SEMI-ANNUAL REPORT
Smith Barney/Travelers
Series Fund Inc.
MFS Total Return Portfolio
TBC Managed Income
Portfolio
Smith Barney Money Market
Portfolio
---------------------------
April 30, 1996
[Logo] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
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MFS Total Return, TBC Managed Income and
Smith Barney Money Market Portfolios
- ----------------------------------------
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith
Barney/Traveler Series Fund Inc. for the period ended April 30, 1996. This
report covers the MFS Total Return, TBC Managed Income and Smith Barney Money
Market Portfolios. For your convenience, we have summarized some of the period's
prevailing economic and market conditions and outlined each Portfolio's
investment strategy during this time. A detailed summary of performance and
current holdings for each Portfolio can be found in the appropriate sections
that follow in the semi-annual report.
Portfolio Highlights
MFS Total Return Portfolio
In the first half of the fiscal year ended April 30, 1996, the MFS Total Return
Portfolio posted a total return of 9.93%. As a balanced mutual fund, the
Portfolio's returns were enhanced by the strong performance of the U.S. stock
market, which was up 13.77% during the same period as measured by the Standard &
Poor's 500 Stock Index. (The Standard & Poor's 500 Stock Index is a
capitalization-weighted measure of 500 widely held common stocks listed on the
New York Stock Exchange, American Stock Exchange and over-the-counter market.)
However, a weakening U.S. bond market over the past two months has adversely
affected the Portfolio's overall performance.
The MFS Total Return Portfolio continues to be managed conservatively. During
the period covered by this report, the Portfolio increased its stock holdings
from 56% to 59% of total assets, kept its holdings in bonds at 33% of total
assets, and slightly reduced its cash position from 11% to 8%. Given the
strength of the U.S. stock market and historically high stock values, the
Portfolio has concentrated its stock investments in the energy, financial
services and aerospace and defense industries. In our view, these particular
industries have favorable earnings prospects and are undervalued in the
marketplace.
In anticipation of continued turbulence in the bond market and no additional
interest rate cuts by the Federal Reserve Board, the Portfolio's duration was
reduced over the past six months. In addition, we believe a strengthening U.S.
economy and higher commodities prices could cause inflation to rise and lead to
even higher bond market volatility.
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TBC Managed Income Portfolio
Over the past six months, interest rates have risen across the entire maturity
spectrum of the bond market, with the rise in rates accelerating over the last
three months. Despite efforts by the Federal Reserve Board to keep short-term
interest rates low, a strengthening U.S. economy caused bond yields to climb
higher and bond prices to fall. Of particular concern to the bond market
recently was the stronger than expected job growth in February and March as the
U.S. economy added more than 800,000 new jobs.
In a continuation of a long-term trend, corporate bonds outperformed other
sectors of the bond market. In our view, this sector's strong performance took
place primarily because of strong investor demand, a relatively low amount of
debt issuance and a general improvement in the credit quality of many new
corporate issues. At the beginning of the period covered by this report, the
price of mortgage-backed securities fell, but performed better as interest rates
rose. As a general rule, homeowners will not refinance their mortgages in an
environment of rising interest rates.
The TBC Managed Income Portfolio remained invested in the three principal
sectors of the bond market: U.S. Treasuries, mortgage-backed securities and
corporate bonds. In our view, mortgage-backed securities are still attractively
priced relative to U.S. Treasury securities and therefore the Portfolio
increased its holdings in that sector. The Portfolio's overweighting in
mortgage-backed securities is principally in the fifteen-year maturity range
where we see attractive yield potential with less risk. In addition, a generally
lower supply of new mortgage-backed securities should help this market sector's
performance going forward. Because investment-grade corporate bonds are trading
at historically high price levels relative to U.S. Treasuries, the Portfolio's
allocation in this area of the bond market was relatively low. However, the
Portfolio continues to focus on select corporate bonds in the below investment
grade category because they should perform well in a growing U.S. economy. For
the six-months ended April 30, 1996, the TBC Managed Income Portfolio had a
total return of negative 0.21% versus the 0.53% total return of the Lehman
Brothers Aggregate Bond Index, an unmanaged bond index made up of more than
6,500 issues of U.S. Treasuries, agencies, corporate bonds and mortgage-backed
securities.
Smith Barney Money Market Portfolio
In our view, the outlook for the economy is much brighter now than just six
months ago. The economy continues to grow modestly with little or no inflation
while Federal Reserve Board monetary policies appear to have been successful.
The Federal Open Market Committee (FOMC), the organization within the Federal
Reserve Board chiefly responsible for implementing monetary policy, lowered
short-term interest rates in December and January
2
<PAGE>
of 1995 from 5.75% to 5.25%. At their last meeting held in March 1996, the
Federal Reserve Board made no changes to its current monetary policy.
Despite last year's periodic shutdowns of the U.S. government, labor unrest at
General Motors and an unusually severe winter, the U.S. economy grew during the
first four months of the year. In the first quarter of 1996, Gross Domestic
Product (GDP) grew at an annual rate of 2.8%, a healthy rise from the reported
GDP annual growth rate of 0.5% in the fourth quarter of 1996. In our view, this
increase in GDP came primarily from three areas of the economy: strong consumer
spending on goods and services, higher capital spending by businesses, and,
lastly, steady spending by the U.S. government.
We expect the annual rate of U.S. GDP growth to continue and finish 1996 in the
range of 2.25% to 2.75%. As a result of modest growth in the economy, and little
or no signs of an increase in the annual rate of inflation, we expect the
Federal Reserve will not make any more policy moves in the foreseeable future.
In the first four months of 1996, inflation has picked up slightly. The consumer
price index (CPI) rose 0.4% in March as the costs of energy, food and
transportation soared. In the first quarter of 1996, the annual rate of
inflation as measured by the CPI was 4.0%, up from the 2.5% annual rate of
inflation experienced in 1995. However, on the wholesale level, price increases
have not been as strong. In addition, many economists believe the recent sharp
increases in the prices of some commodities will be short-lived and are somewhat
typical for this time of year.
While Federal Reserve Board policy has remained unchanged, the short-term yield
curve has steepened. We are bullish on the U.S. economy and the average life of
the Smith Barney Money Market Portfolio as of April 30, 1996 was 39 days. The
Smith Barney Money Market Portfolio also continues to focus on strong,
conservatively-managed banks and high-quality corporate issues that are rated
"A1/P1" or better by Moody's Investors Services, Inc. and Standard & Poor's
Corporation, two major credit reporting and bond rating agencies. In our view,
as domestic banks continue to merge with each other, their profitability should
improve as they gain more market share. We therefore expect that the credit
ratings of the U.S. banking industry should stay strong going forward. Please
note your investment in the Smith Barney Money Market Portfolio is neither
insured nor guaranteed by the U.S. government and it may not be able to maintain
a stable net asset value (NAV) of $1.00 per share.
3
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In closing, thank you for investing in the MFS Total Return, TBC Managed Income
and Smith Barney Money Market Portfolios. We look forward to continue to helping
you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman and Chief Executive Officer
May 28, 1996
4
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Smith Barney/Travelers Series Fund Inc.
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Historical Performance -- MFS Total Return Portfolio
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Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
4/30/96 $11.53 $12.32 $0.27 $0.08 9.93%++
- --------------------------------------------------------------------------------
10/31/95 9.98 11.53 0.05 0.00 16.12
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 9.98 0.00 0.00 (0.20)++
================================================================================
Total $0.32 $0.08
================================================================================
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Historical Performance -- TBC Managed Income Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
4/30/96 $11.16 $10.55 $0.45 $0.15 (0.21)%++
- --------------------------------------------------------------------------------
10/31/95 10.04 11.16 0.13 0.00 12.68
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.04 0.00 0.00 0.40++
================================================================================
Total $0.58 $0.15
================================================================================
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Return+
- --------------------------------------------------------------------------------
MFS Total TBC Managed
Return Income
Portfolio Portfolio
================================================================================
Six Months Ended 4/30/96++ 9.93% (0.21)%
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Year Ended 4/30/96 20.30 7.18
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6/16/94*-4/30/96 13.79 6.69
================================================================================
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Cumulative Total Return+
- --------------------------------------------------------------------------------
MFS Total TBC Managed
Return Income
Portfolio Portfolio
================================================================================
6/16/94*-4/30/96 27.39% 12.89%
================================================================================
+ Assumes the reinvestment of all dividends and capital gain distributions at
net asset value.
++ Total return is not annualized, as it may be representative of the total
return for the year.
* Commencement of operations.
5
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of
MFS Total Return Portfolio vs. S&P 500 Index and
Lehman Brothers Government Corporate Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
[The following table was represented as a line graph in the printed material]
MFS S&P 500 INDEX Lehman Bros. Gov't Corp. Bond Index
--- ------------- -----------------------------------
6/16/94 10000 10000 10000
7/94 9980 9943 10200
4/95 10614 11404 10777
10/95 11589 13053 11704
4/96 12740 14684 11709
+ Hypothetical illustration of $10,000 invested in shares of the MFS Total
Return Portfolio on June 16, 1994 (commencement of operations), assumes
reinvestment of dividends and capital gains, if any, at net asset value
through April 30, 1996. The S&P 500 is an index of widely held common
stocks listed on the New York and American Stock Exchanges and the
over-the-counter markets. Figures for the S&P 500 Index include
reinvestment of dividends. The Lehman Brothers Government Corporate Bond
Index is comprised of over 5,000 issues of U.S. Government Treasury and
Agency securities and Corporate and Yankee securities. The indexes are
unmanaged and are not subject to the same management and trading expenses
of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
6
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
TBC Managed Income Portfolio vs.
Lehman Brothers Aggregate Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
[The following table was represented as a line graph in the printed material]
TBC Lehman Bros. Gov't Corp. Bond Index
--- -----------------------------------
6/16/94 10000 10000
7/94 10100 10199
10/94 10040 10052
1/95 10158 10299
4/95 10533 10757
7/95 10969 11230
10/95 11313 11626
4/96 11289 11687
+ Hypothetical illustration of $10,000 invested in shares of the TBC Managed
Income Portfolio on June 16, 1994 (commencement of operations), assumes
reinvestment of dividends and capital gains, if any, at net asset value
through April 30, 1996. The Lehman Brothers Aggregate Bond Index is
comprised of over 6,500 issues of U.S. Treasuries, Agencies, Corporate
Bonds and Mortgage-Backed securities. The index is unmanaged and is not
subject to the same management and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
7
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCKS -- 54.7%
Aerospace -- 1.0%
11,800 Allied Signal Inc. $ 685,875
6,600 B.F. Goodrich Co. 262,350
- --------------------------------------------------------------------------------
948,225
- --------------------------------------------------------------------------------
Aerospace & Defense -- 2.1%
11,100 Loral Space & Communications Ltd. 159,563
12,900 Raytheon Co. 653,063
11,000 United Technologies Corp. 1,215,500
- --------------------------------------------------------------------------------
2,028,126
- --------------------------------------------------------------------------------
Apparel -- 0.4%
6,600 VF Corp. 376,200
- --------------------------------------------------------------------------------
Automotive -- 2.3%
3,100 Air Products & Chemicals Corp. 177,088
9,200 Dana Corp. 305,900
16,100 Ford Motor Co. 577,588
15,200 General Motors Corp. 824,600
14,000 Volvo AB 318,500
- --------------------------------------------------------------------------------
2,203,676
- --------------------------------------------------------------------------------
Banking -- 6.6%
13,400 Bank of Boston Corp. 648,225
13,800 Bank of New York 669,300
2,000 BankAmerica Corp. 151,500
14,484 Chase Manhattan Corp. 997,586
5,200 Comerica Inc. 226,200
8,000 Federal Home Loan Mortgage Corp. 667,000
8,800 Fleet Financial Group 378,400
26,600 National City Corp. 980,875
9,500 NationsBank Corp. 757,625
4,800 Northern Trust Corp. 270,000
20,800 Southern National Corp. 579,800
- --------------------------------------------------------------------------------
6,326,511
- --------------------------------------------------------------------------------
Beverages -- 0.4%
2,000 Anheuser-Busch Cos. Inc. 134,250
80 Earthgrains Co. 2,590
3,400 PepsiCo Inc. 215,900
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352,740
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See Notes to Financial Statements.
8
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Business Machines -- 0.3%
2,900 International Business Machine Corp. $ 311,750
- --------------------------------------------------------------------------------
Chemicals -- 2.3%
4,500 Aluminum Co. of America 280,688
3,043 Cyprus Amax Minerals Co. 82,541
6,500 Dow Chemical Co. 577,688
7,600 E.I. du Pont De Nemours & Co. 610,850
2,600 Olin Corp. 230,100
6,600 MA Hanna & Co. 227,700
3,000 Phelps Dodge 220,500
- --------------------------------------------------------------------------------
2,230,067
- --------------------------------------------------------------------------------
Coal -- 0.4%
10,100 Eastern Enterprises 362,338
- --------------------------------------------------------------------------------
Consumer Products -- 2.0%
2,800 Alcatel Alsthom 53,200
3,000 Avon Products 266,625
4,300 Colgate Palmolive Co. 329,488
12,500 General Electric Corp. 968,750
5,600 McCormick & Co. Inc. 124,600
6,400 Rubbermaid Corp. 180,800
- --------------------------------------------------------------------------------
1,923,463
- --------------------------------------------------------------------------------
Drugs -- 1.3%
6,300 American Home Products Corp. 664,650
7,400 Eli Lilly Co. 436,600
1,600 Warner Lambert Co. 178,800
- --------------------------------------------------------------------------------
1,280,050
- --------------------------------------------------------------------------------
Electrical Equipment/Utilities -- 4.5%
5,800 American Electric Power Co. 235,625
14,400 DPL Inc. 329,400
7,300 FPL Group Inc. 314,813
14,700 Honeywell Inc. 773,588
16,600 PECO Energy Co. 412,925
17,900 Pinnacle West Capital 476,587
19,500 Portland General Corp. 572,813
9,200 Stanley Works 577,300
2,200 Tektronix Inc. 87,175
7,500 Texas Utilities Co. 301,875
8,700 Unicom Corp. 239,250
- --------------------------------------------------------------------------------
4,321,351
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
9
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Financial Services -- 0.9%
6,200 American Express Co. $ 300,700
12,800 Torchmark Co. 550,400
- --------------------------------------------------------------------------------
851,100
- --------------------------------------------------------------------------------
Food Processing -- 0.8%
10,900 General Mills Inc. 604,950
2,000 Kellogg Co. 142,750
- --------------------------------------------------------------------------------
747,700
- --------------------------------------------------------------------------------
Hospital Related -- 2.4%
13,500 Baxter International Inc. 597,375
600 Ciba Geigy 694,625
1,800 National Health Investors Inc. 59,850
16,500 Smithkline Beecham Units 891,000
- --------------------------------------------------------------------------------
2,242,850
- --------------------------------------------------------------------------------
Insurance -- 1.8%
2,200 GCR Holdings Ltd. 56,100
5,200 Aetna Life & Casualty Co. 370,500
4,400 Cigna Corp. 498,850
7,400 Prudential Reinsurance Co. 168,350
9,400 St. Paul Co. 499,375
2,300 UNUM Corp. 136,850
- --------------------------------------------------------------------------------
1,730,025
- --------------------------------------------------------------------------------
Machinery/Diversified -- 2.5%
16,500 Deere & Co. 641,438
12,600 Ingersoll-Rand Co. 488,250
4,400 Xerox Co. 644,600
13,000 York International Corp. 624,000
- --------------------------------------------------------------------------------
2,398,288
- --------------------------------------------------------------------------------
Manufacturing -- 0.3%
8,700 Witco Corp. 296,888
- --------------------------------------------------------------------------------
Natural Gas -- 2.2%
8,500 Pacific Enterprises 218,875
13,000 Panenergy Corp. 424,125
3,600 Praxair Inc. 139,050
14,000 Sonat Inc. 610,750
4,000 Tenneco Co. 219,500
9,100 Williams Cos. Inc. 465,238
- --------------------------------------------------------------------------------
2,077,538
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
10
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Natural Resources-Foreign -- 0.3%
8,000 Repsol S.A. ADR $ 296,000
- --------------------------------------------------------------------------------
Oil Production-Domestic -- 5.5%
12,300 Amoco Corp. 897,900
4,700 Atlantic Richfield 553,425
17,200 Coastal Corp. 681,550
6,400 Exxon Corp. 544,000
6,600 Mobile Corp. 759,000
7,300 Schlumberger Ltd. 644,225
10,000 Sun Co. 310,000
39,200 USX-Marathon Group Inc. 862,400
- --------------------------------------------------------------------------------
5,252,500
- --------------------------------------------------------------------------------
Paper & Forest Products -- 0.3%
5,100 Weyerhaeuser Co. 252,450
- --------------------------------------------------------------------------------
Petroleum -- 2.7%
7,500 British Petroleum PLC ADR 819,375
16,800 Occidental Petroleum Corp. 432,600
7,000 Royal Dutch Petroleum Co. ADR 1,002,750
11,200 Ultramar PLC 351,400
- --------------------------------------------------------------------------------
2,606,125
- --------------------------------------------------------------------------------
Photography -- 0.8%
10,000 Eastman Kodak Co. 765,000
- --------------------------------------------------------------------------------
Publishing -- 0.7%
4,400 Dun & Bradstreet 267,850
5,300 Tribune Co. 369,675
- --------------------------------------------------------------------------------
637,525
- --------------------------------------------------------------------------------
Railroads -- 0.5%
4,600 Burlington Northern Santa Fe Corp. 402,500
5,000 Canadian National Railway 95,000
- --------------------------------------------------------------------------------
497,500
- --------------------------------------------------------------------------------
Real Estate Investment Trust -- 0.8%
19,500 Hospitality Properties Trust Corp. 497,250
4,700 Meditrust Corp. 159,213
3,000 Nationwide Health Properties Inc. 59,625
- --------------------------------------------------------------------------------
716,088
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
11
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Retail -- 1.5%
9,800 May Department Stores Co. $ 499,800
5,000 Office Depot Inc. 111,875
13,600 Sears, Roebuck & Co. 678,300
6,900 Walmart Corp. 164,738
- --------------------------------------------------------------------------------
1,454,713
- --------------------------------------------------------------------------------
Telecommunications -- 4.0%
12,800 American Telephone & Telegraph Corp. 784,000
10,700 Ameritech Corp. 624,614
16,000 GTE Corp. 694,000
7,000 Lucent Technologies Inc. 245,876
24,300 MCI Communications Corp. 715,332
9,600 Nynex Corp. 471,600
3,300 SBC Communications Inc. 165,000
- --------------------------------------------------------------------------------
3,700,422
- --------------------------------------------------------------------------------
Tobacco -- 1.1%
3,000 American Brands Inc. 124,875
10,500 Philip Morris Cos., Inc. 946,313
- --------------------------------------------------------------------------------
1,071,188
- --------------------------------------------------------------------------------
Transportation -- 1.5%
14,000 CSX Corp. 717,500
25,000 Illinois Central Corp. 750,000
- --------------------------------------------------------------------------------
1,467,500
- --------------------------------------------------------------------------------
Waste Management -- 0.5%
13,100 WMX Technologies Inc. 455,225
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost -- $45,864,913) 52,181,122
================================================================================
CONVERTIBLE PREFERRED STOCKS -- 1.2%
Electric & Natural Gas -- 0.3%
11,000 Enron Corp., Convertible 6.250% 281,875
- --------------------------------------------------------------------------------
Energy -- 0.2%
3,200 Occidental Petroleum Corp., Convertible $3.875++ 199,200
- --------------------------------------------------------------------------------
Financial Services -- 0.5%
5,300 Sci Finance, Class A shares, Exchange $3.125 469,050
- --------------------------------------------------------------------------------
Steel -- 0.1%
3,400 U.S. Steel, Series A, Convertible 8.750% 85,000
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
12
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Telephone -- 0.1%
1,000 Cointel, Exchange 7.000%++ $ 58,000
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost -- $927,596) 1,093,125
================================================================================
PREFERRED STOCKS -- 1.2%
Consumer Products -- 0.1%
2,400 Corning Delaware LP 127,200
- --------------------------------------------------------------------------------
Environmental Control -- 0.3%
7,400 Browning-Ferris Corp. 251,600
- --------------------------------------------------------------------------------
Oil -- 0.6%
1,824 Atlantic Richfield Co. 51,528
9,200 Unocal Corp. 504,850
- --------------------------------------------------------------------------------
556,378
- --------------------------------------------------------------------------------
Steel -- 0.1%
4,000 AK Steel Holding Corp. 147,000
- --------------------------------------------------------------------------------
Tobacco -- 0.1%
14,000 RJR Nabisco Holdings Corp. 84,000
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost -- $1,135,429) 1,166,178
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
CORPORATE BONDS -- 19.8%
Airlines -- 0.7%
$ 97,538 Northwest Airlines Trust, 9.250% due 6/21/14 107,855
300,000 Qantas Airways, 7.500% due 6/30/03++ 301,875
100,000 US Air Inc., 6.760% due 4/15/08 93,618
100,000 United Air Lines Inc., 10.670% due 5/1/04 116,500
- --------------------------------------------------------------------------------
619,848
- --------------------------------------------------------------------------------
Automotive -- 0.1%
100,000 Ford Motor Co., 7.750% due 6/15/43 98,500
- --------------------------------------------------------------------------------
Banking -- 2.1%
100,000 Advanta National Bank, 6.880% due 4/10/01 98,875
300,000 Alex Brown, 7.625% due 8/15/05 299,250
350,000 Bankers Trust, 7.500% due 11/15/15 333,375
170,000 Goldman Sachs Group, 7.250% due 10/1/05 165,750
50,000 Riggs National Bank, 8.500% due 2/1/06 50,813
See Notes to Financial Statements.
13
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Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
Banking -- 2.1% (continued)
Santander Financial Issuances:
$ 800,000 7.000% due 4/1/06 $ 776,000
200,000 6.375% due 2/15/11 178,250
100,000 Sovereign Bancorp, 6.750% due 9/1/00 96,625
- --------------------------------------------------------------------------------
1,998,938
- --------------------------------------------------------------------------------
Consumer Products -- 0.1%
100,000 Black & Decker Corp., 8.440% due 11/1/99 104,750
- --------------------------------------------------------------------------------
Electric Utilities -- 0.5%
100,000 Arkansas Power & Light Corp., 8.750% due 3/1/26 99,000
300,000 California Energy Corp., zero coupon due 1/15/04 287,250
100,000 Utilicorp United, Inc., 8.450% due 11/15/99 104,875
- --------------------------------------------------------------------------------
491,125
- --------------------------------------------------------------------------------
Financial -- 2.4%
520,000 ADT Operations, zero coupon due 7/6/10 269,100
100,000 Fairfax Financial Holdings, 8.300% due 4/15/26 98,880
300,000 Fleet Financial Group, 7.125% due 4/15/06 294,375
500,000 Lehman Brothers Inc., 8.500% due 5/1/07 531,875
400,000 Nationwide Mutual Insurance, 7.500% due 2/15/24 360,500
Prudential Insurance:
100,000 7.650% due 7/1/07 99,375
250,000 8.300% due 7/1/25 247,500
300,000 RHG Finance Corp., 8.875% due 10/1/05 298,500
100,000 Salton Sea Funding, 7.370% due 5/30/05 97,000
- --------------------------------------------------------------------------------
2,297,105
- --------------------------------------------------------------------------------
Food -- 0.1%
100,000 Nabisco Inc., 7.550% due 6/15/15 95,000
- --------------------------------------------------------------------------------
Gas-Transmission -- 0.4%
100,000 AMR Pipeline Corp., 7.000% due 6/1/25 95,250
200,000 Arkla, Inc., Medium Term Note, Series B,
8.600% due 9/15/98 205,750
100,000 Panhandle Eastern Corp., 8.625% due 4/15/25 102,000
- --------------------------------------------------------------------------------
403,000
- --------------------------------------------------------------------------------
Industrial -- 7.5%
400,000 Advanta Corp., 6.800% due 2/28/01 394,480
250,000 Argentina Global Inc., 9.250% due 2/23/01 238,750
100,000 Asarco Inc., 8.500% due 5/1/25 102,750
200,000 Case Corp., 7.250% due 11/5/16 186,250
See Notes to Financial Statements.
14
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
Industrial -- 7.5% (continued)
$ 200,000 Canadian Pacific Forest, 10.250% due 1/15/03 $ 210,500
200,000 Coastal Corp., 10.375% due 10/1/00 225,000
400,000 Continental Cablevision, Inc., 8.875% due 9/15/05 424,000
600,000 Cooper Industries, Inc., 7.050% due 1/1/15 645,000
300,000 Fisher Scientific Group, Inc., 7.125% due 12/15/05 280,125
Georgia Pacific Corp.:
100,000 8.625% due 4/30/25 98,875
100,000 9.875% due 11/1/21 107,375
Jet Equipment Trust:
199,099 8.640% due 11/1/12+ 212,243
250,000 9.410% due 6/15/10+ 279,525
100,000 10.690% due 5/1/15+ 106,148
300,000 11.440% due 11/1/14+ 325,914
100,000 Laidlaw Inc., 8.750% due 4/15/25 106,375
300,000 Louisiana Land, 7.650% due 12/1/23 287,250
200,000 Mark IV Industries Inc., 7.750% due 4/1/06+ 190,749
100,000 Mexican Global, 9.750% due 2/6/01 99,624
300,000 Mitchell Energy & Development Corp., 8.000% due 7/15/99 310,124
100,000 Olsten Corp., 7.000% due 3/15/06 97,749
ORXY Energy Co.:
100,000 10.000% due 4/1/01 109,249
600,000 9.300% due 5/1/96 600,000
100,000 Owens-Corning Fiber Glass Corp., 8.875% due 6/1/02 105,624
100,000 Parker & Parsley Petroleum Co., 8.250% due 8/15/07 99,749
Republic of Columbia:
300,000 7.250% due 2/23/04 279,000
250,000 8.700% due 2/15/16 230,936
Rouse Co.:
140,000 8.500% due 1/15/03 143,500
100,000 8.550% due 3/28/05 102,873
415,000 Tele-Communications Inc., 9.250% due 1/15/23 411,886
100,000 Tenet Healthcare Corp., 10.125% due 3/1/05 107,249
100,000 Walt Disney Co., 6.750% due 3/30/06 97,623
- --------------------------------------------------------------------------------
7,216,495
- --------------------------------------------------------------------------------
Insurance -- 0.3%
250,000 Metlife Insurance Co., 7.770% due 11/1/15 240,938
- --------------------------------------------------------------------------------
Media -- 0.2%
200,000 Lenfest Communications Inc., 8.375% due 11/1/05 188,000
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
15
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
Miscellaneous -- 0.2%
$ 200,000 Coastal Corp., 7.750% due 10/15/35 $ 193,500
- --------------------------------------------------------------------------------
Oil & Gas -- 0.1%
100,000 NGC Corp., 6.750% due 12/15/05 95,625
- --------------------------------------------------------------------------------
Publishing -- 1.7%
News America Holdings Inc.:
150,000 7.750% due 12/1/45 134,438
150,000 7.500% due 3/1/00 140,438
Time Warner Inc.:
333,000 8.110% due 8/15/06 335,498
1,000,000 7.450% due 2/1/98 1,015,000
- --------------------------------------------------------------------------------
1,625,374
- --------------------------------------------------------------------------------
Real Estate Investment Trust -- 0.1%
80,000 Liberty Property Trust, 8.000% due 7/1/01 84,000
- --------------------------------------------------------------------------------
Tobacco -- 0.4%
400,000 Philip Morris Co., 6.375% due 2/1/06 371,500
- --------------------------------------------------------------------------------
Utillity-Electric -- 2.9%
300,000 Commonwealth Edison Co., 8.375% due 2/15/23 294,000
200,000 Edelnor Inc., 7.750% due 3/15/06++ 195,500
1,000,000 Empresa Electrical Pehuenche, 7.300% due 5/1/03 997,200
100,000 First PV Funding, 10.150% due 1/15/16 95,750
100,000 Illinois Power Co., 8.750% due 7/1/21 104,750
Long Island Lighting Co.:
100,000 7.625% due 4/15/98 101,250
400,000 8.900% due 7/15/19 368,000
100,000 9.625% due 7/1/24 100,125
Louisiana Power & Light Co.:
100,000 8.750% due 3/1/26 98,000
100,000 10.670% due 1/2/17 107,500
100,000 Midland Funding II, 11.750% due 7/23/05 105,375
100,000 Ohio Edison, 7.375% due 9/15/02 100,000
100,000 PacificCorp Holdings, 7.200% due 4/1/06++ 98,250
- --------------------------------------------------------------------------------
2,765,700
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $19,242,232) 18,889,398
================================================================================
See Notes to Financial Statements.
16
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 12.3%
$ 150,000 U.S. Treasury Bond, 6.875% due 8/15/25 $ 148,206
927,000 U.S. Treasury Bond, 7.625% due 2/15/25 994,560
335,000 U.S. Treasury Bond, 12.000% due 5/15/03 453,359
553,000 U.S. Treasury Bond, 12.000% due 8/15/13 781,704
150,000 U.S. Treasury Note, 5.625% due 2/15/06 139,047
685,000 U.S. Treasury Note, 6.250% due 5/31/00 682,027
200,000 U.S. Treasury Note, 6.250% due 2/15/03 196,728
960,000 U.S. Treasury Note, 6.250% due 8/31/00 954,509
650,000 U.S. Treasury Note, 7.250% due 8/15/04 673,186
150,000 U.S. Treasury Note, 7.875% due 11/15/04 161,312
100,000 U.S. Treasury Note, 6.125% due 9/30/00 98,950
3,000,000 U.S. Treasury Note, 6.375% due 3/31/01 2,992,890
1,000,000 U.S. Treasury Note, 5.625% due 11/30/00 969,570
1,481,205 FNMA, 6.500% due 11/25/17 1,455,136
1,010,000 GNMA, 7.500% due 4/15/08 1,022,302
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost -- $12,090,125) 11,723,486
================================================================================
SHORT-TERM INVESTMENTS -- 10.8%
7,700,000 Federal Home Loan Banks, 5.300% due 5/1/96 7,700,000
2,570,000 Sara Lee Corp., 5.250% due 5/3/96 2,569,250
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $10,269,250) 10,269,250
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $89,529,545*) $95,322,559
================================================================================
See Notes to Financial Statements.
