SMITH BARNEY ADJUSTABLE RATE GOVERNMENT INCOME FUND
Supplement dated May 5, 1995 to the Prospectus
On June 16, 1994 BlackRock Financial Management L.P., the Fund's
sub-investment adviser ("BlackRock"), entered into an agreement under which
PNC Bank N.A. ("PNC Bank") would acquire all of the outstanding equity in
BlackRock (the "Transaction"). The Transaction, having received approval
from applicable bank regulatory authorities, was concluded on February 28,
1995. PNC Bank is a wholly owned indirect subsidiary of PNC Bank Corp.
("PNC"), a publicly owned multibank holding company incorporated under the
laws of the Commonwealth of Pennsylvania in 1983 and registered under the
Federal Bank Holding Company Act of 1956, as amended. PNC"s banking
subsidiaries are located in Pennsylvania, New Jersey, Kentucky, Delaware,
Ohio, Indiana, and Massachusetts. As of June 30, 1994, PNC was ranked the
eleventh largest bank holding company in the U.S. based on total assets of $64
billion. PNC provides a comprehensive range of financial products and
services. Through its banking subsidiaries, PNC provides retail banking,
commercial banking, trust banking, investment management and other financial
services and securities related activities. PNC's financial services related
subsidiaries provide a broad range of services including investment advisory,
securities brokerage, mortgage banking, credit card processing,
credit-related insurance underwriting, leasing and data processing. As a
result of the Transaction, shareholders of the Fund were asked to approve a new
sub-advisory agreement, which was identical in all substantive respects to
the previously existing sub-adviser agreement. On February 22,1995 a special
meeting of shareholders was convened at which the shareholders approved the new
sub-advisory agreement which then became effective upon the closing of the
Transaction.
Prospectus dated July 30, 1994
