or changes in
fundamental investment restrictions, but shares of all series vote together in
the election of Trustees and the selection of accountants. Shares are
redeemable, transferable and freely assignable as collateral. There are no
sinking fund provisions. (See the accompanying separate account prospectus for
a discussion of voting rights applicable to purchasers of variable annuity and
variable life insurance contracts.)
Under Massachusetts law, it is possible that a shareholder of any series may
be held personally liable for a Portfolio's obligations. However, the Series
Trust's Declaration of Trust provides that shareholders shall not be subject to
any personal liability for the Series Trust's obligations and provides
indemnification from Series Trust assets for any shareholder held personally
liable for the Series Trust's obligations. Disclaimers of such liability are
included in each agreement entered into by the Series Trust or its Portfolios.
HOW TO BUY SHARES
Shares of the Series Trust are currently sold only to The Travelers Fund U
for Variable Annuities and to The Travelers Fund UL for Variable Life Insurance
in connection with variable annuity and variable life insurance contracts
issued by the Company. Shares are not sold to the general public. Shares of the
Series Trust are sold on a continuing basis, without a sales charge, at the net
asset value next computed after payment is made by the insurance company to the
Series Trust's custodian. However, the separate accounts to which shares are
sold may impose sales and other charges, as described in the appropriate
contract prospectus.
Although the Series Trust is not currently aware of any disadvantages to
contract owners of either variable annuity or variable life insurance contracts
because the Series Trust's shares are available with respect to both products,
an irreconcilable material conflict may conceivably arise between contract
owners of different separate accounts investing in the Series Trust due to
differences in tax treatment, management of the Trust's investments, or other
considerations. The Series Trust's Board of Trustees will monitor events in
order to identify any material conflicts between variable annuity contract
owners and variable life insurance policy owners, and will determine what
action, if any, should be taken in the event of such a conflict.
PRICING SHARES
The net asset value of a Portfolio share is computed as of the close of
trading on each day on which the New York Stock Exchange is open for trading,
except on days when changes in the value of the Portfolio's securities do not
affect the current net asset value of its shares. The New York Stock Exchange
is currently closed on weekends, New Year's Day,
SERIES-14
<PAGE>
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share is arrived at
by determining the value of the Portfolio's assets, subtracting its
liabilities, and dividing the result by the number of shares outstanding.
The Portfolios value short-term money market instruments with maturities of
sixty days or less at amortized cost (original purchase cost as adjusted for
amortization of premium or accretion of discount) which, when combined with
accrued interest approximates market. All other investments are valued at
market value, or where market quotations are not readily available, at fair
value as determined in good faith by the Series Trust's Board of Trustees.
HOW TO REDEEM SHARES
Shareholders may redeem all full and fractional shares of the Series Trust on
any business day. Redemptions are effected at the per share net asset value
next determined after receipt by the Portfolio of a proper redemption request.
The redemption value is the net asset value adjusted for fractions of a cent
and may be more or less than the shareholder's cost depending upon changes in
the value of the Portfolio's securities between purchase and redemption.
The Portfolio computes the redemption value at the close of the New York
Stock Exchange at the end of the day on which they have received all proper
documentation from the shareholder. Redemption proceeds are normally wired or
mailed either the same or the next business day, but in no event later than
seven days thereafter.
The Series Trust or the Portfolio may temporarily suspend the right to redeem
their shares when: (1) the New York Stock Exchange is closed, other than
customary weekend and holiday closings; (2) trading on the Exchange is
restricted; (3) an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Portfolio's investments or
determination of its net asset value is not reasonably practicable; or (4) the
Securities and Exchange Commission, for the protection of shareholders, so
orders.
DIVIDENDS AND TAX STATUS
The Series Trust and its Portfolios have qualified and intend to qualify in
the future as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended. A Portfolio qualifies if, among other things, it
distributes to its shareholders at least 90% of its investment company taxable
income during each fiscal year.
Capital gains and dividends are distributed in cash or reinvested in
additional shares of a Portfolio without a sales charge. Although purchasers of
variable contracts are not currently subject to federal income taxes on
distributions made by the Portfolios, they may be subject to state and local
taxes and should review the accompanying contract prospectus for a discussion
of the tax treatment applicable to purchasers of variable annuity and variable
life insurance contracts.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Series Trust or
the Portfolios.
ADDITIONAL INFORMATION
Except as otherwise stated in this Prospectus or as required by law, the
Series Trust reserves the right to change the terms of the offer stated in this
Prospectus without shareholder approval, including the right to impose or
change fees for services provided.
SERIES-15
<PAGE>
EXHIBIT A
DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND
INVESTMENT TECHNIQUES AVAILABLE TO THE PORTFOLIOS
The following types of investments and investment techniques are available to
each of the Portfolios unless otherwise specifically indicated. Please refer to
the investment objective and policies of each Portfolio for a list of available
investments.
VARIABLE AMOUNT MASTER DEMAND NOTES
Variable amount master demand notes are unsecured obligations that permit the
investment of fluctuating amounts by a Portfolio at varying rates of interest
pursuant to direct arrangements between the Portfolio as lender and the issuer
as borrower. Master demand notes permit daily fluctuations in the interest rate
and daily changes in the amounts borrowed. A Portfolio has the right to
increase the amount under the note at any time up to the full amount provided
by the note agreement, or to decrease the amount, and the borrower may repay up
to the full amount of the note without penalty. Because these types of notes
are direct lending arrangements between the lender and the borrower, it is not
generally contemplated that such instruments will be traded, and there is no
secondary market for these notes, although they are redeemable and thus
repayable by the borrower at face value plus accrued interest at any time.
Accordingly, a Portfolio's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. In connection with master
demand note arrangements, the investment advisers consider earning power, cash
flow and other liquidity ratios of the issuer. These notes, as such, are not
typically rated by credit rating agencies. Unless they are so rated, the
Portfolios will invest in them only if, at the time of an investment, the
issuer meets the criteria set forth for all other commercial paper. Pursuant to
procedures established by the investment advisers, such notes are treated as
instruments maturing in one day and valued at their par value. The investment
advisers intend to continuously monitor factors related to the ability of the
borrower to pay principal and interest on demand.
REPURCHASE AGREEMENTS
Interim cash balances may be invested from time to time in repurchase
agreements with approved counterparties. Approved counterparties are limited to
national banks or reporting broker-dealers meeting the investment advisor's
credit quality standards as presenting minimal risk of default. All repurchase
transactions must be collateralized by U.S. Government securities with market
value no less than 102% of the amount of the transaction, including accrued
interest. Repurchase transactions generally mature the next business day but,
in the event of a transaction of longer maturity, collateral will be marked to
market daily and, when required, additional cash or qualifying collateral will
be required from the counterparty.
In executing a repurchase agreement, a Portfolio purchases eligible
securities subject to the seller's simultaneous agreement to repurchase them on
a mutually agreed upon date and at a mutually agreed upon price. The purchase
and resale prices are negotiated with the counterparty on the basis of current
short-term interest rates, which may be more or less than the rate on the
securities collateralizing the transaction. Physical delivery or, in the case
of "book-entry" securities, segregation in the counterparty's account at the
Federal Reserve for the benefit of the Portfolio is required to establish a
perfected claim to the collateral for the term of the agreement in the event
the counterparty fails to fulfill its obligation.
As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by
the counterparty on its obligation, the Portfolio would bear the risks of
delay, adverse market fluctuation and transaction costs in disposing of the
collateral.
WHEN-ISSUED SECURITIES
The U.S. Government Securities Portfolio may, from time to time, purchase
new-issue Government or Agency securities on a "when-issued" or
"to-be-announced" ("TBA") basis ("when-issued securities"). The prices of such
securities will be fixed at the time the commitment to purchase is made, and
may be expressed in either dollar price or yield maintenance terms. Delivery
and payment may be at a future date beyond customary settlement time. It is the
customary practice of the Portfolio to make when-issued or TBA purchases for
settlement no more than 90 days beyond the commitment date.
The commitment to purchase a when-issued security may be viewed as a senior
security, and will be marked to market and reflected in the Portfolio's net
asset value daily from the commitment date. While it is the investment
adviser's intention to take physical delivery of these securities, offsetting
transactions may be made prior to settlement,
SERIES-16
<PAGE>
if it is advantageous to do so. The Portfolio does not make payment or begin to
accrue interest on these securities until settlement date. In order to invest
its assets pending settlement, the Portfolio will normally invest in short-term
money market instruments and other securities maturing no later than the
scheduled settlement date.
The Portfolio does not intend to purchase when-issued securities for
speculative or "leverage" purposes. Consistent with Section 18 of the
Investment Company Act of 1940 and the General Policy Statement of the SEC
thereunder, when the Portfolio commits to purchase a when-issued security, it
will identify and place in a segregated account high-grade money market
instruments and other liquid securities equal in value to the purchase cost of
the when-issued securities.
The investment adviser believes that purchasing securities in this manner
will be advantageous to the Portfolio. However, this practice does entail
certain additional risks, namely the default of the counterparty on its
obligations to deliver the security as scheduled. In this event, the Portfolio
would endure a loss (gain) equal to the price appreciation (depreciation) in
value from the commitment date. The investment adviser employs rigorous credit
quality procedures in determining the counterparties with which it will deal in
when-issued securities, and in some circumstances, will require the
counterparty to post cash or some other form of security as margin to protect
the value of its delivery obligation pending settlement.
CERTIFICATES OF DEPOSIT
Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest
to the bearer of the receipt on the date specified on the certificate. The
certificate can usually be traded in the secondary market prior to maturity.
Certificates of deposit will be limited to U.S. dollar denominated
certificates of United States banks which have at least $1 billion in deposits
as of the date of their most recently published financial statements (including
foreign branches of U.S. banks, U.S. branches of foreign banks which are
members of the Federal Reserve System or the Federal Deposit Insurance
Corporation, and savings and loan associations which are insured by the FDIC).
The Portfolios will not acquire time deposits or obligations issued by the
International Bank for Reconstruction and Development, the Asian Development
Bank or the Inter-American Development Bank. Additionally, the Portfolios do
not currently intend to purchase such foreign securities (except to the extent
that certificates of deposit of foreign branches of U.S. banks may be deemed
foreign securities) or purchase certificates of deposit, bankers' acceptances
or other similar obligations issued by foreign banks.
BANKERS' ACCEPTANCES
Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by the bank which, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.
Bankers' acceptances acquired by the Portfolios must have been accepted by U.S.
commercial banks, including foreign branches of U.S. commercial banks, having
total deposits at the time of purchase in excess of $1 billion and must be
payable in U.S. dollars.
FUTURES CONTRACTS
The Portfolios may use exchange-traded financial futures contracts as a hedge
to protect against changes in interest rates or stock prices. Financial futures
contracts consist of stock index futures contracts and futures contracts on
debt securities ("interest rate futures"). An interest rate futures contract is
a contract to buy or sell specified debt securities at a future time for a
fixed price. A stock index futures contract is a contractual obligation to buy
or sell a specified index of stocks at a future date for a fixed price.
Hedging by use of interest rate futures seeks to establish, with more
certainty than would otherwise be possible, the effective rate of return on
portfolio securities. When hedging is successful, any depreciation in the value
of portfolio securities will substantially be offset by appreciation in the
value of the futures position. Conversely, any appreciation in the value of the
portfolio securities will substantially be offset by depreciation in the value
of the futures position. At no time will the Portfolios' transactions in such
financial futures be employed for speculative purposes.
Stock index futures may be used, to a limited extent, to hedge specific
common stocks with respect to market (systematic) risk (involving the market's
assessment of overall economic prospects) as distinguished from stock-specific
risk (involving the market's evaluation of the merits of the issuer of a
particular security). Gains and losses on futures
SERIES-17
<PAGE>
contracts employed as hedges for specific securities will normally be offset by
losses or gains, respectively, on the hedged security.
When a futures contract is purchased, the Portfolios will set aside, in an
identifiable manner, an amount of cash and cash equivalents equal to the total
market value of the futures contract, less the amount of the initial margin.
The Portfolios will not purchase or sell futures contracts for which the
aggregate initial margin exceeds five percent (5%) of the fair market value of
their respective assets, after taking into account unrealized profits and
unrealized losses on any such contracts they have entered into.
Positions taken in the futures market are not normally held to maturity, but
instead are liquidated through offsetting transactions which may result in a
profit or a loss. Closing out an open futures contract sale or purchase is
effected by entering into an offsetting futures contract purchase or sale,
respectively, for the same aggregate amount of the debt security and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if less, a loss. While futures
positions taken by the Portfolios will usually be liquidated in this manner,
the Portfolios may instead make or take delivery of the underlying securities
whenever it appears economically advantageous for them to do so. In determining
gain or loss, transaction costs must be taken into account. There can be no
assurance that the Portfolios will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time.
All interest rate and stock index futures contracts will be traded
on exchanges that are licensed and regulated by the Commodity
Futures Trading Commission ("CFTC"). To ensure that its
futures transactions meet CFTC standards, the
Portfolios will enter into futures contracts for hedging purposes only, i.e.,
for the purposes or with the intent specified in CFTC regulations and
interpretations, subject to the requirements of the SEC. The Portfolios will
further seek to assure that fluctuations in the price of any futures contracts
that they use for hedging purposes will be substantially related to
fluctuations in the price of the securities which they hold or which they
expect to purchase, or for other risk reduction strategies, though there can be
no assurance the expected result will always be achieved.
As evidence of its hedging intent, the Portfolios expect that on seventy-five
percent (75%) or more of the occasions on which they purchase a long futures
contract, they will effect the purchase of securities in the cash market or
take delivery as they close out a futures position. In particular cases,
however, when it is economically advantageous, a long futures position may be
terminated without the corresponding purchase of securities.
SPECIAL RISKS RELATING TO FUTURES CONTRACTS
While certain futures contracts may be purchased and sold to reduce certain
risks, these transactions may entail other risks. Thus, while the Portfolios
may benefit from the use of such futures, changes in interest rates or stock
price movements may result in a poorer overall performance for the Portfolios
than if they had not entered into such futures contracts. Moreover, in the
event of an imperfect correlation between the futures position and the
portfolio position which is intended to be protected, the desired protection
may not be obtained and the Portfolios may be exposed to risk of loss. The
investment advisers will attempt to reduce this risk by engaging in futures
transactions, to the extent possible, where, in their judgment, there is a
significant correlation between changes in the prices of the futures contracts
and the prices of any portfolio securities sought to be hedged.
In addition to the possibility that there may be a less than perfect
correlation between movements in the futures contracts and securities in the
portfolio being hedged, the prices of futures contracts may not correlate
perfectly with movements in the underlying security due to certain market
distortions. First, rather than meeting variation margin deposit requirements
should a futures contract value move adversely, investors may close future
contracts through offsetting transactions which could distort the normal
relationship between the index and futures markets. Second, since margin
requirements in the futures market are less onerous than in the securities
market, the futures market may attract more speculators than the securities
market. Increased participation by speculators may cause temporary price
distortions. Due to the possibility of such price distortion, and also because
of the imperfect correlation discussed above, even a correct forecast of
general market trends by the investment advisers may not result in a successful
hedging transaction in the futures market over a short time period.
Successful use of futures contracts for hedging purposes is also subject to
the investment advisers' ability to predict correctly movements in the
direction of the market. However, the investment advisers believe that over
time the value of the investments of the Portfolios will tend to move in the
same direction as the market indices which are intended to correlate to the
price movements of the portfolio securities sought to be hedged.
SERIES-18
<PAGE>
WRITING COVERED CALL OPTIONS
The Portfolios may write (i.e., sell) covered call options. By writing a call
option, a Portfolio becomes obligated during the term of the option to deliver
the securities underlying the option upon payment of the exercise price.
The Portfolios may only write "covered" options. This means that as long as a
Portfolio is obligated as the writer of a call option, it will own the
underlying securities subject to the option or, in the case of call options on
U.S. Treasury bills, a Portfolio might own substantially similar U.S. Treasury
bills.
The principal reason for writing call options is to obtain, through a receipt
of premiums, a greater current return than would be realized on the underlying
securities alone. The Portfolios receive a premium from writing a call option
which they retain whether or not the option is exercised. By writing a call
option, a Portfolio might lose the potential for gain on the underlying
security while the option is open.
Options on some securities are relatively new and it is impossible to predict
the amount of trading interest that will exist in such options. There can be no
assurance that viable markets will develop or continue. The failure of such
markets to develop or continue could significantly impair a Portfolio's ability
to use such options to achieve its investment objectives.
BUYING PUT AND CALL OPTIONS
The Portfolios may purchase put options on securities held, or on futures
contracts whose price volatility is expected to closely match that of
securities held, as a defensive measure to preserve shareholders' capital when
market conditions warrant. The Portfolios may purchase call options on specific
securities, or on futures contracts whose price volatility is expected to
closely match that of securities eligible for purchase by the Portfolios, in
anticipation of or as a substitute for the purchase of the securities
themselves. These options may be listed on a national exchange or executed
"over-the-counter" with a broker-dealer as the counterparty. While the
investment advisers anticipate that the majority of option purchases and sales
will be executed on a national exchange, put or call options on specific
securities or for non-standard terms are likely to be executed directly with a
broker-dealer when it is advantageous to do so. Option contracts will be
short-term in nature, generally less than nine months in duration.
The Portfolios will pay a premium in exchange for the right to purchase
(call) or sell (put) a specific par value of a fixed income or equity security
or futures contract at a specified price (the strike price) on or before the
expiration date of the option contract. In either case, a Portfolio's risk is
limited to the option premium paid.
The Portfolios may sell the put and call options prior to their expiration
and thereby realize a gain or loss. A call option will expire worthless if the
price of the related security is below the contract strike price at the time of
expiration; a put option will expire worthless if the price of the related
security is above the contract strike price at the time of expiration.
Put and call options will be employed for bona fide hedging purposes only.
Liquid securities sufficient to fulfill the call option delivery obligation
will be identified and segregated in an account; deliverable securities
sufficient to fulfill the put option obligation will be similarly identified
and segregated. In the case of put options on futures contracts, portfolio
securities whose price volatility is expected to match that of the underlying
futures contract will be identified and segregated.
SHORT SALES AGAINST THE BOX
The Utilities Portfolio may make short sales (except to the extent of 5% of
the Portfolio's net assets) if at all times when a position is open, the
Portfolio owns the stock or owns preferred stock or debt securities convertible
or exchangeable without payment of further consideration for, securities of the
same issue as the securities sold short. Short sales of this kind are referred
to as "against the box." Short sales against the box are used to defer
recognition of capital gains or losses.
Possible losses from short sales differ from losses that could be incurred
from a purchase of a security, because losses from short sales may be
unlimited, whereas losses from purchases can equal only the total amount
invested.
NON-PUBLICLY TRADED AND ILLIQUID SECURITIES
The sale of securities that are not publicly traded is typically restricted
under the federal securities laws. As a result, the Utilities Portfolio may be
forced to sell these securities at less than fair market value or may not be
able to sell them when the investment adviser believes it is desirable to do
so. The Portfolio's investments in illiquid securities are subject to the risk
that should the Portfolio desire to sell any of these securities when a ready
buyer is not available at a price that
SERIES-19
<PAGE>
the Portfolio deems representative of their value, the value of the Portfolio's
net assets could be adversely affected. The Portfolio currently limits its
investments in such securities to 10% of the Portfolio's assets.