17
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 77.0%
$1,325,000 U. S. Treasury Bond, 7.125% due 2/15/23 $ 1,331,903
560,000 U. S. Treasury Note, 6.875% due 3/31/97 566,154
590,000 U. S. Treasury Note, 7.875% due 1/15/98 607,688
380,000 U. S. Treasury Note, 6.500% due 4/30/99 382,865
393,000 U. S. Treasury Note, 7.125% due 2/29/00 403,018
547,000 U. S. Treasury Note, 7.875% due 8/15/01 581,127
1,152,000 U. S. Treasury Note, 6.375% due 8/15/02 1,142,761
1,627,000 U. S. Treasury Note, 5.750% due 8/15/03 1,546,903
585,000 U. S. Treasury Note, 7.250% due 8/15/04 605,867
198,000 Federal National Mortgage Association,
6.500% due 4/1/03 194,967
271,035 Federal National Mortgage Association,
7.500% due 7/1/09 272,813
66,881 Federal National Mortgage Association,
7.500% due 6/1/10 67,320
177,177 Federal National Mortgage Association,
8.000% due 8/1/10 181,550
309,253 Federal National Mortgage Association,
8.000% due 9/1/10 316,886
221,099 Federal National Mortgage Association,
7.000% due 11/1/10 218,818
401,999 Federal National Mortgage Association,
7.500% due 12/1/10 404,637
180,772 Federal National Mortgage Association,
7.500% due 1/1/11 181,959
1,643,062 Federal National Mortgage Association,
7.000% due 2/1/11 1,626,106
412,050 Federal National Mortgage Association,
8.000% due 4/1/11 422,219
241,658 Federal National Mortgage Association,
7.000% due 9/1/25 233,123
471,403 Federal National Mortgage Association,
8.500% due 9/1/25 484,514
168,235 Federal National Mortgage Association,
7.000% due 1/1/26 162,293
1,621,408 Federal National Mortgage Association,
7.000% due 2/1/26 1,564,140
695,366 Federal National Mortgage Association,
6.500% due 3/1/26 652,776
281,400 Federal National Mortgage Association,
6.500% due 4/1/26 264,164
633,150 Federal National Mortgage Association,
7.000% due 4/1/26 610,787
140,700 Federal National Mortgage Association,
8.500% due 4/1/26 144,613
50,000 International Bank for Reconstruction &
Development, 9.875% due 10/1/97 52,688
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost -- $15,966,837) 15,224,659
================================================================================
CORPORATE BONDS -- 23.0%
Banking -- 0.3%
60,000 NationsBank Corp., 6.500% due 3/15/06 56,475
- --------------------------------------------------------------------------------
Financial Services -- 2.5%
200,000 Lehman Brothers, 6.125% due 2/1/01 192,750
50,000 H.F. Ahmanson, 7.650% due 4/15/00 50,875
50,000 Household Finance Corp., 7.800% due 11/1/96 50,487
50,000 Lincoln National Corp., 7.250% due 5/15/05 49,563
150,000 PaineWebber Group, 6.250% due 6/15/98 150,000
- --------------------------------------------------------------------------------
493,675
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
18
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
Healthcare -- 0.8%
Tenet Healthcare Corp.:
$100,000 9.625% due 9/1/02 $ 107,250
50,000 8.625% due 12/1/03 51,125
- --------------------------------------------------------------------------------
158,375
- --------------------------------------------------------------------------------
Industrial -- 5.5%
90,000 ADT Operations, 8.250% due 8/1/00 92,925
39,000 American Home Products Corp., 7.900% due 2/15/05 40,267
95,000 Be Aerospace, 9.875% due 2/1/06 95,237
50,000 Carpenter Technology Corp., 7.440% due 8/16/99 51,125
143,000 Chesapeake Energy Corp., 9.125% due 4/15/06 141,570
190,000 El Paso Electric Company, 7.250% due 2/1/99 186,912
125,000 General Motors Corp., 7.100% due 3/15/06 122,656
170,000 USG Corp., 9.250% due 9/15/01 181,688
75,000 Valassis Inserts Inc., 9.375% due 3/15/99 76,125
100,000 Westpoint Stevens Inc., 8.750% due 12/15/01 100,000
- --------------------------------------------------------------------------------
1,088,505
- --------------------------------------------------------------------------------
Miscellaneous -- 3.0%
119,000 EQCC Home Equity Loan Trust 1996 1 A2,
5.820% due 9/15/09 115,467
200,000 Southland Corp., 5.000% due 12/15/03 158,500
87,000 UCFC Home Equity Loan 1994 - C1 A, 8.075% due 4/10/14 88,980
100,000 Valassis Communications, 9.550% due 12/1/03 102,625
120,000 World Financial Network Credit Card Trust 1996 A,
6.700% due 7/15/00 119,363
- --------------------------------------------------------------------------------
584,935
- --------------------------------------------------------------------------------
Retail -- 1.4%
Federated Department Stores:
85,000 10.000% due 2/15/01 89,569
80,000 10.000% due 10/15/02 77,900
Sears, Roebuck & Co.:
50,000 8.550% due 8/1/96 50,313
60,000 5.710% due 2/6/01 57,600
- --------------------------------------------------------------------------------
275,382
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
19
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
Telecommunications -- 5.8%
$225,000 360 Communications, 7.125% due 3/1/03 $ 216,281
185,000 Jones Intercable Inc., 9.625% due 3/15/02 189,625
330,000 MFS Communications, 8.875% due 1/15/06 205,425
196,000 Lenfest Communications Inc., 8.375% due 11/1/05 184,240
195,000 Paging Network Inc., 8.875% due 2/1/06 187,688
157,000 Vanguard Celluar, 9.375% due 4/15/06 156,411
- --------------------------------------------------------------------------------
1,139,670
- --------------------------------------------------------------------------------
Transportation -- 0.2%
50,000 Federal Express Corp., 6.250% due 4/15/98 49,750
- --------------------------------------------------------------------------------
Yankee Bond With Coupon -- 3.5%
111,000 Aegon NV, 8.000% due 8/15/06 116,411
184,000 BHP Finance USA, 6.690% due 3/1/06 176,410
41,000 Carter Holt Harvey Ltd., 8.875% due 12/1/04 44,485
99,000 Midland Bank, 6.950% due 3/15/11 93,679
100,000 Rogers Cable System, 9.625% due 8/1/02 101,000
185,000 Rogers Communications Inc., 2.000% due 11/26/05 97,125
75,000 Teekay Shipping Corp., 8.320% due 2/1/08 71,625
- --------------------------------------------------------------------------------
700,735
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $4,287,104) 4,547,502
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $20,253,941*) $19,772,161
================================================================================
See Notes to Financial Statements.
20
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
FACE DATE OF
AMOUNT SECURITY PURCHASE VALUE
=================================================================================================
<C> <S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 2.8%
$1,000,000 Federal Home Loan Bank matures 6/20/96 5.29% $ 992,833
1,000,000 Federal National Mortgage Association matures 8/16/96 4.90 985,793
- -------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost -- $1,978,626) 1,978,626
=================================================================================================
DOMESTIC BANK OBLIGATION -- 1.4%
1,000,000 FCC National matures 6/20/96 (Cost -- $1,000,000) 5.25 1,000,000
=================================================================================================
DOMESTIC CERTIFICATES OF DEPOSIT -- 4.2%
1,000,000 Bank of America matures 5/20/96 5.10 1,000,000
2,000,000 Morgan Stanley Guaranty mature 7/15/96 to 8/20/96 5.00 to 5.07 2,000,570
- -------------------------------------------------------------------------------------------------
TOTAL DOMESTIC CERTIFICATES OF DEPOSIT
(Cost -- $3,000,570) 3,000,570
=================================================================================================
COMMERCIAL PAPER -- 77.8%
1,000,000 Abbey National North America Corp. matures 6/20/96 5.19 992,903
2,000,000 AIG Funding matures 5/22/96 5.33 1,993,817
2,000,000 Banca Commerciale Italiana matures 7/8/96 5.36 1,980,016
2,000,000 Bank of America (Bankamerica Corp.)
mature 6/25/96 to 6/26/96 5.32 to 5.40 1,983,767
2,750,000 Bank of New York matures 5/20/96 5.37 2,742,250
2,000,000 Bear Stearns matures 5/23/96 5.36 1,993,486
1,000,000 CAFCO matures 6/27/96 5.32 991,656
3,000,000 Canadian Imperial Holdings Inc. matures 7/2/96 5.34 2,972,772
1,000,000 Canadian Wheat Board matures 6/5/96 5.29 994,964
2,000,000 Cheltenham & Gloucester Building Society matures 7/2/96 5.35 1,981,813
1,000,000 Credito Italiano matures 8/27/96 5.42 982,628
3,000,000 Den Danske Corp. matures 5/6/96 5.35 2,997,783
500,000 General Electric Capital Corp. matures 5/2/96 5.53 499,925
3,000,000 Goldman Sachs Group, L.P.
matures 5/16/96 5.33 2,993,375
2,000,000 International Nederlanden Group matures 6/24/96 5.32 1,984,175
500,000 Merrill Lynch & Co., Inc. matures 5/31/96 5.39 497,800
1,500,000 Nestle Capital Corp. matures 5/14/96 5.33 1,497,129
1,000,000 Oesterreichische Kontrollbank AG matures 8/26/96 5.00 984,140
3,000,000 PHH Corp. matures 5/23/96 5.30 2,990,320
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
FACE DATE OF
AMOUNT SECURITY PURCHASE VALUE
=================================================================================================
<C> <S> <C> <C>
COMMERCIAL PAPER -- 77.8% (continued)
$2,000,000 Preferred Receivable Funding Corp. matures 5/8/96 5.37% $ 1,997,919
1,000,000 Province of British Columbia matures 6/10/96 5.44 994,111
1,000,000 Rabo Bank matures 5/20/96 5.30 997,213
2,000,000 Raytheon matures 5/8/96 5.26 1,997,958
500,000 Royal Bank of Canada matures 6/6/96 5.46 497,340
2,000,000 Sara Lee Corp. matures 6/26/96 5.35 1,983,542
2,000,000 Sheffield Receivable Corp. matures 5/10/96 5.28 1,997,365
2,000,000 Siemens Corp. matures 5/23/96 5.31 1,993,547
3,000,000 Smithkline Beecham matures 5/22/96 5.32 2,990,742
2,000,000 Union Bank of Switzerland matures 5/1/96 5.35 2,000,000
2,000,000 USAA Capital Corp. matures 6/27/96 5.35 1,983,248
2,000,000 Woolwich Building Society matures 7/8/96 5.35 1,980,053
- -------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $55,467,757) 55,467,757
=================================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 12.6%
1,000,000 Bank of Nova Scotia matures 6/10/96 5.10 999,972
1,000,000 Bayerische Vereinsbank matures 7/5/96 5.34 1,000,013
1,000,000 Creditanstalt Bankverein matures 5/13/96 5.53 1,000,003
1,000,000 Credit Suisse matures 6/27/96 5.23 1,000,000
1,000,000 Lloyds Bank matures 7/5/96 5.09 1,000,018
3,000,000 Societe Generale matures 6/5/96 5.36 3,000,000
1,000,000 Westdeutsche Landesbank matures 7/8/96 5.37 1,000,000
- -------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $9,000,006) 9,000,006
=================================================================================================
REPURCHASE AGREEMENT -- 1.2%
879,000 Morgan Stanley Group, 5.31% due 5/1/96; Proceeds at maturity --
$879,130; (Fully collateralized by U.S. Treasury Notes,
5.50% due 9/30/97; Market value -- $905,333) (Cost -- $879,000) 879,000
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $71,325,959*) $71,325,959
=================================================================================================
</TABLE>
++ Non-income producing security.
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
22
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS Total TBC Managed SB Money
Return Income Market
Portfolio Portfolio Portfolio
==============================================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost -- $89,529,545,
$20,253,941 and $71,325,959) $ 95,322,559 $ 19,772,161 $ 71,325,959
Cash 629,545 431,360 560
Receivable for securities sold 315,139 129,990 --
Interest receivable 643,966 230,193 156,125
- --------------------------------------------------------------------------------------------------------------
Total Assets 96,911,209 20,563,704 71,482,644
- --------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 2,086,928 317,474 --
Management fees payable 157,669 44,350 39,133
Dividends payable -- -- 110,666
Accrued expenses 28,584 8,743 88,435
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 2,273,181 370,567 238,234
- --------------------------------------------------------------------------------------------------------------
Total Net Assets $94,638,028 $20,193,137 $71,244,410
==============================================================================================================
NET ASSETS:
Par value of capital shares $ 77 $ 19 $ 712
Capital paid in excess of par value 86,678,480 20,251,350 71,243,698
Undistributed net investment income 969,362 354,906 --
Accumulated net realized gain from
security transactions 1,197,313 68,642 --
Net unrealized appreciation (depreciation)
of investments and foreign currencies 5,792,796 (481,780) --
- --------------------------------------------------------------------------------------------------------------
Total Net Assets $94,638,028 $20,193,137 $71,244,410
==============================================================================================================
Shares Outstanding 7,679,577 1,914,019 71,244,410
- --------------------------------------------------------------------------------------------------------------
Net Asset Value $12.32 $10.55 $1.00
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
MFS Total TBC Managed SB Money
Return Income Market
Portfolio Portfolio Portfolio
====================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,097,421 $ 542,347 --
Interest 610,697 -- $ 1,571,921
- ------------------------------------------------------------------------------------
Total Investment Income 1,708,118 542,347 1,571,921
- ------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 290,547 52,324 84,282
Custody 14,000 1,750 16,653
Audit and legal 11,350 7,000 12,500
Registration fees 10,000 2,500 18,283
Shareholder and system servicing fees 8,000 4,000 17,016
Shareholder communications 4,000 4,000 19,311
Directors' fees 3,500 1,750 5,804
Pricing service fees 2,223 5,000 --
Other 1,405 1,500 8,763
- ------------------------------------------------------------------------------------
Total Expenses 345,025 79,824 182,612
Less: Management fee waiver (Note 3) -- (5,932) --
- ------------------------------------------------------------------------------------
Net Expenses 345,025 73,892 182,612
- ------------------------------------------------------------------------------------
Net Investment Income 1,363,093 468,455 1,389,309
- ------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTE 4):
Realized Gain (Loss) From:
Security transactions
(excluding short-term securities*) 1,218,709 76,869 549
Foreign currency transactions (1,891) -- --
- ------------------------------------------------------------------------------------
Net Realized Gain 1,216,818 76,869 549
- ------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of period 2,217,552 251,203 --
End of period 5,792,796 (481,780) --
- ------------------------------------------------------------------------------------
Increase in Net Unrealized
Appreciation (Depreciation) 3,575,244 (732,983) --
- ------------------------------------------------------------------------------------
Net Gain (Loss) 4,792,062 (656,114) 549
- ------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations $ 6,155,155 $ (187,659) $ 1,389,858
====================================================================================
*Represents only short-term securities for the Smith Barney Money Market Portfolio.
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
MFS Total Return Portfolio 1996 1995
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,363,093 $ 1,035,930
Net realized gain 1,216,818 394,347
Increase in net unrealized appreciation 3,575,244 2,258,516
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 6,155,155 3,688,793
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,430,635) (61,075)
Net realized gains (403,787) --
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,834,422) (61,075)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 39,177,768 37,602,066
Net asset value of shares issued for
reinvestment of dividends 1,834,422 61,075
Cost of shares reacquired (57,906) (431,780)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 40,954,284 37,231,361
- --------------------------------------------------------------------------------
Increase in Net Assets 45,275,017 40,859,079
NET ASSETS:
Beginning of period 49,363,011 8,503,932
- --------------------------------------------------------------------------------
End of period* $ 94,638,028 $ 49,363,011
================================================================================
* Includes undistributed net investment income of: $ 969,362 $ 1,038,795
================================================================================
See Notes to Financial Statements.
25
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
TBC Managed Income Portfolio 1996 1995
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 468,455 $ 452,405
Net realized gain 76,869 177,909
Increase in net unrealized appreciation
(depreciation) (732,983) 310,909
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Operations (187,659) 941,223
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (567,702) (63,967)
Net realized gains (186,111) (2,040)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (753,813) (66,007)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 9,232,740 8,018,349
Net asset value of shares issued for
reinvestment of dividends 753,813 66,007
Cost of shares reacquired (130,868) (1,521,061)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 9,855,685 6,563,295
- --------------------------------------------------------------------------------
Increase in Net Assets 8,914,213 7,438,511
NET ASSETS:
Beginning of period 11,278,924 3,840,413
- --------------------------------------------------------------------------------
End of period* $ 20,193,137 $ 11,278,924
================================================================================
* Includes undistributed net investment income of: $ 354,906 $ 454,153
================================================================================
See Notes to Financial Statements.
26
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
SB Money Market Portfolio 1996 1995
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,389,309 $ 884,152
Net realized gain 549 --
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,389,858 884,152
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2) (1,389,858) (884,152)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 45,753,362 41,451,114
Net asset value of shares issued for
reinvestment of dividends 1,340,696 829,090
Cost of shares reacquired (13,336,447) (10,071,297)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 33,757,611 32,208,907
- --------------------------------------------------------------------------------
Increase in Net Assets 33,757,611 32,208,907
- --------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 37,486,799 5,277,892
- --------------------------------------------------------------------------------
End of period $ 71,244,410 $ 37,486,799
================================================================================
See Notes to Financial Statements.
27
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The MFS Total Return, TBC Managed Income and Smith Barney Money Market
Portfolios ("Portfolios") are separate investment portfolios of the Smith
Barney/Travelers Series Fund Inc. ("Fund"). The Fund, a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company and consists of these
Portfolios and nine other separate investment portfolios: Alliance Growth, AIM
Capital Appreciation, GTGlobal Strategic Income, Putnam Diversified Income,
Smith Barney High Income, Smith Barney Income and Growth, Smith Barney
International Equity, Smith Barney Pacific Basin, and Van Kampen American
Capital Enterprise Portfolios. Shares of the Fund are offered only to insurance
company separate accounts that fund certain variable annuity and variable life
insurance contracts. The financial statements and financial highlights for the
other portfolios are presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Portfolios
are: (a) security transactions are accounted for on trade date; (b) the Smith
Barney Money Market Portfolio uses the amortized cost method for valuing all of
its portfolios securities and the Portfolios use the amortized cost method for
valuing short-term investments with maturities less than 60 days; accordingly,
the cost of securities plus accreted discount or minus amortized premium,
approximates market value; also securities traded on national securities markets
are valued at the closing prices on such markets; securities for which no sales
price was reported and U.S. Government and Government Agency obligations are
valued at the mean between the bid and ask prices; (c) investments that have a
maturity of more than 60 days, other than those held in the Smith Barney Money
Market Portfolio, are valued at prices based on market quotations for securities
of similar type, yield and maturity as applicable; (d) dividend income is
recorded on the ex-dividend date and interest income is recorded on the accrual
basis; (e) gains or losses on the sale of securities are calculated by using the
specific identification method; (f) dividends and distributions to shareholders
are recorded on the ex-dividend date; (g) direct expenses are charged to each
Portfolio; (h) the accounting records of the Portfolios are maintained in U.S.
dollars. All assets and liabilities denominated in foreign currencies are
translated into U.S. dollars based on the rate of exchange of such currencies
against U.S. dollars on the date of valuation. Purchases and sales of
securities, and income and expenses are translated at the rate of exchange
quoted on the respective date that such transactions are recorded. Differences
between income and expense amounts recorded and collected or paid are adjusted
when reported by the custodian bank; (i) in accordance with Statement of
Position 93-2, Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distribution by Investment
Companies, book and tax differences
28
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
================================================================================
have been reclassified to undistributed net investment income. As of October 31,
1995, the cumulative effect of such differences, totaling $3,221 and $1,731 were
reclassified to undistributed net investment income for the MFS Total Return and
TBC Managed Income Portfolios from paid-in capital, respectively. Net investment
income, net realized gains, and net assets were not affected by this change; (j)
the Portfolios intend to comply with the requirements of the Internal Revenue
Code of 1986, as amended, pertaining to regulated investment companies and to
make distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes; and (k) estimates and assumptions are
required to be made regarding assets, liabilities and changes in net assets
resulting from operations when financial statements are prepared. Changes in the
economic environment, financial markets and any other parameters used in
determining these estimates could cause actual results to differ from these
amounts.
2. DIVIDENDS
The Smith Barney Money Market Portfolio declares and records a dividend of
substantially all its net investment income on each business day. Such dividends
are paid or reinvested monthly on the payable date.
3. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH
AFFILIATED PERSONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The MFS
Total Return ("MFSTR"), TBC Managed Income ("TBCMI") and Smith Barney Money
Market ("SBMM") Portfolios pay SBMFM a management fee calculated at annual rates
of 0.80%, 0.65%, and 0.60% of the average daily net assets of each Portfolio,
respectively. These fees are calculated daily and paid monthly. SBMFM waived a
portion of its management fees for TBCMI for the six months ended April 30,
1996.
SBMFM has entered into subadvisory agreements with Massachusetts Financial
Services Company ("MFS") and The Boston Company Asset Management, Inc. ("TBC").
Pursuant to each subadvisory agreement, MFS and TBC are responsible for the
day-to-day portfolio operations and investment decisions for MFSTR and TBCMI,
respectively. As a result, SBMFM pays MFS and TBC a monthly fee calculated at
the annual rate of 0.375% and 0.30% of the average daily net assets of MFSTR and
TBCMI, respectively. TBC waived a portion of its fees related to TBCMI for the
six months ended April 30, 1996.
29
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the six months ended April 30, 1996, SB received brokerage
commissions of $174.
All officers and two Directors of the Fund are employees of SB.
4. INVESTMENTS
During the six months ended April 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
MFS TBC
Total Managed
Return Income
================================================================================
Purchases $95,239,977 $25,589,250
- --------------------------------------------------------------------------------
Sales 55,297,155 15,530,206
================================================================================
At April 30, 1996, net unrealized appreciation and depreciation of
investments for Federal income tax purposes were approximately as follows:
MFS TBC
Total Managed
Return Income
================================================================================
Gross unrealized appreciation $6,958,062 $ 20,994
Gross unrealized depreciation (1,165,048) (502,774)
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $5,793,014 $(481,780)
================================================================================
5. REPURCHASE AGREEMENTS
The Portfolios purchase (and its custodian take possession of) U.S.
Government Securities from banks and securities dealers subject to agreements to
resell the securities to the sellers at a future date (generally, the next
business day) at an agreed-upon higher repurchase price. The Portfolios require
continual maintenance of the market value of the collateral in amounts at least
equal to the repurchase price.
6. CAPITAL SHARES
At April 30, 1996, the Fund had six billion shares of capital stock
authorized with a par value of $0.00001 per share. Each share of a Portfolio
represents an identical interest in that Portfolio with each other share of the
same Portfolio and has an equal entitlement to any dividends and distributions
made by the Portfolio.
30
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1996 October 31, 1995
================================================================================
MFS Total Return
Shares sold 3,250,079 3,460,809
Shares issued on reinvestment 154,267 6,277
Shares redeemed (4,871) (39,326)
- --------------------------------------------------------------------------------
Net Increase 3,399,475 3,427,760
================================================================================
TBC Managed Income
Shares sold 846,014 766,837
Shares issued on reinvestment 69,443 6,674
Shares redeemed (12,292) (145,178)
- --------------------------------------------------------------------------------
Net Increase 903,165 628,333
================================================================================
SB Money Market
Shares sold 45,753,362 41,451,114
Shares issued on reinvestment 1,340,696 829,090
Shares redeemed (13,336,447) (10,071,297)
- --------------------------------------------------------------------------------
Net Increase 33,757,611 32,208,907
================================================================================
31
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
MFS Total Return Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 11.53 $ 9.98 $10.00
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.23 0.45 0.13
Net realized and unrealized gain (loss) 0.91 1.15 (0.15)
- --------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.14 1.60 (0.02)
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.27) (0.05) --
Net realized gains (0.08) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.35) (0.05) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.32 $ 11.53 $ 9.98
- --------------------------------------------------------------------------------
Total Return 9.93%++ 16.12% (0.20)%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $94,638 $49,363 $8,504
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.95%+ 0.95% 0.93%+
Net investment income 3.74+ 4.40 3.51+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 88.98% 103.72% 17.67%
================================================================================
Average commissions per share
paid on equity transactions(4) $ 0.06 $ 0.04 --
================================================================================
(1) For the six months ended April 30,1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the Manager
has reimbursed the Portfolio for $13,857 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share effect on net investment income and expense ratios would have
been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.01 1.06%
1994 0.06 2.51+
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
32
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
TBC Managed Income Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 11.16 $ 10.04 $ 10.00
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.30 0.61 0.21
Net realized and unrealized gain (loss) (0.31) 0.64 (0.17)
- --------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.01) 1.25 0.04
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.45) (0.13) --
Net realized gains (0.15) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.60) (0.13) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.55 $ 11.16 $ 10.04
- --------------------------------------------------------------------------------
Total Return (0.21)%++ 12.68% 0.40%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 20,193 $ 11,279 $ 3,840
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.92%+ 0.92% 0.87%+
Net investment income 5.86+ 6.13 5.67+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 98% 169.51% 41.54%
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the six months ended
April 30, 1996, the year ended October 31, 1995 and the period ended
October 31, 1994. In addition, the Manager has reimbursed the Portfolio for
$15,557 in expenses for the period ended October 31, 1994. If such fees
were not waived and expenses not reimbursed, the per share effect on net
investment income and the expense ratios would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ -------------------
1996 $0.00# 1.00%+
1995 0.04 1.29
1994 0.07 2.91+
# Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
33
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
Smith Barney Money Market Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
Net investment income(3) 0.025 0.052 0.014
Dividends from net investment income (0.025) (0.052) (0.014)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
Total Return 2.49%++ 5.35% 1.46%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 71,244 $ 37,487 $ 5,278
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.64%+ 0.65% 0.66%+
Net investment income 4.90+ 5.26 3.83+
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager waived all or part of its fees for the year ended October 31,
1995 and the period ended October 31, 1994. In addition, the Manager
reimbursed the Portfolio for $15,423 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share effect on net investment income and the expense ratios would
have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.003 0.94%
1994 0.005 2.11+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
34
<PAGE>
Smith Barney/Travelers
Series Fund Inc.
Directors
Victor K. Atkins
Jessica M. Bibliowicz
Alger B. Chapman
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
James M. Shuart
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
John C. Bianchi
Vice President
James B. Conheady
Vice President
Martin Hanley
Vice President
Jeffrey J. Russell
Vice President
Bruce D. Sargent
Vice President
Phyllis Zahorodny
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
------------
A Member of TravelersGroup [LOGO]
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general
information of the shareholders of Smith
Barney/Travelers Series Fund Inc. -- MFS
Total Return, TBC Managed Income and
Smith Barney Money Market Portfolios. It
is not authorized for distribution to
prospective investors unless accompanied
or preceded by a current Prospectus for
the Portfolios, which contains
information concerning the Portfolios'
investment policies and expenses as well
as other pertinent information.
Smith Barney/Travelers
Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0804 6/96
SEMI-ANNUAL REPORT
Smith Barney/Travelers
Series Fund Inc.
Smith Barney Income
& Growth Portfolio
Alliance Growth Portfolio
Van Kampen
American Capital
Enterprise Portfolio
---------------------------
April 30, 1996
[Logo] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
- -----------------------------------------------------
Smith Barney Income & Growth, Alliance Growth
and Van Kampen American Capital Enterprise Portfolios
- -----------------------------------------------------
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith
Barney/Travelers Series Fund Inc. - Smith Barney Income and Growth, Alliance
Growth and Van Kampen American Capital Enterprise Portfolios for April 30, 1996.
For your convenience, we have summarized some of the period's prevailing
economic and market conditions below and outlined the various investment
strategies employed by the Portfolios during this time. A detailed summary of
performance and current holdings for each Portfolio can be found in the
appropriate sections that follow in the semi-annual report.
Portfolio Highlights
Smith Barney Income and Growth Portfolio
For the six months ended April 30, 1996, the Smith Barney/ Travelers Series Fund
- - Income and Growth Portfolio had a total return of 13.98%, which outperformed
the total return of 12.50%, for that same time period, for the Standard & Poor's
500 Stock Index ("S&P 500"), a capitalization-weighted measure of 500 widely
held common stocks listed on the New York Stock Exchange, American Stock
Exchange and over-the-counter market. In the more volatile stock market
environment of the past six months, aggressive smaller company growth funds
generally excelled, while conservative stock funds such as the Smith Barney
Income and Growth Portfolio that generally invest in larger and more established
companies did not do as well.
Market Update
During the first quarter of 1996, the volatility of the stock market increased
significantly. In addition, cyclical stocks such as automobiles and retailers,
which were last year's major underperformers, became the market's new leaders,
replacing the more defensive, stocks such as utilities, oil companies and
consumer-product companies. The one exception was the financial sector, which
performed well in the fourth quarter of 1995 and continued to do well in the
first quarter of the year. This leadership shift took place primarily because
the stock market, which had earlier expected a weaker economy, became convinced
that the economy was growing stronger amidst signs of higher-than-expected
employment growth in February and March.
Portfolio's Investment Strategy
In selecting stocks for the Smith Barney Income and Growth Portfolio, we
typically choose large-capitalization companies with above-market dividend
1
<PAGE>
yield and look for companies with assets that are undervalued by the
marketplace. The Portfolio's conservative and highly disciplined investment
approach involves extensive hands-on research designed to provide high returns
while managing risk. No matter how volatile stock market conditions may become,
we remain committed to our "bottom-up" investment approach. We generally make
investment decisions in the Portfolio because of company-specific reasons rather
than the present state of the market or economy. In the first four months of
1996, we sold our holdings in Chicago-based utility Unicom Corporation because
of a higher-than-expected charge they took to repair a nuclear power plant,
which will definitely slow its previously estimated earnings growth. In
addition, the Portfolio eliminated its position in Pinnacle West Capital, a
utility holding company which is the parent of Arizona Public Service Co.,
Arizona's largest electric utility because of its decision to accelerate
depreciation of earnings which should cause short-term earnings to remain flat.