FOREIGN SECURITIES AND AMERICAN DEPOSITARY RECEIPTS
The Utilities Portfolio may purchase foreign securities or American
Depositary Receipts ("ADRs"). ADRs are U.S. dollar-denominated receipts issued
generally by domestic banks representing the deposit with the bank of a
security of a foreign issuer. ADRs are publicly traded on exchanges or over the
counter in the United States.
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio transactions,
the possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Portfolio will not be registered with, nor will
the issuers thereof be subject to the reporting requirements of, the SEC.
Accordingly, there may be less publicly available information about the
securities and the foreign company or government issuing them than is available
about a domestic company of government entity. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payment positions.
LENDING PORTFOLIO SECURITIES
The U.S. Government Securities Portfolio and the Utilities Portfolio are
authorized to lend their portfolio securities to brokers, dealers and other
financial organizations. The Portfolios' loan of securities will be
collateralized by cash, letters of credit or U.S. government securities that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities. By lending its securities, the Portfolio seeks
to generate income by continuing to receive interest on the loaned securities,
by investing the cash collateral in short-term instruments or by obtaining
yield in the form of interest paid by the borrower when U.S. government
securities are used as collateral.
The risk associated with lending portfolio securities, as with other
extensions of credit, consists of possible loss of rights in the collateral
should the borrower fail financially.
SERIES-20
<PAGE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
TIC Ed. 5-95
L-11788 Printed in U.S.A.
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
- ------------------------------------------------------------------------------
MAY 1, 1995
This Statement of Additional Information is not a prospectus but relates to,
and should be read in conjunction with, the Trust's prospectus dated May 1,
1995. A copy of the Prospectus is available from the office of the Series Trust
at The Travelers Insurance Company, Annuity Services 5 SHS, One Tower Square,
Hartford, Connecticut 06183-5030.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
THE TRAVELERS SERIES TRUST .............................................. 1
U.S. GOVERNMENT SECURITIES PORTFOLIO .................................... 1
Investment Objective and Policies ................................... 1
Investment Restrictions ............................................. 1
SOCIAL AWARENESS STOCK PORTFOLIO ........................................ 2
Investment Objective and Policies ................................... 2
Social Criteria ..................................................... 2
Investment Restrictions ............................................. 2
UTILITIES PORTFOLIO ..................................................... 3
Investment Objective and Policies ................................... 3
Investment Restrictions ............................................. 3
VALUATION OF SECURITIES ................................................. 4
DISTRIBUTIONS AND TAXES ................................................. 5
TRUSTEES AND OFFICERS ................................................... 5
DECLARATION OF TRUST .................................................... 6
INVESTMENT ADVISORY SERVICES ............................................ 7
TAMIC ............................................................... 7
SBMFM ............................................................... 7
Smith Barney Mutual Funds Management Inc. ........................... 7
The Advisory Agreements ............................................. 7
BROKERAGE ............................................................... 8
ADDITIONAL INFORMATION .................................................. 9
FINANCIAL STATEMENTS .................................................... 9
APPENDIX ................................................................ 10
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
The Travelers Series Trust (the "Series Trust") is registered with the
Securities and Exchange Commission as an open-end management investment
company, and is organized as a business trust under the laws of the
Commonwealth of Massachusetts. An Agreement and Declaration of Trust dated
October 11, 1991 (the "Declaration of Trust") authorizes the shares of the
Series Trust to be divided into two or more series related to separate
portfolios of investments, and further allows the Board of Trustees to
establish additional portfolios at any time.
The Series Trust is currently divided into three series (the "Portfolios"),
each with its own investment objective and policies. The three Portfolios of
the Series Trust are currently the U.S. Government Securities Portfolio, the
Social Awareness Stock Portfolio, and the Utilities Portfolio, each of which
are diversified portfolios under the Investment Company Act of 1940 (the "1940
Act").
U.S. GOVERNMENT SECURITIES PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the U.S. Government Securities Portfolio is the
selection of investments from the point of view of an investor concerned
primarily with highest credit quality, current income and total return. To
achieve this objective, the Portfolio invests primarily in direct obligations
of the United States Government, in obligations of its instrumentalities
supported by its full faith and credit, and in obligations issued or guaranteed
by Federal Agencies which are independent corporations sponsored by the United
States and which are subject to its general supervisory oversight, but which do
not carry the full faith and credit obligations of the United States.
INVESTMENT RESTRICTIONS
None of the restrictions enumerated in this paragraph may be changed without
a vote of a majority of the outstanding voting securities of the Portfolio, as
defined in the 1940 Act. The U.S. Government Securities Portfolio will not:
(1) invest more than 5% of its total assets, computed at market value,
in the securities of any one issuer (exclusive of securities issued by the
United States Government, its agencies or instrumentalities, for which there is
no limit);
(2) invest in more than 10% of any class of securities of any one
issuer;
(3) borrow money, except to facilitate redemptions or for emergency
or extraordinary purposes and then only from banks and in amounts of up to 10%
of its gross assets computed at cost; while outstanding according to the 1940
Act, a borrowing may not exceed one-third of the value of the net assets,
including the amount borrowed; the Portfolio has no intention of attempting to
increase its net income by borrowing and all borrowings will be repaid before
additional investments are made; assets pledged to secure borrowings shall be
no more than the lesser of the amount borrowed or 10% of the gross assets
computed at cost;
(4) underwrite securities, except that the Portfolio may purchase
securities from issuers thereof or others and dispose of such securities in a
manner consistent with its other investment policies; in the disposition of
restricted securities, the Portfolio may be deemed to be an underwriter, as
defined in the Securities Act of 1933;
(5) purchase real estate or interests in real estate, except through
the purchase of securities of a type commonly purchased by financial
institutions which do not include direct interest in real estate or mortgages,
or commodities or commodity contracts, except transactions involving financial
futures in order to limit transactions and borrowing costs and for hedging
purposes;
(6) invest for the primary purpose of control or management;
(7) make margin purchases or short sales of securities, except for
short-term credits which are necessary for the clearance of transactions, and
to place not more than 5% of its net asset value in total margin deposits for
positions in futures contracts;
(8) make loans, except that the Portfolio may purchase money market
securities, enter into repurchase agreements, buy publicly and privately
distributed debt securities and lend limited amounts of its portfolio
securities to broker/dealers; all such investments must be consistent with the
investment objective and policies;
(9) invest more than 25% of its total assets in the securities of
issuers in any single industry (other than securities issued by the United
States Government, its agencies or instrumentalities); or
-1-
<PAGE>
(10) purchase securities of other investment companies, except in the
open market and at customary brokerage rates and in no event more than 3% of
the voting securities of any investment company; when consistent with its
investment objectives, the Portfolio may purchase securities of brokers,
dealers, underwriters or investment advisers.
SOCIAL AWARENESS STOCK PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Social Awareness Stock Portfolio is long-term
capital appreciation and retention of net investment income. The Portfolio
seeks to fulfill this objective by selecting investments, primarily common
stocks, that SBMFM determines meet certain social criteria, based on analysis
of data. It is up to the discretion of the investment adviser to determine the
source for the data. This principal objective does not preclude the realization
of short-term gains when conditions suggest the long-term goal is accomplished
by such short-term transactions.
The assets of the Social Awareness Portfolio generally will be invested in a
portfolio of equity securities, primarily common stocks, diversified across
industries and companies. However, when it is determined that investments of
other types may be advantageous for defensive purposes or for temporary
investment of cash flows, investments may be made in bonds, notes or other
evidence of indebtedness, issued publicly or placed privately, deemed to be of
suitable credit quality, including obligations of the United States Government.
SOCIAL CRITERIA
The Social Awareness Stock Portfolio utilizes certain social criteria to
define a universe of common stocks that are acceptable investment vehicles for
the Portfolio. Companies will not meet the social criteria established for the
Portfolio if a significant portion of their revenues, as determined by SBMFM,
are derived from (a) the production of tobacco, tobacco products, alcohol, or
military defense systems; or (b) the provision of military defense related
services, or gambling services. These investment restrictions are not
fundamental and may be changed without shareholder approval.
If a company fails a social criteria restriction after the Social Awareness
Portfolio has purchased its common stock or should the Portfolio inadvertently
acquire a security which is not an acceptable investment, SBMFM will eliminate
the securities of such company from the Social Awareness Portfolio's portfolio
in an orderly manner within a reasonable period of time.
INVESTMENT RESTRICTIONS
The investment restrictions set forth in Items 1 through 9 below are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities of the Portfolio, as defined in the 1940 Act.
Items 10 through 13 may be changed by a vote of the Board of Trustees. The
Social Awareness Stock Portfolio will not:
(1) invest more than 5% of its total assets in securities of any one
issuer, except obligations of the United States Government and its
instrumentalities;
(2) borrow money, except that the right is reserved to borrow from
banks for emergency purposes, provided that such borrowings will not exceed 5%
of the value of the assets of the Portfolio and that immediately after the
borrowing, and at all times thereafter, and while any such borrowing is
unrepaid, there will be asset coverage of at least 300% for all borrowings of
the Portfolio;
(3) underwrite securities of other issuers, except that the Portfolio
could be deemed an underwriter when engaged in the sale of restricted
securities (see item 13);
(4) purchase interests in real estate, except as may be represented
by securities for which there is an established market;
(5) purchase commodities or commodity contracts, except transactions
involving financial futures in order to limit transaction and borrowing costs
and for hedging purposes;
(6) make loans, except through the acquisition of a portion of
privately placed issue of bonds, debentures or other evidences of indebtedness
of a type customarily purchased by institutional investors (see item 13);
(7) invest in the securities of a company for the purpose of
exercising management or control;
(8) acquire more than 10% of the voting securities of any one issuer
(it is the present practice of the Portfolio not to exceed 5% of the voting
securities of any one issuer);
(9) issue senior securities;
-2-
<PAGE>
(10) make short sales of securities;
(11) make purchases on margins, except for short-term credits which
are necessary for the clearance of transactions, and to place not more than 5%
of its net asset value in total margin deposits for positions in futures
contracts;
(12) invest in securities of other investment companies, except as
part of a plan of merger, consolidation or acquisition of assets; or
(13) invest more than 5% of the value of the assets of the Portfolio
in restricted securities (securities which may not be publicly offered without
registration under the Securities Act of 1933).
Changes in the investments of the Portfolio may be made from time to time to
take into account changes in the outlook for particular industries or
companies. The Portfolio's investments will not, however, be concentrated in
any one industry; that is, no more than twenty-five percent (25%) of the value
of its assets will be invested in any one industry. While the Portfolio may
occasionally invest in foreign securities, it is not anticipated that such
investments will, at any time, account for more than ten percent (10%) of its
investment portfolio.
The assets of the Portfolio will be kept fully invested except that (a)
sufficient cash may be kept on hand reasonably to provide for variable annuity
contract obligations, and (b) reasonable amounts of cash, United States
Government or other liquid securities, such as short-term bills and notes, may
be held for limited periods, pending investments in accordance with their
respective investment policies.
UTILITIES PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The primary investment objective of the Utilities Portfolio (the "Portfolio")
is to provide current income. Long-term capital appreciation is a secondary
objective. The Portfolio seeks to achieve its objectives by investing in equity
and debt securities of companies in the utility industries, which industries
are deemed for these purposes to be comprised of companies principally engaged
(that is, at least 50% of a company's assets, gross income or net profits
results from utility operations or the company is regulated as a utility by a
government agency or authority) in the manufacture, production, generation,
transmission and sale of electric and gas energy and companies principally
engaged in the communications field, including entities such as telephone,
telegraph, satellite, microwave and other companies regulated by governmental
agencies as utilities that provide communication facilities for the public
benefit, but not including those in public broadcasting. The Portfolio will
invest primarily in utility equity and debt securities that have a high
expected rate of return, as determined by the investment adviser. Under normal
market conditions, the Portfolio will invest at least 65% of its assets in such
securities. The Portfolio may invest up to 35% of its assets in equity and debt
securities of non-utility companies believed to afford a reasonable opportunity
for achieving the Portfolio's investment objectives. When the investment
adviser believes that market conditions warrant, the Portfolio may adopt a
temporary defensive posture and may invest, without limit, in debt securities
(whether or not they are utility securities) such as rated or unrated bonds,
debentures and commercial paper, United States government securities and money
market instruments. The Portfolio may invest up to 10% of its assets in
securities rated BB or B by Standard & Poor's Corporation ("S&P") or Ba or B by
Moody's Investors Service, Inc. ("Moody's") whenever the investment adviser
believes that the incremental yield on such securities is advantageous to the
Portfolio in comparison to the additional risk involved. The yields on
lower-rated fixed-income securities generally are higher than the yields
available on higher-rated securities. However, investments in lower-rated
securities may be subject to greater market fluctuations and greater risks of
loss of income or principal (including the possibility of default by, or
bankruptcy of, the issuers of such securities) than higher-rated securities.
Lower-rated securities also may have speculative characteristics. In addition,
the Portfolio may enter into repurchase agreements.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental and may not be
changed without a vote of a majority of the outstanding voting securities of
the Portfolio, as defined in the 1940 Act. The Utilities Portfolio will not:
(1) purchase the securities of any issuer (other than U.S. government
securities) if as a result more than 5% of the value of the Portfolio's total
assets would be invested in the securities of the issuer, except that up to 25%
of the value of the Portfolio's total assets may be invested without regard to
this 5% limitation;
(2) purchase more than 10% of the voting securities of any one
issuer, provided that this limitation shall not apply to investments in U.S.
government securities;
(3) purchase securities on margin, except that the Portfolio may
obtain any short-term credits necessary for the clearance
-3-
<PAGE>
of purchases and sales of securities (for purposes of this restriction, the
deposit or payment of initial or variation margin in connection with futures
contracts or related options will not be deemed to be a purchase of securities
on margin by the Portfolio);
(4) make short sales of securities or maintaining a short position,
except to the extent of 5% of the Portfolio's net assets and except that the
Portfolio may engage in such activities without limit if, at all times when a
short position is open, the Portfolio owns an equal amount of the securities or
securities convertible into or exchangeable, without payment of any further
consideration, for securities of the same issuer as, and at least equal in
amount to, the securities sold short;
(5) borrow money, including reverse repurchase agreements, except
that the Portfolio may borrow from banks for temporary or emergency (not
leveraging) purposes including the meeting of redemption requests that might
otherwise require the untimely disposition of securities, in an amount not
exceeding 20% of the value of the Portfolio's total assets (including the
amount borrowed) valued at market less liabilities (not including the amount
borrowed) at the time the borrowing is made. Whenever borrowings exceed 5% of
the value of the Portfolio's total assets, the Portfolio will not make any
additional investments;
(6) pledge, hypothecate, mortgage or otherwise encumber more than 10%
of the value of the Portfolio's total assets as security for any indebtedness
(for purposes of this restriction (a) the deposit of assets in
escrow in connection with the writing of covered put or call
options and the purchase of securities on a when-issued or
delayed-delivery basis and (b) collateral arrangements with
respect to (i) the purchase and sale of stock options, options on foreign
currencies and options on stock indexes and (ii) initial or variation margin
for futures contracts will not be deemed to be pledges of the Portfolio's
assets);
(7) invest in commodities, except that the Portfolio may purchase or
write futures contracts and options on futures contracts as described in this
Prospectus;
(8) make loans to others, except through the purchase of qualified
debt obligations, loans of portfolio securities and the entry into repurchase
agreements; and
(9) concentrate in any industry, except that the Portfolio will
concentrate in excess of 25% of its assets in the securities of companies
within the utility industries.
In addition, the Portfolio will not purchase restricted securities, illiquid
securities (such as repurchase agreements with maturities in excess of seven
days) or other securities that are not readily marketable if more than 10% of
the total assets of the Portfolio would be invested in such securities.
VALUATION OF SECURITIES
The current values for the portfolio securities of the Portfolios are
determined as follows. Securities that are traded on an established exchange
are valued on the basis of the last sales price on the exchange where primarily
traded prior to the time of valuation. Securities traded in the
over-the-counter market, for which complete quotations are readily available,
are valued at the mean of the bid and asked prices at the time of valuation.
Short-term money market instruments having maturities of sixty days or less are
valued at amortized cost (original purchase price as adjusted for amortization
of premium or accretion of discount) which, when combined with accrued
interest, approximates market. Short-term money market instruments having
maturities of more than sixty days, for which complete quotations are readily
available, are valued at current market value. The Board of Trustees of the
Series Trust values the following at prices it deems in good faith to be fair:
(1) securities, including restricted securities, for which complete quotations
are not readily available, (2) listed securities if in the Board's opinion the
last sales price does not reflect a current market value or if no sale
occurred, and (3) other assets.
The Series Trust believes that reliable market quotations generally are not
readily available for purposes of valuing fixed income securities. As a result,
depending on the particular securities owned by either Portfolio, it is likely
that most of the valuations for such securities will be based upon their fair
value determined under procedures which have been approved by the Board of
Trustees. The Board of Trustees has authorized the use of a pricing service to
determine the fair value of the Portfolios' securities. Securities for which
market quotations are readily available are valued on a consistent basis at
that price quoted which, in the opinion of the Trustees or the person
designated by the Trustees to make the determination, most nearly represents
the market value of the particular security. Any securities for which market
quotations are not readily available or other assets are valued on a consistent
basis at fair value as determined in good faith using methods prescribed by the
Trustees.
-4-
<PAGE>
DISTRIBUTIONS AND TAXES
It is the Series Trust's intention to distribute dividends from net
investment income and all net realized capital gains from the Portfolios
annually in shares or, at the option of the shareholder, in cash. All of the
Portfolios have qualified, and intend to qualify in the future, as a regulated
investment company under Subchapter M of the Internal Revenue Code. Thus the
Portfolios are relieved of any federal income tax liability by distributing all
of their net investment income and net capital gains, if any, to its
shareholders.
When any Portfolio makes a distribution, it intends to distribute only its
net capital gains and such income as has been predetermined to the best of the
Portfolio's ability to be taxable as ordinary income. Therefore, net investment
income distributions will not be made on the basis of distributable income as
computed on the Portfolio's books, but will be made on a federal taxation
basis.
As of December 31, 1994, the U.S. Government Securities Portfolio had a
capital loss carryover of approximately $212,281 which expires in 2002. The
Portfolio intends not to distribute realized gains until the carryover is
exhausted. The Portfolio may not realize gains sufficient to use the carryover
before it expires with the passage of time.
TRUSTEES AND OFFICERS
Name Present Position and Principal Occupation During Last Five Years
- ---- -----------------------------------------------------------------
*Heath B. McLendon
Chairman and Member
388 Greenwich Street
New York, New York
Age 61
Managing Director (1993-present), Smith Barney Inc. ("Smith Barney");
Chairman (1993-present), Smith Barney Strategy Advisors, Inc.; President
(1994-present), Smith Barney Mutual Funds Management Inc.; Chairman and/or
Director and President of thirty investment companies associated with Smith
Barney; Chairman, Board of Trustees, Drew University; Trustees, The East New
York Savings Bank; Advisory Director, First Empire State Corporation; Chairman,
Board of Managers, seven Variable Annuity Separate Accounts of The Travelers
Insurance Company+; Chairman, Board of Trustees, five Mutual Funds sponsored by
The Travelers Insurance Company++.
Knight Edwards
Member
2700 Hospital Trust Tower
Providence, Rhode Island
Age 71
Of Counsel (1988-present), Partner (1956-1988), Edwards & Angell, Attorneys;
Member, Advisory Board, (1973-1994) thirty-one mutual funds sponsored by
Keystone Group, Inc.; Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company++.
Robert E. McGill, III
Member
One Elm Street
Windsor Locks, Connecticut
Age 63
Director (1983-present), Executive Vice President (1989-1994), Senior Vice
President, Finance and Administration (1983-1989), The Dexter Corporation
(manufacturer of specialty chemicals and materials); Vice Chairman (1990-1992),
Director (1983-present), Life Technologies, Inc. (life science/present
products); Director (1993-present), Analytical Technology, Inc. (manufacturer
of measurement instruments); Director (1994-present), The Connecticut Surety
Corporation (insurance); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company++.
Lewis Mandell
Member
368 Fairfield Road, U41F
Storrs, Connecticut
Age 52
Professor of Finance (1980-present) and Associate Dean (1993-present), School
of Business Administration, and Director, Center for Research and Development
in Financial Services (1980-present), University of Connecticut; Director
(1992-present), GZA Geoenvironmental Tech, Inc. (engineering services); Member,
Board of Managers, seven Variable Annuity Separate Accounts of The Travelers
Insurance Company+; Trustee, five Mutual Funds sponsored by The Travelers
Insurance Company++.
Frances M. Hawk
Member
222 Berkeley Street
Boston, Massachusetts
Age 47
Portfolio Manager (1992-present), HLM Management Company, Inc. (investment
management); Assistant Treasurer, Pensions and Benefits Management (1989-1992),
United Technologies Corporation (broad-based designer and manufacturer of high
technology products); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company++.
-5-
<PAGE>
Ernest J. Wright
Secretary to the Board
One Tower Square
Hartford, Connecticut
Age 54
Assistant Secretary (1994-present), Counsel (1987-present), The Travelers
Insurance Company; Secretary, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Secretary, Board of
Trustees, five Mutual Funds sponsored by The Travelers Insurance Company++.
Ian R. Stuart
Treasurer
One Tower Square
Hartford, Connecticut
Age 38
Vice President and Financial Officer, Financial Services Department
(1994-present), Second Vice President and Financial Officer, Financial Services
Department (1991-1994), The Travelers Insurance Company; Senior Manager
(1986-1991), Price Waterhouse; Treasurer, Board of Trustees, five Mutual Funds
sponsored by The Travelers Insurance Company++.
+ These seven Variable Annuity Separate Accounts are: The Travelers Growth
and Income Stock Account for Variable Annuities, The Travelers Quality Bond
Account for Variable Annuities, The Travelers Money Market Account for Variable
Annuities, The Travelers Timed Growth and Income Stock Account for Variable
Annuities, The Travelers Timed Short-Term Bond Account for Variable Annuities,
The Travelers Timed Aggressive Stock Account for Variable Annuities and The
Travelers Timed Bond Account for Variable Annuities.
++ These five Mutual Funds are: Capital Appreciation Fund, Cash Income
Trust, High Yield Bond Trust, Managed Assets Trust and The Travelers Series
Trust.
* Mr. McLendon is an "interested person" within the meaning of the 1940
Act by virtue of his position as Managing Director of Smith Barney Inc., an
indirect wholly owned subsidiary of Travelers Group Inc. Mr. McLendon also owns
shares and options to purchase shares of Travelers Group Inc., the indirect
parent of The Travelers Insurance Company.
The Dexter Corporation, of which Mr. McGill is a director, entered into
contracts with The Travelers Insurance Company to provide short-term disability
and life insurance benefits to employees of The Dexter Corporation, and to
administer the health and dental benefits program for employees of The Dexter
Corporation.
Members of the Board of Trustees who are also officers or employees of
Travelers Group Inc. or its subsidiaries are not entitled to any fee. Members
of the Board of Trustees who are not affiliated as employees of Travelers Group
Inc. or its subsidiaries receive an aggregate annual retainer of $10,000 for
service on the Boards of the five Mutual Funds sponsored by The Travelers
Insurance Company and the seven Variable Annuity Separate Accounts established
by The Travelers Insurance Company. They also receive an aggregate annual fee
of $1,800 for each meeting of such Boards attended.
DECLARATION OF TRUST
The Series Trust is organized as a Massachusetts business trust. Pursuant to
certain decisions of the Supreme Judicial Court of Massachusetts, shareholders
of such a trust may, under certain circumstances, be held personally liable as
partners for the obligations of the trust. However, even if the Series Trust
were held to be a partnership, the possibility of its shareholders incurring
financial loss for that reason appears remote because the Series Trust's
Declaration of Trust contains an express disclaimer of shareholder liability
for obligations of the Series Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed
by the Series Trust or the Trustees, and because the Declaration of Trust
provides for indemnification out of Series Trust property for any shareholder
held personally liable for the obligations of the Series Trust.
The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, a Trustee
shall not be liable for the neglect or wrongdoing of any such person; provided,
however, that nothing in the Declaration of Trust shall protect a Trustee
against any liability for his willful misfeasance, bad faith, gross negligence
or the reckless disregard of his duties.
The Trustees were elected by Shareholders at a meeting held on October 30,
1992. After such meeting, no further meetings of shareholders for the purpose
of electing Trustees will be held, unless required by law, and unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, or if at the time of filling a vacancy less than
two-thirds of the Trustees holding office after filling the vacancy were
elected by shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees.
Except as set forth above, the Trustees shall continue to hold office
indefinitely, unless otherwise required by law, and may appoint successor
Trustees. Any Trustee may voluntarily resign from office, or Trustees may be
removed from office (1) at any time by two-thirds vote of the Trustees; (2) by
a majority vote of Trustees where any Trustee becomes mentally or physically
incapacitated; and (3) either by declaration in writing or at a meeting called
for such purpose by the holders of not
-6-
<PAGE>
less than two-thirds of the outstanding shares or other voting interests of
the Trust. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as trustee, if requested in writing
to do so by the holders of not less than 10% of the outstanding shares or other
voting interests of the Trust. The Series Trust is required to assist in
Shareholders' communications. In accordance with current laws, insurance
companies will request voting instructions from contract owners participating
in variable annuity and/or variable life insurance contracts held by their
respective separate accounts. Insurance companies will vote shares of the
Portfolios in the same proportion as the voting instructions received.
Voting rights are not cumulative, that is, the holders of more than 50% of
the shares voting on the election of Trustees can, if they choose to do so,
elect all of the Trustees of the Series Trust, in which event the holders of
the remaining shares will be unable to elect any person as a Trustee.
No amendment may be made to the Declaration of Trust without a "vote of a
majority of the outstanding voting securities" of the Series Trust (as defined
in the 1940 Act).
INVESTMENT ADVISORY SERVICES
TAMIC
Travelers Asset Management International Corporation ("TAMIC"), an indirect
wholly owned subsidiary of Travelers Group Inc., furnishes investment
management and advisory services to the U.S. Government Securities Portfolio in
accordance with the terms of an Investment Advisory Agreement which was
approved by shareholders at a meeting held on April 23, 1993.
For furnishing investment management and advisory services to the U.S.
Government Securities Portfolio, TAMIC is paid an amount equivalent on an
annual basis to 0.3233% of the average daily net assets of the Portfolio. The
fee is computed daily and paid weekly. The total advisory fees paid to TAMIC by
the U.S. Government Securities Portfolio for the period ended December 31, 1993
and 1994 were $56,276 and $82,937.
SBMFM
Smith Barney Mutual Funds Management Inc. (SBMFM) an indirect wholly owned
subsidiary of The Travelers Inc., furnishes investment management and advisory
services to the Social Awareness Stock Portfolio through Greenwich Street
Advisors, a division of SBMFM, in accordance with the terms of an Investment
Advisory Agreement dated May 1, 1995 which was approved by shareholders at a
meeting held on April 28, 1995. Prior to May 1, 1995, The Travelers Investment
Management Company (TIMCO) provided investment management and advisory
services. For furnishing investment management and advisory services to the
Fund, SBMFM is paid any amount equivalent on an annual basis to the advisory
fee schedule set forth in the table below. The fee is computed daily and paid
weekly.
<TABLE>
<CAPTION>
Aggregate Net Asset Value
Annual Management Fee of the Portfolio
--------------------- -------------------------
<S> <C> <C>
0.65% of the first $ 50,000,000, plus
0.55% of the next $ 50,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of amounts over $200,000,000.
</TABLE>
The total advisory fees paid to TIMCO by the Social Awareness Stock Portfolio
for the period ended December 31, 1993 and 1994 were $15,961 and $23,474,
respectively.
Greenwich Street Advisors, a division of SBMFM, also manages the day-to-day
investment operations of the Utilities Portfolio pursuant to an Investment
Advisory Agreement approved by the Board of Trustees. Under the Advisory
Agreement, SBMFM is responsible for furnishing or causing to be furnished to
the Utilities Portfolio advice and assistance with respect to the acquisition,
holding or disposal of securities and recommendations with respect to other
aspects and affairs of the Portfolio. The Utilities Portfolio pays SBMFM an
advisory fee equal to 0.65% on an annual basis for its services as investment
adviser. The fee is computed daily and paid monthly.
The total advisory fees paid to SBMFM by the Utilities Portfolio for the
period ended December 1994 was $21,804.
THE ADVISORY AGREEMENTS
Under the terms of their respective Advisory Agreements, TAMIC and SBMFM
shall:
(1) obtain and evaluate pertinent economic, statistical and
financial data and other information relevant to the investment
-7-
<PAGE>
policy of the Portfolios, affecting the economy generally and individual
companies or industries, the securities of which are included in the
Portfolios or are under consideration for inclusion therein;
(2) be authorized to purchase supplemental research and other
services from brokers at an additional cost to the Portfolios;
(3) regularly furnish recommendations to the Board of Trustees with
respect to an investment program for approval, modification or rejection by
the Board of Trustees;
(4) take such steps as are necessary to implement the investment
programs approved by the Board of Trustees; and
(5) regularly report to the Board of Trustees with respect to
implementation of the approved investment programs and any other activities in
connection with the administration of the assets of the Portfolios.
As required by the Investment Company Act of 1940, as amended, each Advisory
Agreement will continue in effect for a period more than two years from the
date of its execution only so long as its continuance is specifically approved
at least annually (i) by a vote of a majority of the Board of Trustees, or (ii)
by a vote of a majority of the outstanding voting securities of the Portfolios.
In addition, and in either event, the terms of the Advisory Agreements must be
approved annually by a vote of a majority of the Board of Trustees who are not
parties to, or interested persons of any party to, the Advisory Agreements,
cast in person at a meeting called for the purpose of voting on such approval
and at which the Board of Trustees is furnished such information as may be
reasonably necessary to evaluate the terms of the Advisory Agreements. The
Advisory Agreements further provide that they will terminate automatically upon
assignment; may be amended only with prior approval of a majority of the
outstanding voting securities of the Portfolios; may be terminated without the
payment of any penalty at any time upon sixty days' notice by the Board of
Trustees or by a vote of a majority of the outstanding voting securities of the
Portfolios; and may not be terminated by TAMIC or SBMFM without prior approval
of a new investment advisory agreement by a vote of a majority of the
outstanding voting securities of the Portfolios.
BROKERAGE
Subject to approval of the Board of Trustees, it is the policy of TAMIC,
TIMCO and SBMFM (collectively, the "investment advisers"), in executing
transactions in portfolio securities of the Portfolios, to seek best execution
of orders at the most favorable prices. The determination of what may
constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations, including, without
limitation, the overall direct net economic result to the Portfolios, involving
both price paid or received and any commissions and other cost paid, the
efficiency with which the transaction is effected, the ability to effect the
transaction at all where a large block is involved, the availability of the
broker to stand ready to execute potentially difficult transactions in the
future, and the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by management in determining the
overall reasonableness of brokerage commissions paid. Subject to the foregoing,
a factor in the selection of brokers is the receipt of research services,
analyses and reports concerning issuers, industries, securities, economic
factors and trends, and other statistical and factual information. Any such
research and other statistical and factual information provided by brokers to
the Portfolios and the investment advisers is considered to be in addition to
and not in lieu of services required to be performed by the investment advisers
under their respective Investment Advisory Agreements. The cost, value and
specific application of such information are indeterminable and hence are not
practicably allocable among the Portfolios and other clients of either TAMIC,
TIMCO or SBMFM who may indirectly benefit from the availability of such
information. Similarly, the Portfolios may indirectly benefit from information
made available as a result of transactions for such clients.
Purchases and sales of bonds and money market instruments will usually be
principal transactions and will normally be purchased directly from the issuer
or from the underwriter or market maker for the securities. There usually will
be no brokerage commissions paid for such purchases. Purchases from the
underwriters will include the underwriting commission or concession and
purchases from dealers serving as market makers will include the spread between
the bid and asked prices. Where transactions are made in the over-the-counter
market, the Portfolios will deal with primary market makers unless more
favorable prices are otherwise obtainable. Brokerage fees will be incurred in
connection with futures transactions, and the Portfolios will be required to
deposit and maintain funds with brokers as margin to guarantee performance of
future obligations.
Each of the investment advisers may follow a policy of considering the sale
of shares of the Series Trust a factor in the selection of broker-dealers to
execute portfolio transactions, subject to the requirements of best execution
described above.
The investment advisers' policies with respect to brokerage are and will be
reviewed by the Board of Trustees periodically. Because of the possibility of
further regulatory developments affecting the securities exchanges and
brokerage practices generally, the foregoing practices may be changed, modified
or eliminated.
-8-
<PAGE>
The total brokerage commissions paid by the U.S. Government Securities
Portfolio to TAMIC for the period ended December 31, 1992 and the years ended
December 31, 1993 and 1994 were $8,942, $35,756 and $13,363, respectively. For
the year ended December 31, 1994, no portfolio transactions were directed to
certain brokers because of research services. No formula is used in placing
portfolio transactions with brokers which provide research services and no
specific amount of transactions is allocated for research services. No
brokerage business was placed with any brokers affiliated with TAMIC during
1994.
The total brokerage commissions paid by the Social Awareness Stock Portfolio
to TIMCO for the period ended December 31, 1992 and the year ended December 31,
1993 and 1994 were $2,121, $6,302 and $12,927, respectively. For the year ended
December 31, 1994, portfolio transactions in the amount of $6,206,533 were
placed with certain brokers because of research services, of which $8,379 was
paid in commissions with respect to such services. No formula was used in
placing such transactions, and no specific amount of transactions was allocated
for research services. No brokerage business was placed with any brokers
affiliated with TIMCO during 1994.
The total brokerage commissions paid by the Utilities to SBMFM for the period
ended December 31, 1994 was $8,611. For the year ended December 31, 1994, no
portfolio transactions were placed with certain brokers because of research
services. No formula was used in placing such transactions, and no specific
amount of transactions was allocated for research services. No brokerage
business was placed with any brokers affiliated with TIMCO during 1994.
ADDITIONAL INFORMATION
The Travelers Insurance Company (the "Company") acts as transfer agent and
dividend disbursing agent for the Portfolios. The Company is a stock insurance
company chartered in 1864 in Connecticut and continuously engaged in the
insurance business since that time. The Company is a wholly owned subsidiary of
The Travelers Insurance Group Inc., which is indirectly owned, through a wholly
owned subsidiary, by Travelers Group Inc. On April 1, 1995, the Company owned
100% of the Series Trust's outstanding shares. The Company's Home Office is
located at One Tower Square, Hartford, Connecticut 06183, telephone (203)
277-0111.
Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York 11245,
serves as the custodian of all securities and cash of the Portfolios.
Coopers & Lybrand L.L.P., Independent Accountants, 100 Pearl Street,
Hartford, Connecticut 06103, are the independent auditors for the Series Trust
and its Portfolios. The services provided by Coopers & Lybrand L.L.P., include
primarily the examination of the Series Trust's financial statements. The
financial statements included or incorporated by reference in the Prospectus,
Statement of Additional Information and Registration Statement have been
audited by Coopers & Lybrand L.L.P.,as indicated in their report thereon, and
are incorporated herein by reference in reliance upon the authority of said
firm as experts in accounting and auditing.
Except as otherwise stated in its prospectus or as required by law, the
Series Trust reserves the right to change the terms of the offer stated in its
prospectus without shareholder approval, including the right to impose or
change fees for services provided.
No dealer, salesman or other person is authorized to give any information or
to make any representation not contained in the Series Trust's prospectus, this
Statement of Additional Information or any supplemental sales literature issued
by the Series Trust, and no person is entitled to rely on any information or
representation not contained therein.
The Series Trust's prospectus and this Statement of Additional Information
omit certain information contained in the Series Trust's registration statement
filed with the Securities and Exchange Commission which may be obtained from
the Commission's principal office in Washington, D.C. upon payment of the fee
prescribed by the Rules and Regulations promulgated by the Commission.
FINANCIAL STATEMENTS
The financial statements contained in the Series Trust's December 31, 1994
Annual Report to Shareholders are incorporated herein by reference. Copies may
be obtained by writing to The Travelers Insurance Company, Annuity Services--5
SHS, One Tower Square, Hartford, Connecticut 06183-5030, or by calling
1-800-842-0125.
-9-
<PAGE>
APPENDIX
COMMERCIAL PAPER RATINGS
The Portfolio's investments in commercial paper are limited to those rated
A-1 by Standard & Poor's Corporation (S&P) or Prime-1 by Moody's Investors
Service, Inc. (Moody's). These ratings and other money market instruments are
described as follows.
Commercial paper rated A-1 by Standard & Poor's has the following
characteristics: liquidity ratios are adequate to meet cash requirements. The
issuer's long-term senior debt is rated "A" or better, although in some cases
"BBB" credits may be allowed. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the issuer's industry is
well established and the issuer has a strong position within the industry.
The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks
which may be inherent in certain areas; (3) evaluation of the issuer's products
in relation to competition and customer acceptance; (4) liquidity; (5) amount
and quality of long-term debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public preparations to meet
such obligations. Relative strength or weakness of the above factors determines
how the issuer's commercial paper is rated within various categories.
-10-
<PAGE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
L-11788S TIC Ed. 5-95
Printed in U.S.A.
<PAGE>
COPY OF ANNUAL REPORT DATED DECEMBER 31, 1994 TO WHICH THE REGISTRANT'S
FINANCIAL STATEMENTS ARE INCORPORATED IN THE PROSPECTUS/STATEMENT OF
ADDITIONAL INFORMATION BY REFERENCE TO THIS FILING.