Two recent additions to the Smith Barney Income and Growth Portfolio included
Unilever N.V. (a vast international Anglo-Dutch organization that is a global
leader in brand name consumer goods such as foods, detergents and toiletries)
and Pennsylvania-based AMP Inc. (a world leader in electrical and electronic
connection devices). Unilever is a significant global competitor for Proctor &
Gamble, especially in the emerging markets. Under Co-Chairman Niall FitzGerald,
Unilever has begun to streamline its operations and implement cost-cutting
measures to improve operating margins, a strategy that many U.S. consumer brand
name companies followed successfully in the 1980s. We believe Unilever's current
restructuring efforts will ultimately be positive and result in the company
becoming a leaner and even more formidable global competitor, especially in
Europe and the U.S.
In our view, AMP Inc. was an undervalued technology company. In 1995, AMP had
nearly a 20% market share in the $25 billion market for electrical and
electronic connection devices. However, the company's core business was tied to
the cyclical fortunes of the auto and computer industries. Last year, AMP
acquired M/A-COM to gain access to the fast-growing telecommunications industry,
which was a key element of the new management team's strategy to transform AMP
into a high growth technology company.
We think AMP paid a reasonable price for M/A COM and this acquisition made
excellent sense from both a strategic and business point of view. In addition,
because we purchased AMP shares when they were trading near the bottom of their
historical range and had low relative values compared to its market, in our
opinion, the upside potential of AMP Inc. was excellent while the downside risk
was minimal.
2
<PAGE>
Market Outlook
We expect that the stock market will remain volatile for the foreseeable future.
In an environment where valuations are at historical highs as measured by many
parameters, it will become more challenging for the Smith Barney Income and
Growth Portfolio to find out-of-favor blue chip companies that meet our strict
investment criteria. However, we will remain patient and stick to our
disciplined strategy. We will continue to look for companies that are either at
their lowest point in the business cycle or have been poorly managed in the past
but which, in our view, are about to turn the corner because of a new management
team, new product, or new business strategy.
Alliance Growth Portfolio
For the six months ended April 30, 1996, the Alliance Growth Portfolio had a
total return of 15.85% which compares favorably with the S&P 500 return of
12.50% for the same time period. The U.S. stock market recorded most of this
gain from November through February. Through March and April, the U.S. stock
market moved sideways. Early in the six-month period under review, the U.S.
economy was slowing but not entering into a recession. More recent economic data
has suggested that the U.S. economy is recovering faster than generally
expected. While this may be good news for corporate earnings prospects, it had a
negative impact on the U.S. bond market and caused the performance of U.S. stock
market to flatten out.
Leadership within the stock market has shifted back and forth between defensive
stocks and cyclical stocks depending on the recent trend from released economic
data. The Alliance Growth Portfolio has not attempted to time these shifts in
market sentiment, but instead has focused on higher growth industries such as
networking technology company stocks and more value-oriented stocks primarily
from the financial services sector of the market.
After a remarkable performance in 1995, the stock market is off to a fairly
strong start so far in 1996. We believe the bull market continues to have some
momentum left. However, with corporate earnings growth slowing, the stock
market's continued vitality will depend in large part on interest rates staying
near their current levels. Any signs of a stronger U.S. economy should put
upward pressure on interest rates. That scenario could pose a threat to the
stock market's continuing climb.
Van Kampen American Capital Enterprise Portfolio
For the six months ended April 30, 1996, the Van Kampen American Capital
Enterprise had a total return of 15.32% which compares favorably to its Lipper
Analytical Services, Inc. growth fund peer group average of 13.12% for the same
time period.
3
<PAGE>
Portfolio's Investment Strategy
Because the Van Kampen American Capital Enterprise Portfolio is almost always
fully invested, we have an extreme focus on individual stock selection. In
addition, the Portfolio is broadly diversified across all sectors of the
economy, with an emphasis on growth areas such as technology, health care and
retail. No significant sector rotation is utilized, which is in keeping with our
investment philosophy that the best investment returns can be achieved by
selecting specific individual stocks that have, in our view, the best growth
potential rather than attempting to time the market. We follow a simple,
disciplined and long-term strategy in selecting stocks. We look for one of the
following criteria in choosing a particular stock: accelerating earnings growth;
consistent earnings growth; better than expected fundamentals; or a fundamental
change in a company, industry or regulatory environment. Subject to valuation
considerations and as long as these factors remain positive, a stock will
generally be kept in the Portfolio.
During the first quarter of 1996, the Portfolio increased its holdings in the
raw materials/process and technology sectors of the market and decreased its
holdings in the consumer, non-durable goods and health care sectors of the
market. In addition, the Portfolio made some significant additions to its
holdings in Aspect Telecommunications; Boise Cascade; Gymboree; Harley Davidson;
Healthsouth; U.S. Office Products and Tiffany & Co.
Thank you for investing in the Smith Barney Income and Growth, Alliance Growth
and Van Kampen American Capital Enterprise Portfolios. We look forward to
continuing to help you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman and Chief Executive Officer
June 6, 1996
4
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance -- Smith Barney Income and Growth Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
4/30/96 $12.12 $13.63 $0.17 $0.04 13.98%++
- --------------------------------------------------------------------------------
10/31/95 10.14 12.12 0.06 0.00 20.21
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.14 0.00 0.00 1.40++
================================================================================
Total $0.23 $0.04
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Alliance Growth Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
4/30/96 $13.28 $14.91 $0.09 $0.33 15.85%++
- --------------------------------------------------------------------------------
10/31/95 10.65 13.28 0.02 0.10 26.19
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.65 0.00 0.00 6.50++
================================================================================
Total $0.11 $0.43
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Van Kampen American Capital Enterprise Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
4/30/96 $12.89 $14.37 $0.04 $0.37 15.32%++
- --------------------------------------------------------------------------------
10/31/95 10.38 12.89 0.02 0.03 24.74
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.38 0.00 0.00 3.80++
================================================================================
Total $0.06 $0.40
================================================================================
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
5
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Average Annual Total Return+
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SB Van Kampen
Income and Alliance American Capital
Growth Portfolio Growth Portfolio Enterprise Portfolio
=====================================================================================
<S> <C> <C> <C>
Six Months Ended 4/30/96++ 13.98% 15.85% 15.32%
- -------------------------------------------------------------------------------------
Year Ended 4/30/96 26.50 35.56 38.80
- -------------------------------------------------------------------------------------
6/16/94* through 4/30/96 19.18 26.59 23.86
=====================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
<CAPTION>
SB Van Kampen
Income and Alliance American Capital
Growth Portfolio Growth Portfolio Enterprise Portfolio
=====================================================================================
6/16/94* through 4/30/96 38.93% 55.56% 49.33%
=====================================================================================
</TABLE>
+ Assumes the reinvestment of all dividends and capital gain distributions,
if any, at net asset value.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
* Commencement of operations.
6
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Income and Growth Portfolio vs. S&P 500 Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
[The following table was represented as a line graph in the printed material]
SB INCOME S&P 500 INDEX
--------- -------------
Jun 16, 94 10000 10000
10/94 10140 10324
4/95 10982 11404
10/95 12189 13053
4/96 13983 14684
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Income and Growth Portfolio on June 16, 1994 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through April 30, 1996. The S&P 500 is an index of widely held common
stocks listed on the New York and American Stock Exchanges and the
over-the-counter markets. Figures for the S&P 500 Index include
reinvestment of dividends. The index is unmanaged and is not subject to the
same management and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
7
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Alliance Growth Portfolio vs. S&P 500 Index and Russell 1000 Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
[The following table was represented as a line graph in the printed material]
ALLIANCE S&P 500 INDEX RUSSELL 1000 INDEX
-------- ------------- ------------------
6/16/94 10000 10000 10000
10/94 10650 10324 10191
4/95 11475 11404 11050
10/95 13428 13053 12612
4/30/96 15557 14684 14327
+ Hypothetical illustration of $10,000 invested in shares of the Alliance
Growth Portfolio on June 16, 1994 (commencement of operations), assuming
reinvestment of dividends and capital gains, if any, at net asset value
through April 30, 1996. The S&P 500 is an index of widely held common
stocks listed on the New York and American Stock Exchanges and the
over-the-counter markets. Figures for the S&P 500 Index include
reinvestment of dividends. The Russell 1000 Index is comprised of 1,000 of
the largest capitalized U.S. domiciled companies whose common stock is
traded on either the New York, American or NASDAQ stock exchanges. The
indexes are unmanaged and are not subject to the same management and
trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
8
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares
of the Van Kampen American Capital
Enterprise Portfolio vs.
S&P 500 Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
[The following table was represented as a line graph in the printed material]
American S&P 500 INDEX
-------- -------------
6/16/94 10000 10000
10/94 10380 10324
4/95 11160 11404
10/95 12948 13053
4/96 14933 14684
+ Hypothetical illustration of $10,000 invested in shares of the Van Kampen
American Capital Enterprise Portfolio on June 16, 1994 (commencement of
operations), assuming reinvestment of dividends and capital gains, if any,
at net asset value through April 30, 1996. The S&P 500 is an index of
widely held common stocks listed on the New York and American Stock
Exchanges and the over-the-counter markets. Figures for the S&P 500 Index
include reinvestment of dividends. The index is unmanaged and is not
subject to the same management and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
9
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY INCOME AND GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
COMMON STOCKS -- 87.8%
Aerospace/Defense -- 1.5%
6,000 Lockheed Martin Corp. $ 483,750
8,000 United Technologies Corp. 884,000
- -----------------------------------------------------------------------------------
1,367,750
- -----------------------------------------------------------------------------------
Auto Related -- 2.8%
25,000 Chrysler Corp. 1,568,750
50,000 Federal Mogul Corp. 950,000
- -----------------------------------------------------------------------------------
2,518,750
- -----------------------------------------------------------------------------------
Capital Goods -- 2.6%
5,000 Emerson Electric Co. 418,125
25,000 General Electric Co. 1,937,500
- -----------------------------------------------------------------------------------
2,355,625
- -----------------------------------------------------------------------------------
Conglomerates -- 2.8%
13,000 Alexander Baldwin Inc. 318,500
40,000 Tenneco Inc. 2,195,000
- -----------------------------------------------------------------------------------
2,513,500
- -----------------------------------------------------------------------------------
Consumer Cyclical -- 20.4%
40,000 B.F. Goodrich Co. 1,590,000
50,000 Deluxe Corp. 1,750,000
10,000 E.W. Scripps Co., Class A Shares 425,000
40,000 International Paper Co. 1,595,000
60,000 Jostens Inc. 1,350,000
30,000 Kimberly-Clark Corp. 2,178,750
20,000 Lyondell Petrochemical Co. 587,500
4,000 McGraw Hill Cos., Inc. 176,500
50,000 National Service Industries, Inc. 1,850,000
40,000 New York Times Co., Class A Shares 1,300,000
30,000 Pharmacia & Upjohn, Inc. 1,147,500
5,000 Reader's Digest Association Inc., Class A Shares Non-Voting 205,000
20,000 Sears Roebuck & Co. 997,500
30,000 Stanley Works 1,882,500
25,000 Tambrands, Inc. 1,196,875
4,905 Times Mirror Co., Class A Shares 209,076
- -----------------------------------------------------------------------------------
18,441,201
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY INCOME AND GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Consumer Staples -- 6.2%
10,000 American Brands, Inc. $ 416,250
20,000 American Home Products Corp. 2,110,000
20,000 Eli Lilly & Co. 1,180,000
80,000 Interstate Bakeries Corp. 1,900,000
- -----------------------------------------------------------------------------------
5,606,250
- -----------------------------------------------------------------------------------
Energy -- 9.6%
60,000 Dresser Industries Inc. 1,912,500
17,000 Kerr-McGee Corp. 1,085,875
15,000 Mobil Oil Corp. 1,725,000
8,000 Royal Dutch Petroleum Co. 1,146,000
15,000 Schlumberger Ltd. 1,323,750
17,000 Texaco Inc. 1,453,500
- -----------------------------------------------------------------------------------
8,646,625
- -----------------------------------------------------------------------------------
Financial Services -- 11.6%
14,000 Aetna Life & Casualty Co. 997,500
25,000 Allstate Corp. 971,877
20,000 Bankers Trust Corp. 1,387,500
18,720 Chase Manhattan Corp. 1,289,340
20,000 Crescent Real Estate Equities Inc. 677,500
40,000 H&R Block, Inc. 1,405,000
20,000 Household International Inc. 1,382,500
17,500 MARC Inc. 299,687
21,100 Provident Cos. 714,763
25,000 St. Paul Cos., Inc. 1,328,125
- -----------------------------------------------------------------------------------
10,453,792
- -----------------------------------------------------------------------------------
Food Supermarkets -- 0.5%
15,000 Giant Foods Inc., Class A Shares 478,125
- -----------------------------------------------------------------------------------
Leisure Products -- 1.2%
50,000 Brunswick Corp. 1,100,000
- -----------------------------------------------------------------------------------
Medical Products & Supplies -- 2.5%
50,000 Baxter International, Inc. 2,212,500
- -----------------------------------------------------------------------------------
Raw Intermediate Materials -- 9.0%
20,000 Aluminium Co. of America 1,247,500
20,000 Asarco, Inc. 662,500
10,000 Monsanto Co. 1,515,000
30,000 Olin Corp. 2,655,000
15,000 Unilever NV 2,047,500
- -----------------------------------------------------------------------------------
8,127,500
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY INCOME AND GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Steel & Iron -- 0.5%
10,000 Cleveland Cliffs Inc. $ 417,500
- -----------------------------------------------------------------------------------
Technology -- 5.3%
30,000 Eastman Kodak Co. 2,295,000
20,000 Honeywell, Inc. 1,052,500
10,000 Xerox Corp. 1,465,000
- -----------------------------------------------------------------------------------
4,812,500
- -----------------------------------------------------------------------------------
Telecommunications -- 1.9%
40,000 GTE Corp. 1,735,000
- -----------------------------------------------------------------------------------
Transportation -- 2.3%
30,000 Union Pacific Corp. 2,043,750
- -----------------------------------------------------------------------------------
Utility -- 7.1%
20,000 Dominion Resources, Inc. 770,000
20,000 Entergy Corp. 530,000
20,000 Nynex Corp. 982,500
30,000 Panenergy Corp. 978,750
35,000 Pinnacle West Capital Corp. 931,875
70,000 Unocal Corp. 2,248,750
- -----------------------------------------------------------------------------------
6,441,875
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost-- $70,450,578) 79,272,243
===================================================================================
PREFERRED STOCKS -- 1.1%
Insurance -- 0.6%
20,000 FHP International Corp., Convertible, Series A 547,500
- -----------------------------------------------------------------------------------
Mining -- 0.2%
6,000 Freeport McMoRan, Series B 215,250
- -----------------------------------------------------------------------------------
Publishing -- 0.3%
10,095 Times Mirror Co., Series B 271,303
- -----------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (Cost-- $939,459) 1,034,053
===================================================================================
FACE
AMOUNT SECURITY VALUE
===================================================================================
REPURCHASE AGREEMENT -- 11.1%
$9,977,000 Chase Manhattan Corp., 5.224% due 5/1/96; Proceeds at
maturity -- $9,978,448; (Fully collateralized by U.S. Treasury
Notes, 6.125% due 5/31/97; Market value -- $10,193,133)
(Cost -- $9,977,000) 9,977,000
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $81,367,037*) $ 90,283,296
===================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
COMMON STOCKS -- 93.8%
Aluminum -- 0.4%
8,000 Aluminum Company of America $ 499,000
18,800 Century Aluminum Co. 277,300
- -----------------------------------------------------------------------------------
776,300
- -----------------------------------------------------------------------------------
Aerospace -- 1.7%
20,000 Boeing Co. 1,642,500
131,000 Loral Space & Communications+ 1,883,125
- -----------------------------------------------------------------------------------
3,525,625
- -----------------------------------------------------------------------------------
Banks -- 1.5%
29,504 Chase Manhattan Corp. 2,032,088
17,000 First Union Corp. 1,045,500
- -----------------------------------------------------------------------------------
3,077,588
- -----------------------------------------------------------------------------------
Chemicals -- 1.7%
17,900 Great Lakes Chemical Corp. 1,221,675
11,400 Monsanto Co. 1,727,100
7,100 W.R. Grace & Co. 550,250
- -----------------------------------------------------------------------------------
3,499,025
- -----------------------------------------------------------------------------------
Drugs -- 3.0%
28,000 Amgen Inc.+ 1,610,000
21,000 Astra AB Series, Class A Shares 931,473
40,800 Merck & Co., Inc. 2,468,400
20,000 Pfizer Inc. 1,377,500
- -----------------------------------------------------------------------------------
6,387,373
- -----------------------------------------------------------------------------------
Electronics -- 16.7%
10,000 Altera Corp.+ 527,500
118,500 Bay Networks Inc.+ 3,732,750
30,000 Cabletron Systems Inc.+ 2,261,250
212,400 Cisco Systems Inc.+ 11,018,250
151,000 EMC Corp.+ 3,095,500
68,000 Newbridge Networks Corp.+ 4,377,500
61,300 Texas Instruments Inc. 3,463,450
90,000 3Com Corp.+ 4,151,250
128,000 Westinghouse Electric Corp. 2,416,000
- -----------------------------------------------------------------------------------
35,043,450
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Financial Services -- 2.7%
40,000 AmeriCredit Corp.+ $ 575,000
210,400 Mercury Finance Co. 2,419,600
49,400 MS Financial Inc.+ 358,150
149,600 Union Acceptance Corp., Class A Shares+ 2,318,800
- -----------------------------------------------------------------------------------
5,671,550
- -----------------------------------------------------------------------------------
Food and Beverages -- 1.7%
132,000 Coca Cola Femsa S.A. ADR 3,547,500
- -----------------------------------------------------------------------------------
Holding Company - Diversified -- 1.5%
51,400 ITT Corp.+ 3,128,975
- -----------------------------------------------------------------------------------
Hospital Supplies & Services -- 0.9%
22,000 Healthsource Inc. 750,750
102,000 Quest Medical Inc.+ 1,224,000
- -----------------------------------------------------------------------------------
1,974,750
- -----------------------------------------------------------------------------------
Insurance -- 5.6%
20,450 American International Group Inc. 1,868,619
78,000 Capital Re Corp. 2,925,000
64,000 PennCorp Financial Group Inc. 1,960,000
49,900 Progressive Corp. 2,326,588
52,000 The PMI Group Inc.+ 2,210,000
34,600 Twentieth Century Industries 540,625
- -----------------------------------------------------------------------------------
11,830,832
- -----------------------------------------------------------------------------------
Lumber -- 0.6%
53,000 Louisiana Pacific 1,331,625
- -----------------------------------------------------------------------------------
Mining -- 1.1%
60,483 Freeport McMoRan Inc. 2,207,630
- -----------------------------------------------------------------------------------
Office Equipment and Services -- 2.8%
24,000 Compaq Computer Corp.+ 1,119,000
23,600 Dell Computer Corp.+ 1,082,650
11,500 Digital Equipment Corp. 687,125
40,000 General Motors Corp., Class E Shares 2,255,000
5,200 Xerox Corp. 761,800
- -----------------------------------------------------------------------------------
5,905,575
- -----------------------------------------------------------------------------------
Oil Related -- 3.8%
62,300 Belco Oil & Gas Corp.+ 1,798,912
1,143,000 Gulf Canada Resources Ltd.+ 6,286,500
- -----------------------------------------------------------------------------------
8,085,412
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Printing, Publishing and Broadcasting -- 4.9%
66,700 Argyle Television Inc., Class A Shares+ $ 1,525,762
232,500 Tele-Communications Inc., Class A Shares+ 4,446,562
46,125 Tele-Communications Liberty Media Group, Class A Shares+ 1,262,672
80,000 Turner Broadcasting Systems Inc., Class B Shares 2,160,000
45,000 U. S. West Media Group+ 877,500
- -----------------------------------------------------------------------------------
10,272,496
- -----------------------------------------------------------------------------------
Railroads -- 2.7%
112,400 Southern Pacific Rail Co. 2,810,000
42,000 Union Pacific Corp. 2,861,250
- -----------------------------------------------------------------------------------
5,671,250
- -----------------------------------------------------------------------------------
Real Estate -- 5.7%
231,200 Castle & Cooke Inc.+ 3,757,000
23,000 First Industrial Realty Trust Inc. 549,125
93,000 JP Realty Inc. 1,848,375
72,900 Macerich Co. 1,412,437
55,000 Patriot American Hospitality Inc.+ 1,533,125
35,000 Saul Centers Inc. 503,125
19,000 Storage USA Inc. 629,375
38,100 Summit Properties Inc. 728,663
40,000 Sun Communities Inc. 1,045,000
- -----------------------------------------------------------------------------------
12,006,225
- -----------------------------------------------------------------------------------
Restaurants -- 0.2%
10,000 McDonalds Corp. 478,750
- -----------------------------------------------------------------------------------
Retail -- 7.5%
60,000 Federated Department Stores+ 2,002,500
43,000 Home Depot Inc. 2,037,125
107,300 Lowe's Cos., Inc. 3,473,837
87,800 Sears Roebuck & Co. 4,379,025
21,000 Tandy Corp. 1,089,375
122,000 Wal-Mart Stores 2,912,750
- -----------------------------------------------------------------------------------
15,894,612
- -----------------------------------------------------------------------------------
Technology-Computer Software -- 10.4%
192,000 Informix Corp.+ 5,064,000
32,000 Microsoft Corp.+ 3,628,000
164,700 Oracle Corp.+ 5,558,625
79,700 Sterling Software Inc.+ 6,196,675
25,900 UUNET Technologies Inc.+ 1,486,013
- -----------------------------------------------------------------------------------
21,933,313
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Technology - Semi-Conductor -- 1.8%
13,400 Intel Corp. $ 907,850
184,400 National Semiconductor Corp.+ 2,904,300
- -----------------------------------------------------------------------------------
3,812,150
- -----------------------------------------------------------------------------------
Telecommunications -- 4.4%
79,400 Airtouch Communications Inc.+ 2,481,250
100,000 Cox Communications Inc., Class A Shares+ 2,050,000
6,700 Mannesmann AG ADR 2,281,350
35,000 Millicom International Cellular S.A.+ 1,653,750
25,500 United States Cellular Corp.+ 844,688
- -----------------------------------------------------------------------------------
9,311,038
- -----------------------------------------------------------------------------------
Tobacco -- 7.8%
79,300 Loews Corp. 6,046,625
83,200 Philip Morris Cos., Inc. 7,498,400
94,000 RJR Nabisco Holdings 2,808,250
- -----------------------------------------------------------------------------------
16,353,275
- -----------------------------------------------------------------------------------
Toy Manufacturing -- 0.5%
28,000 Hasbro Inc. 1,029,000
- -----------------------------------------------------------------------------------
Utility - Telephone -- 2.2%
98,800 Telephone & Data Systems Inc. 4,594,200
===================================================================================
TOTAL COMMON STOCKS
(Cost-- $169,946,710) 197,349,519
===================================================================================
PREFERRED CONVERTIBLE STOCKS -- 0.2%
Drugs -- 0.2%
24,400 Gensia Parmaceuticals Inc. Exchangable $3.75++
(Cost-- $441,975) 342,942
===================================================================================
FACE
AMOUNT SECURITY VALUE
===================================================================================
CONVERTIBLE BONDS -- 1.6%
Computers -- 0.9%
$1,300,000 3Com Corp., 10.250% due 11/1/01++ 1,984,125
- -----------------------------------------------------------------------------------
Electronics -- 0.7%
1,120,000 Altera Corp., 5.750% due 6/15/02++ 1,386,000
- -----------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(Cost-- $3,295,674) 3,370,125
===================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
SHORT-TERM SECURITIES -- 4.4%
$9,200,000 Federal Home Loan Mortgage Corp. Discount Note,
5.300% due 5/1/96
(Cost-- $9,198,646) $ 9,200,000
===================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $182,883,005*) $210,262,586
===================================================================================
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
COMMON STOCKS -- 93.6%
Advertising -- 0.9%
14,900 Omnicom Group Inc. $ 646,288
- -----------------------------------------------------------------------------------
Automotive -- 2.0%
11,900 Chrysler Corp. 746,725
7,200 Harley Davidson Co. 317,700
6,800 Lear Seating Corp.+ 224,400
2,100 Phelps Dodge Corp. 154,350
- -----------------------------------------------------------------------------------
1,443,175
- -----------------------------------------------------------------------------------
Aircraft & Aerospace -- 2.9%
7,200 Boeing Co. 591,300
3,000 Continental Airlines Co.+ 170,250
8,800 Northwest Airlines Co. 400,400
5,600 Textron Inc. 480,200
3,900 United Technologies Corp. 430,950
- -----------------------------------------------------------------------------------
2,073,100
- -----------------------------------------------------------------------------------
Banking-Major -- 3.5%
7,200 BankAmerica Corp. 545,400
9,600 Bank of Boston Corp. 464,400
11,300 Chase Manhattan Corp. 778,288
3,000 Citicorp 236,250
2,800 NationsBank Corp. 223,300
1,300 Wells Fargo & Co. 315,412
- -----------------------------------------------------------------------------------
2,563,050
- -----------------------------------------------------------------------------------
Beverage-Soft Drink -- 1.1%
12,000 Pepsico Inc. 762,000
- -----------------------------------------------------------------------------------
Broadcast Media and Cable Television -- 2.3%
4,900 American Radio Systems Corp.+ 165,375
5,900 Cabletron Systems Corp.+ 444,713
7,600 Emmis Broadcasting Corp., Class A Shares+ 326,800
11,900 Evergreen Media Corp., Class A Shares+ 467,075
9,200 Infinity Broadcasting Corp.+ 266,800
- -----------------------------------------------------------------------------------
1,670,763
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Chemicals -- 2.9%
2,700 Cytec Industries Inc.+ $ 223,762
6,000 Lyondell Petrochemical Co. 176,250
20,400 Praxair Inc. 787,950
2,100 Rohm & Haas Co. 139,388
4,500 Sigma-Aldrich Corp. 243,000
12,100 Union Carbide Corp. 550,550
- -----------------------------------------------------------------------------------
2,120,900
- -----------------------------------------------------------------------------------
Communications -- 1.5%
7,300 Ascend Communications Co.+ 448,950
1,700 Cascade Communications Co. 170,425
6,800 Octel Communications Corp.+ 304,300
7,333 360 Communications Co.+ 172,326
- -----------------------------------------------------------------------------------
1,096,001
- -----------------------------------------------------------------------------------
Consumer Services -- 2.9%
8,500 Career Horizons Inc.+ 299,625
9,700 Outback Steakhouse Inc.+ 389,212
5,300 Pep Boys - Manny, Moe & Joe 176,888
11,800 Service Corp. 626,875
4,000 UCAR International Inc.+ 164,000
6,600 Von Companies, Inc. 211,200
3,500 Willamette Industries 215,250
- -----------------------------------------------------------------------------------
2,083,050
- -----------------------------------------------------------------------------------
Electrical Products -- 0.6%
10,700 SCI Systems Inc.+ 458,763
- -----------------------------------------------------------------------------------
Energy - Oil & Gas -- 3.4%
6,200 Exxon Corp. 527,000
4,400 Mobil Oil Corp. 506,000
8,500 Panenergy Corp. 277,312
6,300 Texaco Inc. 538,650
11,500 Williams Co. 587,938
- -----------------------------------------------------------------------------------
2,436,900
- -----------------------------------------------------------------------------------
Energy - Oilfield Services -- 1.6%
6,500 Baker Hughes Inc. 206,375
5,500 Halliburton Co. 315,563
15,000 Smith International Inc. 446,250
3,300 Sonat Offshore Drilling Co. 181,088
- -----------------------------------------------------------------------------------
1,149,276
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Environmental Production/Services -- 1.4%
12,300 United Waste Systems Inc.+ $ 676,500
11,900 USA Waste Service Inc.+ 309,400
- -----------------------------------------------------------------------------------
985,900
- -----------------------------------------------------------------------------------
Financial Services -- 5.3%
5,500 Aames Financial Corp. 242,688
3,100 Alex Brown Inc. 167,788
3,000 C-Cube Microsystems+ 148,500
35,500 Federal National Mortgage Association 1,087,187
1,000 First USA Payment Tech.+ 43,500
22,700 Green Tree Financial Corp. 766,125
3,600 Merrill Lynch & Co., Inc. 217,350
12,100 Money Store 305,525
2,900 Morgan Stanley Group 145,725
2,800 Raychem Corp. 218,050
7,000 Student Loan Marketing Association 512,750
- -----------------------------------------------------------------------------------
3,855,188
- -----------------------------------------------------------------------------------
Gaming -- 1.7%
13,150 Grand Casinos Inc.+ 425,731
7,400 Mirage Resorts Inc.+ 387,575
11,900 Trump Hotels & Casino Resort Inc.+ 385,263
- -----------------------------------------------------------------------------------
1,198,569
- -----------------------------------------------------------------------------------
Healthcare - Biotech -- 1.1%
5,000 Amgen Inc.+ 287,500
2,800 Coherent Inc.+ 150,150
6,500 Genzyme Corp. - General Division+ 365,625
- -----------------------------------------------------------------------------------
803,275
- -----------------------------------------------------------------------------------
Healthcare - Hospital/Medical Services -- 4.4%
7,500 Guidant Corp. 420,938
9,975 Health Management Association Inc., Class A Shares+ 319,200
10,000 HealthSouth Rehabilitation+ 371,250
11,100 Lincare Holdings Inc.+ 430,818
6,100 Maxicare Health Plans Inc.+ 125,050
5,000 Medtronic Inc. 265,625
6,300 Mentor Corp. 148,838
1,000 Orthodontic Centers of America+ 39,500
7,200 Pfizer Inc. 495,900
3,700 Physician Reliance Network+ 160,025
12,700 Renal Treatment Centers Inc.+ 368,300
- -----------------------------------------------------------------------------------
3,145,444
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Healthcare - Pharmaceuticals -- 3.0%
3,800 Bristol Myers $ 312,550
5,100 Johnson & Johnson 471,750
7,300 Merck & Co., Inc. 441,650
7,200 Schering-Plough Corp. 413,100
2,800 Target Therapeutics 151,900
7,900 Watson Pharmaceuticals Inc. 375,250
- -----------------------------------------------------------------------------------
2,166,200
- -----------------------------------------------------------------------------------
Hotels/Motels -- 1.4%
7,000 La Quinta Inns Inc. 204,750
11,100 Marriott International Inc. 541,125
8,500 Promus Hotel Corp. 241,188
- -----------------------------------------------------------------------------------