<PAGE>
THE TRAVELERS VARIABLE PRODUCTS MUTUAL FUNDS
ANNUAL REPORT
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
DECEMBER 31, 1994
THETRAVELERS (logo with umbrella)
THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
<PAGE>
TIMCO (logo with globe)
A COMPANY OF THETRAVELERS (logo with umbrella)
The Travelers Investment Management Company ("TIMCO")
provides equity management and advisory services for the following
Travelers Variable Product Mutual Funds contained in this report:
The Capital Appreciation Fund and the Social Awareness Stock
Portfolio. Additionally, TIMCO is the sub-adviser for Managed
Assets Trust.
TAMIC (logo with globe and lines)
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL CORPORATION
Travelers Asset Management International Corporation
("TAMIC") provides fixed income management and advisory services
for the following Travelers Variable Product Mutual Funds contained
in this report: U.S. Government Securities Portfolio, High Yield
Bond Trust, Managed Assets Trust and Cash Income Trust.
JANUS CAPITAL
CORPORATION (logo with two faces)
Janus Capital Corporation ("Janus") is the sub-adviser for Capital
Appreciation Fund. As sub-adviser, Janus is responsible for the
daily management of Capital Appreciation Fund.
SMITH BARNEY (logo)
An asset management group of Smith Barney, Greenwich Street
Advisors provides management services for the Utilities Portfolio.
<PAGE>
THETRAVELERS (logo with umbrella)
THE TRAVELERS VARIABLE PRODUCTS MUTUAL FUNDS
INVESTMENT ADVISORY COMMENTARY AS OF DECEMBER 31, 1994
ECONOMIC REVIEW AND OUTLOOK
Economic growth kicked into high gear in 1994, and the economy used
up any excess capacity in product and labor markets. The fitful
recovery of the previous three years was replaced by a broad-based
expansion. Unemployment fell to 5.4% at year-end, from 7.0% at the
end of 1993. This robust economic activity was accompanied by few
signs of higher inflation. The Consumer Price Index rose just 2.7%
during 1994, the same as during the prior year. However, certain
commodity prices showed large gains, and there was evidence by
year-end of a modest acceleration in wage gains.
The Federal Reserve ("Fed") started a tightening policy in
February, while there still appeared to be slack in the economy.
Fed actions served to push 3-month T-bill rates up from 3.1% at the
start of the year to 5.7% at year-end. The yield curve rose and
flattened significantly during the year. Yields on one-year
Treasury bills rose by over 350 basis points, while yields on the
30-year bond were up over 150 basis points. At year-end, there
was little evidence that Fed tightening had started to slow growth.
In the fourth quarter, the economy grew at an annual rate of 4.5%,
well above the 2.0-2.5% pace that many economists think is
compatible with price stability.
There is normally a lag of 6-12 months between Federal Reserve
actions and the resulting impact on the economy. Coming into 1994,
Fed policy was very accommodative of economic growth, with real
money market interest rates (adjusted for inflation) close to zero.
Monetary policy became truly restrictive only with the last 2 or 3
rates hikes. With unemployment at levels that many economists view
as inflationary, we expect the Fed to push money market interest
rates somewhat higher in 1995. We think that the Federal Reserve
will succeed in slowing economic growth, and that inflation will
stay below 4% during 1995 and into 1996. However, convincing
evidence of the slowdown may take a while longer to emerge.
FIXED-INCOME MARKET COMMENTARY
Like a neutron bomb, which kills people but leaves buildings
intact, rising interest rates in 1994 decimated complicated
strategies much more than it hurt broad market averages. During
the fourth quarter, Orange County and emerging markets investors
were added to the casualty list, joining the hedge funds and
various corporate users of derivatives that were hurt earlier in
the year. While derivatives and mortgage backed securities have
taken much of the blame for these incidents, the rise in short-term
interest rates hurt any strategy that was based on leverage or
benefited from the prior three years of low short-term rates.
For the year, cash was the best performing asset, while stocks
treaded water and bonds had their worst year in recent history.
The Lehman Long Treasuries index showed a negative return of 7.6%
for the full year 1994. The long end of the yield curve stabilized
late in the year, allowing long Treasuries to outperform cash
during the fourth quarter. For the year as a whole, mortgage
backed securities and corporates outperformed similar duration
Treasuries. Late in the year, corporate spreads widened modestly
with growing concerns over the 1995 economic outlook; as a result,
long corporates underperformed similar duration Treasuries in the
fourth quarter.
<PAGE>
We have been concerned by tight spreads on corporate issues
throughout 1994. We expect issuance of new corporates to be light
in the first half of 1995; this will help to support prices of
corporate issues. Corporates are still likely to underperform
Treasuries if a significant economic slowdown develops. We think
inflation will stay below 4% in 1995. We also expect stable to
modestly lower yields on Treasuries with maturities of 5 years or
longer. If we are correct, bond investors will enjoy real returns,
after inflation, of 4-7% in 1995. If the Federal Reserve is
successful in containing economic growth and inflation, lower
interest rates (stronger bond prices) are likely in 1996.
EQUITY MARKET COMMENTARY
Despite increased pressure by the Federal Reserve Board and a
string of potentially dangerous financial crises, the U.S. stock
market managed to achieve a broad-based gain in the second half of
1994. Surprisingly strong corporate earnings offset the negative
effect of higher interest rates on equity valuations. During the
final six months of 1994, the S&P 500 Stock Index provided a total
return of 4.9%, including dividends. The stocks of small and
medium sized companies provided comparable returns over that
period, but with considerably higher volatility.
Technology stocks led the market during the second half. The
office and business equipment group was up over 25%, owing to
continued booming sales of personal computers and a sharp rebound
in networking stocks. Semi conductor stocks advanced in concert,
reflecting strong demand for memory chips and microprocessors.
Investors also returned to many defensive and recently out-of-favor
"growth" groups in the second half. In the consumer staples
sector, for example, beverage stocks rose 24% on earnings
surprising and improving international growth prospects. In the
health care sector, drug and medical product stocks rebounded over
20%.
On the negative side, rising interest rates and fears of an
impending economic slowdown hurt many interest sensitive and early
cycle groups. Airline, trucking and railroad stocks were down over
10%. Auto stocks were off 8%. Regional banks declined 12%. In the
energy sector, independent producers and drilling companies were
down 12%, due to weaker oil and gas prices and the poor outlook for
new production.
We remain constructive, but cautious, in our outlook for stocks in
1995. With the S&P 500 Stock Index trading at only 14.5 times
operating earnings, the equity market starts the year with
reasonable valuation support. A more stable interest rate
environment could even help to reverse the broad-based market price
to earnings ratio contraction that has occurred over the past year.
Where we think the stock market is most likely to run into problems
is on the earnings front. Corporate earnings are expected to grow
8-10% in 1995, but most of that growth is expected to occur in the
first half of the year. By the third quarter, we expect a
noticeable deceleration in earnings growth. With equity indices
near their all-time highs, the stock market is probably more
vulnerable than the bond market to negative surprises, given the
relative performance of the two asset classes over the past year.
TIMCO (logo of globe) TAMIC (logo globe with lines)
A COMPANY OF THETRAVELERS(logo TRAVELERS ASSET MANAGEMENT
with umbrella) INTERNATIONAL CORPORATION
<PAGE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
Interest rates rose steadily through 1994, with yields on 10-year
Treasuries up over 2 percentage points. In the fourth quarter,
yield curve flattening accelerated; yields on 1 to 2 year
Treasuries rose by over a percentage point, while the yield on the
long bond rose about a tenth of a percentage point. At year end,
only 20 basis points separated the yield on 2-year Treasuries from
the yield on the long bond. Mortgage-backed securities
outperformed similar duration Treasuries. Economic growth remained
strong through year end, but we think the Federal Reserve will
succeed in slowing the economy in 1995. As slower growth becomes
evident, we expect bond yields to stabilize and eventually move
lower.
Early in 1994, the portfolio was underweighted in mortgage-backed
securities relative to the benchmark, which is 50% long Treasuries
and 50% Mortgage Pass Throughs. In the third quarter, we brought
the mortgage-backed weighting closer to the benchmark, and this
helped fourth quarter performance. With a flatter yield curve, we
will look to move away from the maturity barbell that was in place
during 1994. We think interest rates have moved above levels that
are sustainable in the long run; so we are maintaining interest
rate exposure above the benchmark levels. In mortgage-backed
securities, we are focusing on coupons and structures that will
perform well in a stable or declining interest rate environment.
(Line chart representing the following table of numbers)
<TABLE>
<S> <C> <C> <C>
U.S. Government Consumer Price Index Lehman
Securities Government
Portfolio Bond Index
1/24/92 10000 10000 10000
10070 10060 9941
6/92 10340 10141 10334
10740 10205 10844
12/92 10791 10291 10849
11306 10370 11339
6/93 11581 10436 11667
11937 10487 12045
12/93 11815 10573 12005
11264 10638 11641
6/94 11107 10703 11508
10991 10797 11556
12/94 11149 10866 11598
Average Annual Total Returns Ended
December 31, 1994:
1 year -5.64%
</TABLE>
This chart assumes an initial investment of $10,000
made on January 24,1992 (date operations commenced). Returns
include the reinvestment of all distributions at Net Asset Value
and the change in share price for the stated period, but excludes
insurance and administration charges assessed by Travelers
Insurance separate accounts.
Past performance is not predictive of future performance.
Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<S> <C>
ASSETS:
Investment securities, at market value(identified
cost $26,685,496)..................................... $ 24,310,849
Interest receivable .................................... 243,588
-------------
Total Assets..................................... 24,554,437
-------------
LIABILITIES:
Cash overdraft......................................... 12,430
Payable for investment management and advisory fees.... 875
Accrued expenses....................................... 18,967
-------------
Total Liabilities................................ 32,272
-------------
NET ASSETS................................................ $ 24,522,165
-------------
-------------
NET ASSETS REPRESENTED BY:
Paid-in capital........................................ $ 25,705,114
Undistributed net investment income.................... 1,418,225
Accumulated net realized gains (losses) on
investment security transactions..................... (226,527)
Net unrealized depreciation on investment securities... (2,374,647)
-------------
Total net assets (applicable to 2,317,285
shares outstanding at $10.58 per share)........ $ 24,522,165
-------------
-------------
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................ $ 1,599,887
EXPENSES:
Investment management and advisory fees........... $ 82,937
Accounting and audit fees......................... 66,680
Custodian fees.................................... 11,845
Printing and postage.............................. 12,751
Trustees' fees.................................... 5,511
Registration fees................................. 1,938
---------
Total expenses................................. 181,662
------------
Net investment income....................... 1,418,225
------------
REALIZED AND CHANGE IN UNREALIZED GAIN(LOSS) ON
INVESTMENT SECURITIES:
Realized loss from investment security
transactions:
Proceeds from investment securities sold....... 8,022,134
Cost of investment securities sold............. 8,233,405
---------
Net realized loss............................ (211,271)
Change in unrealized gain (loss) on
investment securities:
Unrealized gain at December 31, 1993........... 377,690
Unrealized loss at December 31, 1994...........(2,374,647)
---------
Net change in unrealized gain (loss)
for the year................................ (2,752,337)
------------
Net realized and change in unrealized
gain (loss).............................. (2,963,608)
------------
Net decrease in net assets resulting
from operations................................. $ (1,545,383)
------------
------------
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income............................$ 1,418,225 $ 865,566
Net realized gain (loss) from
investment security transactions................ (211,271) 68,277
Net change in unrealized gain (loss)
on investment securities........................ (2,752,337) 310,644
----------- ----------
Net increase (decrease) in
net assets resulting from operations......... (1,545,383) 1,244,487
----------- ----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income and net short-term
realized gains from investment security
transactions ................................... (883,624) (179,264)
Net long-term realized gains from
investment security transactions................ (63,504) --
----------- ----------
Total distributions to shareholders.......... (947,128) (179,264)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold........................ 7,137,525 16,341,309
Dividend reinvestment............................ 947,128 179,264
Payments for shares redeemed..................... (6,590,182) (1,082,333)
----------- ----------
Net increase in net assets resulting
from capital share transactions.............. 1,494,471 15,438,240
----------- ----------
Net increase (decrease) in net assets...... (998,040) 16,503,463
NET ASSETS:
Beginning of year............................... 25,520,205 9,016,742
---------- ---------
End of year (including undistributed
net investment income as follows:
December, 1994 $1,418,225 and
December, 1993 $865,566).....................$24,522,165 $25,520,205
----------- -----------
----------- -----------
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
<TABLE>
PRINCIPAL MARKET
<S> AMOUNT VALUE
--------- -------
BONDS (37.1%)
COLLATERALIZED MORTGAGE
OBLIGATIONS (37.1%)
Federal Home Loan Mortgage Corp.,
7.00% Pass Through, 2007 $ 1,000,000 $ 895,900
Federal Housing Authority 236,
7.796% Pass Through, 2013 (B) 980,342 942,648
Federal Housing Authority 236,
7.275% Pass Through, 2018 (B), 946,970 892,018
FHLMC Multiclass PC Series 1607,
5.50% Pass Through, 2010 1,066,114 917,530
FHLMC Multiclass PC Series 1663,
6.25% Pass Through, 2023 1,000,000 851,560
FNMA Remic Trust 1993-05,
7.50% Pass Through, 2008 1,000,000 930,730
FNMA Remic Trust 1993-13,
6.50% Pass Through, 2000 1,126,196 988,856
FNMA Remic Trust 1994-22,
5.00% Pass Through, 2023 1,000,000 762,690
Guaranteed Export Certificate 1994-A,
7.12% Sinking Fund, 2006 973,043 924,994
Vendee Mortgage Trust 1992-1,
7.75% Pass Through, 2005 200,000 192,750
Vendee Mortgage Trust 1993-3,
6.50% Pass Through, 2020 1,084,404 723,840
--------
TOTAL BONDS
(Cost $10,033,589) 9,023,516
---------
U.S. GOVERNMENT AGENCY SECURITIES (6.1%)
GNMA 30-Year Single Family,
6.00% Pass Through, 2024 1,524,909 1,272,826
GNMA 30-Year Single Family,
10.00% Pass Through, 2018 82,292 86,639
GNMA 30-Year Single Family,
9.00% Pass Through, 2016 35,692 36,049
GNMA 30-Year Single Family,
9.00% Pass Through, 2019 80,844 81,652
---------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES
(Cost $1,531,891) 1,477,166
---------
U.S. GOVERNMENT SECURITIES (42.8%)
United States of America Treasury,
0.00% Notes, 2010 5,860,000 1,737,724
United States of America Treasury,
7.25% Bonds, 2016 3,850,000 3,557,670
PRINCIPAL MARKET
<S> AMOUNT VALUE
--------- -------
U.S. GOVERNMENT SECURITIES (continued)
United States of America Treasury,
7.50% Bonds, 2016 $ 2,475,000 $ 2,347,389
United States of America Treasury,
7.25% Bonds, 2022 3,000,000 2,768,460
---------
TOTAL U.S. GOVERNMENT
SECURITIES
(Cost $11,721,200) 10,411,243
----------
SHORT-TERM INVESTMENTS (14.0%)
U.S. GOVERNMENT AGENCY SECURITIES (2.0%)
Federal National Mortgage Assoc.,
5.56% due January 25, 1995 500,000 494,437
-------
U.S. GOVERNMENT SECURITIES (4.0%)
United States of America Treasury,
4.81% due January 19, 1995 1,000,000 976,487
-------
REPURCHASE AGREEMENTS (8.0%)
Merrill Lynch Government
Securities, Inc., 5.25% Repurchase
Agreement dated December 30,
1994, due January 3, 1995,
collateralized by: United States
of America Treasury, $2,045,000,
6.5% due April 30, 1999 1,928,000 1,928,000
---------
TOTAL SHORT-TERM INVESTMENTS
(Cost $3,398,815) 3,398,924
---------
TOTAL INVESTMENTS (100%)
(Cost $26,685,496) (A) (C) $ 24,310,849
----------
----------
NOTES
(A) At December 31, 1994, net unrealized depreciation for
all securities was $2,374,647. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over cost of $248 and aggregate gross unrealized depreciation
for all securities in which there was an excess of cost over market
value of $2,374,895.
(B) Management Priced Security.
(C) The cost of investments for federal income tax purposes
is identical.
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS
STOCK PORTFOLIO
In the second half of 1994, equity investors temporarily shifted
their focus away from Fed policy and back to earnings growth.
Through October, the stock market moved broadly higher on the
strength of reported earnings, in spite of rising interest rates
and numerous inflation alarms. Late in the year, however, investor
confidence waned and the market failed to make further gains. For
the six months ending December 31, 1994, the S&P 500 Stock Index
had a positive return of 4.9%, including dividends. During that
period, our Portfolio trailed the unmanaged S&P 500 Stock Index,
but outperformed the majority of socially responsive equity funds
tracked by Lipper in the Growth & Income category.
Because the Portfolio mirrors the sector weightings of the S&P 500
Stock Index, the reasons for our under performance relative to the
index were largely stock-specific. In the utility sector, our
holdings included MCI and Sprint, the long-distance telephone
carriers. Both stocks dropped back in response to earnings
disappointments and recent losses of market share to AT&T. In the
health care sector, we lost ground against the index as a result of
our overweighted positions in United Healthcare and Columbia/HCA
Healthcare, both leaders in market-based healthcare reform. Along
with most HMO and hospital management stocks, these shares weakened
in the fourth quarter as investors focused on the potential impact
of reductions in Medicare/Medicaid payment formulas.
The Portfolio was helped by stock selection in the technology
sector. In particular, the shares of Compaq Computer and Micron
Technology moved higher, in response to continued strong sales of
personal computers to businesses and households. In the
semi-conductor equipment group, new positions in Applied Materials
and Varian Associates also made positive contributions to
performance. Late in the fourth quarter, the fund was also helped
by our overweighted position in a number of newspaper stocks,
including the Tribune Co., Gannett and Dow Jones.
We continue to employ a disciplined approach to stock selection,
emphasizing stocks that compare favorably on the basis of both
valuation and superior earnings trends. Looking ahead to the next
six months, we are cautiously optimistic about the equity market,
based on our view that current valuation levels allow some room for
price to earnings ratio multiple expansion if interest rates
stabilize. We recently trimmed our technology holdings, although
we still maintain core holdings in companies that are well
positioned to benefit from the secular trends toward client/server
computing and wireless personal communications. In the finance
sector, we have reduced our bank holdings because of falling
earnings estimates. We maintain our exposure to a number of
industrial cyclical companies, such as Dow Chemical, Morton
International and Stone Container, whose earnings are just now
beginning to reflect firmer commodity prices.
(Line chart representing the following table of numbers)
<TABLE>
<S> <C> <C> <C>
Social Awareness Stock S&P 500 Stock Index Consumer Price Index
Portfolio
5/1/92 10000 10000 10000
6/30/92 9920 9908 10058
10130 10215 10122
12/31/92 10950 10738 10207
11452 11199 10286
6/30/93 11402 11256 10351
11847 11545 10401
12/31/93 11776 11812 10487
11252 11362 10551
6/30/94 11168 11409 10615
11688 11971 10708
12/31/94 11460 11968 10776
Average Annual Total Returns
Ended December 31, 1994:
1 year -2.69%
</TABLE>
This chart assumes an initial investment of $10,000
made on May 1, 1992 (date operations commenced). Returns include
the reinvestment of all distributions at Net Asset Value and the
change in share price for the stated period, but exclude insurance
and administration charges assessed by Travelers Insurance separate
accounts.