987,063
- -----------------------------------------------------------------------------------
Insurance -- 4.3%
11,900 Allstate Corp. 462,612
4,700 CMAC Investment Corp. 263,200
8,300 Conseco Inc. 302,950
9,200 Exel Limited 662,400
6,000 MGIC Investment Corp. 325,500
10,500 Penncorp Financial Group Inc. 321,563
14,200 SunAmerica Inc. 773,900
- -----------------------------------------------------------------------------------
3,112,125
- -----------------------------------------------------------------------------------
Machine - Diversified -- 1.2%
5,000 Black & Decker Corp. 201,250
8,400 Harnischfeger Industries Inc. 340,200
6,400 Snap-On Inc. 307,200
- -----------------------------------------------------------------------------------
848,650
- -----------------------------------------------------------------------------------
Manufacturing -- 4.6%
8,500 Agrium Inc. 109,438
7,400 AK Steel Holding Corp. 283,050
7,900 Case Corp. 398,950
8,400 Deere & Co. 326,550
8,900 Dover Corp. 458,350
7,400 Fort Howard Corp 162,800
3,400 Georgia Pacific Corp. 264,350
7,300 Greenfield Industries Inc. 277,400
4,700 Illinois Tool Works Inc. 316,075
5,600 Input/Output Inc. 194,600
13,200 Jefferson Smurfit Corp. 174,900
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Manufacturing -- 4.6% (continued)
2,400 Johnson Controls Inc. $ 171,600
5,300 MSC Industrial Direct Co.+ 192,788
- -----------------------------------------------------------------------------------
3,330,851
- -----------------------------------------------------------------------------------
Packaged Food and Goods -- 0.4%
4,400 CPC International Inc. 304,150
- -----------------------------------------------------------------------------------
Paper Products & Containers -- 0.3%
5,700 Bemis Inc. 184,538
- -----------------------------------------------------------------------------------
Retail - Department/Discount -- 1.6%
7,000 Gymboree Corp.+ 181,125
14,200 Sears Roebuck & Co. 708,225
10,200 TJX Co. 300,900
- -----------------------------------------------------------------------------------
1,190,250
- -----------------------------------------------------------------------------------
Retail - Specialty -- 4.3%
8,500 Champion International 410,125
6,100 Elan Corp. PLC+ 403,363
4,200 Fila Holding S.p.A. 286,650
10,800 Gap Inc. 325,350
9,500 Liz Claiborne Inc. 345,562
6,700 Nautica Enterprises Inc.+ 311,550
4,200 Oakley Inc.+ 193,200
13,000 Officemax Inc.+ 341,250
3,800 Tiffany & Co. 247,950
5,700 Tommy Hilfiger+ 259,350
- -----------------------------------------------------------------------------------
3,124,350
- -----------------------------------------------------------------------------------
Retail - Food/Drugs -- 3.3%
18,700 Eckerd Drugs Corp.+ 892,925
12,700 Kroger Inc.+ 522,288
29,100 Safeway Inc.+ 982,125
- -----------------------------------------------------------------------------------
2,397,338
- -----------------------------------------------------------------------------------
Technology - Computers & Office Equipment -- 3.9%
10,400 Boise Cascade Corp. 483,600
6,000 Compaq Computer Corp.+ 279,750
5,500 Hewlett-Packard Co. 582,313
15,950 Staples + 303,050
15,600 Sun Microsystems 846,300
9,500 US Office Products Co.+ 342,000
- -----------------------------------------------------------------------------------
2,837,013
- -----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Technology - Computer Software -- 9.0%
6,500 BMC Software + $ 395,688
7,950 Cadence Design Systems Inc. + 415,388
12,600 Computer Associates International, Inc. 924,525
10,600 DST Systems Inc.+ 389,550
3,600 First Data Corp. 273,600
4,100 In Focus Systems + 207,050
5,000 Intuit Inc. + 260,000
6,100 Lucent Technologies + 214,263
5,000 Medic Computer Systems Inc. + 467,500
7,400 Microsoft Corp. + 838,975
4,500 Newbridge Networks Corp. + 289,686
11,400 Oracle Systems + 384,750
4,700 Pairgain Technologies Inc. + 448,850
3,500 Peoplesoft Inc. + 220,500
6,800 Seagate Technology + 394,400
2,900 Solectron Corp. + 129,050
3,000 Synopsys Inc. + 123,750
3,200 Wind River Systems + 124,800
- -----------------------------------------------------------------------------------
6,502,325
- -----------------------------------------------------------------------------------
Technology - Peripherals -- 1.3%
7,200 Adaptec Inc.+ 414,000
4,500 Honeywell Inc. 236,813
7,900 Komag Inc.+ 264,650
- -----------------------------------------------------------------------------------
915,463
- -----------------------------------------------------------------------------------
Technology - Semiconductors -- 2.6%
15,500 Analog Devices+ 399,125
7,500 Atmel Corp.+ 300,000
8,000 International Rectifier Inc.+ 180,000
8,400 Intel Corp. 569,100
8,800 Linear Technology Co. 302,500
3,300 Maxim Integrated Product 113,025
- -----------------------------------------------------------------------------------
1,863,750
- -----------------------------------------------------------------------------------
Technology - Telecommunications Equipment -- 3.4%
4,500 Boston Scientific Corp.+ 194,063
10,900 Cisco Systems Inc.+ 565,437
6,300 Microcom Inc.+ 153,563
4,400 Picture Tel Corp.+ 149,600
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===================================================================================
<C> <S> <C>
Technology - Telecommunications Equipment -- 3.4% (continued)
6,800 Proxim Inc. $ 189,550
6,200 Tellabs Inc. 342,550
5,000 3Com Corp.+ 230,625
4,200 U.S. Robotics Corp.+ 657,300
- -----------------------------------------------------------------------------------
2,482,688
- -----------------------------------------------------------------------------------
Telecommunications -- 1.5%
5,000 ADC Telecommunications+ 210,000
7,600 Aspect Telecommunication+ 437,000
11,100 ECI Telecom LTD 289,988
6,800 LCI International Inc. 176,800
- -----------------------------------------------------------------------------------
1,113,788
- -----------------------------------------------------------------------------------
Tobacco -- 3.7%
29,600 Philip Morris Cos., Inc. 2,667,700
- -----------------------------------------------------------------------------------
Transportation -- 0.8%
3,000 Burlington Northern 262,500
6,300 CSX Corp. 322,875
- -----------------------------------------------------------------------------------
585,375
- -----------------------------------------------------------------------------------
Utilities - Telephone -- 3.5%
8,300 Frontier Corp. 262,480
29,000 MCI Communications Corp. 853,687
15,000 Sprint Corp. 631,875
17,500 WorldCom Inc.+ 822,500
- -----------------------------------------------------------------------------------
2,570,542
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost-- $59,108,380) 67,675,801
===================================================================================
FACE
AMOUNT SECURITY VALUE
===================================================================================
SHORT-TERM INVESTMENTS -- 6.4%
$ 155,000 U.S. Treasury Bills, 4.88% due 5/2/96 154,979
400,000 U.S. Treasury Bills, 4.90% due 5/2/96 399,946
130,000 U.S. Treasury Bills, 4.97% due 5/2/96 129,982
160,000 U.S. Treasury Bills, 5.00% due 5/2/96 159,978
735,000 U.S. Treasury Bills, 4.68% due 5/9/96 734,236
640,000 U.S. Treasury Bills, 4.85% due 5/23/96 638,103
140,000 U.S. Treasury Bills, 4.86% due 5/23/96 139,584
120,000 U.S. Treasury Bills, 4.90% due 6/13/96 119,298
890,000 U.S. Treasury Bills, 4.91% due 6/20/96 883,931
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
===================================================================================
<C> <S> <C>
SHORT-TERM INVESTMENTS -- 6.4% (continued)
$1,255,000 U.S. Treasury Bills, 4.835% due 7/18/96 $ 1,241,853
60,000 U.S. Treasury Bills, 5.000% due 5/2/96 59,990
- -----------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost-- $4,661,880) 4,661,880
===================================================================================
TOTAL INVESTMENTS AT VALUE -- 100%
(Cost-- $63,770,260*) $72,337,681
===================================================================================
</TABLE>
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
25
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Van Kampen
SB American
Income Alliance Capital
and Growth Growth Enterprise
Portfolio Portfolio Portfolio
=====================================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost - $71,390,037,
$182,883,005 and $63,770,260, respectively) $ 80,306,296 $ 210,262,586 $ 72,337,681
Repurchase agreement (Cost - $9,977,000,
$0 and $0, respectively) 9,977,000 -- --
Cash 20 55,598 8,467
Receivable for securities sold -- 724,276 22,337
Dividends and interest receivable 66,507 110,071 223,229
Other assets -- 13,097 --
- -----------------------------------------------------------------------------------------------------
Total Assets 90,349,823 211,165,628 72,591,714
- -----------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 3,446,369 573,481 642,092
Management fees payable 131,176 164,158 121,229
Accrued expenses 31,633 12,378 49,957
- -----------------------------------------------------------------------------------------------------
Total Liabilities 3,609,178 750,017 813,278
- -----------------------------------------------------------------------------------------------------
Total Net Assets $ 86,740,645 $ 210,415,611 $ 71,778,436
=====================================================================================================
NET ASSETS:
Par value of capital shares $ 64 $ 141 $ 50
Capital paid in excess of par value 77,008,670 178,915,703 62,849,560
Underdistributed net investment income 445,335 188,455 89,310
Accumulated net realized gain on
security transactions 370,317 3,931,731 272,095
Net unrealized appreciation of investments 8,916,259 27,379,581 8,567,421
- -----------------------------------------------------------------------------------------------------
Total Net Assets $ 86,740,645 $ 210,415,611 $ 71,778,436
=====================================================================================================
Shares Outstanding 6,364,525 14,111,799 4,994,247
- -----------------------------------------------------------------------------------------------------
Net Asset Value $ 13.63 $ 14.91 $ 14.37
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
Van Kampen
SB American
Income Alliance Capital
and Growth Growth Enterprise
Portfolio Portfolio Portfolio
=====================================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 817,415 $ 921,629 $ 296,584
Interest 108,224 257,542 79,211
Less: Foreign withholding tax -- (1,141) (50)
- -----------------------------------------------------------------------------------------------------
Total Investment Income 925,639 1,178,030 375,745
- -----------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 206,030 639,491 181,035
Registration fees 12,735 17,891 10,000
Audit and legal 7,111 7,988 7,000
Shareholder communications 5,968 1,524 2,500
Directors' fees 3,979 3,649 2,000
Shareholder and system servicing fees 2,983 2,486 3,000
Custody 2,384 7,532 22,000
Other 213 2,048 1,251
- -----------------------------------------------------------------------------------------------------
Total Expenses 241,403 682,609 228,786
- -----------------------------------------------------------------------------------------------------
Net Investment Income 684,236 495,421 146,959
- -----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE3):
Realized Gain From Security transactions
(excluding short-term securities):
Proceeds from sales 7,043,490 58,715,118 34,565,576
Cost of securities sold 6,673,173 54,709,919 34,177,941
- -----------------------------------------------------------------------------------------------------
Net Realized Gain 370,317 4,005,199 387,635
- -----------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period 2,551,104 8,264,697 1,338,823
End of period 8,916,259 27,379,581 8,567,421
- -----------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 6,365,155 19,114,884 7,228,598
- -----------------------------------------------------------------------------------------------------
Net Gain on Investments 6,735,472 23,120,083 7,616,233
- -----------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 7,419,708 $ 23,615,504 $ 7,763,192
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
SB Income
and Growth Portfolio
--------------------
1996 1995
================================================================================
OPERATIONS:
Net investment income $ 684,236 $ 494,918
Net realized gain 370,317 208,200
Increase in net unrealized appreciation 6,365,155 2,537,787
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 7,419,708 3,240,905
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (735,738) (51,640)
Net realized gains (199,857) --
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (935,595) (51,640)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares 40,243,673 30,321,187
Net asset value of shares issued for
reinvestment of dividends 935,588 51,640
Cost of shares reacquired (286,256) (575,314)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 40,893,005 29,797,513
- --------------------------------------------------------------------------------
Increase in Net Assets 47,377,118 32,986,778
NET ASSETS:
Beginning of period 39,363,527 6,376,749
- --------------------------------------------------------------------------------
End of period* $86,740,645 $39,363,527
================================================================================
* Includes undistributed net investment income of: $ 445,335 $ 496,837
================================================================================
See Notes to Financial Statements.
28
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
Alliance Growth
Portfolio
--------------------
1996 1995
================================================================================
OPERATIONS:
Net investment income $ 495,421 $ 655,256
Net realized gain 4,005,199 3,286,075
Increase in net unrealized appreciation 19,114,884 7,747,277
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 23,615,504 11,688,608
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (966,222) (50,811)
Net realized gains (3,357,984) (231,524)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (4,324,206) (282,335)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares 76,010,022 83,125,087
Net asset value of shares issued for
reinvestment of dividends 4,324,206 282,335
Cost of shares reacquired (782,763) (326,769)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 79,551,465 83,080,653
- --------------------------------------------------------------------------------
Increase in Net Assets 98,842,763 94,486,926
NET ASSETS:
Beginning of period 111,572,848 17,085,922
- --------------------------------------------------------------------------------
End of period* $210,415,611 $111,572,848
================================================================================
* Includes undistributed net investment income of: $ 188,455 $ 659,256
================================================================================
See Notes to Financial Statements.
29
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
Van Kampen
American Capital
Enterprise Portfolio
--------------------
1996 1995
================================================================================
OPERATIONS:
Net investment income $ 146,959 $ 86,576
Net realized gain 387,635 1,248,678
Increase in net unrealized appreciation 7,228,598 1,146,998
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 7,763,192 2,482,252
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (144,600) (13,157)
Net realized gains (1,364,193) (16,757)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,508,793) (29,914)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sales of shares 31,747,382 26,651,648
Net asset value of shares issued for
reinvestment of dividends 1,508,793 29,914
Cost of shares reacquired (179,100) (2,420,846)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 33,077,075 24,260,716
- --------------------------------------------------------------------------------
Increase in Net Assets 39,331,474 26,713,054
NET ASSETS:
Beginning of period 32,446,962 5,733,908
- --------------------------------------------------------------------------------
End of period* $ 71,778,436 $32,446,962
================================================================================
* Includes undistributed net investment income of: $ 89,310 $ 86,951
================================================================================
See Notes to Financial Statements.
30
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Smith Barney Income and Growth, Alliance Growth and Van Kampen American
Capital Enterprise Portfolios ("Portfolios") are separate investment portfolios
of the Smith Barney/Travelers Series Fund Inc. ("Fund"). The Fund, a Maryland
corporation, is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company and consists of these Portfolios
and nine other separate investment portfolios: AIM Capital Appreciation, Smith
Barney International Equity, Smith Barney Pacific Basin, TBC Managed Income,
Putnam Diversified Income, GT Global Strategic Income, Smith Barney High Income,
MFS Total Return and Smith Barney Money Market Portfolios. Shares of the Fund
are offered only to insurance company separate accounts which fund certain
variable annuity and variable life insurance contracts. The financial statements
and financial highlights for the other portfolios are presented in separate
semi-annual reports.
The significant accounting policies consistently followed by the Portfolios
are: (a) security transactions are accounted for on trade date; (b) securities
traded on national securities markets are valued at the closing prices on such
markets; securities for which no sales price was reported and U.S. Government
and Government Agency obligations are valued at the mean between bid and ask
prices; fixed income investments and securities maturities of more than 60 days
are valued at prices based on market quotations for securities of similar type,
yield and maturity; (c) securities maturing within 60 days are valued at cost
plus accreted discount, or minus amortized premium, as applicable; (d) dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis; (e) dividends and distributions to shareholders are recorded
on the ex-dividend date; (f) gains or losses on the sale of securities are
calculated by using the specific identification method; (g) direct expenses are
charged to each Portfolio; (h) the accounting records of the Portfolios are
maintained in U.S. dollars. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities, and income and expenses are translated at the rate of
exchange quoted on the respective date that such transactions are recorded.
Differences between income and expense amounts recorded and collected or paid
are adjusted when reported by the custodian bank; (i) in accordance with the
Statement of Position 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies, book and tax differences relating to shareholder
distributions and other permanent book and tax differences have been
reclassified to undistributed net investment income. As of October 31, 1995, the
cumulative effect of such differences, totaling $1,949, $2,383
31
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
and $350 were reclassified to undistributed net investment income for the Smith
Barney Income and Growth, Alliance Growth and Van Kampen American Capital
Enterprise Portfolios from paid-in capital, respectively. Net investment income,
net realized gains, and net assets were not affected by this change; (j) the
Portfolios intend to comply with the requirements of the Internal Revenue Code
of 1986, as amended, pertaining to regulated investment companies and to make
distributions of taxable income sufficient to relieve it from substantially all
Federal income and excise taxes; and (k) estimates and assumptions are required
to be made regarding assets, liabilities and changes in net assets resulting
from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ from these amounts.
2. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH
AFFILIATED PERSONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The Smith
Barney Income and Growth ("SBIG"), Alliance Growth ("AGP") and Van Kampen
American Capital Enterprise Portfolios ("VKACEP") pay SBMFM a management fee
calculated at an annual rate of 0.65%, 0.80%, and 0.70% of the average daily net
assets of each Portfolio, respectively. All fees are calculated daily and paid
monthly.
SBMFM has entered into sub-advisory agreements with Alliance Capital
Management L.P. ("Alliance Capital") and Van Kampen American Capital Asset
Management, Inc. ("VKAC"). Pursuant to each sub-advisory agreement, Alliance
Capital and VKAC are responsible for the day-to-day portfolio operations and
investment decisions for AGP and ACEP, respectively. As a result, SBMFM will pay
Alliance Capital and VKAC a monthly fee calculated at the annual rate of 0.375%
and 0.325% of the average daily net assets of AGP and VKACEP, respectively.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the six months ended April 30, 1996, SB received brokerage
commissions of $53,046.
All officers and two Directors of the Fund are employees of SB.
32
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. INVESTMENTS
During the six months ended April 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were:
Van Kampen
SB American
Income and Alliance Capital
Growth Growth Enterprise
================================================================================
Purchases $44,345,224 $129,107,184 $63,751,431
- --------------------------------------------------------------------------------
Sales 7,043,490 58,718,118 34,565,576
- --------------------------------------------------------------------------------
At April 30, 1996, net unrealized appreciation of investments for Federal
income tax purposes consisted of the following:
Van Kampen
SB American
Income and Alliance Capital
Growth Growth Enterprise
================================================================================
Gross unrealized appreciation $9,712,769 $30,466,977 $8,974,670
Gross unrealized depreciation (796,510) (3,087,396) (407,249)
- --------------------------------------------------------------------------------
Net unrealized appreciation $8,916,259 $27,379,581 $8,567,421
================================================================================
4. REPURCHASE AGREEMENTS
The Portfolios purchase (and its custodian takes possession of) U.S.
Government Securities from banks and securities dealers subject to agreements to
resell the securities to the sellers at a future date (generally, the next
business day) at an agreed-upon higher repurchase price. The Portfolios require
continual maintenance of the market value of the collateral in amounts at least
equal to the repurchase price.
33
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
5. CAPITAL SHARES
At April 30, 1996, the Fund had six billion shares of $0.00001 par value
capital stock authorized. Each share of a Portfolio represents an equal
proportionate interest in that Portfolio with each other share of the same
Portfolio and has an equal entitlement to any dividends and distributions made
by the Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1996 October 31, 1995
================================================================================
SB Income and Growth
Shares sold 3,065,722 2,665,475
Shares issued on reinvestment 72,830 5,253
Shares redeemed (21,326) (52,420)
- --------------------------------------------------------------------------------
Net Increase 3,117,226 2,618,308
================================================================================
Alliance Growth
Shares sold 5,439,573 6,799,083
Shares issued on reinvestment 322,568 27,438
Shares redeemed (54,649) (26,705)
- --------------------------------------------------------------------------------
Net Increase 5,707,492 6,799,816
================================================================================
Van Kampen American Capital Enterprise
Shares sold 2,372,804 2,171,971
Shares issued on reinvestment 117,703 2,968
Shares redeemed (13,131) (210,523)
- --------------------------------------------------------------------------------
Net Increase 2,477,376 1,964,416
================================================================================
34
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
SB Income and Growth Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 12.12 $ 10.14 $ 10.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.11 0.28 0.11
Net realized and unrealized gain 1.61 1.76 0.03
- --------------------------------------------------------------------------------
Total Income From Operations 1.72 2.04 0.14
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.17) (0.06) --
Net realized gains (0.04) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.21) (0.06) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 13.63 $ 12.12 $ 10.14
- --------------------------------------------------------------------------------
Total Return 13.98%++ 20.21% 1.40%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 86,741 $ 39,364 $ 6,377
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.76%+ 0.73% 0.73%+
Net investment income 2.16+ 2.70 2.82+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 11.75% 38.39% 2.17%
================================================================================
Average per share commissions paid on
equity transactions(4) $ 0.07 $ 0.07 --
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the Manager
has reimbursed the Portfolio for $13,120 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share decreases in net investment income and the ratios of expenses
to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.02 0.94%
1994 0.05 2.08+
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
35
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
Alliance Growth Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 13.28 $ 10.65 $ 10.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.03 0.14 0.06
Net realized and unrealized gain 2.02 2.61 0.59
- --------------------------------------------------------------------------------
Total Income From Operations 2.05 2.75 0.65
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.09) (0.02) --
Net realized gains (0.33) (0.10) --
- --------------------------------------------------------------------------------
Total Distributions (0.42) (0.12) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 14.91 $ 13.28 $ 10.65
- --------------------------------------------------------------------------------
Total Return 15.85%++ 26.19% 6.50%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 210,416 $ 111,573 $ 17,086
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.88%+ 0.90% 0.88%+
Net investment income 0.64+ 1.24 1.47+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 39.51% 77.66% 36.66%
================================================================================
Average per share commissions paid on
equity transactions(4) $ 0.06 $ 0.06 --
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the Manager
has reimbursed the Portfolio for $3,500 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share decreases in net investment income and the ratios of expenses
to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.01 0.97%
1994 0.03 1.76+
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
36
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
Van Kampen American Capital Enterprise Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 12.89 $ 10.38 $10.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.03 0.03 0.03
Net realized and unrealized gain 1.86 2.53 0.35
- --------------------------------------------------------------------------------
Total Income From Operations 1.89 2.56 0.38
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.04) (0.02) --
Net realized gains (0.37) (0.03) --
- --------------------------------------------------------------------------------
Total Distributions (0.41) (0.05) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 14.37 $ 12.89 $10.38
- --------------------------------------------------------------------------------
Total Return 15.32%++ 24.74% 3.80%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $71,778 $32,447 $5,734
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.88%+ 0.88% 0.84%+
Net investment income 0.57+ 0.65 0.79+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 64.30% 180.26% 54.74%
================================================================================
Average per share commissions paid on
equity transactions(4) $ 0.06 $ 0.05 --
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the Manager
has reimbursed the Portfolio for $19,007 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share decreases in net investment income and the ratios of expenses
to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.06 1.26%
1994 0.07 2.66+
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
37
<PAGE>
Smith Barney/Travelers
Series Fund Inc.
Directors
Victor K. Atkins
Jessica M. Bibliowicz
Alger B. Chapman
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
James M. Shuart
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
John C. Bianchi
Vice President
James B. Conheady
Vice President
Martin Hanley
Vice President
Jeffrey J. Russell
Vice President
Bruce D. Sargent
Vice President
Phyllis Zahorodny
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
------------
A Member of TravelersGroup [Logo]
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the
general information of the
shareholders of Smith Barney/Travelers
Series Fund Inc. Smith Barney Income
and Growth, Alliance Growth and Van
Kampen American Capital Enterprise
Portfolios. It is not authorized for
distribution to prospective investors
unless accompanied or preceded by a
current Prospectus for the Portfolio,
SEMI-ANNUAL REPORT
Smith Barney/Travelers
Series Fund Inc.
AIM Capital
Appreciation Portfolio
- -------------------------------------------------------------------------------
April 30, 1996
[LOGO] SMITH BARNEY MUTUAL FUNDS
INVESTING FOR YOUR FUTURE.
EVERY DAY.
<PAGE>
AIM CAPITAL APPRECIATION PORTFOLIO
DEAR SHAREHOLDER:
We are pleased to provide you with the semi-annual report for the Smith
Barney/Travelers Series Fund Inc.: AIM Capital Appreciation Portfolio for the
period ended April 30, 1996. For your convenience, we have summarized some of
the period's prevailing economic and market conditions and outlined the
investment strategy employed by the Portfolio during this time. A detailed
summary of performance and current holdings for the Portfolio can be found in
the appropriate sections that follow in the semi-annual report.
PORTFOLIO HIGHLIGHTS
Investors continue to wonder where the stock market is heading as market
volatility has increased so far in 1996. Even though the stock market has
climbed upward, 1996 has been a turbulent ride for many investors characterized
by rapid price movements up and down. For the six months ended April 30, 1996,
the AIM Capital Appreciation Portfolio had a total return of 7.22%, which
compares to the total return of 12.50%, for that same time period, for the
Standard & Poor's 500 Stock Index ("S&P 500"), a capitalization-weighted measure
of 500 widely held common stocks listed on the New York Stock Exchange, American
Stock Exchange and over-the-counter market.
The foundation of AIM's equity investment strategy is to focus on stock
selection based on earnings momentum. In our view, earnings drive stock prices
and the stock of a growing company tends to appreciate. AIM believes that
identifying and capturing such "earnings-acceleration" stocks in a portfolio is
crucial to achieving investment growth. This strategy also helps identify those
stocks with slowing earnings growth that may no longer meet the Portfolio's
investment criteria.
Technology stocks currently make up approximately 30% of the AIM Capital
Appreciation Portfolio. During the period covered by this report, the
Portfolio's emphasis shifted away from semiconductor producers to computer and
networking companies. After the technology sector, the Portfolio held 18% of its
assets in health care companies and 17% in retail companies.
1
<PAGE>
Thank you for investing in the AIM Capital Appreciation Portfolio. We look
forward to continuing to help you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman and Chief Executive Officer
June 6, 1996
2
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
HISTORICAL PERFORMANCE++
<TABLE>
<CAPTION>
Net Asset Value
--------------------
<S> <C> <C> <C> <C> <C>
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns
====================================================================================================================================
4/30/96 $ 10.00 $10.70 $0.01 $0.00 7.22%+
- ------------------------------------------------------------------------------------------------------------------------------------
10/10/95* - 10/31/95 10.00 10.00 0.00 0.00 0.00
====================================================================================================================================
Total $0.01 $0.00
====================================================================================================================================
It is the Fund's policy to distribute dividends and capital gains,
if any, annually.
AVERAGE ANNUALIZED TOTAL RETURN+++
====================================================================================================================================
Six Months Ended 4/30/96 7.22%++
- ------------------------------------------------------------------------------------------------------------------------------------
10/10/95* through 4/30/96 7.11
====================================================================================================================================
</TABLE>
CUMULATIVE TOTAL RETURN+
========================================================================
10/10/95* through 4/30/96 7.11%
=======================================================================
+ Assumes the reinvestment of all dividends and capital gain distributions.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
* Commencement of operations.