Past performance is not predictive of future performance.
Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
<PAGE>
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS STOCK PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $3,607,016) $ 3,580,584
Cash 128,752
Receivables:
Dividends 8,890
Interest 301
Investment securities sold 265,996
Receivable from Travelers Insurance 75,353
-----------
Total Assets 4,059,876
-----------
LIABILITIES:
Payables:
Investment securities purchased 98,999
Investment management and advisory fees 278
Accrued expenses:
Reimbursable expenses 75,353
Other expenses 5,975
-----------
Total Liabilities 180,605
-----------
NET ASSETS $3,879,271
-----------
-----------
NET ASSETS REPRESENTED BY:
Paid-in capital $3,804,668
Undistributed net investment income 51,650
Accumulated net realized gains (losses) on investment
security transactions 49,385
Net unrealized depreciation on investment securities (26,432)
-----------
Total net assets (applicable to 351,002 shares
outstanding at $11.05 per share) $3,879,271
-----------
-----------
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS STOCK PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 91,034
Interest 5,978
-----------
Total income $ 97,012
EXPENSES:
Investment management and advisory fees 23,474
Accounting and audit fees 63,682
Custodian fees 14,820
Printing and postage 12,752
Trustees' fees 5,512
Registration fees 475
-----------
Total expenses before reimbursement from Travelers Insurance 120,715
Less: Reimbursement from Travelers Insurance (75,353)
-----------
Net expenses 45,362
--------
Net investment income 51,650
--------
REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold 5,144,675
Cost of investment securities sold 5,094,000
-----------
Net realized gain 50,675
Change in unrealized gain (loss) on investment securities:
Unrealized gain at December 31, 1993 168,804
Unrealized loss at December 31, 1994 (26,432)
-----------
Net change in unrealized gain (loss) for the year (195,236)
--------
Net realized and change in unrealized gain (loss) (144,561)
--------
Net decrease in net assets resulting from operations $ (92,911)
--------
--------
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS STOCK PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income $ 51,650 $ 36,012
Net realized gain from investment security transactions 50,675 50,367
Net change in unrealized gain (loss) on investment securities (195,236) 75,275
--------- ---------
Net increase (decrease) in net assets resulting from operations (92,911) 161,654
--------- ---------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income and net short-term realized gains from
investment security transactions (70,411) (18,115)
Net long-term realized gains from investment security transactions (17,258) --
--------- ---------
Total distributions to shareholders (87,669) (18,115)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds for shares sold 1,378,970 2,171,936
Dividend reinvestment 87,669 18,115
Payments for shares redeemed (768,126) (366,665)
--------- ---------
Net increase in net assets resulting from capital share transactions 698,513 1,823,386
--------- ---------
Net increase in net assets 517,933 1,966,925
NET ASSETS:
Beginning of year 3,361,338 1,394,413
--------- ---------
End of year (including undistributed net investment income as follows:
December, 1994 $51,650 and December, 1993 $36,012) $ 3,879,271 $ 3,361,338
--------- ---------
--------- ---------
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
SOCIAL AWARENESS STOCK PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
NO. OF SHARES MARKET VALUE
------------- ------------
<S> <C> <C>
COMMON STOCKS (96.0%)
AGRICULTURE (0.3%)
Dole Food Co., Inc. 400 $ 9,200
-------
AMUSEMENTS (1.2%)
Walt Disney Co. 900 41,513
-------
BANKING (6.4%)
Banc One Corp. 700 17,762
Bank of Boston Corp. 500 12,937
Barnett Banks, Inc. 200 7,675
Chase Manhattan Corp. 200 6,875
Chemical Banking Corp. 300 10,763
Citicorp 700 28,963
First Interstate Bancorp 100 6,763
First Union Corp. 800 33,100
Mellon Bank Corp. 600 18,375
MBNA Corp. 750 17,531
NationsBank Corp. 700 31,588
Norwest Corp. 800 18,700
Signet Banking Corp. 100 2,863
Wells Fargo & Co. 100 14,500
-------
228,395
-------
CHEMICALS, PHARMACEUTICALS AND
ALLIED PRODUCTS (15.9%)
Abbott Laboratories 1,100 35,887
Air Products & Chemicals, Inc. 200 8,925
Amgen (A) 100 5,893
Bristol-Myers Squibb Co. 1,400 81,025
Clorox Co. 100 5,888
Dow Chemical Co. 300 20,175
E.I. Dupont de Nemours & Co. 800 45,000
Eastman Chemical Co. 200 10,100
Eli Lilly & Co. 400 26,250
Forest Labs, Inc. (A) 100 4,662
Georgia Gulf Corp. (A) 300 11,663
Great Lakes Chemical Corp. 200 11,400
Johnson & Johnson 800 43,800
Merck & Co., Inc. 1,200 45,750
Morton International, Inc. 900 25,650
Pfizer, Inc. 500 38,625
Praxair, Inc. 600 12,300
Procter & Gamble Co. 1,200 74,400
Schering-Plough Corp. 700 51,800
Union Carbide Corp. 300 8,813
-------
568,006
-------
No. of Market
Shares Value
-------- ---------
COMMUNICATION (8.0%)
AirTouch Communications (A) 400 $ 11,650
Ameritech Corp. 1,200 48,450
Bellsouth Corp. 800 43,300
Capital Cities ABC, Inc. 300 25,575
CBS, Inc. 300 16,612
MCI Communications Corp. 1,500 27,655
NYNEX Corp. 100 3,675
Pacific Telesis Group 400 11,400
Southwestern Bell Corp. 1,000 40,375
Sprint Corp. 700 19,338
Tele-Communications, Inc. (A) 800 17,450
U.S. West, Inc. 400 14,250
Viacom International, Inc. (A) 24 999
Viacom International, Inc., Warrent (A) 300 338
Viacom International, Inc., Cl. B (A) 181 7,353
-------
288,420
-------
CONTRACTORS (0.4%)
Fluor Corp. 300 12,937
-------
ELECTRICAL AND ELECTRONIC MACHINERY (2.7%)
Advanced Micro Device (A) 400 9,950
American Power Conversion (A) 400 6,525
General Instrument Corp. (A) 400 12,000
Intel Corp. 700 44,625
Micron Technology 300 13,237
Varian Associates, Inc. 200 7,000
Whirlpool Corp. 100 5,025
-------
98,362
-------
FINANCE (4.5%)
American Express Co. 300 8,850
Dean Witter Discover & Co. 400 13,550
Federal Home Loan Corp. 700 35,350
Federal National Mortgage Assoc. 500 36,437
Green Tree Financial Corp. 500 15,188
Lehman Brothers Holding, Inc. 700 10,325
Merrill Lynch & Co., Inc. 400 14,300
SunAmerica, Inc. 100 3,625
Transamerica Corp. 500 24,875
-------
162,500
-------
<PAGE>
STATEMENT OF INVESTMENTS -- CONTINUED
<CAPTION>
NO. OF SHARES MARKET VALUE
------------- ------------
<S> <C> <C>
FOOD (6.2%)
Coca-Cola Co. 1,600 $82,400
Conagra, Inc. 700 21,875
General Mills, Inc. 100 5,700
Hershey Foods Corp. 100 4,837
IBP, Inc. 700 21,175
Kellogg Co. 400 23,250
PepsiCo, Inc. 1,200 43,500
Quaker Oats Co. 200 6,150
Unilever NV 100 11,650
-------
220,537
-------
INSURANCE (3.7%)
Aetna Life & Casualty Co. 200 9,425
American General Corp. 200 5,650
American International Group 400 39,200
Chubb Corp. 200 15,475
Health Systems International, Inc. (A) 400 12,150
U.S. Healthcare, Inc. 450 18,506
United Healthcare Corp. 500 22,562
UNUM Corp. 200 7,550
USF&G Corp. 200 2,725
-------
133,243
-------
LUMBER AND WOOD PRODUCTS (0.8%)
Georgia-Pacific Corp. 200 14,300
Weyerhaeuser Co. 400 15,000
-------
29,300
-------
MACHINERY (6.3%)
Applied Materials (A) 500 21,000
Briggs & Stratton Corp. 200 6,550
Caterpillar, Inc. 300 16,538
Cisco Systems, Inc. (A) 400 14,025
Clark Equipment Co. (A) 200 10,850
Compaq Computer Corp. (A) 800 31,600
Deere & Co. 200 13,250
Dover Corp. 300 15,488
International Business Machines Corp. 800 58,800
Pitney Bowes, Inc. 600 19,050
Varity Corp. (A) 500 18,125
-------
225,276
-------
METAL PRODUCTS (2.7%)
Aluminum Company of America 370 32,051
Alumax, Inc. (A) 300 8,513
Gillette Co. 300 22,425
Nucor Corp. 400 22,200
USX-U.S. Steel Group 300 10,650
-------
95,839
-------
No. of Market
Shares Value
-------- ---------
MINING (0.7%)
American Barrick Resources Corp. 700 $ 15,575
Placer Dome, Inc. 500 10,875
-------
26,450
-------
MISCELLANEOUS MANUFACTURING (2.7%)
Callaway Golf Co. 600 19,875
Eastman Kodak Co. 400 19,100
Emerson Electric Co. 200 12,500
Medtronic, Inc. 400 22,250
Thermo Electronics Corp. (A) 300 13,463
Xerox Corp. 100 9,900
-------
97,088
-------
OIL & GAS (0.9%)
Anadarko Petroleum 400 15,400
Pogo Producing Co. 300 5,325
Schlumberger Ltd. 200 10,075
-------
30,800
-------
PAPER AND ALLIED PRODUCTS (2.3%)
Champion International Corp. 300 10,950
International Paper Co. 200 15,075
Kimberly Clark Corp. 400 20,200
Mead Corp. 300 14,587
Stone Container Corp. (A) 1,300 22,425
-------
83,237
-------
PETROLEUM REFINING AND
RELATED INDUSTRIES (3.8%)
Amoco Corp. 700 41,387
Kerr McGee Corp. 300 13,800
Phillips Petroleum Co. 900 29,475
Sun Co., Inc. 400 11,500
Tosco Corp. 600 17,475
Unocal Corp. 800 21,800
-------
135,437
-------
PRINTING, PUBLISHING AND
ALLIED INDUSTRIES (1.6%)
American Greeting Corporation 200 5,387
Dow Jones & Co., Inc. 300 9,300
Time Warner, Inc. 600 21,075
Tribune Co. 400 21,900
-------
57,662
-------
<PAGE>
STATEMENT OF INVESTMENTS -- CONTINUED
<CAPTION>
NO. OF SHARES MARKET VALUE
------------- ------------
<S> <C> <C>
RETAIL (6.9%)
Albertsons, Inc. 400 $ 11,600
Home Depot, Inc. 500 23,000
J.C. Penney Co. 400 17,850
Kmart Corp. 700 9,100
Kroger Co. (A) 700 16,888
Lowe's Co.'s, Inc. 200 6,950
May Department Stores 400 13,500
McDonalds Corp. 900 26,325
Sears Roebuck & Co. 700 32,200
The GAP, Inc. 200 6,100
Toys R Us (A) 200 6,100
Wal-Mart Stores, Inc. 3,300 70,125
Walgreen Co. 200 8,750
-------
248,488
-------
RUBBER AND PLASTIC PRODUCTS (1.7%)
Armstrong World Industries 500 19,250
Goodyear Tire & Rubber Co. 300 10,088
Premark International, Inc. 300 13,425
Reebok International, Ltd. 500 19,750
-------
62,513
-------
SERVICES (3.8%)
Columbia HCA Healthcare Corp. 1,100 40,150
Computer Associates International 200 9,700
Dun & Bradstreet Corp. 200 11,000
FHP International Corp. (A) 200 5,100
Microsoft (A) 700 42,875
Omnicom Group, Inc. 300 15,525
Oracle Systems Corp. (A) 300 13,275
-------
137,625
-------
STONE, CLAY, GLASS AND
CONCRETE PRODUCTS (1.0%)
Minnesota Mining &
Manufacturing Co. 700 37,362
-------
TEXTILE MILL PRODUCTS (0.3%)
VF Corp. 200 9,725
-------
TRANSPORTATION (2.5%)
AMR, Inc. (A) 200 10,650
Burlington Northern Railroad 300 14,437
Chicago & North Western Transportation (A) 500 9,625
Consolidated Freightways 400 8,950
Delta Airlines, Inc. 100 5,050
Illinois Central Corp. 400 12,300
No. of Market
Shares Value
-------- ---------
Norfolk Southern Corp. 100 6,063
Southwest Airlines 700 11,725
Union Pacific Corp. 200 9,125
-------
87,925
-------
TRANSPORTATION MANUFACTURING (2.4%)
Echlin, Inc. 400 12,000
Ford Motor Co. 2,100 58,800
PACCAR, Inc. 345 15,180
-------
85,980
-------
UTILITIES (6.1%)
American Electric Power Co. 400 13,150
Baltimore Gas & Electric Co. 400 8,850
Browning and Ferris Ind. 300 8,512
Carolina Power & Light Co. 300 7,988
Central & Southwest Corp. 500 11,313
Duke Power Co. 400 15,250
Florida Power & Light Co. 400 14,050
NIPSCO Industries, Inc. 400 11,900
Pacific Gas & Electric Co. 200 4,875
Panhandle Eastern Corp. 400 7,900
Peco Energy Co. 600 14,700
Portland General Electric Co. 500 9,625
Public Service Co. of Colorado 400 11,750
Public Service Enterprises Group 1,000 26,500
Southern Co. 1,400 28,000
SCE Corp. 600 8,775
Wheelabrator Technologies, Inc. 400 5,900
WMX Technologies, Inc. 300 7,874
-------
216,912
-------
WHOLESALE TRADE (0.2%)
Alco Standard Corp. 100 6,275
-------
TOTAL COMMON STOCKS
(COST $3,463,013) 3,437,007
---------
CALL OPTIONS (1.2%)
S&P 400 Stock Index,
Exp.June, 1995 500 44,750
---------
TOTAL CALL OPTIONS
(COST $45,365) 44,750
---------
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INVESTMENTS -- CONTINUED
<S> <C> <C>
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
SHORT-TERM INVESTMENTS (2.8%)
U.S. Government Securities (2.8%)
United States of America Treasury,
5.77% due March 9,1995 $ 100,000 $ 98,827
TOTAL SHORT-TERM INVESTMENTS
(Cost $98,638) 98,827
TOTAL INVESTMENTS (100%)
(Cost $3,607,016) (B) (C) $ 3,580,584
------------
------------
NOTES
(A) Non-income Producing Security.
(B) At December 31, 1994, net unrealized depreciation for all securities
was $26,432. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over cost of $167,188 and aggregate gross unrealized depreciation
for all securities in which there was an excess of cost over market
value of $193,620.
(C) The cost of investments for federal income tax purposes
amounted to $3,625,802. Gross unrealized appreciation and depreciation
of investments, based on identified tax cost, at December 31, 1994,
were as follows:
Gross unrealized appreciation $ 159,533
Gross unrealized depreciation (204,751)
--------
Net unrealized depreciation $ (45,218)
--------
--------
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
This past year was a difficult one for utility (electric,
telecommunication and natural gas) investors as this market sector
experienced substantial price declines. The most significant
declines were recorded by the electric utility companies,
reflecting both a substantial rise in long-term interest rates and
investor concerns about the fundamental changes occurring within
the industry. The electric utility industry has begun a move from
a highly regulated one, to one with increased competition in the
sale of electricity. The goal is to reduce the cost of electricity
and improve industry efficiency. These changes will require
companies to reformulate their corporate strategies and will
generally lead to slower earnings and dividend growth. We are
confident that the industry will survive these structural changes
as it provides an essential service. The decade of the 1990's will
be viewed as part of the competitive evolution in the electric
utility industry. Utilities faced the oil crisis of the 1970's and
the nuclear construction cycle of the 1980's and subsequently went
to each new highs for investors with a long-term investment
horizon.
We recognized these factors affecting utility stocks early in the
year and maintained a very cautious investment strategy. The
Portfolio held a very large cash position during the first half of
the year which enabled us to monitor the fixed income markets'
reaction to stronger-than-expected economic growth and the
corresponding decline in share prices for utility issues. During
the second half of the year, we gradually began to invest in a
combination of electric utility, telecommunication and natural gas
companies that have positive investment outlooks and sound
corporate strategies. We placed special emphasis on those electric
companies with favorable competitive positions and more clearly
defined growth rates. This leads to investments in FPL Group and
NIPSCO in the electric company sector, Ameritech, Bell South and
AT&T in the telecommunication sector and Coastal Corporation and
Tenneco in the natural gas sector. Our investment strategy focuses
on attractive relative valuation and has lead to additional
holdings in those issues that appear attractively priced when
compared to their peer group averages.
Our outlook for 1995 is more positive as we feel the substantial
period of underperformance by utility issues has ended. Investors
are returning to utilities for their traditional defensive
characteristics. During the past several months several market
strategists and utility analysts have increased their fixed income
and utility portfolio allocations. We continue to recommend
utilities as part of a well-balanced, diversified investment
portfolio offering current income and long-term growth. A slowing
rate of economic growth during 1995 should provide a favorable
long-term interest rate outlook which is positive for utilities.
(Line chart representing the following table of numbers)
<TABLE>
<S> <C> <C> <C>
Utilities Portfolio Consumer Price Index S & P 500 Stock
Index
2/4/94 10000 10000 10000
10010 10023 9770
3/94 10000 10057 9345
4/94 10100 10071 9466
5/94 10070 10091 9621
6/94 9889 10119 9384
7/94 10210 10153 9695
8/94 10300 10187 10089
9/94 10070 10208 9846
10/94 10160 10215 10072
11/94 10090 10243 9702
12/94 10169 10273 9844
Average Annual Total Returns Ended December 31, 1994:
1 year 1.70%
</TABLE>
This chart assumes an initial investment of $10,000
made on February 4, 1994. Returns include the reinvestment of all
distributions at Net Asset Value and the change in share price for
the stated period, but exclude insurance and administration charges
assessed by Travelers Insurance separate accounts.
Past performance is not predictive of future performance.
Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
<PAGE>
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $6,212,686) $ 6,135,137
Receivables:
Dividends 23,037
Interest 3,655
Investment securities sold 207,193
Receivable from Travelers Insurance 75,274
-------
Total Assets 6,444,296
---------
LIABILITIES:
Cash overdraft 837
Payable for investment securities purchased 604,936
Accrued expenses:
Reimbursable expenses 75,274
Other expenses 6,590
---------
Total Liabilities 687,637
---------
NET ASSETS $ 5,756,659
---------
---------
NET ASSETS REPRESENTED BY:
Paid-in capital $ 5,683,717
Undistributed net investment income 139,138
Accumulated net realized gains (losses) on investment
security transactions 11,353
Net unrealized depreciation on investment securities (77,549)
---------
Total net assets (applicable to 565,761 shares outstanding
at $10.17 per share) $ 5,756,659
-------------
-------------
See Notes to Financial Statements
</TABLE>
<PAGE>
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 4, 1994 (DATE OPERATIONS COMMENCED)
TO DECEMBER 31, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 126,486
Interest 54,578
--------
Total income $ 181,064
EXPENSES:
Investment management and advisory fees 21,804
Accounting and audit fees 60,878
Custodian fees 18,000
Printing and postage 12,751
Trustees' fees 1,911
Registration fees 1,856
------
Total expenses before
reimbursement from Travelers
Insurance 117,200
Less: Reimbursement from
Travelers Insurance (75,274)
-------
Net expenses 41,926
-----------
Net investment income 139,138
-----------
REALIZED AND CHANGE IN UNREALIZED LOSS ON
INVESTMENT SECURITIES:
Realized gain from investment security
transactions:
Proceeds from investment securities sold 955,786
Cost of investment securities sold 944,433
--------
Net realized gain 11,353
Unrealized loss on investment securities:
December 31, 1994 (77,549)
--------
Net realized and change in unrealized loss (66,196)
--------
Net increase in net assets resulting from operations $ 72,942
---------
---------
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FEBRUARY 4, 1994 (DATE OPERATIONS COMMENCED)
TO DECEMBER 31, 1994
<CAPTION>
1994
----
<S> <C>
OPERATIONS:
Net investment income $ 139,138
Net realized gain from investment
security transactions 11,353
Net change in unrealized loss on
investment securities (77,549)
--------
Net increase in net assets resulting
from operations 72,942
------
CAPITAL SHARE TRANSACTIONS:
Proceeds for shares sold 7,595,972
Payments for shares redeemed (1,912,255)
-----------
Net increase in net assets
resulting from capital share
transactions 5,683,717
-----------
Net increase in net assets 5,756,659
NET ASSETS:
Beginning of period --
------------
End of period (including
undistributed net investment
income of $139,138) $ 5,756,659
------------
------------
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
THE TRAVELERS SERIES TRUST
UTILITIES PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
NO. OF MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (70.5%)
COMMUNICATION (17.8%)
Ameritech Corp. 3,500 $ 141,312
AT&T Corp. 5,000 251,250
Bell Atlantic Corp. 1,000 49,750
Bellsouth Corp. 5,000 270,625
GTE Corp. 2,000 60,750
NYNEX Corp. 2,000 73,500
Pacific Telesis Group 2,500 71,250
Sprint Corp. 2,500 69,063
U.S. West, Inc. 3,000 106,875
-----------
1,094,375
-----------
UTILITIES (52.7%)
Central & Southwest Corp. 2,000 45,250
Cinergy Corp. 4,000 93,500
Coastal Corp. 7,500 193,125
CMS Energy Corp. 6,000 137,250
DPL, Inc. 2,000 41,000
Eastern Utility Assoc. 5,000 110,000
Florida Power & Light Co. 5,000 175,625
General Public Utilities 5,000 131,250
IPALCO Enterprises 5,000 150,000
New York State Electric & Gas Co. 6,000 114,000
Northeast Utilities, Inc. 5,000 108,125
NIPSCO Industries, Inc. 6,500 193,375
Pacific Gas & Electric Co. 5,000 121,875
Pacificorp 5,000 90,625
Peco Energy Co. 5,000 122,500
Public Service Co. of New Mexico (A) 5,000 65,000
Public Service Co. of Colorado 3,000 88,125
Public Service Enterprises Group 4,000 106,000
Southern Co. 5,000 100,000
SCE Corp. 5,000 73,125
Tenneco, Inc. 5,000 212,500
Texas Utilities Co. 6,500 208,000
TECO Energy, Inc. 5,000 100,625
Unicom Corp. 5,000 120,000
Westcoast Energy, Inc. 5,000 79,375
Western Resources, Inc. 2,000 57,250
Williams Companies 2,500 62,812
Wisconsin Energy 5,000 129,375
-----------
3,229,687
-----------
TOTAL COMMON STOCKS
(Cost $4,400,210) 4,324,062
-----------
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
---------------- ------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (16.2%)
United States of America Treasury,
7.75% Notes, 1999 $ 500,000 $ 498,285
United States of America Treasury,
7.50% Notes, 1996 500,000 498,790
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $998,476) 997,075
-----------
SHORT-TERM INVESTMENTS (13.3%)
Barclays Bank PLC,
5.50% Repurchase Agreement
dated December 30, 1994 due
January 3, 1995 collateralized
by United States of America Treasury, $815,000,
7.25% due August 31, 1996 814,000 814,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $814,000) 814,000
-----------
TOTAL INVESTMENTS (100%) (Cost $6,212,686) (B) (C) $ 6,135,137
-----------
-----------
NOTES
(A) Non-Income Producing Security.
(B) At December 31, 1994, net unrealized depreciation for
all securities was $77,549. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market
value over cost of $72,234 and aggregate gross unrealized depreciation
for all securities in which there was an excess of cost over market
value of $149,783.
(C) The cost of investments for federal income tax purposes
is identical.
See Notes to Financial Statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Series Trust (the "Series Trust") is a Massachusetts
business trust registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment
company. The Declaration of Trust authorizes the shares of the
Series Trust to be divided into two or more series. As of December
31, 1994, the Series Trust consisted of three series: U.S.
Government Securities Portfolio, Social Awareness Stock Portfolio
and Utilities Portfolio (the "Portfolios"). Shares in each
Portfolio are currently offered, without a sales charge, to
separate accounts of The Travelers Insurance Company ("Travelers
Insurance"), an indirect wholly owned subsidiary of The Travelers
Inc., in connection with the issuance of certain variable annuity
and variable life insurance contracts.
The following is a summary of significant accounting policies
consistently followed by each Portfolio in the preparation of its
financial statements.
SECURITY VALUATION.
Investments in securities traded on a national securities exchange
are valued at the last reported sale price as of the close of
business of the New York Stock Exchange on the last business day of
the year; securities traded on the over-the-counter market and
listed securities with no reported sales are valued at the mean
between the last reported bid and asked prices or on the basis of
quotations received from a reputable broker or other recognized
source.
When market quotations are not considered to be readily available
for long-term corporate bonds and notes, such investments are
generally stated at fair value on the basis of valuations furnished
by a pricing service. These valuations are determined for normal
institutional-size trading units of such securities using methods
based on market transactions for comparable securities and various
relationships between securities which are generally recognized by
institutional traders. Securities, including restricted
securities, for which pricing services are not readily available
are valued by management at prices which it deems in good faith to
be fair.
Short-term investments for which a quoted market price is available
are valued at market. Short-term investments for which there is no
reliable quoted market price are valued by computing a market value
based upon quotations from dealers or issuers for securities of a
similar type, quality and maturity.
FUTURES CONTRACTS.
Each Portfolio uses stock index futures contracts, and may also use
interest rate futures contracts, as a substitute for the purchase
or sale of individual securities. When each Portfolio enters into
a futures contract, it agrees to buy or sell a specified index of
stocks, or debt securities, at a future time for a fixed price,
unless the contract is closed prior to expiration. Each Portfolio
is obligated to deposit with a broker an "initial margin"
equivalent to a percentage of the face, or notional value of the
contract.
It is each Portfolio's practice to hold short-term investments in
an amount at least equal to the notional value of outstanding
futures contracts. Generally, futures contracts are closed prior
to expiration.
Futures contracts purchased by each Portfolio are priced and
settled daily; accordingly, changes in daily prices are recorded as
realized gains or losses and no asset is recorded in the Statements
of Investments. However, when each Portfolio holds open futures
contracts, it assumes a market risk generally equivalent to the
underlying market risk of changes in the value of the specified
indexes associated with the futures contract.
OPTIONS.
Each Portfolio may purchase index or individual equity put or call
options, thereby obtaining the right to sell or buy a fixed number
of shares of the underlying asset at the stated price on or before
the stated expiration date. Each Portfolio may sell the options
before expiration. Options held in each Portfolio are listed on
either national securities exchanges or on over-the-counter
markets, and are short-term contracts with a duration of less than
nine months. The market value of the options will be the latest
sale price at the close of the New York Stock Exchange, or, in the
absence of such sale, the latest bid quotation.
<PAGE> NOTES TO FINANCIAL STATEMENTS -- CONTINUED
REPURCHASE AGREEMENTS.
When each Portfolio enters into a repurchase agreement (a purchase
of securities whereby the seller agrees to repurchase the
securities at a mutually agreed-upon date and price), the
repurchase price of the securities will generally equal the amount
paid by each Portfolio plus a negotiated interest amount. The
seller under the repurchase agreement will be required to provide
to each Portfolio securities (collateral) whose market value,
including accrued interest, will be at least equal to 102% of the
repurchase price. Each Portfolio monitors the value of collateral
on a daily basis. Repurchase agreements will be limited to
transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Each Portfolio's
custodian will take actual or constructive receipt of all
securities underlying repurchase agreements until such agreements
expire.
TAXES.
Each Portfolio has qualified, and intends to continue to qualify
each year, as a "regulated investment company" under Subchapter M
of the Internal Revenue Code of 1986, as amended. As a regulated
investment company, each Portfolio is relieved of any federal
income tax liability by distributing all of its net taxable
investment income and net taxable capital gains, if any, to its
shareholders. Each Portfolio further intends to avoid excise tax
liability by distributing substantially all of its investment
income. Therefore, no federal income tax provision has been made
by each Portfolio in its financial statements. As of December 31,
1994, the U.S. Government Securities Portfolio had a capital loss
carryover of $212,281, which may be available to offset any future
realized taxable capital gains, to the extent provided by
regulations. This amount expires during the year 2002.
OTHER.
Security transactions are accounted for on the trade date.
Interest income is recorded on the accrual basis and dividend
income is recorded on the ex-dividend date. Distributions to
shareholders are recorded at the close of business on the record
date.
2. INVESTMENTS
Purchases and sales of securities other than short-term investments
aggregated $8,409,218 and $3,361,787, respectively, for U.S.
Government Securities Portfolio; $5,198,931 and $4,749,495,
respectively, for Social Awareness Stock Portfolio; and $5,344,642
and $955,786, respectively, for Utilities Portfolio for the period
ended December 31, 1994. Realized gains and losses from security
transactions are reported on an identified cost basis.
The market value of options held by Social Awareness Stock
Portfolio was $44,750 at December 31, 1994. Net realized gains
(losses) from options transactions were ($3,020) and $3,922 for the
years ended December 31, 1994 and 1993, respectively. These gain
(losses) are included in the net realized gain from investment
securities transactions in both the Statement of Operations and the
Statement of Changes in Net Assets. The market value of options is
included on the Statement of Assets and Liabilities as investment
securities at market value.
3. PORTFOLIO CHARGES
Investment management and advisory fees for U.S. Government
Securities Portfolio are calculated daily at an annual rate of
0.3233% of the Portfolio's average net asset value. These fees are
paid to Travelers Asset Management International Corporation, an
indirect wholly owned subsidiary of The Travelers Inc.
Investment management and advisory fees for Social Awareness Stock
Portfolio are calculated daily at annual rates which start at 0.65%
and decrease, as net assets increase, to 0.40% of the Portfolio's
average net asset value. These fees are paid to The Travelers
Investment Management Company, an indirect wholly owned subsidiary
of The Travelers Inc.
Investment management and advisory fees for Utilities Portfolio are
calculated daily at an annual rate of 0.65% of the Portfolio's
average net asset value. These fees are paid to Greenwich Street
Advisors, a division of Mutual Management Corporation which is an
indirect wholly owned subsidiary of The Travelers Inc.
Travelers Insurance has agreed to reimburse the Portfolios for the
amount by which each Portfolio's aggregate annualized operating
expenses, excluding brokerage commissions and any interest charges
and taxes, exceed 1.25% of each Portfolio's average net assets.
Trustees and officers of the Series Trust, who are also officers
and employees of The Travelers Inc., or its subsidiaries, receive
no compensation directly from the Series Trust.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
4. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust authorizes the issuance of an unlimited
number of shares of beneficial interest without par value.
Transactions in shares of each Portfolio were as follows:
<TABLE>
U.S. GOVERNMENT SECURITIES PORTFOLIO
------------------------------------
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C>
1994 1993
----------- -----------
Shares sold............................. 655,046 1,437,014
Shares redeemed......................... (616,041) (95,094)
Shares issued in reinvestment of distributions:
from net investment income and net
short-term realized gains........... 77,901 16,522
from net long-term realized gains..... 5,990 --
----------- -----------
Net..................................... 122,896 1,358,442
----------- -----------
----------- -----------
SOCIAL AWARENESS STOCK PORTFOLIO
--------------------------------
FOR THE YEARS ENDED DECEMBER 31,
1994 1993
----------- -----------
Shares sold............................. 122,407 191,902
Shares redeemed......................... (67,708) (32,203)
Shares issued in reinvestment of distributions:
from net investment income and net
short-term realized gains........... 6,067 1,639
from net long-term realized gains..... 1,517 --
----------- -----------
Net..................................... 62,283 161,338
----------- -----------
----------- -----------
UTILITIES PORTFOLIO
-------------------
February 4,* to
December 31,
1994
-----------
Shares sold............................. 754,802
Shares redeemed......................... (189,041)
-----------
Net..................................... 565,761
-----------
-----------
</TABLE>
*Date operations commenced.
As of December 31, 1994, all outstanding shares of beneficial
interest of each Portfolio were owned by The Travelers Fund U for
Variable Annuities and/or The Travelers Fund UL for Variable Life
Insurance, both of which are separate accounts of Travelers
Insurance.
5. SUBSEQUENT EVENT
On January 27, 1995, the Board of Trustees declared a distribution
of net investment income of $0.60 per share from the U.S.
Government Securities Portfolio; a distribution of net investment
income of $0.14 per share and a distribution from net long-term
realized gains of $0.18 per share from the Social Awareness Stock
Portfolio; and a distribution of net investment income and net
short-term realized gains of $0.24 per share from the Utilities
Portfolio, payable on January 30, 1995, to shareholders of record
as of January 27, 1995. These distributions are not reflected in
the accompanying financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
6.FINANCIAL HIGHLIGHTS*
(Per share data for a share outstanding
throughout each period.)
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES PORTFOLIO
JANUARY 24,**
FOR THE YEARS ENDED TO
DECEMBER 31 DECEMBER 31,
--------------------- -------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
PER SHARE DATA:
- ---------------
Net asset value, beginning of period $ 11.63 $ 10.79 $ 10.00
Income from operations
- ----------------------
Net investment income 0.60 0.57 0.53
Net gains or losses on securities
(realized and unrealized) (1.23) 0.44 0.26
------ ----- -----
Total from investment operations (0.63) 1.01 0.79
LESS DISTRIBUTIONS
- ------------------
Distributions from net investment income
and short-term realized gains (0.39) (0.17) --
Distributions from long-term realized gains (0.03) -- --
------- ------- -------
Total distributions (0.42) (0.17) --
Net asset value, end of period $ 10.58 $ 11.63 $ 10.79
------- ------- -------
------- ------- -------
TOTAL RETURN***
- ------------ (5.64)% 9.48% 7.90%
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (thousands) $ 24,522 $ 25,520 $ 9,017
Ratio of expenses to average net assets+ 0.71% 0.58% 0.38%#
Ratio of net investment income
to average net assets 5.56% 5.04% 4.72%#
Portfolio turnover rate 16% 51% 25%
</TABLE>
* The information set forth in Note 6 replaces the data
presented in prior periods as supplementary information.
** Date operations commenced.
*** Total return is determined by dividing the increase
(decrease) in value of a share during the period, after reflecting
the reinvestment of dividends declared during the period by the beginning
of period share price. As described in Note 1, shares in the U.S.
Government Securities Portfolio are only sold to Travelers Insurance
separate accounts in connection with the issuance of variable annuity
and variable life insurance contracts. The total return does not
reflect the deduction of any contract charges or fees assessed by
Travelers Insurance separate accounts. For the periods less than
one year, total returns are not annualized.
+ The ratio of expenses to average net assets for 1992-1993
reflects an expense reimbursement by Travelers Insurance in connection
with voluntary expense limitations. Without the expense reimbursement,
the ratios of operating expenses to average net assets would have
been 0.77% and 0.72% for the year ended December 31, 1993 and the
period ended December 31, 1992, respectively. For the year ended
December 31, 1994, there was no expense reimbursement by Travelers
Insurance in connection with the voluntary expense limitations described
in Note 3.
# Annualized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
7. FINANCIAL HIGHLIGHTS*
(Per share data for a share outstanding
throughout each period.)
<TABLE>
SOCIAL AWARENESS STOCK PORTFOLIO
<CAPTION> MAY 1**
FOR THE YEARS ENDED TO
DECEMBER 31 DECEMBER 31,
--------------------- -------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
PER SHARE DATA:
- ---------------
Net asset value, beginning of period $ 11.64 $ 10.95 $ 10.00
Income from operations
- ----------------------
Net investment income 0.16 0.17 0.16
Net gains or losses on securities
(realized and unrealized) (0.45) 0.65 0.79
------ ------- -------
Total from investment operations (0.29) 0.82 0.95
Less distributions
- ------------------
Distributions from net investment income
and short-term realized gains (0.24) (0.13) --
Distributions from long-term realized gains (0.06) -- --
------ ------ ------
Total distributions (0.30) (0.13) --
Net asset value, end of period $ 11.05 $ 11.64 $ 10.95
------- ------- -------
------- ------- -------
TOTAL RETURN*** (2.69)% 7.55% 9.50%
- ---------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (thousands) $ 3,879 $ 3,361 $ 1,394
Ratio of expenses to average
net assets@ 1.25% 1.05% 0.71%#
Ratio of net investment income to
average net assets 1.43% 1.50% 2.22%#
Portfolio turnover rate 137% 60% 56%
</TABLE>
* The information set forth in Note 7 replaces the data
presented in prior periods as supplementary information.
** Date operations commenced.
*** Total return is determined by dividing the increase
(decrease) in value of a share during the period, after reflecting
the reinvestment of dividends declared during the period, by the beginning
of period share price. As described in Note 1, shares in the Social
Awareness Stock Portfolio are only sold to Travelers Insurance separate
accounts in connection with the issuance of variable annuity contracts. The
total return does not reflect contract charges or fees assessed by
Travelers Insurance separate accounts. For the periods less than one
year, total returns are not annualized.
+ The ratio of expenses to average net assets reflects
an expense reimbursement by Travelers Insurance in connection with
voluntary expense limitations, including those described in Note 3. Without
the expense reimbursement, the ratios of operating expenses to average
net assets would have been 3.34%, 3.73% and 2.19% for the years ended
December 31, 1994, 1993 and the period ended December 31, 1992, respectively.
# Annualized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
8. FINANCIAL HIGHLIGHTS
(Per share data for a share outstanding
throughout the period.)