3
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
HISTORICAL PERFORMANCE (UNAUDITED)
GROWTH OF $10,000 INVESTED IN SHARES OF THE
AIM CAPITAL APPRECIATION PORTFOLIO VS. LIPPER MIDCAP INDEX+
- --------------------------------------------------------------------------------
October 1995 - April 1996
[GRAPH APPEARS HERE]
+ Hypothetical illustration of $10,000 invested in shares of the AIM Capital
Appreciation Portfolio on October 10, 1995 (commencement of operations),
assuming reinvestment of dividends and capital gains at net asset value
through April 30, 1996. The Lipper Midcap Index is an index of widely held
common stocks listed on the New York and American Stock Exchanges and over-
the-counter markets. Figures for the Lipper Midcap Index include reinvestment
of dividends. The index is unmanaged and is not subject to the same
management and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
4
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESMENTS (UNAUDITED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
<TABLE>
<CAPTION>
COMMON STOCKS -- 77.9%
BANKS-COMMERCIAL -- 1.6%
<C> <S> <C>
4,900 Bank of Boston+ $ 237,037
1,000 Barnett Inc.+ 23,500
3,000 Capital One Financial Corp. 88,500
1,400 Cityscape Financial+ 61,250
19,200 MBNA Corp. 544,800
3,300 PMT Services Inc.+ 95,287
- ----------------------------------------------------------------------------
1,050,374
- ----------------------------------------------------------------------------
BEVERAGES-ALCOHOLIC -- 0.1%
1,500 Canadaigua Wine+ 45,562
- ----------------------------------------------------------------------------
BROADCASTING -- 0.6%
3,000 American Radio Systems+ 101,250
2,900 Chancellor Broadcasting+ 73,950
5,200 Infinity Broadcasting+ 150,800
6,500 Paxson Communications+ 96,687
- ----------------------------------------------------------------------------
422,687
- ----------------------------------------------------------------------------
CAPITAL GOODS -- 0.6%
4,200 Agrium Inc.+ 54,075
10,800 Airgas Inc.+ 232,200
3,100 IMC Global+ 114,312
- ----------------------------------------------------------------------------
400,587
- ----------------------------------------------------------------------------
COMMUNICATIONS-EQUIPMENT & SOFTWARE -- 1.0%
7,900 Gandalf Technologies+ 140,225
2,940 Mark IV Industries Inc. 61,005
2,800 U.S. Robotics+ 438,200
- ----------------------------------------------------------------------------
639,430
- ----------------------------------------------------------------------------
COMPUTERS -- 5.5%
7,600 3Com Corp. 350,550
1,400 Bisys Group Inc.+ 53,550
3,700 Cabletron Systems Inc.+ 278,888
4,200 Ceridian Corp.+ 200,550
4,300 Compaq Computer Corp.+ 200,487
1,900 Computer Science Corp.+ 140,600
3,400 CSG Systems International+ 108,800
1,100 Cycare Systems Inc.+ 40,150
6,100 Dell Computer Corp.+ 279,838
12,300 EMC Corp.+ 252,150
4,200 GTech Holdings+ 119,175
4,700 HBO & Co. 558,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=============================================================================
<S> <C> <C>
COMPUTERS -- 5.5% (CONTINUED)
3,500 Komag Inc.+ $ 117,250
7,100 Madge Networks ADR+ 209,450
2,500 Stratacom Inc.+ 130,000
6,900 Structural Dynamics
Research+ 219,938
5,800 Sun Microsystems Inc.+ 314,650
2,600 Sungard Data Systems+ 86,450
- -----------------------------------------------------------------------------
3,660,601
- -----------------------------------------------------------------------------
COMPUTER SOFTWARE -- 9.9%
4,300 Anixter+ 75,250
5,600 BMC Software Inc.+ 340,900
6,150 Cadence Design System+ 321,338
5,700 Computer Associates
International Inc. 418,237
9,000 Computervision Corp.+ 109,125
5,400 DST Systems+ 198,450
3,100 First Data Corp. 235,600
1,600 Gartner Group+ 54,800
1,500 HPR Inc.+ 64,500
1,700 IDX Systems Corp.+ 62,475
1,700 Imnet Systems Inc.+ 56,100
5,900 Informix Corp.+ 155,613
3,300 Mcafee Associates Inc.+ 202,125
3,700 Microsoft Corp.+ 419,487
6,400 Network General Corp.+ 282,400
6,300 Octel Communications Corp.+ 281,925
14,850 Oracle Corp.+ 501,188
16,400 Parametric Technology+ 660,100
4,800 Physician Computer Network+ 54,000
2,700 Premiere Technologies+ 101,925
3,800 Rational Software Corp.+ 202,825
1,000 Red Brick Systems Inc.+ 59,250
3,500 Reynolds & Reynolds, Class A 161,875
5,100 Seagate Technology+ 295,800
800 Shiva Corp.+ 47,800
5,300 Softkey International Inc.+ 148,400
5,500 Sterling Commerce Inc.+ 192,500
2,700 Sterling Software Inc.+ 209,925
3,100 Symantec Corp.+ 49,988
3,500 Sync Research Inc.+ 69,125
8,700 Synopsys Inc.+ 358,875
3,300 Verity, Inc.+ 113,437
- -----------------------------------------------------------------------------
6,505,338
- -----------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
6
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
CONSUMER SERVICES -- 1.4%
5,400 Accustaff Inc.+ $ 160,650
2,100 Career Horizons+ 74,025
3,300 CUC International+ 108,488
6,600 Manpower Inc.+ 244,200
6,100 Olsten Corp. 185,287
2,300 Stewart Enterprises Inc. 105,225
1,900 Tyco International Ltd.+ 73,388
- --------------------------------------------------------------------------------
951,263
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 1.6%
4,800 Allen Group+ 118,800
3,600 Linear Technology Corp.+ 123,750
6,100 MEMC Electronics Materials+ 304,237
1,000 Methode Electronics Inc. 16,750
6,900 Microchip Technology 175,950
7,500 Scientific Atlanta Corp. 138,750
4,500 Symbol Technologies+ 208,125
- --------------------------------------------------------------------------------
1,086,362
- --------------------------------------------------------------------------------
ELECTRONICS -- 1.8%
3,500 Altera Corp.+ 184,625
7,100 Ascend Communications+ 436,650
6,300 ECI Telecom Ltd.+ 164,588
11,500 International Rectifier+ 258,750
3,500 Solectron Corp.+ 155,750
- --------------------------------------------------------------------------------
1,200,363
- --------------------------------------------------------------------------------
ELECTRONICS-SEMICONDUCTORS AND COMPONENTS -- 5.9%
7,000 Adaptec Inc.+ 402,500
13,200 Analog Devices Inc.+ 339,900
2,900 Arrow Electronics+ 145,363
6,300 Atmel Corp.+ 252,000
4,800 Avnet Inc. 253,200
2,600 Berg Electronics Corp.+ 69,225
3,400 BMC Industries Inc.+ 90,950
4,800 Cable Design Technologies+ 158,400
7,500 Fore Systems Inc.+ 592,500
5,400 Intel Corp. 365,850
5,700 Lattice Semiconductor+ 186,675
9,200 LSI Logic Corp.+ 331,200
1,000 Molex Inc. 32,500
1,200 Molex Inc.+ 36,000
5,700 SCI Systems Inc.+ 244,388
6,000 Sierra Semiconductor Corp.+ 98,250
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
ELECTRONICS-SEMICONDUCTORS AND COMPONENTS -- 5.9% (CONTINUED)
13,600 SIII Inc.+ $ 192,100
3,000 Vitesse Semiconductors Co.+ 89,625
- --------------------------------------------------------------------------------
3,880,626
- --------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE TIME -- 1.5%
6,600 HFS Inc.+ 339,075
6,600 Mirage Resorts Inc.+ 345,675
2,200 Speedway Motorsports Inc.+ 58,850
2,900 Sun International Hotel+ 123,975
2,700 Trump Hotels & Casino Resort+ 87,412
- --------------------------------------------------------------------------------
954,987
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 5.5%
3,000 Advanta Corp., Class A 167,625
3,000 Advanta Corp., Class B 150,375
2,500 Beneficial Corp.+ 138,125
8,200 Credit Acceptance Corp.+ 153,750
2,200 Equifax Inc. 53,900
4,400 First U.S.A. Inc. 247,500
10,100 Green Tree Financial Corp. 340,875
5,000 Household International 345,625
4,200 Imperial Credit Industries+ 109,200
8,200 Medaphis Corp.+ 378,225
6,300 MGIC Investment Corp.+ 341,775
5,400 Money Store+ 136,350
5,200 Olympic Financial Ltd.+ 115,700
10,000 Service Corp. 531,250
1,600 Student Loan Marketing+ 117,200
2,200 Sun America Inc.+ 119,900
5,300 United Cos Financial+ 169,600
- --------------------------------------------------------------------------------
3,616,975
- --------------------------------------------------------------------------------
HOSPITAL RELATED -- 2.7%
4,400 Advanced Technology Lab+ 143,000
2,400 American Medical Response+ 88,800
3,200 Biomet Inc.+ 47,200
3,500 Cardiothoractic Systems+ 82,687
1,000 Endosonics Corp.+ 17,375
6,300 Genesis Health Ventures+ 186,637
6,100 Idexx Laboratoreis Inc.+ 271,450
5,900 Living Centers of America+ 218,300
8,400 Omnicare Inc. 504,000
8,900 OrNda Healthcorp+ 244,750
- --------------------------------------------------------------------------------
1,804,199
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
HOUSING & HOME FURNISHINGS -- 0.2%
6,700 Clayton Homes Inc. $ 123,950
800 Oakwood Homes+ 35,700
- --------------------------------------------------------------------------------
159,650
- --------------------------------------------------------------------------------
INSURANCE -- 0.1%
1,300 Equitable of Iowa 45,825
- --------------------------------------------------------------------------------
MACHINERY & MACHINE TOOLS -- 0.6%
3,900 Pall Corp. 109,200
1,900 Smith International+ 56,525
3,200 Thermo Electron 197,200
- --------------------------------------------------------------------------------
362,925
- --------------------------------------------------------------------------------
MANAGED CARE & MEDICAL SERVICES -- 9.5%
700 American Oncology
Resources+ 33,425
15,400 Apria Healthcare Group+ 523,600
6,900 Columbia HCA Healthcare 366,562
5,800 Community Health Systems+ 251,575
3,100 Compdent Corp.+ 137,175
2,500 Express Scripts Inc.,
Class A+ 123,750
2,600 Foundation Health Corp.+ 101,725
9,000 Health Care & Retirement+ 331,875
10,300 Health Management
Association+ 329,600
3,300 Healthcare Compare Corp.+ 155,513
8,400 Healthsource, Inc.+ 286,650
17,000 Healthsouth Rehab+ 631,125
8,200 Lincare Holdings Inc.+ 318,263
8,000 Manor Care Inc. 321,000
4,500 Medtronic Inc. 239,063
3,000 Occusystems Inc.+ 87,000
1,800 Orthondontic Centers of
America+ 71,100
9,500 Oxford Health Plans, Inc.+ 479,750
1,000 Pacificare Health Systems,
Class A+ 81,000
1,500 Pacificare Health Systems,
Class B+ 125,813
3,900 Phycor Inc.+ 192,075
1,700 Phymatrix+ 32,300
4,100 Physician Reliance Network+ 177,325
2,300 Physician Sales & Service+ 62,100
3,400 Quorum Health Group Inc.+ 86,275
5,500 Riscorp Inc.+ 129,937
11,000 Tenet Healthcare Corp.+ 225,500
11,500 Vencor Inc.+ 388,125
- --------------------------------------------------------------------------------
6,289,201
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
MANUFACTURING -- 2.2%
2,700 Amphenol Corp., Class A+ $ 71,213
5,300 Callaway Golf Company 141,775
13,400 Cisco Systems Inc.+ 695,125
2,100 Kennametal Inc. 79,538
1,000 Oakley Inc.+ 46,000
1,100 Parker-Hannifin 46,475
3,100 Pentair Inc.+ 78,275
6,500 Tech Data Corp.+ 126,750
3,800 Zilog Inc.+ 142,975
- --------------------------------------------------------------------------------
1,428,126
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT -- 1.4%
2,700 Dentsply International Inc. 112,725
2,900 Guidant Corp.+ 162,763
3,200 Invacare Corp.+ 83,200
2,600 Nellcor, Inc.+ 127,400
2,700 Spine Tech Inc.+ 78,300
600 Stryker Corp.+ 29,025
11,800 Sybron International+ 297,950
- --------------------------------------------------------------------------------
891,363
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS & SUPPLIES -- 1.1%
6,700 Boston Scientific Corp.+ 288,937
3,500 Conmed Corp.+ 104,125
11,300 Medpartners/Mullikin+ 326,288
- --------------------------------------------------------------------------------
719,350
- --------------------------------------------------------------------------------
OIL & GAS -- 0.2%
1,000 Belco Oil & Gas Corp.+ 28,875
1,800 Chesapeake Energy Corp.+ 127,350
- --------------------------------------------------------------------------------
156,225
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT, PRODUCTS & SUPPLIES -- 3.3%
1,400 Avery Dennison Corp.+ 79,800
1,600 Boise Cascade Office Products+ 125,200
1,500 BT Office Products International+ 26,063
2,600 CDW Computers Centers+ 201,175
8,700 Danka Business Systems Corp. 417,600
4,300 Global Direct Mail+ 168,775
8,100 Office Depot Inc.+ 181,237
19,750 Staples+ 375,250
3,900 U.S. Office Products Co.+ 140,400
7,300 Viking Office Products+ 433,437
- --------------------------------------------------------------------------------
2,148,937
- --------------------------------------------------------------------------------
10
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
PHARMACEUTICALS -- 2.2%
9,500 Cardinal Health Inc. $ 596,125
4,300 Elan Corp PLC ADR+ 284,338
1,100 Jones Medical Industries+ 57,475
6,600 Mylan Laboratories 128,700
1,500 Parexel International
Corp.+ 73,875
1,800 Quintiles Transnational+ 131,850
1,000 Teva Pharmaceutical Corp. 44,875
3,200 Watson Pharmaceuticals+ 152,000
- --------------------------------------------------------------------------------
1,469,238
- --------------------------------------------------------------------------------
RESTAURANTS -- 0.7%
4,400 Applebees International+ 116,600
1,700 Cracker Barrel Old Country 40,163
3,100 Lonestar Steakhouse+ 128,263
4,500 Outback Steakhouse Inc.+ 180,563
- --------------------------------------------------------------------------------
465,589
- --------------------------------------------------------------------------------
RETAIL-APPAREL -- 1.5%
6,700 Liz Claiborne+ 243,713
5,300 Nine West Group+ 227,238
2,900 Ross Stores Inc.+ 100,050
3,400 Talbot's 97,750
5,450 The Mens Warehouse+ 201,650
5,100 The Sports Authority+ 151,725
- --------------------------------------------------------------------------------
1,022,126
- --------------------------------------------------------------------------------
RETAIL -- 3.3%
4,000 Caseys General Stores Inc. 86,250
5,900 Consolidated Stores Corp.+ 212,400
3,400 Corporate Express Inc.+ 127,075
3,000 Dollar General Corp. 79,125
3,700 Eckerd Drugs+ 176,675
12,900 Gap Inc. 388,613
6,200 Kohl's Corp.+ 213,125
3,900 Orchard Supply Hardware+ 93,600
6,500 Petco Animal Supplies+ 186,875
8,500 Petsmart Inc.+ 377,187
17,500 Thrifty Payless Holdings+ 236,250
- --------------------------------------------------------------------------------
2,177,175
- --------------------------------------------------------------------------------
RETAIL-AUTO -- 0.6%
7,200 Autozone Inc.+ 262,800
4,500 Pep Boys--Manny, Moe & Jack 150,187
- --------------------------------------------------------------------------------
412,987
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED) APRIL 30, 1996
SHARES SECURITY VALUE
================================================================================
RETAIL-FOOD CHAINS -- 1.6%
6,700 Kroger Co.+ $ 275,538
4,700 Richfood Holdings Inc. 153,338
12,100 Safeway Inc.+ 408,375
6,600 Vons Co.+ 211,200
- --------------------------------------------------------------------------------
1,048,451
- --------------------------------------------------------------------------------
RETAIL-SPECIAL LINE -- 2.9%
5,000 Bed Bath & Beyond+ 295,313
3,400 Fred Meyer Inc.+ 97,750
7,900 General Nutrition Co.+ 154,050
3,200 Gymboree Corp.+ 82,800
3,900 Helig Meyers 80,437
7,500 Micro Warehouse Inc.+ 322,500
3,700 Nautica Enterprises+ 172,050
11,700 Sunglass Hut International
Inc.+ 342,225
3,300 TJX Companies+ 97,350
4,400 Tommy Hilfiger Corp.+ 200,200
2,100 Wolverine Worldwide Inc. 64,837
- --------------------------------------------------------------------------------
1,909,512
- --------------------------------------------------------------------------------
STEEL -- 0.3%
1,600 Thermo Instruments Systems+ 52,800
3,500 U.S. Satellite
Broadcasting+ 119,875
- --------------------------------------------------------------------------------
172,675
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 1.7%
4,100 Aspect Telecommunications+ 235,750
19,500 Ericsson LM Telephone ADR+ 397,312
5,400 Frontier Corp. 170,775
1,800 Network Equipment
Technologies+ 45,900
1,400 U.S. Long Distance Corp.+ 36,050
5,400 Worldcom Inc.+ 253,800
- --------------------------------------------------------------------------------
1,139,587
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS-EQUIPMENT -- 4.2%
1,800 ADC Telecommunications+ 75,600
10,450 Andrew Corp.+ 501,600
5,150 Cascade Communications+ 516,288
2,300 Cidco Inc.+ 82,225
5,400 Glenayre Technologies+ 251,100
4,400 Newbridge Networks Corp.+ 283,250
4,600 Pairgain Technologies+ 439,300
12
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS(UNAUDITED)(CONTINUED) APRIL 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
TELECOMMUNICATIONS-EQUIPMENT -- 4.2% (CONTINUED)
6,400 Premysis Communications+ $ 280,000
1,300 TCSI Corp.+ 42,575
5,600 Tellabs Inc.+ 309,400
- --------------------------------------------------------------------------------
2,781,338
- --------------------------------------------------------------------------------
TOYS -- 0.1%
2,750 Mattel Inc.+ 71,500
- --------------------------------------------------------------------------------
TRANSPORTATION-MISCELLANEOUS -- 0.3%
4,000 American Freightways Corp.+ 60,500
3,500 JB Hunt Transport
Services, Inc. 71,310
1,900 TNT Freightways+ 42,986
- --------------------------------------------------------------------------------
174,796
- --------------------------------------------------------------------------------
WASTE MANAGEMENT -- 0.2%
5,300 U.S.A. Waste Service Inc.+ 137,800
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost -- $45,162,802) 51,403,730
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM INVESTMENTS -- 22.1%
$1,655,000 U.S. Treasury Bill 4.910% due 6/27/96 1,642,134
4,650,000 U.S. Treasury Bill 5.030% due 6/27/96 4,612,966
8,341,000 Federal Home Loan Mortgage Corp.
Discount Notes 5.300% due 5/1/96 8,341,000
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $14,596,100) 14,596,100
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $59,758,902*) $65,999,830
===============================================================================
</TABLE>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (Cost -- $59,758,902) $65,999,830
Receivable for Fund shares sold 184,932
Dividends receivable 3,457
- -------------------------------------------------------------------------------
Total Assets 66,188,219
- -------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 698,007
Management fees payable 129,009
Payable to broker 2,850
Accrued expenses 20,410
- -------------------------------------------------------------------------------
Total Liabilities 850,276
- -------------------------------------------------------------------------------
Total Net Assets $65,337,943
===============================================================================
NET ASSETS:
Par value of capital shares $ 61
Capital paid in excess of par value 60,275,265
Undistributed net investment income 57,354
Accumulated net realized loss on security transactions (1,534,650)
Net unrealized appreciation of investments and futures 6,539,913
- -------------------------------------------------------------------------------
Total Net Assets $65,337,943
===============================================================================
Shares Outstanding 6,105,301
- -------------------------------------------------------------------------------
Net Asset Value $10.70
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1996
<S> <C>
INVESTMENT INCOME:
Interest $ 221,799
Dividends 25,034
- --------------------------------------------------------------------------------
Total Investment Income 246,833
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 140,857
Registration fees 8,500
Audit and legal 7,500
Custody 7,000
System servicing fees 5,000
Shareholder communications 3,000
Directors' fees 2,000
Other 1,480
- --------------------------------------------------------------------------------
Total Expenses 175,337
- --------------------------------------------------------------------------------
Net Investment Income 71,496
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FUTURES (note 3):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 7,229,529
Cost of securities sold 8,756,575
- --------------------------------------------------------------------------------
Net Realized Loss (1,527,046)
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of
Investments and Futures:
Beginning of period (10,437)
End of period 6,539,913
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 6,550,350
- --------------------------------------------------------------------------------
Net Gain on Investments 5,023,304
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 5,094,800
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1996 (unaudited)
and the Period Ended October 31, 1995
<TABLE>
<CAPTION>
1996 1995(a)
===============================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 71,496 $ 13,217
Net realized loss (1,527,046) (7,604)
Increase (decrease) in net
unrealized depreciation 6,550,350 (10,437)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations 5,094,800 (4,824)
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (27,359) --
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (27,359) --
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sales 53,096,529 10,257,531
Net asset value of shares issued for
reinvestment of dividends 27,358 --
Cost of shares reacquired (936,092) (2,170,000)
- -------------------------------------------------------------------------------
Increase in Net Assets From Fund
Share Transactions 52,187,795 8,087,531
- -------------------------------------------------------------------------------
Increase in Net Assets 57,255,236 8,082,707
NET ASSETS:
Beginning of period 8,082,707 --
- -------------------------------------------------------------------------------
End of period* $65,337,943 $ 8,082,707
===============================================================================
* Includes undistributed net
investment income of: $ 57,354 $ 13,217
===============================================================================
</TABLE>
(a) For the period from October 10, 1995 (commencement of operations) to
October 31, 1995.
16
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The AIM Capital Appreciation Portfolio ("Portfolio") is a separate investment
portfolio of the Smith Barney/Travelers Series Fund Inc. ("Fund"). The Fund, a
Maryland corporation, is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company and consists of this
portfolio and eleven other separate investment portfolios: Smith Barney Income
and Growth, Alliance Growth, Van Kampen American Capital Enterprise, Smith
Barney International Equity, Smith Barney Pacific Basin, TBC Managed Income,
Putnam Diversified Income, GT Global Strategic Income, Smith Barney High Income,
MFS Total Return and Smith Barney Money Market Portfolios. Shares of the Fund
are offered only to insurance company separate accounts that fund certain
variable annuity and variable life insurance contracts. The financial statements
and financial highlights for the other portfolios are presented in separate
semi-annual reports.
The significant accounting policies followed by the Fund are: (a) security
transactions are accounted for on trade date; (b) securities traded on national
securities markets are valued at the closing prices on such markets; securities
for which no sales price was reported and U.S. Government and Government Agency
obligations are valued at the mean between the bid and the ask prices; (c)
short-term investments that have a maturity of 60 days or more are valued at
prices based on market quotations for securities of similar type, yield and
maturity; (d) investments maturing within 60 days are valued at cost plus
accreted discount, or minus amortized premium, as applicable; (e) dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis; (f) dividends and distributions to shareholders are recorded
on the ex-dividend date; (g) gains or losses on the sale of securities are
calculated by using the specific identification method; (h) direct expenses are
charged to the Portfolio; (i) the accounting records of the Portfolio are
maintained in U.S. dollars. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities, and income and expenses are translated at the rate of
exchange quoted on the respective date that such transactions are recorded.
Differences between
17
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
income and expense amounts recorded and collected or paid are adjusted when
reported by the custodian; (j) the Portfolio intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (k) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ from these amounts.
2. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The
Portfolio pays SBMFM a management fee calculated at an annual rate of 0.80% on
the average daily net assets. This fee is calculated daily and paid monthly.
SBMFM has entered into a subadvisory agreement with AIM Capital Management,
Inc. ("AIM"). Pursuant to the subadvisory agreement AIM is responsible for the
day-to-day portfolio operations and investment decisions. As a result, SBMFM
will pay AIM a monthly fee calculated at the annual rate of 0.375% of the
average daily net assets of the Portfolio.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares and primary broker for its portfolio agency transactions.
All officers and two Directors of the Fund are employees of SB.
3. INVESTMENTS
During the six months ended April 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term investments) were as follows:
================================================================================
Purchases $47,029,543
================================================================================
Sales 7,229,529
================================================================================
18
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
At April 30, 1996, the net unrealized appreciation of investments for Federal
income tax purposes consisted of the following:
================================================================================
Gross unrealized appreciation $7,057,219
Gross unrealized depreciation (816,291)
================================================================================
Net unrealized appreciation $6,240,928
4. CAPITAL LOSS CARRYFORWARD
At October 31, 1995, the Portfolio had for Federal tax purposes approximately
$331 of unused capital loss carryforwards, expiring October 31, 2003 available
to offset future realized capital gains, if any. To the extent that these
carryforward losses are used to offset capital gains, it is possible that the
gains so offset will not be distributed.
5. FUTURES CONTRACTS
Initial margin deposits made upon entering into futures contracts are
recognized as assets due from the broker (the Portfolio's agent in aquiring the
futures position). During the period the futures contract is open, changes in
the value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the contract
at the end of each day's trading. Variation margin payments are made or received
and recognized as assets due from or liabilities due to broker, depending upon
whether unrealized gains or losses are incurred. When the contract is closed,
the Portfolio records a realized gain or loss equal to the difference between
the proceeds from (or cost of) the closing transactions and the Portfolio's
basis in the contract.
At April 30, 1996, the Portfolio had the following open futures contracts:
<TABLE>
<CAPTION>
Expiration # of Basis Market Unrealized
Month/Year Contracts Value Value Gain
================================================================================
<S> <C> <C> <C> <C> <C>
Futures
contracts
purchased:
S&P 500 Index 6/96 13 $3,970,870 $4,256,525 $285,655
S&P 500 Index 6/96 6 1,951,220 1,964,550 13,330
================================================================================
Net Unrealized Gain $298,985
================================================================================
</TABLE>
19
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
6. CAPITAL SHARES
At April 30, 1996, the Fund had six billion shares of $0.00001 par value
capital stock authorized. Each share represents an equal proportionate interest
and has an equal entitlement to any dividends and distributions made by the
Portfolio.
Transactions in shares of the Portfolio were as follows:
<TABLE>
<CAPTION>
Six Months Ended Period Ended
April 30, 1996 October 31, 1995
================================================================================
<S> <C> <C>
Shares sold 5,387,814 1,026,832
Shares issued on reinvestment 2,850 --
Shares redeemed (93,532) (218,663)
- --------------------------------------------------------------------------------
Net Increase 5,297,132 808,169
================================================================================
</TABLE>
20
<PAGE>
Smith Barney/Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout the period:
<TABLE>
<CAPTION>
1996(1) 1995(2)
================================================================================
<S> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $10.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.02 0.02
Net realized and unrealized gain (loss) 0.69 (0.02)
- --------------------------------------------------------------------------------
Total Income From Operations 0.71 --
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) --
- --------------------------------------------------------------------------------
Total Distributions (0.01) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.70 $10.00
- --------------------------------------------------------------------------------
Total Return++ 7.22% 0.00%
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $65,338 $8,083
- --------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses(3) 0.99% 1.00%
Net investment income 0.40 4.07
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 26% 5.91%
================================================================================
Average commissions per share paid on
equity transactions $ 0.06 $ 0.06
================================================================================
</TABLE>
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from October 10, 1995 (commencement of operations) to
October 31, 1995.
(3) The manager has waived all or part of its fees and reimbursed expenses of
$13,456 for the period ended October 31, 1995. If such fees were not
waived, the per share decreases in net investment income and the ratios of
expenses to average net assets would have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases Expense Ratios
in Net Investment Income Without Fee Waivers
------------------------ -------------------
<S> <C> <C>
1995 1995
---- ----
$0.03 5.95%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
21
<PAGE>
Smith Barney
[LOGO]
A Member of Travelers Group
Smith Barney/Travelers Series Fund Inc.
Directors
Victor K. Atkins
Jessica M. Bibliowicz
Alger B. Chapman
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
James M. Shuart
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
John C. Bianchi
Vice President
James B. Conheady
Vice President
Martin Hanley
Vice President
Jeffrey J. Russell
Vice President
Bruce D. Sargent
Vice President
Phyllis Zahorodny
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Smith Barney/Travelers Series Fund Inc. -- AIM Capital Appreciation Portfolio.
It is not authorized for distribution to prospective investors unless
accompanied or preceded by a current Prospectus for the Portfolio, which
contains information concerning the Portfolio's investment policies and expenses
as well as other pertinent information.
which contains information concerning
the Portfolio's investment policies
and expenses as well as other
pertinent information.
Smith Barney/Travelers
Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0801 6/96
<PAGE>
SEMI - ANNUAL REPORT
Smith Barney/Travelers
Series Fund Inc.
Smith Barney International
Equity Portfolio
Smith Barney Pacific Basin
Portfolio
GT Global Strategic Income
Portfolio
----------------------------
April 30, 1996
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney International Equity, Smith Barney Pacific Basin and GT Global
Strategic Income Portfolios
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the period ended
April 30, 1996 for the Smith Barney/Travelers Series Fund Inc. -- Smith Barney
International Equity, Smith Barney Pacific Basin and GT Global Strategic Income
Portfolios. In this report, we summarize the period's prevailing economic and
market conditions below and briefly outline each Portfolio's investment
strategy. A detailed summary of performance and current holdings for each
Portfolio can be found in the appropriate sections that follow in the semi-
annual report.
Portfolio Highlights
Smith Barney International Equity Portfolio
The International Equity Portfolio had a total return of 13.39% for the six-
months ended April 30, 1996. This performance figure compares favorably to its
Lipper Analytical Services, Inc. international fund peer group average of 11.95%
for the same time period. (Lipper Analytical Services, Inc. is a major fund
tracking organization.)
After the unexpected Mexican devaluation of the peso at the end of 1994, many of
the international markets had a difficult year and a half as many investors
reduced their international holdings, especially in the emerging markets, and
invested their money in rising U.S. markets in a classic "flight to safety."
Because of Mexico's problems, many emerging markets were adversely affected. In
our view, many smaller equity markets reached the bottom in terms of their stock
prices around November 1995.
Since the beginning of 1996, both institutional and retail investors have
returned to the international markets. In our opinion, many non-U.S. stocks
continue to be undervalued, relatively inexpensive and represent outstanding
long-term investment opportunities. Furthermore, many non-U.S. companies have
considerable scope for earnings improvements either due to improving
macroeconomic conditions or individual corporate moves such as restructuring. We
continue to believe that the international markets have largely completed a two-
year, significant correction and the risk/reward ratio looks appealing in many
of the world's smaller markets.
In addition, since many of these international markets are thinly capitalized,
it does not take much investment capital to stimulate investor interest, which
demonstrates the cyclical nature of international investing. Today, a typical
U.S. corporate pension has approximately 10% invested internationally, a
1
<PAGE>
dramatic increase since the early 1980s. In addition, U.S. investors own more
than $462 billion of foreign stocks, a more than ten-fold increase since 1985.
Another positive trend for the international markets is the accelerating pace of
restructuring over the past six months, especially in Europe. Enhancing
shareholder value has become a very important issue for the management of many
European companies. In addition, merger and acquisition activity in Europe has
also increased. For example, Switzerland-based temporary employment company,
Adia, recently agreed to merge with temporary help agency Ecco in France,
creating a formidable competitor in one of the fastest growing segments of the
global economy.
During the period covered by this report, the International Equity Portfolio did
not make any significant changes to its country weightings or stock holdings.
The Portfolio remains broadly diversified by both sector and country and has
positions in developed stock markets such as Germany and Italy, as well as in
emerging markets such as India and Poland. The Portfolio's largest allocations
were in Europe followed by companies in the Pacific Rim region. The remainder of
the Portfolio's assets were invested in smaller, high impact emerging markets in
Latin America, the Middle East and Africa.
We continue to follow the same basic growth-oriented investment policy in place
since the Portfolio's inception. We believe that earnings growth drives stock
performance. As a result, the Portfolio focuses on companies growing at a
premium rate and that are superior to that of the overall international equity
market. Macroeconomic conditions, although an important investment
consideration, are generally not as critical as company-specific factors.
Over the past six months, the International Equity Portfolio's performance was
helped by its holdings in the emerging markets, especially companies located in
the Southeast Asian region. Because the currencies of countries such as
Singapore, Hong Kong, Thailand and Malaysia are pegged to the U.S. dollar, the
performance of their stock markets has historically been linked to U.S. monetary
policies. However, the recent decline in the U.S. bond market did not affect
these emerging markets, which were stellar performers in the early part of 1996.
Smith Barney Pacific Basin Portfolio
The Pacific Basin Portfolio had a total return of 14.89% for the six-months
ended April 30, 1996 and outperformed its Lipper Analytical Services, Inc. peer
group average of 13.50% for the same period.