<TABLE>
UTILITIES PORTFOLIO
<CAPTION>
FEBRUARY 4,*
TO
DECEMBER 31,
-----------
1994
----
<S> <C>
PER SHARE DATA:
- ------------
Net asset value, beginning of period $ 10.00
Income from operations
-----------------
Net investment income 0.35
Net losses on securities (realized and unrealized) (0.18)
------
Total from investment operations 0.17
Net asset value, end of period $ 10.17
------
------
TOTAL RETURN** 1.70%
- -----------
RATIOS/SUPPLEMENTAL DATA
- ---------------------
Net assets, end of period (thousands) $ 5,757
Ratio of expenses to average net assets*** 1.25%#
Ratio of net investment income to average net assets 3.86%#
Portfolio turnover rate 32%
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in
value of a share during the period, after reflecting the reinvestment
of dividends declared during the period, by the beginning of period
share price. As described in Note 1, shares in the Utilities Portfolio
are only sold to Travelers Insurance separate accounts in connection
with the issuance of variable annuity contracts. The total return does
not reflect contract charges or fees assessed by Travelers Insurance
separate accounts. For periods less than one year, total returns are
not annualized.
*** The ratio of expenses to average net assets reflects an expense
reimbursement by Travelers Insurance in connection with the
voluntary expense limitations described in Note 3. Without the
expense reimbursement, the ratio of operating expenses to
average net assets would have been 3.49% annualized.
# Annualized.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of The Travelers Series
Trust:
We have audited the accompanying statements of assets and
liabilities of
THE TRAVELERS SERIES TRUST:
U.S. GOVERNMENT SECURITIES PORTFOLIO,
SOCIAL AWARENESS STOCK PORTFOLIO AND
UTILITIES PORTFOLIO
including the statements of investments, as of December 31,1994,
and the related statements of operations for the year then ended
and for the Utilities Portfolio for the period February 4,1994
(date operations commenced) to December 31,1994, the statement of
changes in net assets for each of the two years in the period then
ended and for the Utilities Portfolio for the period February
4,1994 (date operations commenced) to December 31,1994, and the
financial highlights for each of the two years in the period then
ended and for the U. S. Government Securities Portfolio for the
period January 24,1992 (date operations commenced) to December
31, 1992 and the Social Awareness Stock Portfolio for the period
May 1, 1992 (date operations commenced) to December 31,1992, and for
the Utilities Portfolio for the period February 4,1994 (date
operations commenced) to December 31, 1994. These financial
statements and financial highlights are the responsibility of
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of December 31, 1994, by correspondence with the custodian
and also with brokers for the Social Awareness Stock Portfolio and
Utilities Portfolio. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of The Travelers Series Trust: U. S. Government
Securities Portfolio, Social Awareness Stock Portfolio, and
Utilities Portfolio as of December 31, 1994, the results of its
operations for the year then ended and for the Utilities Portfolio
for the period February 4, 1994 (date operations commenced) to
December 31, 1994, the changes in its net assets for each of the
two years in the period then ended and for the Utilities Portfolio
for the period February 4, 1994 (date operations commenced) to
December 31, 1994 and the financial highlights for each of the two
years in the period then ended and for the U. S. Government
Securities Portfolio for the period January 24, 1992 (date
operations commenced) to December 31, 1992 and for the Social
Awareness Stock Portfolio for the period May 1, 1992 (date
operations commenced) to December 31, 1992, and for the Utilities
Portfolio for the period February 4, 1994 (date operations
commenced) to December 31, 1994, in conformity with generally
accepted accounting principles.
COOPPERS & LYBRAND L.L.P.
Hartford, Connecticut
February 15, 1995
<PAGE>
This page intentionally left blank.
<PAGE>
Investment Advisers
------------------------
(CAPITAL APPRECIATION FUND AND
SOCIAL AWARENESS STOCK PORTFOLIO)
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Hartford, Connecticut
(MANAGED ASSETS TRUST, HIGH YIELD
BOND TRUST, CASH INCOME
TRUST AND U.S. GOVERNMENT SECURITIES PORTFOLIO)
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
Hartford, Connecticut
(UTILITIES PORTFOLIO)
GREENWICH STREET ADVISORS
New York, New York
Independent Accountants
------------------------
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
Custodian
------------------------
SHAWMUT BANK CONNECTICUT, N.A.
Hartford, Connecticut
This report is prepared for the general information
of contract owners and is not an offer of shares of Managed Assets
Trust, High Yield Bond Trust, Capital Appreciation Fund, Cash
Income Trust, U.S. Government Securities Portfolio, Social
Awareness Stock Portfolio or Utilities Portfolio. It should not be
used in connection with any offer except in conjunction with the
Prospectuses for the Variable Annuity and Variable Universal Life
Insurance products offered by The Travelers Insurance Company and
the Prospectuses of the underlying mutual funds, which collectively
contain all pertinent information, including the applicable selling
commissions.
VG-181 (Annual) (12-94) Printed in U.S.A.
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant and the Report of Independent
Accountants are contained in the December 31, 1994 Annual Report to
Shareholders and are incorporated by reference in the Statement of
Additional Information. The Registrant's financial statements include:
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO and
UTILITIES PORTFOLIO
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the year ended December 31, 1994 and for
the Utilities Portfolio for the period February 4, 1994 (date
operations commenced) to December 31, 1994
Statement of Changes in Net Assets for the years ended December 31,
1994 and 1993 and for the Utilities Portfolio for the period
February 4, 1994 (date operations commenced) to December 31, 1994
Statement of Investments as of December 31, 1994
Notes to Financial Statements
(b) Exhibits
*1. Agreement and Declaration of Trust. (Incorporated herein by reference
to Exhibit 24(b)(1) to the Registration Statement on Form N-1A filed
on October 29, 1991.)
*2. By-Laws. (Incorporated herein by reference to Exhibit 24(b)(2) to
the Registration Statement on Form N-1A filed on October 29, 1991.)
*5(a). Investment Advisory Agreement between the U.S. Government Securities
Portfolio and Travelers Asset Management International Corporation.
(Incorporated herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 5 to the Registration Statement on Form N-1A filed on
February 17, 1993.)
5(b). Form of Investment Advisory Agreement between the Social Awareness
Stock Portfolio and Smith Barney Mutual Fund Management Inc.
5(c). Form of Investment Advisory Agreement between the Utilities Portfolio
and Smith Barney Mutual Fund Management Inc.
8. Custody Agreement dated February 1, 1995 between the Registrant and
Chase Manhattan Bank, N.A., Brooklyn, New York.
*9. Transfer and Recordkeeping Agreement between the Registrant and The
Travelers Insurance Company. (Incorporated herein by reference to
Exhibit 24(b)(9)(A) to the Registration Statement on Form N-1A filed
on October 29, 1991.)
<PAGE>
*10. Opinion and Consent of Counsel. (Incorporated herein by reference
to the Registrant's most recent 24f-2 Notice filed on February 27,
1995.)
11(a). Consent of Coopers & Lybrand L.L.P., Independent Accountants, to the
use of their name and opinion in Part A and Part B of this Form N-1A
and to the incorporation by reference of their report.
11(b). Powers of Attorney authorizing Ernest J. Wright, Secretary, to be
the signatory for Heath B. McLendon, Knight Edwards, Robert E. McGill,
III, Lewis Mandell, Frances M. Hawk and Ian R. Stuart.
27. Financial Data Schedule
* Previously filed and incorporated herein by reference.
Item 25. Persons Controlled By or Under Common Control With the Registrant
Not Applicable.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of February 17, 1995
- -------------- ------------------------
Shares of beneficial interest, Two (2)
without par value
Item 27. Indemnification
Provisions for the indemnification of the Series Trust's Trustees and officers
are contained in the Series Trust's Declaration of Trust, which was filed with
the Fund's Registration Statement as Exhibit 24(b)(1) and is incorporated
herein by reference.
<PAGE>
Item 28. Business and Other Connections of Investment Advisers
U.S. GOVERNMENT SECURITIES PORTFOLIO
Officers and Directors of Travelers Asset Management International Corporation
(TAMIC), the Investment Adviser for the U.S. Government Securities Portfolio
of the Series Trust, are set forth in the following table:
Name Position with TAMIC Other Business
- ---- ------------------- --------------
Marc P. Weill Director, Chairman and Senior Vice President**
President
David A. Tyson Director and Senior Vice Senior Vice President*
President
David Amaral Vice President Fixed Income Trader**
John R. Calcagni Vice President Second Vice President
Gene Collins Vice President Investment Officer**
Eric Dobbin Vice President Investment Officer**
Phillip A. Duncan Vice President Investment Officer**
Emil Molinaro Vice President Vice President**
F. Denney Voss Vice President Senior Vice President**
William H. White Treasurer Vice President and
Treasurer*
Charles B. Chamberlain Assistant Treasurer Assistant Treasurer*
George C. Quaggin Assistant Treasurer Assistant Treasurer*
John R. Britt Secretary Assistant Secretary*
Marla A. Berman Assistant Secretary Assistant General Counsel**
Paul M. Danie Compliance Officer Assistant Director*
Frank J. Fazzina Controller Director*
* Positions are held with The Travelers Insurance Company, One Tower Square,
Hartford, Connecticut 06183.
** Positions are held with Travelers Group Inc., 388 Greenwich Street,
New York, New York 10013.
<PAGE>
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
Officers and Directors of Smith Barney Mutual Funds Management Inc. (SBMFM),
the Investment Adviser for the Social Awareness Stock Portfolio and Utilities
Portfolio of the Series Trust, are set forth in the following table:
Name Position with SBMFM Other Business
- ---- ------------------- --------------
Stephen J. Treadway Director and CEO Executive Vice President
Smith Barney Inc.
("Smith Barney"); Trustee and
Chairman of the Board of
Corporate Realty Income Trust
I and Director of Corporate
Realty Advisors, Inc.
Heath B. McLendon President Managing Director of
Smith Barney; Director and/or
President of certain
investment companies
sponsored by Smith Barney
Lewis E. Daidone Director and Senior Managing Director of
Vice President Smith Barney, Senior Vice
President and Treasurer of
certain investment companies
sponsored by Smith Barney
A. George Saks Director Managing Director and General
Counsel of Smith Barney
Bruce D. Sargent Director and Vice Managing Director of
President Smith Barney; Vice President
and Director of certain
investment companies sponsored
by Smith Barney
Malcoml Van Arsdale Vice President Vice President of Smith Barney
in the Capital Management
Division
Peter M. Coffey Vice President Managing Director of
Smith Barney
James Conahan Controller Managing Director of
Smith Barney
Michael J. Day Treasurer Managing Director of
Smith Barney
<PAGE>
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
(2) Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, New York
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The undersigned Registrant hereby undertakes to provide to each person to whom
a prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, The Travelers Series Trust, certifies
that it meets all the requirements for effectiveness of this post-effective
amendment to this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this amendment to this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on April 25, 1995.
THE TRAVELERS SERIES TRUST
(Registrant)
By: *HEATH B. McLENDON
-------------------
Heath B. McLendon
Chairman, Board of Trustees
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on April 25, 1995.
*HEATH B. McLENDON Chairman of the Board
- ------------------------
(Heath B. McLendon)
*KNIGHT EDWARDS Trustee
- ------------------------
(Knight Edwards)
*ROBERT E. McGILL, III Trustee
- ------------------------
(Robert E. McGill, III)
*LEWIS MANDELL Trustee
- ------------------------
(Lewis Mandell)
*FRANCES M. HAWK Trustee
- ------------------------
(Frances M. Hawk)
*IAN R. STUART Treasurer and Chief Accounting Officer
- ------------------------
(Ian R. Stuart)
*By: /s/ Ernest J. Wright
--------------------------------------
Ernest J. Wright, Attorney-in-Fact
Assistant Secretary, Board of Trustees
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
1. Agreement and Declaration of Trust. (Incorporated
herein by reference to Exhibit 24(b)(1) to the
Registration Statement on Form N-1A filed on
October 29, 1991.)
2. By-Laws. (Incorporated herein by reference to
Exhibit 24(b)(2) to the Registration Statement on
Form N-1A filed on October 29, 1991.)
5(a). Investment Advisory Agreement between the U.S.
Government Securities Portfolio and Travelers
Asset Management International Corporation.
(Incorporated herein by reference to
Exhibit 5(a) to Post-Effective Amendment No. 5
to the Registration Statement on Form N-1A filed
on February 17, 1993.)
5(b). Form of Investment Advisory Agreement between Electronically
the Social Awareness Stock Portfolio and
Smith Barney Mutual Fund Management Inc.
5(c). Form of Investment Advisory Agreement between Electronically
the Utilities Portfolio and Smith Barney Mutual
Fund Management Inc.
8. Custody Agreement dated February 1, 1995 Electronically
between the Registrant and Chase Manhattan
Bank, N.A., Brooklyn, New York.
9. Transfer and Recordkeeping Agreement between
the Registrant and The Travelers Insurance
Company. (Incorporated herein by reference to
Exhibit 24(b)(9)(A) to the Registration Statement
on Form N-1A filed on October 29, 1991.)
10. Opinion and Consent of Counsel. (Incorporated
herein by reference to the Registrant's most
recent 24f-2 Notice filed on February 27, 1995.)
11(a). Consent of Coopers & Lybrand L.L.P., Independent Electronically
Accountants, to the use of their name and opinion
in Part A and Part B of this Form N-1A and to the
incorporation by reference of their Report.
11(b). Powers of Attorney authorizing Ernest J. Wright, Electronically
Secretary, to be the signatory for Heath B.
McLendon, Knight Edwards, Robert E. McGill, III,
Lewis Mandell, Frances M. Hawk and Ian R. Stuart.
27. Financial Data Schedule Electronically
Exhibit 5(b)
FORM OF
INVESTMENT ADVISORY AGREEMENT
May 1, 1995
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
The Travelers Series Trust (the Trust) a business trust organized
under the laws of the Commonwealth of Massachusetts, confirms its
agreement with Smith Barney Mutual Funds Management Inc. (the Adviser) as
follows:
1. Investment Description; Appointment
The Social Awareness Stock Portfolio of The Travelers Series Trust
(the Portfolio) desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Prospectus (the Prospectus) and Statement of
Additional Information (the Statement) filed with the Securities and
Exchange Commission as part of the Trust's Registration Statement on Form
N-1A, as amended from time to time, and in the manner and to the extent
as may from time to time be approved by the Board of Trustees of the
Trust. Copies of the Trust's Prospectus and the Statement have been or
will be submitted to the Adviser. The Trust desires to employ and hereby
appoints the Adviser to act as its investment adviser. The Adviser
accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of Trustees
of the Trust, the Adviser will (a) manage the portfolio in accordance
with the Portfolio's investment objective and policies as stated in the
Prospectus and the Statement; (b) make investment decisions for the
Portfolio; (c) place purchase and sale orders for portfolio transactions
for the Portfolio; and (d) employ professional portfolio managers and
securities analysts who provide research services to the Portfolio. In
providing those services, the Adviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Portfolio's assets.
3. Compliance with Internal Revenue Code Requirements
Adviser represents and warrants that the Portfolio will at all
times be invested in such a manner as to ensure compliance with Section
817(h) of the Internal Revenue Code of 1986, as amended (the Code) and
Treasury Regulations Section 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts
and any amendments or other modifications to such Section or Regulation.
Adviser will be relieved of this obligation and shall be held harmless
when direction from the Trust causes non-compliance with Section 817(h)
and/or Regulation Section 1.817-5. Adviser agrees to provide quarterly
reports to the life insurance company that issues the variable annuity,
endowment or life insurance contracts (the Life Company), executed by a
duly authorized officer of Adviser, within seven (7) days of the close of
each calendar quarter certifying as to compliance with Section or Regula-
tions. In addition to the quarterly reports, Life Company may request
and Adviser agrees to provide Section 817 diversification compliance
reports at more frequent intervals, as reasonably requested by Life
Company. Adviser also represents and warrants that it shall manage the
investment and reinvestment of the assets of the Portfolio in compliance
with the annual gross income qualification requirements of Section
851(b)(2) and 851(b)(3) of the Code, and with the diversification
requirements of Section 851(b)(4) of the Code.
Adviser agrees to indemnify and hold harmless the Trust and the
Life Company and each of their directors and officers and each person, if
any, who controls the Trust or Life Company within the meaning of Section
15 of the Securities Act of 1933 (collectively, the Indemnified Parties
for purposes of this Paragraph 3) against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties, or any of them, may become
subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements arise out of or result from any material breach
of the representation and warranty contained in this Paragraph 3,
resulting from gross negligence, willful misfeasance, bad faith, or
reckless disregard of duties of Adviser, including a failure to comply
with the diversification requirements described in this Paragraph 3.
Adviser may rely on Treasury Regulation Section 1.817-5(a)(2) in the
event of a material breach of the diversification requirements under
Section 817(h) as described in this Paragraph 3.
4. Brokerage
In selecting brokers or dealers to execute transactions on behalf
of the Portfolio, the Adviser will seek the best overall terms available.
In assessing the best overall terms available for any transaction, the
Adviser will consider factors it deems relevant, including, but not
limited to, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker
or dealer and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In selecting brokers of
dealers to execute a particular transaction, and in evaluating the best
overall terms available, the Adviser is authorized to consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended) provided to the
Portfolio and/or other accounts over which the Adviser or its affiliates
exercise investment discretion.
5. Information Provided to the Trust
The Adviser will keep the Trust informed of developments materially
affecting the Portfolio's portfolio, and will, on its own initiative,
furnish the Trust from time to time with whatever information the Adviser
believes is appropriate for this purpose.
6. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraph 2 above. Except as provided in paragraph 3
above, Adviser shall not be liable for any error of judgment or mistakes
of law or for any loss suffered by the Portfolio or the Trust in
connection with the matters to which this Agreement relates, provided
that nothing in this Agreement shall be deemed to protect or purport to
protect the Adviser against any liability to the Trust or to its
shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement.
7. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Trust will pay the Adviser on the first business day of
each month a fee for the previous month which is an amount equivalent on
an annual basis to the following:
Aggregate
Annual Management Net Asset Value
Fee of the Portfolio
0.65% of the first $ 50,000,000, plus
0.55% of the next $ 50,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of amounts over $200,000,000.
The fee for the period from the date the Portfolio commences its
investment operations to the end of the month during which the Portfolio
commences its investment operations shall be prorated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such
part of that month shall be prorated according to the proportion that
such period bears to the full monthly period and shall be payable upon
the date of termination of this Agreement. For the purpose of determin-
ing fees payable to the Adviser, the value of the Portfolio's net assets
shall be computed at the times and in the manner specified in the Trust's
Prospectus and/or the Statement.
8. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Trust will bear
certain other expenses to be incurred in its operation, including, but
not limited to, investment advisory, sub-investment advisory and
administration fees; fees for necessary professional and brokerage
services; fees for any pricing service; the costs of regulatory
compliance; and costs associated with maintaining the Trust's legal exis-
tence and shareholder relations.