2
<PAGE>
The Pacific Basin markets have generally been volatile and have lagged the U.S.
market by approximately 4% to 5%. Because most currencies in the Pacific Basin
region are pegged to the U.S. dollar, the main concerns continue to be where
U.S. interest rates are heading and rising commodity prices, specifically higher
oil prices. Although the majority of the Pacific Rim economies have experienced
some problems over the last six months, a few markets have showed signs of
recovery. In addition, investor confidence in the Pacific Basin region has begun
to rise, leading to a recent surge in some of the region's major equity markets.
In Japan, the yen continued its decline against the U.S. dollar, depreciating
approximately 3.5% during the first quarter of 1996. Moreover, the Bank of Japan
has kept short-term interest rates low in order to spur more economic growth in
Japan. While Japan's Gross Domestic Product (GDP) grew at an unexpectedly high
rate in the fourth quarter of 1995, unemployment has since risen, and Japan's
economy continues to lag behind those of many other industrialized nations.
However, the Nikkei Index has posted some strong gains in recent months, rising
26% between November 1, 1995 and April 30, 1996. As Japanese investors have
become much more conscious of their own market, liquidity has increased
somewhat. On the other hand, the year-end closing of the books in Japan means
that some numbers are still being finalized, and that has kept some investors on
the sidelines.
Over the past six months, the Pacific Basin Portfolio remained fully invested in
Asia and Australia and has broadly diversified holdings in over 11 countries as
well as positions in 50 different companies. The Portfolio continues to focus
primarily on companies with outstanding growth potential because they have an
established franchise, dominant market share, or have an edge in technology.
Macroeconomic conditions are generally not as important as company-specific
factors in the Portfolio's individual stock selection process as well.
During the period covered by this report, the Pacific Basin Portfolio increased
its weighting in Japanese companies from 15.4% to 19.2% because of our belief
that the long-awaited Japanese economic recovery had finally begun. Moreover,
the Portfolio increased its weighting in Malaysian companies during this time
and that helped its performance. For example, the Kuala Lumpur Stock Exchange
Composite Index rose above 1000 in early January and reached a 20-month high in
April, a gain of 26% since November. In all of the other Pacific Basin
countries, the Portfolio reduced its weighting during this period because of the
uncertain outlook for interest rates in the United States.
Over the last six months, the Pacific Basin Portfolio added to its position in
Noritsu-Koki, a company that manufactures one-hour photo developing
3
<PAGE>
equipment with a current worldwide market share of approximately 85%. Because
most Asian consumers no longer want to wait three or four days for their photos
to be developed, we believe Noritsu-Koki's proprietary photo developing
technology makes this company extremely attractive. In addition, because our
investment strategy is driven by a long-term perspective and a strong belief
that the full growth potential of many companies in the Pacific Basin Region has
yet to be realized, Noritsu-Koki is a good example of the kinds of companies in
which the Pacific Portfolio invests.
In China, the intellectual piracy of many Western goods continues to be an
contentious issue. However, because of the upcoming U.S. Presidential election
in November, we believe this potentially explosive political issue will be put
on the back burner only to re-surface later. Another area of concern in the
Pacific Basin region remains the ultimate intentions of North Korea, the last
Stalinist stronghold in the world. With its economy in shambles and chronic food
shortages, North Korea remains very much a regional wild card.
GT Global Strategic Income Portfolio
The GT Global Strategic Income Portfolio generated a total return of 7.15% for
the six-months ended April 30, 1996, which significantly outperformed its Lipper
Peer Group Average of 1.96%.
Due to weakening economic growth, the global bond markets rallied strongly
throughout most of 1995. At the start of 1996, however, concerns about
strengthening economic growth in the U.S., Japan and Germany caused global bond
yields to rise sharply. Stronger U.S. employment growth raised investors' fears
about higher wage inflation and led to a large increase in U.S. bond yields. The
increase in foreign bond yields was generally less than in the U.S. More
importantly, though, the Japanese yen and other core European currencies
weakened significantly against the U.S. dollar. Therefore, in U.S. dollar-terms,
the returns of some of the world's major bond markets were extremely
unattractive.
During the period covered by this report, the GT Global Strategic Income
Portfolio remained underweighted in U.S. bonds versus European bonds. However,
in comparison to October 1995, the Portfolio continues to be positioned more
defensively. In addition, we have generally reduced the maturities of the U.S.
and Japanese bonds we own.
The Portfolio was able to minimize the impact of the 150 basis point correction
in U.S. Treasuries in February 1996 by decreasing the duration of its U.S. bond
holdings. However, the Portfolio's performance was positively affected by its
holdings in high yield bonds. In addition, the February correction in the U.S.
Treasury securities market interrupted the rally that had begun in some emerging
market bonds. Yet, within one month, some emerging market bonds had recouped
most of their losses.
4
<PAGE>
The Portfolio decreased its allocations in South Africa and Bulgaria and
increased its exposure to Russia, primarily because of our positive expectations
for the Russian economy and our favorable outlook for inflation. Moreover, the
Portfolio increased its exposure to Brazil despite its slow progress with
respect to political and economic reform. We believe Brazil will outperform
other Latin American countries, particularly since the market has already
factored in much of the country's negative news.
We anticipate further weakness in the U.S. Treasury securities market over the
short term. However, additional increases in yields should be somewhat limited
because much of the bad news has already been factored into the market. Over the
longer term and assuming an annual inflation rate of 3.25%, a nominal yield of
7% for U.S. Treasuries represents fair value. However, the Portfolio will
continue to focus on more attractive fixed income opportunities in countries
such as Denmark, Italy and the U.K. because, in our opinion, these bonds offer
good value compared to U.S. bonds.
In closing, thank you for investing in the Smith Barney International Equity,
Smith Barney Pacific Basin and GT Global Strategic Income Portfolios. We look
forward to helping you achieve your investment goals.
Sincerely,
/s/ Heath B. Mclendon
Heath B. McLendon
Chairman and Chief Executive Officer
June 10, 1996
5
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance -- Smith Barney International Equity Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Total
Period Ended of Period of Period Dividends Returns+
================================================================================
4/30/96 $10.48 $11.87 $0.01 13.39%++
- --------------------------------------------------------------------------------
10/31/95 10.55 10.48 0.00 (0.66)
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.55 0.00 5.50++
================================================================================
Total $ 0.01
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- Smith Barney Pacific Basin Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Total
Period Ended of Period of Period Dividends Returns+
================================================================================
4/30/96 $ 8.95ds $10.23 $0.03 14.89%++
- --------------------------------------------------------------------------------
10/31/95 10.10 8.95 0.00 (11.58)
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.10 0.00 1.00++
================================================================================
Total $ 0.03
================================================================================
- --------------------------------------------------------------------------------
Historical Performance -- GT Global Strategic Income Portfolio
- --------------------------------------------------------------------------------
Net Asset Value
---------------
Beginning End Income Total
Period Ended of Period of Period Dividends Returns+
================================================================================
4/30/96 $10.77 $11.11 $0.42 7.15%++
- --------------------------------------------------------------------------------
10/31/95 9.95 10.77 0.10 9.37
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 9.95 0.00 (0.50)++
================================================================================
Total $ 0.52
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
6
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Average Annual Total Return+
- --------------------------------------------------------------------------------
SB SB GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
Six Months Ended 4/30/96++ 13.39% 14.89% 7.15%
- --------------------------------------------------------------------------------
Year Ended 4/30/96 23.66 17.12 15.74
- --------------------------------------------------------------------------------
6/16/94* through 4/30/96 9.65 1.38 8.54
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
SB SB GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
6/16/94* through 4/30/96 18.84% 2.60% 16.59%
================================================================================
+ Assumes the reinvestment of all dividends and capital gains
distributions.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
* Commencement of operations.
7
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney International Equity Portfolio vs.
MSCI EAFE-GDP Weighted Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
SB Int'l Equity Morgan Stanley EAFE - Weighted Index
6/16/94 10,000 10,000
10/94 10,550 10,345
4/95 9,610 10,585
10/95 10,480 10,398
4/96 11,884 11,749
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
International Equity Portfolio on June 16, 1994 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through April 30, 1996. The Morgan Stanley Capital International EAFE-
GDP Weighted Index is a composite portfolio consisting of equity total
returns for the countries of Europe, Australia, New Zealand and countries in
the Far East, weighted based on each country's gross domestic product. The
index is unmanaged and is not subject to the same management and trading
expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
8
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Pacific Basin Portfolio vs.
MSCI Pacific Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
SB Pacific Basin MSCI Pacific INDEX
6/16/94 10,000 10,000
10/94 10,100 9,952
4/95 8,760 9,702
10/95 8,950 8,836
4/96 10,260 10,430
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Pacific Basin Portfolio on June 16, 1994 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through April 30, 1996. The Morgan Stanley Capital International Pacific
Index is comprised of a sampling of large, medium and small capitalization
companies who are listed on the various Pacific exchanges, such as Australia,
Hong Kong, Japan, Malaysia, New Zealand and the Singapore stock exchange. The
index is unmanaged and is not subject to the same management and trading
expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and redemption
value may be more or less than the original cost.
9
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
GT Global Strategic Income Portfolio vs.
J.P. Morgan Global Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1996
GT Global Strategic Income JP Morgan Global Bond Index
6/16/94 10,000 10,000
10/94 9,950 10,391
4/95 10,074 11,490
10/95 10,882 11,985
4/30/96 11,660 12,009
+ Hypothetical illustration of $10,000 invested in shares of the GT Global
Strategic Income Portfolio on June 16, 1994 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through April 30, 1996. The J.P. Morgan Global Bond Index is a daily,
market capitalization weighted international fixed income index consisting of
13 countries. The index is unmanaged and is not subject to the same management
and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and redemption
value may be more or less than the original cost.
10
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
STOCKS -- 100.0%
Argentina -- 0.6%
35,000 Quilmes Industrial S.A.++ $ 420,000
17,500 Quilmes Industrial S.A. ADR++ 207,813
- --------------------------------------------------------------------------------
627,813
- --------------------------------------------------------------------------------
Australia -- 2.2%
201,176 Coca-Cola Amatil Ltd. 2,118,092
- --------------------------------------------------------------------------------
Austria -- 5.3%
6,000 Austria Mikro Systeme International AG 727,957
5,000 VA Technologie AG 663,169
4,000 VAE Eisenbahn AG 373,711
15,500 Wolford AG 3,361,726
- --------------------------------------------------------------------------------
5,126,563
- --------------------------------------------------------------------------------
Belgium -- 3.2%
20,000 Barco N.V. 3,150,880
- --------------------------------------------------------------------------------
Chile -- 1.8%
40,000 Banco de A. Edwards ADR 845,000
25,000 Embotelladora Andina S.A. ADR 875,000
1,720,000
- --------------------------------------------------------------------------------
Denmark -- 1.0%
50,000 Scandinavian Mobility International A.S. 930,232
- --------------------------------------------------------------------------------
Finland -- 0.7%
20,000 Nokia OY AB A Shares 727,500
- --------------------------------------------------------------------------------
France -- 5.9%
10,000 B.I.S. S.A.++ 1,108,686
3,348 Castorama Dubois Investment 639,556
5,000 Ecco S.A. 1,121,241
5,000 Group Axime++ 615,185
25,000 SGS - Thomson Microelectronics N.V.++ 1,175,000
4,750 Sidel S.A. Registered Foreign 1,128,484
5,788,152
- --------------------------------------------------------------------------------
Germany -- 4.1%
5,000 Mannesmann AG 1,707,747
25,000 SGL Carbon AG 2,331,116
- --------------------------------------------------------------------------------
4,038,863
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
11
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
====================================================================================
<S> <C> <C>
Hong Kong -- 5.0%
150,000 Cheung Kong Holdings Ltd. $1,071,359
150,000 Guoco Group Ltd. 746,558
74,800 HSBC Holdings PLC 1,116,851
200,000 Sun Hung Kai Properties Ltd. 1,906,793
- ------------------------------------------------------------------------------------
4,841,561
- ------------------------------------------------------------------------------------
India -- 3.5%
75,000 BSES Ltd. GDR++ 1,500,000
100,000 Larsen & Toubro Ltd. GDR++ 1,875,000
- -------------------------------------------------------------------------------------
3,375,000
- -------------------------------------------------------------------------------------
Ireland -- 4.0%
150,088 Bank of Ireland 1,080,893
100,636 CRH PLC 905,941
200,000 Independent Newspapers PLC 1,660,743
30,203 Irish Continental Group PLC 253,141
- -------------------------------------------------------------------------------------
3,900,718
- -------------------------------------------------------------------------------------
Israel -- 2.6%
50,000 Gilast Satellite Networks Ltd.++ 1,162,500
30,000 Teva Pharmaceutical Industries Ltd. ADR 1,346,250
- -------------------------------------------------------------------------------------
2,508,750
- -------------------------------------------------------------------------------------
Italy -- 9.4%
50,000 De Rigo S.p.A. ADR++ 1,537,500
50,000 Gucci Group N.V. - NY Registered Shares++ 2,718,750
100,000 Industria Macchine Automatiche++ 703,048
25,000 Industrie Natuzzi S.p.A. ADR 1,300,000
20,000 Luxottica Group S.p.A. ADR 1,610,000
600,000 Telecom Italia Mobile S.p.A. 1,313,806
- -------------------------------------------------------------------------------------
9,183,104
- -------------------------------------------------------------------------------------
Japan -- 5.6%
500 Bank of Tokyo - Mitsubishi 11,551
23,500 Bunkyodo Co. Ltd. 578,779
40,000 Canon Inc. 794,234
7,000 Japan Associated Finance 868,694
20,000 Matsushita Electric Industrial Co. Ltd. 353,205
77,000 Mitsubishi Heavy Industries Ltd. 686,535
25,000 Noritsu Koki Co. Ltd. 1,016,658
22,847 Sato Corp. 584,506
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================
<S> <C> <C>
Japan -- 5.6% (continued)
11,000 Trans Cosmos $ 598,539
- --------------------------------------------------------------------------------------
5,492,701
- --------------------------------------------------------------------------------------
Malaysia -- 3.8%
99,666 Leader Universal Holdings Berhad 293,747
300,000 Renong Berhad 522,095
60,000 Renong Berhad 4% ICULS Rights++ 361
37,500 Renong Berhad Warrant Rights++ 10,526
250,000 Sungei Way Holdings Berhad 1,152,859
300,000 TA Enterprise Berhad 517,283
125,000 Telekom Malaysia Berhad 1,177,922
- --------------------------------------------------------------------------------------
3,674,793
- --------------------------------------------------------------------------------------
Mexico -- 3.8%
100,000 Cemex S.A. de C.V. Sponsored ADR B Shares 843,750
199,980 Gruma S.A. de C.V. B Shares 804,802
100,000 Grupo Carso S.A. de C.V. Series A1 757,932
70,000 Kimberly Clark A NPV 1,277,081
- --------------------------------------------------------------------------------------
3,683,565
- ---------------------------------------------------------------------------------------
Netherlands -- 8.8%
25,000 Getronics N.V. 1,733,784
10,000 Heineken N.V. 2,089,865
20,000 Hunter Douglas N.V. 1,261,146
20,000 IHC Caland N.V. 784,428
20,000 Randstad Holdings N.V. 1,279,795
13,000 Wolters Kluwer N.V. 1,419,022
- ---------------------------------------------------------------------------------------
8,568,040
- ---------------------------------------------------------------------------------------
Norway -- 1.9%
14,500 Multisoft A.S.++ 550,694
13,200 SpecTec A.S. 340,899
100,000 Tomra Systems A.S. 919,090
- ---------------------------------------------------------------------------------------
1,810,683
- ---------------------------------------------------------------------------------------
Philippines -- 1.4%
989,800 Bankard Inc. 548,627
3,000,000 SM Prime Holdings Inc. 871,560
- ---------------------------------------------------------------------------------------
1,420,187
- ---------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=======================================================================================
<C> <S> <C>
Singapore -- 5.3%
150,000 Cerebos Pacific Ltd. $1,354,908
90,000 Fraser & Neave Ltd. 998,578
750,000 QAF Ltd. 1,018,848
150,000 Sembawang Maritime Ltd. 394,737
600,000 Singapore Technologies Industrial Corp. 1,382,646
- ---------------------------------------------------------------------------------------
5,149,717
- ---------------------------------------------------------------------------------------
South Africa -- 1.8%
75,000 Barlow Ltd. 863,216
30,333 South African Breweries Ltd. ADR 875,865
- ---------------------------------------------------------------------------------------
1,739,081
- ---------------------------------------------------------------------------------------
South Korea -- 1.7%
14,800 Korea Electric Power Corp. 702,812
5,200 Korea Electric Power Corp. ADR 144,300
7,590 Samsung Display Devices Co. 775,336
41 Samsung Electronics Co. 5,584
- ---------------------------------------------------------------------------------------
1,628,032
- ---------------------------------------------------------------------------------------
Sweden -- 6.3%
15,000 Astra AB Class A 665,338
25,000 Astra AB Class B 1,101,540
20,000 Autoliv AB 1,088,667
30,000 Getinge Industrier AB B Shares 1,575,626
55,000 Nobelpharma AB 873,876
40,000 Telefon AB Ericsson Series B 809,145
- ---------------------------------------------------------------------------------------
6,114,192
- ---------------------------------------------------------------------------------------
Switzerland -- 3.7%
1,000 Ciba-Geigy AG 1,151,281
2,000 Edipresse S.A. 539,889
100 Roche Holdings AG 784,526
1,000 Sandoz AG 1,089,419
- ---------------------------------------------------------------------------------------
3,565,115
- ---------------------------------------------------------------------------------------
Thailand -- 1.3%
125,000 Krung Thai Bank Public Co. Ltd. 599,010
50,000 United Communication Industry Public Co. Ltd. 685,148
- ---------------------------------------------------------------------------------------
1,284,158
- ---------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- ------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- ------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
=================================================================
United Kingdom -- 5.3%
30,000 British Biotech PLC++ $ 1,316,777
100,000 Carlton Communications PLC 699,280
75,436 Misys PLC 933,894
150,000 Rentokil Group 860,969
20,000 Reuters Holdings PLC ADR B Shares 1,352,500
- ------------------------------------------------------------------
5,163,420
- ------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $84,363,106*) $97,330,912
=================================================================
See Notes to Financial Statements.
15
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
STOCKS -- 100.0%
Australia -- 2.9%
35,918 Coca-Cola Amatil Ltd. $378,164
- --------------------------------------------------------------------------------
Hong Kong -- 17.9%
60,000 Guoco Group Ltd. 298,623
120,000 Hong Kong & China Gas Co. Ltd. 197,014
60,000 Hong Kong Electric Holdings Ltd. 190,809
25,200 HSBC Holdings PLC 376,265
50,000 Hutchinson Whampoa Ltd. 310,258
62,091 New World Development Co. Ltd. 278,529
100,068 New World Infrastructure Ltd.++ 222,503
50,000 Sun Hung Kai Properties Ltd. 476,698
- --------------------------------------------------------------------------------
2,350,699
- --------------------------------------------------------------------------------
Indonesia -- 2.9%
3,500 PT Indonesia Satellite Corp. ADR 122,063
75,000 PT Semen Gresik 259,981
- --------------------------------------------------------------------------------
382,044
- --------------------------------------------------------------------------------
Japan -- 19.2%
6,300 Bank of Tokyo-Mitsubishi 145,540
12,000 Canon Inc. 238,270
45,000 Hitachi Ltd. 485,418
9,000 Ishikawajima Construction Materials Co. Ltd. 130,590
20,000 Itochu Corp. 152,165
2,000 Japan Associated Finance 248,198
19,000 Kajima Corp. 214,023
8,000 Matsushita Electric Industrial Co. 141,282
21,000 Mitsubishi Heavy Industries Ltd. 187,237
6,000 Noritsu Koki Co. Ltd. 243,998
8,000 Sato Corp. 204,668
2,200 Trans Cosmos 119,708
- --------------------------------------------------------------------------------
2,511,097
- --------------------------------------------------------------------------------
Malaysia -- 17.6%
50,000 Arab Malaysian Corp. 202,502
40,000 Bandar Raya Developments Berhad 76,029
30,000 Gamuda Berhad 190,071
75,000 Leader Universal Holdings Berhad 221,048
125,000 Public Bank Berhad++ 358,389
See Notes to Financial Statements.
16
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==========================================================================================
<C> <S> <C>
Malaysia -- 17.6% (continued)
125,000 Renong Berhad $217,540
25,000 Renong Berhad 4% ICULS Rights++ 150
15,625 Renong Berhad Warrant Rights++ 4,386
75,000 Sungei Way Holdings Berhad 345,858
100,000 Sunway Building Technology Berhad 497,233
20,000 Telekom Malaysia Berhad 188,467
- ------------------------------------------------------------------------------------------
2,301,673
- ------------------------------------------------------------------------------------------
New Zealand -- 2.6%
5,000 Telecom Corp. of New Zealand Ltd. ADR 337,500
- ------------------------------------------------------------------------------------------
Philippines -- 7.3%
150,000 Ayala Corp. Class B 212,156
273,200 Bankard Inc.++ 151,430
200,000 Fil-Estate Land Inc. 210,245
6,253 Metropolitan Bank & Trust Co. 168,515
750,000 SM Prime Holdings Inc. 217,890
- ------------------------------------------------------------------------------------------
960,236
Singapore -- 17.3%
35,000 Cerebos Pacific Ltd. 316,145
60,000 DBS Land Ltd. 243,243
24,000 Fraser & Neave Ltd. 266,287
20,605 Jardine Matheson Holdings Ltd. 164,840
150,000 QAF Ltd. 203,770
40,000 Sembawang Maritime Ltd. 105,263
150,000 Singapore Technologies Industrial Corp. 345,661
300,000 Steamers Maritime Holdings Ltd. 253,912
Van Der Horst Ltd. 370,733
- ------------------------------------------------------------------------------------------
2,269,854
- ------------------------------------------------------------------------------------------
South Korea -- 6.2%
10,000 Korea Electric Power Corp. 277,500
7,920 Korea Housing Bank 250,774
290 Korea Mobile Telecommunications Corp. 280,218
- ------------------------------------------------------------------------------------------
808,492
- ------------------------------------------------------------------------------------------
Taiwan -- 0.7%
6,600 Advanced Semiconductor Engineering GDR 96,558
- ------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Thailand -- 5.4%
20,000 Dhana Siam Finance & Securities Public Co. $140,990
30,000 Krung Thai Bank Public Co. Ltd. 143,762
900 Land and House Public Co. Ltd. 13,901
75,000 Quality House Public Co. Ltd. 273,267
10,000 United Communication Industry Public Co. Ltd. 137,030
- --------------------------------------------------------------------------------
708,950
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $11,891,863*) $13,105,267
================================================================================
See Notes to Financial Statements.
18
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT(a) SECURITY VALUE
================================================================================
<S> <C> <C>
BONDS -- 100.0%
Argentina -- 6.1%
129,500 Argentina Bocon PRE4, zero coupon due 9/1/02 $ 117,845
418,000 Republic of Argentina, 5.250% due 3/31/23+ 227,810
465,300 Republic of Argentina, 6.313% due 3/31/05+ 355,084
- --------------------------------------------------------------------------------
700,739
- --------------------------------------------------------------------------------
Australia -- 0.7%
102,000 Government of Australia, 9.750% due 3/15/02 84,758
- --------------------------------------------------------------------------------
Brazil -- 3.4%
250,000 Government of Brazil Discount Bond, 6.500%
due 4/15/24+ 169,375
290,000 Republic of Brazil, 6.813% due 4/15/06+ 220,763
- --------------------------------------------------------------------------------
390,138
- --------------------------------------------------------------------------------
Bulgaria -- 0.8%
194,000 Republic of Bulgaria Discount Bond Tranche A,
6.250% due 7/28/24+ 97,485
- --------------------------------------------------------------------------------
Canada -- 1.6%
95,000 Government of Canada, 8.000% due 11/1/98 72,337
150,000 Government of Canada, 8.750% due 12/1/05 117,185
- --------------------------------------------------------------------------------
189,522
- --------------------------------------------------------------------------------
Denmark -- 0.9%
590,000 Kingdom of Denmark, 7.000% due 12/15/04 100,038
- --------------------------------------------------------------------------------
Ecuador -- 3.4%
899,657 Ecuador Bearer PDI, 6.063% due 2/27/15+ 391,351
- --------------------------------------------------------------------------------
France -- 4.2%
2,200,000 France OAT, 8.500% due 11/25/02 484,210
- --------------------------------------------------------------------------------
Germany -- 7.9%
1,340,000 Bundesrepublik, 6.750% due 7/15/04 907,051
- --------------------------------------------------------------------------------
Italy -- 3.5%
600,000,000 BTP Italy, 10.500% due 11/1/00 403,345
- --------------------------------------------------------------------------------
Mexico -- 8.2%
858,000 Mexican States Discount Bond, 6.094% due 12/31/19+ 686,940
300,000 Mexican States Series A, 6.250% due 12/31/19 198,189
85,000 Mexican States Series B, 6.250% due 12/31/19 56,154
385,000 Mexican States Value Recovery Rights, Series A,
Warrants, Expire 6/30/03++ 0
- --------------------------------------------------------------------------------
941,283
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT(a) SECURITY VALUE
================================================================================
Morocco -- 4.4%
700,000 Morocco Tranche A Loan, 4.500% due 7/18/99+ $ 504,441
- --------------------------------------------------------------------------------
New Zealand -- 2.2%
390,000 New Zealand Government, 8.000% due 2/15/01 259,063
- --------------------------------------------------------------------------------
Nigeria -- 3.4%
750,000 Central Bank of Nigeria, 6.250% due 11/15/20+ 393,285
750 Central Bank of Nigeria Oil Linked Warrants, Expire
11/15/20++ 0
- --------------------------------------------------------------------------------
393,285
- --------------------------------------------------------------------------------
Philippines -- 3.4%
500,000 Central Bank of Philippines, 6.250% due 12/1/17+ 395,625
- --------------------------------------------------------------------------------
Poland -- 5.4%
170,000 Poland Bearer PDI Bond, 3.375% due 10/27/14+ 130,370
460,000 Poland Registered Discount Bond, 6.438% due 10/27/24+ 427,800
200,000 Poland Treasury Bill, zero coupon due 7/31/96 71,109
- --------------------------------------------------------------------------------
629,279
- --------------------------------------------------------------------------------
Russia -- 8.0%
800,000 Russia Ministry of Finance, 3.000% due 5/14/99(b) 558,000
900,000 Vneshekonombank Loan Agreement, 5.438% due 1/1/99(c)++ 365,063
- --------------------------------------------------------------------------------
923,063
- --------------------------------------------------------------------------------
Spain -- 6.6%
41,000,000 Kingdom of Spain, 10.100% due 2/28/01 342,112
40,000,000 Kingdom of Spain, 4.625% due 7/22/04 414,777
- --------------------------------------------------------------------------------
756,889
- --------------------------------------------------------------------------------
Sweden -- 1.4%
900,000 Kingdom of Sweden, 13.000% due 6/15/01 162,059
- --------------------------------------------------------------------------------
United Kingdom -- 5.7%
315,000 United Kingdom Treasury Gilt, 7.000% due 11/6/01 461,167
140,000 United Kingdom Treasury Gilt, 7.500% due 12/7/06 202,101
- --------------------------------------------------------------------------------
663,268
- --------------------------------------------------------------------------------
United States -- 16.0%
215,000 U.S. Treasury Bond, 6.875% due 8/15/25 212,429
1,610,000 U.S. Treasury Note, 6.875% due 3/31/00(d) 1,638,207
- --------------------------------------------------------------------------------
1,850,636
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
20
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1996
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT(a) SECURITY VALUE
================================================================================
Venezuela -- 2.8%
500,000 Republic of Venezuela Discount Bond,
6.563% due 12/18/07+ $ 327,500
TOTAL INVESTMENTS -- 100%
(Cost -- $11,458,965*) $11,555,028
================================================================================
(a) Represents local currency.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(c) Security is in default.
(d) Security partially segregated by custodian for futures contracts
commitments.
++ Non-income producing security.
+ Represents current rate on floating rate security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
21
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SB SB GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
===============================================================================================
<S> <C> <C> <C>
Assets:
Investments, at value
(Cost -- $84,363,106, $11,891,863,
and $11,458,965) $ 97,330,912 $ 13,105,267 $ 11,555,028
Foreign currency
(Cost -- $2,817,760, $10,047, and $821) 2,817,760 5,644 835
Cash 2,341,321 880,126 1,965,522
Receivable for securities sold 1,352,221 85,803 2,518,586
Receivable from broker -- -- 2,851
Receivable for open forward foreign
currency contracts 5,406 -- 18,754
Dividends and interest receivable 140,021 31,736 334,338
Other assets 1,076 -- --
- -----------------------------------------------------------------------------------------------
Total Assets 103,988,717 14,108,576 16,395,914
- -----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 2,844,830 -- 2,268,295
Management fees payable 87,761 17,920 19,751
Payable for open forward foreign
currency contracts 12,674 5,154 3,407
Dividends payable -- -- 105
Accrued expenses 13,192 19,212 10,641
Other liabilities 360 618 615
- -----------------------------------------------------------------------------------------------
Total Liabilities 2,958,817 42,904 2,302,814
- -----------------------------------------------------------------------------------------------
Total Net Assets $101,029,900 $14,065,672 $14,093,100
===============================================================================================
NET ASSETS:
Par value of capital shares $ 85 $ 14 $ 13
Capital paid in excess of par value 89,433,422 13,180,630 13,225,070
Undistributed (overdistributed)
net investment income (68,829) 31,373 338,026
Accumulated net realized gain (loss)
on investments (1,342,027) (350,277) 420,631
Net unrealized appreciation of investments,
futures and foreign currencies 13,007,249 1,203,932 109,360
- -----------------------------------------------------------------------------------------------
Total Net Assets $101,029,900 $14,065,672 $14,093,100
===============================================================================================
Shares Outstanding 8,514,886 1,375,057 1,268,032
- -----------------------------------------------------------------------------------------------
Net Asset Value $11.87 $10.23 $11.11
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
SB SB GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
===============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 439,053 $ 81,476 --
Interest 26,566 -- $ 476,799
Less: Foreign withholding tax (40,688) (4,864) (1,940)
- -----------------------------------------------------------------------------------------------
Total Investment Income 424,931 76,612 474,859
- -----------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 325,112 46,779 45,826
Custody 39,603 18,614 9,738
Shareholder and system servicing fees 9,698 7,371 3,589
Audit and legal 8,028 6,930 6,441
Shareholder communications 5,056 2,448 2,344
Directors' fees 3,250 1,714 1,591
Registration fees 612 979 597
Other 1,601 1,348 1,168
- -----------------------------------------------------------------------------------------------
Total Expenses 392,960 86,183 71,294
- -----------------------------------------------------------------------------------------------
Less: Management fee waiver (Note 2) -- (10,395) (5,728)
Custody earnings credit (Note 2) (39,603) (18,614) (9,738)
- -----------------------------------------------------------------------------------------------
Total Waivers and Credits (39,603) (29,009) (15,466)
- -----------------------------------------------------------------------------------------------
Net Expenses 353,357 57,174 55,828
- -----------------------------------------------------------------------------------------------
Net Investment Income 71,574 19,438 419,031
- -----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, FUTURES AND FOREIGN
CURRENCIES (NOTES 3 AND 6):
Realized Gain (Loss) From:
Security transactions
(excluding short-term securities) (23,485) (45,282) 450,415
Foreign currency transactions (140,054) 78,982 (20,259)
- -----------------------------------------------------------------------------------------------
Net Realized Gain (Loss) (163,539) 33,700 430,156
- -----------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments, Futures
and Foreign Currencies:
Beginning of period 2,906,679 (194,730) 236,306
End of period 13,007,249 1,203,932 109,360
- -----------------------------------------------------------------------------------------------
Increase (Decrease) in
Net Unrealized Appreciation 10,100,570 1,398,662 (126,946)
- -----------------------------------------------------------------------------------------------
Net Gain 9,937,031 1,432,362 303,210
- -----------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $10,008,605 $1,451,800 $ 722,241
===============================================================================================
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
SB International Equity Portfolio 1996 1995
==========================================================================
OPERATIONS:
Net investment income $ 71,574 $ 86,074
Net realized loss (163,539) (1,329,860)
Increase in net unrealized appreciation 10,100,570 2,520,365
- --------------------------------------------------------------------------
Increase in Net Assets From Operations 10,008,605 1,276,579
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (75,105) --
- --------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (75,105) --
- --------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 37,780,137 38,693,155
Net asset value of shares issued
for reinvestment of dividends 75,105 --
Cost of shares reacquired (297,294) (242,713)
- --------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 37,557,948 38,450,442
- --------------------------------------------------------------------------
Increase in Net Assets 47,491,448 39,727,021
NET ASSETS:
Beginning of period 53,538,452 13,811,431
- --------------------------------------------------------------------------
End of period* $101,029,900 $53,538,452
==========================================================================
* Includes undistributed (overdistributed)
net investment income of: $ (68,829) $ 74,756
==========================================================================
See Notes to Financial Statements.
24
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- -------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
SB Pacific Basin Portfolio 1996 1995
===============================================================================
OPERATIONS:
Net investment income (loss) $ 19,438 $ (14,162)
Net realized gain (loss) 33,700 (318,221)
Increase (decrease) in net
unrealized appreciation 1,398,662 (229,837)
- -------------------------------------------------------------------------------
Increase (Decrease) in
Net Assets From Operations 1,451,800 (562,220)
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (25,705) --
- -------------------------------------------------------------------------------
Decrease in Net Assets
From Distributions to Shareholders (25,705) --
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 5,989,882 4,389,864
Net asset value of shares issued
for reinvestment of dividends 25,705 --
Cost of shares reacquired (497,677) (944,296)
- -------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 5,517,910 3,445,568
- -------------------------------------------------------------------------------
Increase in Net Assets 6,944,005 2,883,348
NET ASSETS:
Beginning of period 7,121,667 4,238,319
- -------------------------------------------------------------------------------
End of period* $14,065,672 $7,121,667
===============================================================================
* Includes undistributed (overdistributed)
net investment income of: $ 31,373 $(41,342)
===============================================================================
See Notes to Financial Statements.
25
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- -------------------------------------------------------------------------------
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
GT Global Strategic Income Portfolio 1996 1995
===============================================================================
OPERATIONS:
Net investment income $ 419,031 $ 385,183
Net realized gain (loss) 430,156 (60,795)
Increase (decrease) in
net unrealized appreciation (126,946) 258,297
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 722,241 582,685
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (385,932) (34,436)
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (385,932) (34,436)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 5,197,184 5,781,130
Net asset value of shares issued
for reinvestment of dividends 385,932 31,412
Cost of shares reacquired (223,269) (587,696)
- -------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 5,359,847 5,224,846
- -------------------------------------------------------------------------------
Increase in Net Assets 5,696,156 5,773,095
NET ASSETS:
Beginning of period 8,396,944 2,623,849
- -------------------------------------------------------------------------------
End of period* $14,093,100 $8,396,944
===============================================================================
* Includes undistributed
net investment income of: $ 338,026 $ 325,186
===============================================================================
See Notes to Financial Statements.
26
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney International Equity, Smith Barney Pacific Basin and GT
Global Strategic Income Portfolios ("Portfolios") are separate investment
portfolios of the Smith Barney/Travelers Series Fund Inc. ("Fund"). The Fund, a
Maryland corporation, is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company and consists
of these Portfolios and nine other separate investment portfolios: AIM Capital
Appreciation, Alliance Growth, MFS Total Return, Putnam Diversified Income,
Smith Barney High Income, Smith Barney Income and Growth, Smith Barney Money
Market, TBC Managed Income and Van Kampen American Capital Enterprise
Portfolios. Shares of the Fund are offered only to insurance company separate
accounts which fund certain variable annuity and variable life insurance
contracts. The financial statements and financial highlights for the other
portfolios are presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Portfolios
are: (a) security transactions are accounted for on trade date; (b) securities
traded on national securities markets are valued at the closing prices in the
primary exchange on which they are traded; securities listed or traded on
certain foreign exchanges or other markets whose operations are similar to the
U.S. over-the-counter market (including securities listed on exchanges where the
primary market is believed to be over-the-counter) and listed securities for
which no sale was reported on that date are valued at the mean between the bid
and ask prices. Securities which are listed or traded on more than one exchange
or market are valued at the quotations on the exchange or market determined to
be the primary market for such securities; (c) securities maturing within 60
days are valued at cost plus accreted discount, or minus amortized premium, as
applicable; (d) gains or losses on the sale of securities are calculated by
using the specific identification method; (e) interest income, adjusted for
amortization of premiums and accretion of discount, is recorded on the accrual
basis; (f) dividend income is recorded on the ex-dividend date except that
certain dividends from foreign securities are recorded as soon as the Portfolio
is informed of the ex-dividend date; (g) dividends and distributions to
shareholders are recorded on the ex-dividend date; (h) direct expenses are
charged to each Portfolio; (i) foreign currency receivables and payables for
unsettled foreign securities transactions are translated into U.S. dollars based
on
27
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
the rate of exchange of such currencies against U.S. dollars on the date of
valuation; (j) during 1994, the Portfolios adopted Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
- --------------------------------------------------------------------------
Capital Gain and Return of Capital Distributions by Investment Companies.
- ------------------------------------------------------------------------
Accordingly, book and tax basis differences relating to shareholder
distributions are reclassified to undistributed net investment income. As of
November 1, 1995, the cumulative effect of such differences totaling $766 for
the GT Global Strategic Income Portfolio was reclassified to undistributed net
investment income from paid-in capital. Net investment income, net realized
gains, and net assets were not affected by this change; (k) each Portfolio
intends to comply with the requirements of the Internal Revenue Code of 1986, as
amended pertaining to regulated investment companies and make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (l) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ from these amounts.
In addition, the Portfolios may enter into forward exchange contracts in
order to hedge against foreign currency risk. These contracts are marked to
market daily, by recognizing the difference between the contract exchange rate
and the current market rate as an unrealized gain or loss. Realized gains or
losses are recognized when contracts are settled.
2. Management Agreement and Transactions with
Affiliated Persons
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The Smith
Barney International Equity ("SBIE"), Smith Barney Pacific Basin ("SBPB") and GT
Global Strategic Income Portfolios ("GTGSI") pay SBMFM a management fee
calculated at the annual rates of 0.90%, 0.90% and 0.80% of the average daily
net assets of each Portfolio, respectively. This fee is calculated daily and
paid monthly. SBMFM waived a portion of its management fees for SBPB and GTGSI,
respectively, for the six months ended April 30, 1996.
SBMFM has entered into a subadvisory agreement with LGT Asset Management,
Inc. ("LGT"). Pursuant to the subadvisory agreement, LGT is responsible for the
day-to-day portfolio operations and investment
28
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
decisions for GTGSI. SBMFM will pay LGT with regard to GTGSI, a monthly fee
calculated at the annual rate of 0.375% of the average daily net assets of
GTGSI.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. SB also acts as broker for certain portfolio transactions. For the
six months ended April 30, 1996, SB received brokerage commissions of $16,319.
All officers and two Directors of the Fund are employees of SB.
The Fund has an arrangement with its custodian, The Bank of New York, where
custody earnings credits are earned on available cash balances. These credits
offset custody fees which may be charged to the Portfolios. These credits
totalled $39,603, $18,614 and $9,738 for the Smith Barney International Equity,
Smith Barney Pacific Basin and GT Global Strategic Income Portfolios,
respectively, for the six months ended April 30, 1996.
3. Investments
For the six months ended April 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SB SB GT Global
International Pacific Strategic
Equity Basin Income
================================================================================
Purchases $57,499,051 $6,771,064 $14,780,857
- --------------------------------------------------------------------------------
Sales 21,305,941 885,150 11,313,240
================================================================================
At April 30, 1996, aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were approximately as follows:
SB SB GT Global
International Pacific Strategic
Equity Basin Income
================================================================================
Gross unrealized appreciation $14,563,844 $1,480,399 $ 360,483
Gross unrealized depreciation (1,596,038) (266,995) (264,420)
- --------------------------------------------------------------------------------
Net unrealized appreciation $12,967,806 $1,213,404 $ 96,063
================================================================================
29
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
4. Capital Loss Carryforward
At October 31, 1995, the Fund had capital loss carryforwards available to
offset future realized capital gains, if any, for Federal income tax purposes of
$1,318,542, $304,995 and $29,784 for SBIE, SBPB and GTGSI, respectively. To the
extent that these carryforward losses are used to offset capital gains, it is
probable that the gains so offset will not be distributed. The amount and
expiration of the carryovers amounts are indicated below. Expiration occurs on
October 31 of the year indicated.
Portfolio 2002 2003
================================================================================
SBIE -- $1,318,542
SBPB -- 304,995
GTGSI $ 29,639 145
================================================================================
5. Forward Foreign Currency Contracts
At April 30, 1996, the Portfolios had open forward foreign currency
contracts as described below. The Portfolios bear the market risk that arises
from changes in foreign currency exchange rates. The unrealized gain (loss) on
the contracts is reflected in the accompanying financial statements as follows:
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
Smith Barney International Equity
To Sell:
Austrian Schilling 99,840 $ 9,254 5/2/96 $ (178)
Austrian Schilling 6,373,960 592,210 5/7/96 4,435
Austrian Schilling 3,516,199 326,860 5/14/96 909
Japanese Yen 24,415,180 233,069 5/1/96 (4,206)
Philippines Peso 1,446,473 55,293 5/2/96 (85)
Philippines Peso 1,897,509 80,546 5/3/96 (8,205)
Swiss Franc 13,000 10,444 5/2/96 62
- --------------------------------------------------------------------------------
Total Market Value and
Unrealized Loss on Forward
Foreign Currency Contracts $ 1,307,676 $ (7,268)
================================================================================
30
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
Smith Barney Pacific Basin
To Sell:
Philippines Peso 399,541 $ 16,358 5/2/96 $(1,108)
Philippines Peso 524,480 22,263 5/3/96 (2,268)
Philippines Peso 184,888 8,823 5/6/96 (1,771)
Thai Baht 79,249 3,139 5/2/96 (5)
Thai Baht 39,459 1,562 5/3/96 (2)
- --------------------------------------------------------------------------------
Total Market Value and
Unrealized Loss on Forward
Foreign Currency Contracts $ 52,145 $(5,154)
================================================================================
GT Global Strategic Income
To Sell:
French Franc 2,200,000 $426,707 6/24/96 $ 3,821
German Deutschemark 733,000 478,975 5/13/96 11,727
Spanish Peseta 10,000,000 78,520 5/13/96 1,237
Swedish Krona 2,000,000 294,714 5/13/96 (2,974)
- --------------------------------------------------------------------------------
1,278,916 13,811
- --------------------------------------------------------------------------------
To Buy:
British Pound 139,781 210,832 5/1/96 (433)
Japanese Yen 35,050,000 334,391 5/13/96 1,131
Swedish Krona 700,000 103,150 5/13/96 838
- --------------------------------------------------------------------------------
648,373 1,536
- --------------------------------------------------------------------------------
Total Market Value and
Unrealized Gain on Forward
Foreign Currency Contracts $1,927,289 $15,347
================================================================================
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are
recognized as assets due from the broker (the Portfolio's agent in acquiring the
futures position). During the period the futures contract is open, changes in
the value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the contract
at the end of each day's trading. Variation margin payments are made or received
and recognized as assets due from or liabilities due to
31
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
broker, depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transactions and
the Portfolio's basis in the contract.
At April 30, 1996, the GT Global Strategic Income Portfolio had the
following open futures contracts:
Expiration # of Basis Market Unrealized
Futures contracts sold Month/Year Contracts Value Value Loss
==============================================================================
U.S. 10 Year Note 6/96 3 $321,844 $322,500 $(656)
==============================================================================
7. Portfolio Concentration
The Portfolios' investments in foreign securities may involve risks not
present in domestic investments. Since securities may be denominated in a
foreign currency and may require settlement in foreign currencies and pay
interest or dividends in foreign currencies, changes in the relationship of
these foreign currencies to the U.S. dollar can significantly affect the value
of the investments and earnings of the Portfolio. Foreign investments may also
subject the Portfolios to foreign government exchange restrictions,
expropriation, taxation or other political, social or economic developments, all
of which could affect the market and/or credit risk of the investments.
In addition to the risks described above, risks may arise from forward
foreign currency contracts with respect to the potential inability of counter-
parties to meet the terms of their contracts.
32
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
8. Capital Shares
At April 30, 1996, the Fund had six billion shares of capital stock
authorized with a par value of $0.00001 per share. Each share of a Portfolio
represents an equal proportionate interest in that Portfolio with each share of
the same Portfolio and has an equal entitlement to any dividends and
distributions made by the Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1996 October 31, 1995
===============================================================================
Smith Barney International Equity
Shares sold 3,427,241 3,823,913
Shares issued on reinvestment 7,032 --
Shares redeemed (25,952) (26,232)
- -------------------------------------------------------------------------------
Net Increase 3,408,321 3,797,681
===============================================================================
Smith Barney Pacific Basin
Shares sold 628,788 477,242
Shares issued on reinvestment 2,782 --
Shares redeemed (52,034) (101,281)
- -------------------------------------------------------------------------------
Net Increase 579,536 375,961
===============================================================================
GT Global Strategic Income
Shares sold 472,870 573,083
Shares issued on reinvestment 35,504 3,338
Shares redeemed (20,315) (60,141)
- -------------------------------------------------------------------------------
Net Increase 488,059 516,280
===============================================================================
33
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney International Equity Portfolio 1996(1) 1995 1994(2)
===================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.48 $ 10.55 $ 10.00
- -----------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3)++ (0.01) 0.03 (0.03)
Net realized and unrealized gain (loss) 1.41 (0.10) 0.58
- -----------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.40 (0.07) 0.55
- -----------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) -- --
- -----------------------------------------------------------------------------------
Total Distributions (0.01) -- --
- -----------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.87 $ 10.48 $ 10.55
- -----------------------------------------------------------------------------------
Total Return 13.39%++ (0.66)% 5.50%++
- -----------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 101,030 $53,538 $ 13,811
- -----------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 1.05%+ 1.44% 1.20%+
Net investment income (loss) 0.19+ 0.25 (0.73)+
- -----------------------------------------------------------------------------------
Portfolio Turnover Rate 28.98% 28.72% --
===================================================================================
Average commissions per share
paid on equity transactions(4) $ 0.04 $ 0.01 --
===================================================================================
</TABLE>
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived part of its fees for the period ended October 31,
1994. If such fees were not waived, the per share decrease in net
investment income would have been $0.03 and the expense ratio would have
been 2.00% (annualized). In addition, during the six months ended April 30,
1996 and the year ended October 31, 1995, the Portfolio has earned credits
from the custodian which reduce service fees incurred. When the credits are
taken into consideration the expenses ratios are 0.94% (annualized) and
1.21%, respectively; prior year numbers have not been restated to reflect
these adjustments.
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
++ Includes realized gains and losses from foreign currency transactions.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
34
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney Pacific Basin Portfolio 1996(1) 1995 1994(2)
==================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 8.95 $ 10.10 $ 10.00
- ----------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3)++ 0.05 (0.04) (0.04)
Net realized and unrealized gain (loss) 1.26 (1.11) 0.14
- ----------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.31 (1.15) 0.10
Less Distributions From:
Net investment income (0.03) -- --
- ----------------------------------------------------------------------------------
Total Distributions (0.03) -- --
- ----------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.23 $ 8.95 $ 10.10
- ----------------------------------------------------------------------------------
Total Return 14.89%+++ (11.58)% 1.00%+++
- ----------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 14,066 $ 7,122 $ 4,238
- ----------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 1.52%+ 1.83% 1.26%+
Net investment income (loss) 1.98+ (0.51) (0.93)+
- ----------------------------------------------------------------------------------
Portfolio Turnover Rate 9.65% 27.70% --
==================================================================================
Average commissions per share
paid on equity transactions(4) $ 0.02 $ 0.01 --
==================================================================================
</TABLE>
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for each of the periods
reported. In addition, the Manager has reimbursed the Portfolio for $9,778
in expenses for the period ended October 31, 1994. If such fees were not
waived and expenses not reimbursed, the effect on the net investment loss
and the expense ratios would have been as follows:
Per Share Expense Ratios
Decreases to Net Without Fee Waiver
Investment Income and Reimbursement
----------------------- ------------------------
1996 $0.01 1.73%+
1995 0.03 2.23
1994 0.06 2.82+
In addition, during the six months ended April 30, 1996 and the year ended
October 31, 1995, the Portfolio has earned credits from the custodian which
reduce service fees incurred. If the credits are taken into consideration
the expense ratios are 1.15% (annualized) and 1.30%, respectively; prior
year numbers have not been restated to reflect these adjustments. The
manager has also agreed to cap the expense ratio at 1.50%.
(4) As of October 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
++ Includes realized gains and losses from foreign currency transactions.
+++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
35
<PAGE>
Smith Barney/Travelers Series Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
GT Global Strategic Income Portfolio 1996(1) 1995 1994(2)
======================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.77 $ 9.95 $ 10.00
- --------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3)++ 0.33 0.64 0.17
Net realized and unrealized gain (loss) 0.43 0.28 (0.22)
- --------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.76 0.92 (0.05)
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.42) (0.10) --
- --------------------------------------------------------------------------------------
Total Distributions (0.42) (0.10) --
- --------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.11 $ 10.77 $ 9.95
- --------------------------------------------------------------------------------------
Total Return 7.15%+++ 9.37% (0.50)%+++
- --------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 14,093 $ 8,397 $ 2,624
- --------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 1.16%+ 1.47% 1.07%+
Net investment income 7.43+ 6.44 4.58+
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 110.61% 295.47% 56.34%
======================================================================================
</TABLE>
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for each of the periods
reported. In addition, the Manager has reimbursed the Portfolio for $18,556
in expenses for the period ended October 31, 1994. If such fees were not
waived and expenses not reimbursed, the per share effect on net investment
income and expense ratios would have been as follows:
Per Share Expense Ratios
Decreases to Net Without Fee Waiver
Investment Income and Reimbursement
----------------------- ------------------------
1996 $0.01 1.26%+
1995 0.04 1.93
1994 0.13 4.53+
In addition, during the six months ended April 30, 1996 and the year ended
October 31, 1995, the Portfolio has earned credits from the custodian which
reduce service fees incurred. If the credits are taken into consideration
the expense ratios are 0.99% (annualized) and 1.11%, respectively; prior
year numbers have not been restated to reflect these adjustments.
++ Includes realized gains and losses from foreign currency transactions.
+++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
36
<PAGE>
SMITH BARNEY/TRAVELERS
SERIES FUND INC.
SMITH BARNEY
- ------------
A Member of TravelersGroup[ART]
Directors
Victor K. Atkins
Jessica M. Bibliowicz
Alger B. Chapman
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
James M. Shuart
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
John C. Bianchi
Vice President
James B. Conheady
Vice President
Martin Hanley
Vice President
Jeffrey J. Russell
Vice President
Bruce D. Sargent
Vice President
Phyllis Zahorodny
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
The Bank of New York
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Smith Barney/Travelers Series Fund Inc. --Smith Barney International Equity,
Smith Barney Pacific Basin and GT Global Strategic Income Portfolios. It is not
authorized for distribution to prospective investors unless accompanied or
preceded by a current Prospectus for the Portfolios, which contains information
concerning the Portfolios' investment policies and expenses as well as other
pertinent information.
Smith Barney/Travelers
Series Fund Inc.
388 Greenwich Street
<PAGE>
S E M I - A N N U A L R E P O R T
SMITH BARNEY/TRAVELERS
SERIES FUND INC.
SMITH BARNEY HIGH INCOME
PORTFOLIO
PUTNAM DIVERSIFIED INCOME
PORTFOLIO
-----------------------------
April 30, 1996
[LOGO] Smith Barney Mutual Funds
INVESTING FOR YOUR FUTURE.
EVERY DAY.
<PAGE>
Smith Barney High Income and
Putnam Diversified Income Portfolios
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney/Travelers
Series Fund Inc. -- High Income Portfolio and Putnam Diversified Income
Portfolio for the period ended April 30, 1996. For your convenience, we have
summarized the period's prevailing economic and market conditions and outlined
each Portfolio's investment strategy employed during this time. A detailed
summary of performance and current holdings can be found in the appropriate
sections that follow in the semi-annual report.
Portfolio Highlights
Smith Barney High Income Portfolio
The Smith Barney High Income Portfolio generated a total return of 5.96% for the
six months ended April 30, 1996. The Portfolio slightly underperformed its
Lipper Analytical Services, Inc. high yield bond peer group average of 6.41% for
the same time period. (Lipper is a major fund tracking organization.)
After a rather strong rally in the fourth quarter of 1995, the bond market
became highly volatile in 1996 with the more interest-rate sensitive areas of
the bond market such as U.S. Treasury securities and investment-grade corporate
bonds performing poorly. The longest-maturity instruments generated the worst
performance as evidenced by the negative 10.25% total return from the 30-Year
U.S. Treasury Bond for the first four months of 1996. Despite a rather difficult
bond market, the high yield bond market continued to generate the strongest
total returns in the bond market.
In response to higher interest rates and a more volatile bond market, the Smith
Barney High Income Portfolio has maintained a relatively conservative investment
strategy over the past six months. We continue to emphasize higher credit
quality, intermediate-term issues rated either "B/B" or "Ba/BB" from Standard &
Poor's Corporation or Moody's Investors Services, Inc. in the below investment-
grade bond category. (Moody's and S&P are two major credit report and bond
rating agencies.)
Despite the fact that the Portfolio's higher credit quality orientation hurt its
performance in the first four months of 1996, we will continue to avoid lower
quality, CCC/Caa-rated issues because of the extremely high risk they may
default over the course of a full economic cycle. We believe our investment
strategy of concentrating on improving high yield bonds rated "B/B" and "Ba/BB"
is prudent over the long term.
1
<PAGE>
In anticipation of a possible high yield bond market downturn, the High Income
Portfolio has realized profits on several of its holdings and temporarily raised
its cash levels. The Portfolio's higher cash reserves should help to buffer it
somewhat from increased market turbulence as well as give us greater flexibility
to take advantage of new investment opportunities that may arise over the next
several months.
Putnam Diversified Income Portfolio
For the six months ended April 30, 1996, the Putnam Diversified Income Portfolio
posted a total return of 3.23% and outperformed its Lipper peer group average of
2.52%.
After the Federal Reserve Board lowered short-term interest rates in December
and again in January, many investors became bullish on the U.S. economy and bid
aggressively for many high yield bonds. Despite the fact the amount of new high
yield bonds issued in the market was at a record high, investor demand for high
yield bonds was extremely strong and spreads narrowed dramatically. This same
investor confidence regarding the U.S. economy led to heightened concerns about
inflation and caused the value of U.S. Treasuries to decline sharply. Due to
slow economic growth overseas, many foreign bond markets outperformed the U.S.
bond market while a number of foreign currencies declined versus the U.S.
dollar. As investors became more convinced of the strong commitment from many
emerging markets to implement meaningful political and economic reforms, many
emerging market bonds performed well.
The Portfolio's asset allocation strategy for the period covered by this report
was to remain overweighted in high yield bonds. Moreover, the Portfolio took
some profits in its U.S. government securities holdings and redeployed these
assets in the international area because many foreign bond markets offered what
we believe was good value relative to U.S. Treasuries. Within the international
sector, the Portfolio's exposure to the emerging markets was kept to at the high
end of its 0% to 5% range. The following table below shows the Putnam
Diversified Portfolio's allocation of assets during the past six months.
Portfolio's Asset Allocation
10/95 1/96 4/96
--------------------
High Yield 36.1% 35.9% 36.7%
U.S. Government 35.7% 34.3% 30.0%
International 23.8% 24.9% 29.0%
Emerging Markets 4.4% 4.9% 4.3%
2
<PAGE>
The Putnam Diversified Income Portfolio's high yield bonds were the strongest
performer during the first part of 1996, especially its holdings in single-B
rated issues as well as its exposure to the gaming, retail and
telecommunications industries. In addition, the Portfolio's holdings in
international bonds also performed well because of its currency hedging, focus
on less major European bond markets, underweighting in Japanese issues and its
exposure in the emerging markets.
We anticipate maintaining the Portfolio's current asset allocation for the
foreseeable future. Stronger-than-expected economic growth should continue to be
positive for the high yield bond market and negative for the U.S. Treasuries
market. We believe the Portfolio's current exposure to foreign bonds is
appropriate given our expectations for continued strength in the U.S. dollar.
In closing, thank you for investing in the High Income and Putnam Diversified
Income Portfolios. We look forward to continuing to help you achieve your
financial goal.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman of the Board
June 14, 1996
3
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Historical Performance -- Smith Barney High Income Portfolio
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/96 $11.26 $11.42 $0.50 $0.00 5.96%++
- --------------------------------------------------------------------------------
10/31/95 10.07 11.26 0.22 0.00 14.30
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.07 0.00 0.00 0.70++
================================================================================
Total $0.72 $0.00
================================================================================
Historical Performance -- Putnam Diversified Income Portfolio
Net Asset Value
---------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/96 $11.46 $11.31 $0.39 $0.13 3.23%++
- --------------------------------------------------------------------------------
10/31/95 10.18 11.46 0.09 0.00 13.55
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.18 0.00 0.00 1.80++
================================================================================
Total $0.48 $0.13
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
4
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Average Annual Total Return+
Smith Barney Putnam
High Diversified
Income Income
Portfolio Portfolio
================================================================================
Six Months Ended 4/30/96++ 5.96% 3.23%
- --------------------------------------------------------------------------------
Year Ended 4/30/96 13.73 10.66
- --------------------------------------------------------------------------------
6/16/94* through 4/30/96 11.18 9.89
================================================================================
Cumulative Total Return+
Smith Barney Putnam
High Diversified
Income Income
Portfolio Portfolio
================================================================================
6/16/94* through 4/30/96 21.96% 19.33%
================================================================================
+ Assumes the reinvestment of all dividends and capital gains distributions.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
* Commmencement of operations.
5
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Historical Performance (unaudited)
Growth of $10,000 Invested in Shares of the
Smith Barney High Income Portfolio vs. Salomon Brothers
Intermediate High Yield Index+
--------------------------------------------------------
June 1994 -- April 1996
[CHART APPEARS HERE]
Brothers Aggregate Bond Index
6/16/94 10,000 10,000 10,000
7/94 10,080 10,121 10,000
10/94 10,180 10,288 10,061
1/95 10,249 10,347 10,099
4/95 10,783 11,840 10,609
7/95 11,247 12,419 11,255
10/95 11,560 12,117 11,476
4/96 11,933 12,155 11,626
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
High Income Portfolio on June 16, 1994 (commencement of operations), assuming
reinvestment of dividends and capital gains, if any, at net asset value
through April 30, 1996. The Salomon Brothers Intermediate High Yield Index is
comprised of 434 issues, both cash-pay and deferred interest bonds with a
remaining maturity of at least seven years, but less than ten years. The
bonds are all public, non-convertible issues with at least $50 million
outstanding. The index is unmanaged and is not subject to the same management
and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
6
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Historical Performance (unaudited)
Growth of $10,000 Invested in Shares of the
Putnam Diversified Income Portfolio vs. Lehman Brothers
Aggregate Bond Index and the Salomon Brothers
Non-U.S. World Government Bond Index+
---------------------------------------------------------
June 1994 -- April 1996
[CHART APPEARS HERE]
Brothers Aggregate Bond Index
6/16/94 10,000 10,000 10,000
7/94 10,080 10,121 10,000
10/94 10,180 10,288 10,061
1/95 10,249 10,347 10,099
4/95 10,783 11,840 10,609
7/95 11,247 12,419 11,255
10/95 11,560 12,117 11,476
4/96 11,933 12,155 11,626
+ Hypothetical illustration of $10,000 invested in shares of the Putnam
Diversified Income Portfolio on June 16, 1994, assuming reinvestment of
dividends and capital gains, if any, at net asset value (commencement of
operations) through April 30, 1996. The Lehman Brothers Aggregate Bond Index
is comprised of over 6,500 issues of U.S. Treasuries, Agencies, Corporate
Bonds and Mortgage-Backed Securities. The Salomon Brothers Non-U.S. World
Government Bond Index is comprised of fixed rate bonds with a maturity of one
year or longer, and at least $25 million outstanding. This index includes
securities from 10 countries, providing a comprehensive measure of the total
return performance of the domestic bond markets in each country included, as
well as the ten combined countries. These indexes are unmanaged and are not
subject to the same management and trading expenses of a mutual fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
7
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) April 30, 1996
Smith Barney High Income Portolio
Face
Amount Rating Security Value
================================================================================
CORPORATE BONDS AND NOTES -- 85.4%
Aerospace/Defense -- 2.8%
$ 500,000 Ba2* Airplanes Pass Through Trust,
Trust Certificates,
10.875% due 3/15/19 $ 510,000
350,000 B Howmet Corp., Sr. Sub. Notes, 368,375
10.000% due 12/1/03
350,000 B Tracor Inc., Sr. Sub. Notes, 373,188
10.875% due 8/15/01
- --------------------------------------------------------------------------------
1,251,563
- --------------------------------------------------------------------------------
Automobile -- 1.8%
750,000 B+ Harvard Industries Inc., Sr. 774,375
Notes, 12.000% due 7/15/04
- --------------------------------------------------------------------------------
Broadcasting -- 16.9%
1,000,000 B3* Australis Media Limited, Sr.