9. Services to Other Companies or Accounts
The Trust understands that the Adviser now acts, will continue to
act and may act in the future as investment adviser to fiduciary and
other managed accounts, and as investment adviser to other investment
companies, and the Trust has no objection to the Adviser's so acting,
provided that whenever the Portfolio and one or more other investment
companies or other clients advised by the Adviser have available funds
for investment, transactions in such securities will generally be
allocated daily among the clients pro rata in relation to the size of the
order, using the daily average price. The Trust recognizes that in some
cases this procedures may adversely affect the size of the position
obtainable for the Portfolio; however, Adviser agrees that the Portfolio
shall not be disadvantaged in relation to other clients of Adviser when
the same or similar advice or decisions are made for more than one
client. In addition, the Trust understands that the persons employed by
the Adviser to assist in the performance of the Adviser's duties under
this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict
the right of the Adviser or any affiliate of the Adviser to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
10. Term of Agreement
This Agreement shall become effective as of the date the Portfolio
commences its investment operations and continue for an initial two-year
term and shall continue thereafter so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of
the Trust or (ii) a vote of a majority (as defined in the Investment
Company Act of 1940, as amended (the 1940 Act) of the Portfolio's
outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Trustees who
are not interested persons (as defined in the 1940 Act) of any party to
this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This agreement is terminable,
without penalty, on 60 days written notice, by the board of Trustees of
the Trust or by vote of holders of a majority of assignment (as defined
in the 1940 Act). This agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act). This Agreement
may not be terminated by Adviser without the prior approval of a new
Investment Advisory Agreement by a vote of a majority of the outstanding
voting securities of the Portfolio
11. Representation by the Trust
The Trust represents that a copy of the Trust's Agreement and
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and with the City of Boston.
12. Limitation of Liability
The Trust and the Adviser agree that the obligations of the Trust
under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust individually, but are binding only upon
the assets and property of the Trust as provided in the Agreement and
Declaration of Trust. The execution and delivery of this Agreement have
been authorized by the Trustees, and signed by an authorized officer of
the Trust acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the assets and property of the
Trust as provided in the Agreement and Declaration of Trust.
13. Information and Reports to California Commissioner
Adviser agrees that it shall furnish to the California Commissioner
of Insurance any information or reports concerning the Trust or the
Portfolio as the Commissioner, in the performance of his or her duties,
may reasonably request.
14. Books and Records
Adviser acknowledges that all books and records which it maintains
for the Trust in performing its duties under this Agreement are the
property of the Trust and subject to its control; provided, however, that
during the term of this Agreement the Trust shall not exercise such
control so as to interfere with the performance of the Adviser's duties
hereunder.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
THE SOCIAL AWARENESS STOCK PORTFOLIO
OF THE TRAVELERS SERIES TRUST
By:_________________________________
Ernest J. Wright
Secretary, Board of Trustees
Accepted:
Smith Barney Mutual Funds
Management Inc.
By:________________________
Ken A. Egan
Managing Director
Exhibit 5(c)
FORM OF
INVESTMENT ADVISORY AGREEMENT
October 29, 1993
As Revised December 30, 1994
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
The Travelers Series Trust (the Trust) a business trust organized
under the laws of the Commonwealth of Massachusetts, confirms its
agreement with Smith Barney Mutual Funds Management Inc. (the Adviser) as
follows:
1. Investment Description; Appointment
The Utilities Portfolio of The Travelers Series Trust (the
Portfolio) desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified
in its Prospectus (the Prospectus) and Statement of Additional
Information (the Statement) filed with the Securities and Exchange
Commission as part of the Trust's Registration Statement on Form N-1A, as
amended from time to time, and in the manner and to the extent as may
from time to time be approved by the Board of Trustees of the Trust.
Copies of the Trust's Prospectus and the Statement have been or will be
submitted to the Adviser. The Trust desires to employ and hereby
appoints the Adviser to act as its investment adviser. The Adviser
accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of Trustees
of the Trust, the Adviser will (a) manage the portfolio in accordance
with the Portfolio's investment objective and policies as stated in the
Prospectus and the Statement; (b) make investment decisions for the
Portfolio; (c) place purchase and sale orders for portfolio transactions
for the Portfolio; and (d) employ professional portfolio managers and
securities analysts who provide research services to the Portfolio. In
providing those services, the Adviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Portfolio's assets.
3. Compliance with Internal Revenue Code Requirements
Adviser represents and warrants that the Portfolio will at all
times be invested in such a manner as to ensure compliance with Section
817(h) of the Internal Revenue Code of 1986, as amended (the Code) and
Treasury Regulations Section 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts
and any amendments or other modifications to such Section or Regulation.
Adviser will be relieved of this obligation and shall be held harmless
when direction from the Trust causes non-compliance with Section 817(h)
and/or Regulation Section 1.817-5. Adviser agrees to provide quarterly
reports to the life insurance company that issues the variable annuity,
endowment or life insurance contracts (the Life Company), executed by a
duly authorized officer of Adviser, within seven (7) days of the close of
each calendar quarter certifying as to compliance with Section or Regula-
tions. In addition to the quarterly reports, Life Company may request
and Adviser agrees to provide Section 817 diversification compliance
reports at more frequent intervals, as reasonably requested by Life
Company. Adviser also represents and warrants that it shall manage the
investment and reinvestment of the assets of the Portfolio in compliance
with the annual gross income qualification requirements of Section
851(b)(2) and 851(b)(3) of the Code, and with the diversification
requirements of Section 851(b)(4) of the Code.
Adviser agrees to indemnify and hold harmless the Trust and the
Life Company and each of their directors and officers and each person, if
any, who controls the Trust or Life Company within the meaning of Section
15 of the Securities Act of 1933 (collectively, the Indemnified Parties
for purposes of this Paragraph 3) against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties, or any of them, may become
subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements arise out of or result from any material breach
of the representation and warranty contained in this Paragraph 3,
resulting from gross negligence, willful misfeasance, bad faith, or
reckless disregard of duties of Adviser, including a failure to comply
with the diversification requirements described in this Paragraph 3.
Adviser may rely on Treasury Regulation Section 1.817-5(a)(2) in the
event of a material breach of the diversification requirements under
Section 817(h) as described in this Paragraph 3.
4. Brokerage
In selecting brokers or dealers to execute transactions on behalf
of the Portfolio, the Adviser will seek the best overall terms available.
In assessing the best overall terms available for any transaction, the
Adviser will consider factors it deems relevant, including, but not
limited to, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker
or dealer and the reasonableness of the commission, if any, for the
specific transaction and on a continuing basis. In selecting brokers of
dealers to execute a particular transaction, and in evaluating the best
overall terms available, the Adviser is authorized to consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended) provided to the
Portfolio and/or other accounts over which the Adviser or its affiliates
exercise investment discretion.
5. Information Provided to the Trust
The Adviser will keep the Trust informed of developments materially
affecting the Portfolio's portfolio, and will, on its own initiative,
furnish the Trust from time to time with whatever information the Adviser
believes is appropriate for this purpose.
6. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraph 2 above. Except as provided in paragraph 3
above, Adviser shall not be liable for any error of judgment or mistakes
of law or for any loss suffered by the Portfolio or the Trust in
connection with the matters to which this Agreement relates, provided
that nothing in this Agreement shall be deemed to protect or purport to
protect the Adviser against any liability to the Trust or to its
shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Adviser's reckless
disregard of its obligations and duties under this Agreement.
7. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Trust will pay the Adviser on the first business day of
each month a fee for the previous month at the annual rate of 0.65% of
the Portfolio's average daily net assets. The fee for the period from
the date the Portfolio commences its investment operations to the end of
the month during which the Portfolio commences its investment operations
shall be prorated according to the proportion that such period bears to
the full monthly period. Upon any termination of this Agreement before
the end of a month, the fee for such part of that month shall be prorated
according to the proportion that such period bears to the full monthly
period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to the Adviser,
the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Trust's Prospectus and/or the
Statement.
8. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Trust will bear
certain other expenses to be incurred in its operation, including, but
not limited to, investment advisory, sub-investment advisory and
administration fees; fees for necessary professional and brokerage
services; fees for any pricing service; the costs of regulatory
compliance; and costs associated with maintaining the Trust's legal exis-
tence and shareholder relations.
9. Services to Other Companies or Accounts
The Trust understands that the Adviser now acts, will continue to
act and may act in the future as investment adviser to fiduciary and
other managed accounts, and as investment adviser to other investment
companies, and the Trust has no objection to the Adviser's so acting,
provided that whenever the Portfolio and one or more other investment
companies or other clients advised by the Adviser have available funds
for investment, transactions in such securities will generally be
allocated daily among the clients pro rata in relation to the size of the
order, using the daily average price. The Trust recognizes that in some
cases this procedures may adversely affect the size of the position
obtainable for the Portfolio; however, Adviser agrees that the Portfolio
shall not be disadvantaged in relation to other clients of Adviser when
the same or similar advice or decisions are made for more than one
client. In addition, the Trust understands that the persons employed by
the Adviser to assist in the performance of the Adviser's duties under
this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict
the right of the Adviser or any affiliate of the Adviser to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
10. Term of Agreement
This Agreement shall become effective as of the date the Portfolio
commences its investment operations and continue for an initial two-year
term and shall continue thereafter so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of
the Trust or (ii) a vote of a majority (as defined in the Investment
Company Act of 1940, as amended (the 1940 Act) of the Portfolio's
outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Trustees who
are not interested persons (as defined in the 1940 Act) of any party to
this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days written notice, by the Board of Trustees of
the Trust or by vote of holders of a majority of assignment (as defined
in the 1940 Act). This agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act). This Agreement
may not be terminated by Adviser without the prior approval of a new
Investment Advisory Agreement by a vote of a majority of the outstanding
voting securities of the Portfolio
11. Representation by the Trust
The Trust represents that a copy of the Trust's Agreement and
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and with the City of Boston.
12. Limitation of Liability
The Trust and the Adviser agree that the obligations of the Trust
under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust individually, but are binding only upon
the assets and property of the Trust as provided in the Agreement and
Declaration of Trust. The execution and delivery of this Agreement have
been authorized by the Trustees, and signed by an authorized officer of
the Trust acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the assets and property of the
Trust as provided in the Agreement and Declaration of Trust.
13. Information and Reports to California Commissioner
Adviser agrees that it shall furnish to the California Commissioner
of Insurance any information or reports concerning the Trust or the
Portfolio as the Commissioner, in the performance of his or her duties,
may reasonably request.
14. Books and Records
Adviser acknowledges that all books and records which it maintains
for the Trust in performing its duties under this Agreement are the
property of the Trust and subject to its control; provided, however, that
during the term of this Agreement the Trust shall not exercise such
control so as to interfere with the performance of the Adviser's duties
hereunder.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
THE UTILITIES PORTFOLIO OF THE
TRAVELERS SERIES TRUST
By:____________________________
Ernest J. Wright
Secretary, Board of Trustees
Accepted:
Smith Barney Mutual Funds
Management Inc.
By:________________________
Ken A. Egan
Managing Director
<PAGE>
Coopers Coopers & Lybrand L.L.P.
& Lybrand
a professional
services firm
EXHIBIT 11(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 11 of this Registration Statement on Form N-1A of our
report dated February 15, 1995, on our audits of the financial
statements and financial highlights of The Travelers Series Trust.
We also consent to the reference to our Firm as experts under the caption
"Additional Information".
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
April 18, 1995
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Heath B. McLendon of Summit, New Jersey, Chairman of the Board of
Trustees of The Travelers Series Trust, do hereby make, constitute and
appoint ERNEST J. WRIGHT, Secretary of said Trust, and KATHLEEN A. McGAH,
Assistant Secretary of said Trust, either one of them acting alone, my true
and lawful attorney-in-fact, for me, and in my name, place and stead, to
sign registration statements of said Trust on Form N-1A or other applicable
form under the Securities Act of 1933 for the registration of Shares of
Beneficial Interest of The Travelers Series Trust and to sign any and all
amendments, including post-effective amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 28th day of February,
1995.
/s/Heath B. McLendon
Chairman of the Board of Trustees
The Travelers Series Trust
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Knight Edwards of Providence, Rhode Island, member of the Board of
Trustees of The Travelers Series Trust, do hereby make, constitute and appoint
ERNEST J. WRIGHT, Secretary of said Trust, and SARA CHAMBERLAIN, Assistant
Secretary of said Trust, either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign
registration statements of said Trust on Form N-1A or other applicable form
under the Securities Act of 1933 for the registration of Shares of Beneficial
Interest of The Travelers Series Trust and to sign any and all amendments,
including post-effective amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 21st day of October,
1994.
/s/Knight Edwards
Member of the Board of Trustees
The Travelers Series Trust
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Robert E. McGill, III of Williamstown, Massachusetts, a member of
the Board of Trustees of The Travelers Series Trust, do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said Trust, and
SARA CHAMBERLAIN, Assistant Secretary of said Trust, either one of them
acting alone, my true and lawful attorney-in-fact, for me, and in my name,
place and stead, to sign registration statements of said Trust on Form N-1A
or other applicable form under the Securities Act of 1933 for the registration
of Shares of Beneficial Interest of The Travelers Series Trust and to sign
any and all amendments, including post-effective amendments thereto, that
may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 21st day of October,
1994.
/s/Robert E. McGill, III
Member of the Board of Trustees
The Travelers Series Trust
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Lewis Mandell of Storrs, Connecticut, a member of the Board of
Trustees of The Travelers Series Trust, do hereby make, constitute and
appoint ERNEST J. WRIGHT, Secretary of said Trust, and SARA CHAMBERLAIN,
Assistant Secretary of said Trust, either one of them acting alone, my true
and lawful attorney-in-fact, for me, and in my name, place and stead, to
sign registration statements of said Trust on Form N-1A or other applicable
form under the Securities Act of 1933 for the registration of Shares of
Beneficial Interest of The Travelers Series Trust and to sign any and all
amendments, including post-effective amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 21st day of October,
1994.
/s/Lewis Mandell
Member of the Board of Trustees
The Travelers Series Trust
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Frances M. Hawk of Sherborn, Massachusetts, a member of the Board
of Trustees of The Travelers Series Trust, do hereby make, constitute and
appoint ERNEST J. WRIGHT, Secretary of said Trust, and SARA CHAMBERLAIN,
Assistant Secretary of said Trust, either one of them acting alone, my true
and lawful attorney-in-fact, for me, and in my name, place and stead, to
sign registration statements of said Trust on Form N-1A or other applicable
form under the Securities Act of 1933 for the registration of Shares of
Beneficial Interest of The Travelers Series Trust and to sign any and all
amendments, including post-effective amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 21st day of October,
1994.
/s/Frances M. Hawk
Frances M. Hawk
Member of the Board of Trustees
The Travelers Series Trust
<PAGE>
Exhibit 11(B)
THE TRAVELERS SERIES TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Ian R. Stuart of East Hampton, Connecticut, Treasurer of The
Travelers Series Trust, do hereby make, constitute and appoint
ERNEST J. WRIGHT, Secretary of said Trust, and SARA CHAMBERLAIN,
Assistant Secretary of said Trust, either one of them acting alone,
my true and lawful attorney-in-fact, for me, and in my name, place
and stead, to sign registration statements of said Trust on Form N-1A
or other applicable form under the Securities Act of 1933 for the
registration of Shares of Beneficial Interest of The Travelers Series
Trust and to sign any and all amendments, including post-effective amendments
thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this 21st day of October,
1994.
/s/Ian R. Stuart
Treasurer, The Travelers Series Trust
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> U.S. GOVERNMENT SECURITIES PORTFOLIO
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 26,685,496
<INVESTMENTS-AT-VALUE> 24,310,849
<RECEIVABLES> 243,588
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24,554,437
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,272
<TOTAL-LIABILITIES> 32,272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,705,114
<SHARES-COMMON-STOCK> 2,317,285
<SHARES-COMMON-PRIOR> 2,194,389
<ACCUMULATED-NII-CURRENT> 1,418,225
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (226,527)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,374,647)
<NET-ASSETS> 24,522,165
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,599,887
<OTHER-INCOME> 0
<EXPENSES-NET> 181,662
<NET-INVESTMENT-INCOME> 1,418,225
<REALIZED-GAINS-CURRENT> (211,271)
<APPREC-INCREASE-CURRENT> (2,752,337)
<NET-CHANGE-FROM-OPS> (1,545,383)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (883,624)
<DISTRIBUTIONS-OF-GAINS> (63,504)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 655,046
<NUMBER-OF-SHARES-REDEEMED> (616,041)
<SHARES-REINVESTED> 83,891
<NET-CHANGE-IN-ASSETS> (998,040)
<ACCUMULATED-NII-PRIOR> 865,566
<ACCUMULATED-GAINS-PRIOR> 66,306
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 82,937
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 181,662
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.63
<PER-SHARE-NII> .60
<PER-SHARE-GAIN-APPREC> (1.23)
<PER-SHARE-DIVIDEND> (.39)
<PER-SHARE-DISTRIBUTIONS> (.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.58
<EXPENSE-RATIO> .71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> SOCIAL AWARENESS PORTFOLIO
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 3,607,016
<INVESTMENTS-AT-VALUE> 3,580,584
<RECEIVABLES> 350,540
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 128,752
<TOTAL-ASSETS> 4,059,876
<PAYABLE-FOR-SECURITIES> 98,999
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81,606
<TOTAL-LIABILITIES> 180,605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,804,668
<SHARES-COMMON-STOCK> 351,002
<SHARES-COMMON-PRIOR> 288,719
<ACCUMULATED-NII-CURRENT> 51,650
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 49,385
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,432)
<NET-ASSETS> 3,879,271
<DIVIDEND-INCOME> 91,034
<INTEREST-INCOME> 5,978
<OTHER-INCOME> 0
<EXPENSES-NET> 45,362
<NET-INVESTMENT-INCOME> 51,650
<REALIZED-GAINS-CURRENT> 50,675
<APPREC-INCREASE-CURRENT> (195,236)
<NET-CHANGE-FROM-OPS> (92,911)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (70,411)
<DISTRIBUTIONS-OF-GAINS> (17,258)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 122,407
<NUMBER-OF-SHARES-REDEEMED> (67,708)
<SHARES-REINVESTED> 7,584
<NET-CHANGE-IN-ASSETS> 517,933
<ACCUMULATED-NII-PRIOR> 36,012
<ACCUMULATED-GAINS-PRIOR> 50,367
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 23,474
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120,715
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.64
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> (.45)
<PER-SHARE-DIVIDEND> (.24)
<PER-SHARE-DISTRIBUTIONS> (.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.05
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> UTILITIES PORTFOLIO
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> FEB-28-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 6,212,686
<INVESTMENTS-AT-VALUE> 6,135,137
<RECEIVABLES> 309,159
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,444,296
<PAYABLE-FOR-SECURITIES> 604,936
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82,701
<TOTAL-LIABILITIES> 687,637
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,683,717
<SHARES-COMMON-STOCK> 565,761
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 139,138
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11,353
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (77,549)
<NET-ASSETS> 5,756,659
<DIVIDEND-INCOME> 126,486
<INTEREST-INCOME> 54,578
<OTHER-INCOME> 0
<EXPENSES-NET> 41,926
<NET-INVESTMENT-INCOME> 139,138
<REALIZED-GAINS-CURRENT> 11,353
<APPREC-INCREASE-CURRENT> (77,549)
<NET-CHANGE-FROM-OPS> 72,942
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 754,802
<NUMBER-OF-SHARES-REDEEMED> (189,041)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,756,659
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21,804
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117,200
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .35
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