Discount Notes, step bond
to yield 12.700% due 5/15/03 685,000
Bell Cablemedia PLC, Sr. Discounts Notes:
800,000 BB- Step bond to yield 13.040% due 7/15/04 584,000
775,000 BB- Step bond to yield 11.760% due 9/15/05 503,750
300,000 B Cablevision Systems Corp., Sr. Sub.
Debentures, 9.875% due 2/15/13 300,000
900,000 B Comcast UK Cable, Sr. Discount
Debentures, step bond to yield
12.700% due 5/15/03 535,500
475,000 B1* Continental Cablevision, Inc.,
Sr. Sub. Notes, 11.000% due 6/1/07 537,938
850,000 B Marcus Cable Capital Corp., Sr. Discount
Notes, step bond to yield 12.240%
due 8/1/04 616,250
925,000 B NWCG Holding Corp., Sr. Discount Notes,
zero coupon due 6/15/99 682,188
Rogers Cablesystems:
375,000 BB+ Sr. Secured Debentures, 10.000% due 12/1/07 385,313
450,000 BB- Sr. Sub. Debentures, 11.000% due 12/1/15 475,875
500,000 BB+ Sr. Debentures, 13.143% due 1/15/14 317,664
450,000 BB- Sr. Debentures, 10.875% due 4/15/04 464,625
300,000 BB- SCI Television, Sr. Notes, 11.000% due 6/30/05 315,750
750,000 BB- United International Holdings, Sr.
Discount Notes, zero coupon due 11/15/99 487,500
400,000 B+ Videotron Holdings PLC, Sr. Discount
Notes, step bond to yield 11.010%
due 8/15/05 266,000
250,000 B- Wireless One Inc., Sr. Notes,
13.000% due 10/15/03 268,750
- --------------------------------------------------------------------------------
7,426,103
- --------------------------------------------------------------------------------
Building/Construction -- 2.4%
350,000 Ba3* American Standard Inc., Sr. Debentures,
11.375% due 5/15/04 380,625
Building/Construction -- 2.4%
8
<PAGE>
Smith Barney/Travelers Series Fund, Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
Smith Barney High Income Portfolio
Face
Amount Rating Security Value
=========================================================================
Building/Construction -- 2.4% (continued)
$ 150,000 B Greystone Homes, Sr. Sub.
Notes, 10.750% due 3/1/04 $ 148,688
500,000 B2* Southdown, Inc., Sr. Sub.
Notes, 10.000% due 3/1/06 502,500
- -------------------------------------------------------------------------
1,031,813
- -------------------------------------------------------------------------
Chemical -- 2.4%
420,000 B NL Industries Inc., Sr.
Secured Notes, 11.750% due
10/15/03 434,175
500,000 BB- PT Polysindo, Sr. Notes,
13.000% due 6/15/01 531,250
100,000 Ba3* Terra Industries, Inc., Sr.
Notes, 10.500% due 6/15/05+ 107,000
- -------------------------------------------------------------------------
1,072,425
- -------------------------------------------------------------------------
Communications -- 16.7%
500,000 B- Allbritton Communications
Co., Sr. Sub. Debenture,
9.750% due 11/30/07 470,000
1,500,000 B3* Clearnet Communications, step
bond to yield
14.731% due 12/15/05 922,500
200,000 Caa* Dial Call Communications,
Inc., Sr. Discount Notes, step
bond to yield 13.630%
due 4/15/04 122,500
300,000 B+ Fonorola, Inc., Sr. Secured,
12.500% due 8/15/02 322,500
300,000 NR Intelcommmunications Group
U.S.A., Sr. Discount Notes, step
bond to yield 13.630% due 5/1/06 166,500
350,000 B- Metrocall Inc., Sr. Sub.
Notes, 10.375% due 10/1/07 341,688
1,000,000 BB- Mobile Telecommunications
Technology, Sr. Notes, 13.500%
due 12/15/02 1,047,500
1,850,000 B3* Nextel Communications, Sr.
Discount Notes, step bond
to yield 13.310% due 8/15/04+ 1,073,000
750,000 NR Nextlink Communications, Sr.
Discount Notes,
12.500% due 4/15/06 759,375
275,000 NR Pagemart Inc., Sr. Discount
Notes, step bond to
yield 12.730% due 11/1/03+ 208,313
500,000 NR Pagemart Nationwide, Sr.
Discount Notes, step bond
to yield 10.950% due 2/1/05 330,000
1,400,000 BB Telewest Communications, Sr.
Discount Debentures,
step bond to yield 10.950%
due 10/1/06 857,500
600,000 B- U.S.A. Mobile Communications,
Inc., Sr. Notes,
14.000% due 11/1/04 698,250
- -------------------------------------------------------------------------
7,319,626
- -------------------------------------------------------------------------
Consumer Durables -- 1.2%
400,000 Ba2* International Semi-Tech, Sr.
Secured Notes, step bond
to yield 12.280% due 8/15/03 241,000
250,000 B- TAG-Heuer International, Sr.
Sub Notes, 12.000% due 5/15/02 258,125
- -------------------------------------------------------------------------
499,125
- -------------------------------------------------------------------------
See Notes to Financial Statements.
9
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Smith Barney High Income Portfolio
Face
Amount Rating Secutity Value
=======================================================================
Diversified and Conglomerate Manufacturing -- 1.9%
$250,000 B3* Interlake Corp., Sr. Sub.Debentures,
12.125% due 3/1/02 $241,250
525,000 B- Williamhouse Regency, Sr. Sub Notes,
13.000% due 11/15/05 595,875
- -----------------------------------------------------------------------
837,125
- -----------------------------------------------------------------------
Electric Utilities -- 0.8%
350,000 Ba3* California Energy Inc., Sr. Discount
Notes, step bond to yield 10.250% due
1/15/04 335,125
20,769 Ba3* Midland Cogeneration Venture Limited
Partnership, Midland Funding, Sr.
Secured Lease Bond, Series C,
10.330% due 7/23/02 21,782
- -----------------------------------------------------------------------
356,907
- -----------------------------------------------------------------------
Electronics and Computers -- 3.0%
350,000 B3* Bell and Howell Holdings Co.,
Sr. Discount Sub. Notes, step bond
to yield 14.440% due 3/1/05 235,375
300,000 B3* Dictaphone Corp., Sr. Sub. Notes, 11.750%
due 8/1/05 297,000
250,000 B- Graphic Controls Corp., Sr. Sub. Notes,
12.000% due 9/15/05+ 265,000
500,000 B1* Unisys Corp., Sr. Notes,
12.000% due 4/15/03 502,500
- -----------------------------------------------------------------------
1,299,875
- -----------------------------------------------------------------------
Food -- 2.8%
750,000 BB- TLC Beatrice International, Sr. Secured
Notes, 11.500% due 10/1/05 757,500
450,000 B- Van De Kamp Inc., Sr. Sub. Notes, 12.000%
due 9/15/05+ 479,250
- -----------------------------------------------------------------------
1,236,750
- -----------------------------------------------------------------------
Grocery and Convenience Stores -- 3.1%
200,000 B- Farm Fresh Inc., Sr. Notes,
12.250% due 10/1/00 174,000
135 B- Kash-N-Karry Food Stores, Inc.,
Sr. Notes, 11.500% due 2/1/03 135
250,000 B Pathmark Stores Inc., Debentures,
12.625% due 6/15/05 820,000
500,000 B- Ralphs Grocery, Sr. Sub. Notes,
11.000% due 6/15/05 375,000
- -----------------------------------------------------------------------
1,369,135
- -----------------------------------------------------------------------
Healthcare -- 1.0%
250,000 B Magellan Health Services, Sr. Sub Notes
11.250% due 4/15/04 278,125
160,125 B- Ornda Healthcorp, Sr. Sub.
Notes, 12.250% due 5/15/02 163,125
- -----------------------------------------------------------------------
441,250
- -----------------------------------------------------------------------
See Notes to Financial Statements.
10
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
Smith Barney High Income Portfolio
Face
Amount Rating Security Value
===============================================================================
Hotel, Casinos and Gaming -- 6.9%
$ 450,000 B Aztar Corp., Sr. Sub. Notes, $ 501,750
13.750% due 10/1/04
455,000 BB Bally's Grand, 1st Mortgage Notes,
10.375% due 12/15/03 474,338
500,000 B- Courtyard by Marriott, Sr. Secured Notes,
10.750% due 2/1/08 489,375
100,000 BB- HMC Acquisition Properties, Sr. Notes,
9.000% due 12/15/07 279,000
500,000 B Showboat Inc., Sr. Sub Notes, 571,250
13.000% due 8/1/09 Station Casinos Inc:
250,000 B Sr. Sub. Notes, 9.625% due 6/1/03 241,875
500,000 B+ Sr. Sub. Notes, 10.125% due 3/15/06 493,750
- ------------------------------------------------------------------------------
3,051,338
- ------------------------------------------------------------------------------
Insurance -- 1.5%
600,000 BB+ Life Partners Group Inc., Sr. Sub. Notes,
12.750% due 7/15/02 653,250
- ------------------------------------------------------------------------------
Leisure -- 1.3%
400,000 B Coleman Holdings Inc., Sr. Discount Notes,
zero coupon to yield 13.210% due 5/27/98 332,000
240,646 NR Gillett Holdings, Inc., Sr.
Sub. Notes, 12.250% due 6/30/02 252,678
- -----------------------------------------------------------------------------
584,678
- ------------------------------------------------------------------------------
Machinery -- 1.4%
275,000 NR Alvey Systems, Inc., Sr. Sub Notes,
11.325% due 1/31/03 286,688
300,000 B- Day International Group, Sr. Sub Notes
11.125% due 6/1/05+ 308,625
- ------------------------------------------------------------------------------
595,313
- -----------------------------------------------------------------------------
Metals and Mining -- 1.0%
300,000 B- Kaiser Aluminum, Sr. Sub Notes, 12.750%
due 2/1/03 324,000
100,000 B- Russell Metals, Sr. Notes, 10.250%
due 6/15/00 99,000
30,000 B+ UCAR Global Enterprises Inc., Sr. Sub. Notes
12.000% due 1/15/05 34,275
- -----------------------------------------------------------------------------
457,275
- -----------------------------------------------------------------------------
Oil and Natural Gas -- 5.5%
650,000 B+ Clark USA, Sr. Notes, 10.875% due 12/1/05 677,625
550,000 B+ Global Marine, Sr. Secured Notes, 12.750%
due 12/15/99 605,000
750,000 B+ Kelley Oil & Gas, Sr. Notes, 13.500% due
6/15/99 394,218
500,000 BB- Santa Fe Energy Resources, Sr. Sub.
Debentures, 11.000% due 5/15/04 543,125
See Notes to Financial Statements.
11
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Smith barney High Income Portfolio
Face
Amount Rating Security Value
===============================================================================
Oil and Natural Gas - 5.5% (continued)
$ 200,000 B United Meridian Corp., Sr. Sub Notes,
10.375% due 10/15/05 $ 209,000
- -------------------------------------------------------------------------------
2,428,968
- -------------------------------------------------------------------------------
Other Utilities - 1.0%
450,000 BB- California Energy, Sr. Notes, 9.875%
due 6/30/93 460,685
- -------------------------------------------------------------------------------
Paper and Printing - 6.6%
550,000 B Crown Paper, Sr. Sub Notes, 11.000% due
due 9/1/05 512,875
Indah Kiat International Finance Co., Sr.
Secured Notes:
300,000 BB 11.375% due 6/15/99 313,500
500,000 BB 11.875% due 6/15/99 510,000
900,000 BBB News America Holdings, Sr. Sub. Debentures,
10.939% due 2/7/14 596,210
450,000 B+ Repap New Brunswick, Sr. Secured Notes,
10.625% due 4/15/05 427,500
500,000 BB Tjiwi Kimia Industries, Sr. Notes, 13.250%
due 8/1/01 547,500
- -------------------------------------------------------------------------------
2,907,585
- -------------------------------------------------------------------------------
Personal Care - 1.6%
100,000 B- Revlon Consumer Products Corp., Sr. Sub.
Notes, 10.500% due 2/15/03 102,250
750,000 B- Revlon Worldwide Corp., Sr. Secured Notes,
zero coupon to yield 13.750% due 3/15/98+ 611,250
- -------------------------------------------------------------------------------
713,500
- -------------------------------------------------------------------------------
Real Estate Investment - 0.8%
275,000 BB- Trizec Finance, Sr. Notes, 10.875%
due 10/15/05 331,500
- -------------------------------------------------------------------------------
Tobacco - 0.4%
165,000 B Consolidated Cigar Acquisition Corp., Sr. Sub.
Notes, 10.500% due 3/1/03 175,488
- -------------------------------------------------------------------------------
Transportation - 0.6%
250,000 BB- Sea Containers Limited, Sr. Sub. Debentures,
12.500% due 12/1/04 270,938
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost - $37,331,694) 37,545,590
===============================================================================
SHARES SECURITY VALUE
===============================================================================
COMMON STOCK - 0.7%
Mining and Steel - 0.7%
15,500 Freeport McMoRan Resources
(Cost - $ 335,048) 296,437
===============================================================================
See Notes to Financial Statements.
12
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Smith Barney High Income Portfolio
Shares Security Value
===============================================================================
Convertible Preferred Stock -- 0.9%
Automobiles and Trucking -- 0.9%
7,500 Navistar International, Series G. Convertible
Prefered $6.00 (Cost -- $401,776) $ 411,563
===============================================================================
Preferred Stocks -- 4.7%
Health Care and Pharmaceuticals -- 0.9%
12,279 Foxmeyer Health Corp., Series A, Payment-in-kind,
Exchange Preferred $4.20 388,323
- -------------------------------------------------------------------------------
Metals and Mining -- 0.2%
4,401 BCP/Essex Holding, Series A, Exchange 15.000% 112,226
- -------------------------------------------------------------------------------
Telecommunications -- 3.6%
6,592 Cablevision Systems Corp., Preferred Stock 11.125% 646,016
111 PanAmSat Corp., Series A, Exchange $31.875 129,891
800 Time Warner Inc., Preferred Stock 10.250% 800,000
- -------------------------------------------------------------------------------
1,575,907
- -------------------------------------------------------------------------------
Total Preferred Stocks
(Cost -- 42,141,086) 2,076,456
===============================================================================
Warrants -- 0.0%
200 Dial Call Communiations, Inc., Expire 12/15/98+ 4
750 Wireless One Inc., Expire 9/9/99 4,500
- -------------------------------------------------------------------------------
Total Warrants
(Cost -- $3,240) 4,500
===============================================================================
Face
Amount Security Value
===============================================================================
Repurchas Agreement -- 8.3%
$3,627,000 Chase Securities Inc., 5.800% due 5/1/96;
Proceeds at maturity -- $3,627,526; (Fully
collateralized by U.S. Treasury Notes, 6.125%
due 5/31/97;
Market value -- $3,705,572) (Cost -- $3,627,000) 3,627,000
- ------------------------------------------------------------------------------
Total Investments -- 100%
(Cost -- $43,839,844*) $43,961,550
==============================================================================
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
* Aggregate cost for federal tax purposes is substantially the same.
See Notes to Financial Statements.
13
<PAGE>
Smith Barney/Traveler Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Putnam Diversified Income Portfolio
Face
Amount Rating Security Value
==============================================================================
U.S. Government Sector -- 27.1%
==============================================================================
U.S. Government & Agency Obligations -- 26.4%
$ 940,000 AAA U.S. Treasury Bond, 7.875% due 2/15/21 $ 1,024,233
460,000 AAA U.S. Treasury Notes, 6.250% due 4/30/01 457,272
1,785,000 AAA U.S. Treasury Notes, 6.375% due 3/31/01 1,780,770
530,000 AAA U.S. Treasury Notes, 6.250% due 2/15/03 521,329
503,189 AAA FNMA, 7.000% due 7/1/25 485,420
27,719 AAA FNMA, 7.000% due 10/1/25 26,741
365,353 AAA FNMA, 7.000% due 12/1/25 352,449
200,320 AAA FNMA, 7.000% due 2/1/26 193,246
712,048 AAA FNMA, 7.000% due 4/1/26 686,898
868,599 AAA FNMA, 7.500% due 9/1/25 859,097
350,000 AAA FNMA, 7.500% due 9/2/25 345,625
903,948 AAA FNMA, 7.500% due 4/1/26 894,059
180,000 AAA FNMA TBA, 7.000% due 8/14/25 173,362
840,000 AAA FNMA TBA, 8.000% due 5/16/26 848,131
52,545 AAA GNMA, 7.000% due 12/15/23 50,607
6,666 AAA GNMA, 7.000% due 12/15/24 6,420
292,087 AAA GNMA, 7.000% due 3/15/24 281,316
53,824 AAA GNMA, 7.000% due 4/15/24 51,840
44,060 AAA GNMA, 7.000% due 5/15/24 42,435
66,353 AAA GNMA, 7.000% due 5/15/24 63,906
543,430 AAA GNMA, 7.000% due 7/1/24 523,391
455,480 AAA GNMA, 7.000% due 11/15/24 438,684
207,755 AAA GNMA, 7.000% due 8/14/25 200,224
384,503 AAA GNMA, 7.000% due 3/15/26 370,565
499,440 AAA GNMA, 7.000% due 3/15/26 481,023
494,520 AAA GNMA, 7.000% due 3/15/26 476,284
415,800 AAA GNMA, 7.000% due 4/15/26 400,727
489,517 AAA GNMA, 7.500% due 9/15/25 483,704
378,447 AAA GNMA, 7.500% due 10/15/25 373,953
521,160 AAA GNMA, 7.500% due 10/15/25 515,297
288,763 AAA GNMA, 7.500% due 11/15/25 285,334
504,558 AAA GNMA, 7.500% due 1/15/26 498,566
1,202,252 AAA GNMA, 7.500% due 1/15/26 1,188,727
- ------------------------------------------------------------------------------
15,381,635
- ------------------------------------------------------------------------------
Collateralized Mortgage Obligations -- 0.7%
155,000 AAA Chemical Master Credit Card Trust, 6.230%
due 6/15/03 151,561
255,000 AAA Sears Credit Account Master Trust, 6.050%
due 2/15/04 243,604
- ------------------------------------------------------------------------------
395,165
- ------------------------------------------------------------------------------
Total U.S. Government Sector
(Cost -- $16,041,304) 15,776,800
==============================================================================
See Notes to Financial Statements.
14
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
==============================================================================
HIGH YIELD SECTOR -- 35.6%
==============================================================================
CORPORATE DEBENTURES -- 34.2%
Advertising-Communications -- 0.4%
$ 50,000 B Outdoor Systems Inc.,
Sr. Notes, 10.750% due
8/15/03 $ 50,500
175,000 B3* Universal Outdoor
Inc., Sr. Notes,
11.000% due 11/15/03 178,938
- ------------------------------------------------------------------------------
229,438
- ------------------------------------------------------------------------------
Automotive -- 0.3%
125,000 B3* Aftermarket
Technology, Sr. Sub.
Notes, 12.000% due
8/1/04 133,438
30,000 B Blue Bird Body Co.,
Sr. Sub. Notes,
11.750% due 4/15/02 30,600
- ------------------------------------------------------------------------------
164,038
- ------------------------------------------------------------------------------
Aviation Components -- 1.1%
130,000 B- BE Aerospace, Sr.
Notes, 9.750% due
3/1/03 132,925
275,000 BB Howmet Corp., Sr. Sub.
Notes, 10.000% due
12/1/03 289,438
107,000 B- K&F Industries Inc.,
Sr. Sub. Discount Debenture,
13.750% due 8/1/01 111,012
75,000 BB Sequa Corp., Sr.
Notes, 9.625% due
10/15/99 76,313
45,000 BB- UNC Inc., Sr. Notes,
9.125% due 7/15/03 42,693
- ------------------------------------------------------------------------------
652,381
- ------------------------------------------------------------------------------
Brewers -- 0.2%
100,000 B+ Canandaigua Wine, Sr.
Sub. Notes, 8.750% due
12/15/03 99,750
- ------------------------------------------------------------------------------
Broadcasting -- 1.2%
125,000 B- Argyle Television, Sr.
Sub. Notes, 9.750% due
11/1/05 120,938
150,000 B- Paxson Communications,
Sr. Sub. Notes, 11.625%
due 10/1/02 159,375
83,000 NR Petracom Holdings,
zero coupon due 2/1/03 60,590
100,000 BB+ Rogers Cablesystems of
America Inc., 10.125%
due 9/1/12 102,000
50,000 B SFX Broadcasting, Sr.
Sub. Notes, 11.375%
due 10/1/00 53,500
100,000 NA Sullivan Broadcasting
Inc., Sr. Sub. Notes,
10.250% due 12/15/05 97,750
100,000 B- Wireless One Inc., Sr.
Notes, 13.000% due
10/15/03 107,500
- ------------------------------------------------------------------------------
701,653
- ------------------------------------------------------------------------------
Building Materials -- 0.6%
200,000 B Intercity Products
Corp., Sr. Secured
Notes, 9.750%
due 3/1/00 176,000
25,000 BB- Schuller International
Group, Sr. Notes,
10.875% due 12/15/04 27,125
150,000 B Triangle Pacific
Corp., Sr. Notes,
10.500% due 8/1/03 157,313
- ------------------------------------------------------------------------------
360,438
- ------------------------------------------------------------------------------
See Notes to Financial Statements
15
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
Putnam Diversified Income Portfolio
FACE
AMOUNT RATING SECURITY VALUE
==============================================================================
Casinos -- 3.5%
$ 75,000 BB Ballys Park Place
Funding Inc.,
Guaranteed Mortgage
Notes, 9.250% due 3/15/04 $ 76,875
150,000 B Casino America Inc.,
1st Mortgage Notes,
11.500% due 11/15/01 159,375
150,000 B Coast Hotels & Casinos
Inc., 1st Mortgage Notes,
13.000% due 12/15/02 156,375
150,000 BB Empress River Casino
Financial Corp., Guaranteed
Sr. Notes, 10.750% due 4/1/02 157,500
75,000 B Fitzgerald Gaming
Corp., Sr. Secured Notes,
13.000% due 12/31/02 69,000
175,000 BB- Grand Casinos Inc.,
Guaranteed 1st Mortgage Notes,
10.125% due 12/1/03 183,312
100,000 CCC Lady Luck Gaming Financial Corp.,
Guaranteed 1st Mortgage Notes,
11.875% due 3/1/01 98,750
23,000 NR Louisiana Casino Cruises,
1st Mortgage, 11.500%
due 12/1/98 22,310
100,000 BB- MGM Grand Hotel
Financial Corp.,
12.000% due 5/1/02 109,000
125,000 B- Mohegan Tribal Gaming,
Sr. Secured Notes,
13.500% due 11/15/02 155,625
75,000 B- PRT Funding, Sr.
Notes, 11.625% due
4/15/04 63,938
200,000 BB Players International
Inc., Sr. Notes,
10.875% due 4/15/05 204,750
190,000 B Stratosphere Corp.,
Guaranteed 1st Mortgage
Notes, 14.250% due 5/15/02 239,875
200,000 B+ Trump Atlantic City
Associates, 1st Mortgage
Notes, 11.250% due 5/1/06 204,500
140,000 B- Trump Hotel Casino
Resorts Funding, Sr. Secured
Notes, 15.500% due 6/15/05 163,450
- ------------------------------------------------------------------------------
2,064,635
- ------------------------------------------------------------------------------
Chemicals -- 1.0%
125,000 BB- Acetex Corp., Sr.
Notes, 9.750 % due
10/1/03 125,781
250,000 B+ Arcadian Partners LP,
Sr. Notes, Series B,
10.750% due 5/1/05 270,000
150,000 B Magellan Health
Services Inc., Sr.
Sub. Notes, 11.250%
due 4/15/04 166,875
25,000 BB- Sifto Canada Inc.,
Guaranteed Secured
Note, 8.500% due 7/15/00 24,156
- ------------------------------------------------------------------------------
586,812
- ------------------------------------------------------------------------------
Computer Software Services -- 0.3%
150,000 B- Graphic Controls Corp.,
Sr. Sub. Notes, 12.000%
due 9/15/05 159,000
- ------------------------------------------------------------------------------
See Notes to Financial Statements
16
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
Conglomerates -- 0.2%
$ 25,000 BB- ADT Group Limited, $ 26,062
9.250% due 8/1/03
75,000 NR MacAndrews and Forbes
Holdings Inc., Sub.
Debentures, 13.000% due 3/1/99 77,438
- --------------------------------------------------------------------------------
103,500
- --------------------------------------------------------------------------------
Consumer Products -- 0.8%
150,000 B+ Coty Inc., Guaranteed
Sr. Sub. Notes,
10.250% due 5/1/05 157,125
150,000 BB- Ekco Group Inc., Sr.
Notes, 9.250% due
4/1/06 149,438
255,000 A International Semi-Tech., Sr.
Secured Discount Notes,
step bond to yield 11.500% due
8/15/03 153,637
- --------------------------------------------------------------------------------
460,200
- --------------------------------------------------------------------------------
Defense -- 0.4%
200,000 B Alliant Techsystems
Inc., Sr. Sub. Notes,
11.750% due 3/1/03 218,250
- --------------------------------------------------------------------------------
Entertainment -- 1.0%
125,000 B- Alliance Entertainment
Corp., Sr. Sub. Notes,
Series B, 11.250% due 7/15/05 126,094
Chelsea Piers Funding Corp.:
50,000 NR 1st Mortgage Discount
Notes, 12.500% due
6/15/04 47,500
5,000 NR Discount Notes, Class
B, step bond to yield
11.000% due 6/15/09 4,781
30,000 B+ Cinemark USA Inc., Sr.
Notes, 12.000% due
6/1/02 32,700
150,000 B+ Premier Parks, Sr.
Notes, 12.000% due
8/15/03 162,375
Time Warner Inc., Notes:
15,000 BBB- 8.110% due 8/15/06 15,113
15,000 BBB- 8.180% due 8/15/07 15,131
175,000 BB- Viacom Inc., Sub.
Debentures Exchangeable,
8.000% due 7/7/06 163,187
- --------------------------------------------------------------------------------
566,881
- --------------------------------------------------------------------------------
Financial Services -- 1.5%
50,000 BB AIM Management Group,
Sr. Notes, 9.000% due
11/15/03 51,000
75,000 BB+ Centerbank, Sub.
Notes, 8.375% due
10/1/02 75,625
200,000 B Chevy Chase Savings
Bank, Sub. Notes,
9.250% due 12/1/05 196,750
135,000 BB- Keystone Group Inc.,
Sr. Note, 9.750% due
9/1/03 134,662
100,000 NR PSF Finance LP, Sr.
Secured Notes, 12.250%
due 6/15/04 102,375
150,000 BB+ Tanger PPTYS Ltd.
Partnership,
Guaranteed Notes,
8.750% due 3/11/01 147,188
See Notes to Financial Statements.
17
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Putnam Diversified Income Portfolio
Face
Amount Rating Security Value
================================================================================
Fiancial Services -- 1.5% (continued)
$ 150,000 BB Terra Nova Holdings, Sr. Guaranteed Notes,
10.750% due 7/1/05 $ 166,500
- --------------------------------------------------------------------------------
873,100
- --------------------------------------------------------------------------------
Gas/Oil Exploration -- 1.5%
50,000 BB+ Arkla Inc., Debentures, 8.900% due 12/15/06 53,813
100,000 B Benton Oil & Gas Co., Sr. Notes 11.625%
due 5/1/03 102,000
Chesapeake, Energy Corp.:
50,000 B+ Sr. Notes, 9.125% due 4/15/06 49,500
150,000 Ba3* Guaranteed Sr. Exchangeable, 12.000% due 3/1/01 161,062
50,000 B+ Gulf Canada Resources Ltd., Sr. Sub. Notes,
9.625% due 7/1/05 50,937
75,000 BB Maxus Energy, Medium Term Note, 10.200% due 5/10/96 75,188
150,000 BB- Maxus Energy Corp., 9.500% due 2/15/03 147,750
25,000 BBB- Transcontinental Gas Pipeline, Debentures,
9.125% due 2/1/17 25,719
150,000 BB- Trans Texas Gas, Sr. Notes 11.500% due 6/15/02 151,125
100,000 B+ Triton Energy, Sr. Sub. Discount Notes,
step bond to yield 9.750% due 12/15/00 94,500
- --------------------------------------------------------------------------------
910,594
- --------------------------------------------------------------------------------
Healthcare Services -- 1.0%
30,000 B American Medical International Inc., Sr. Sub. Notes,
13.500% due 8/15/01 33,225
65,000 BBB+ Columbia/HCA Healthcare, Term Notes, 7.580%
due 9/15/25 62,806
100,000 B Paracelsus Healthcare Corp., Sr. Sub. Notes,
9.875% due 10/15/03 100,875
100,000 B+ Quorum Health Group, Sr. Sub. Notes, 8.750%
due 11/1/05 99,000
Tenet Healthcare Corp., Sr. Notes:
50,000 BB- 9.625% due 9/1/02 53,625
100,000 B+ 10.125% due 3/1/05 107,250
99,000 B- Total Rental Care Inc., Sub. Discount Notes,
step bond to yield 12.000% due 8/15/04 92,936
85,000 B+ Universal Health Service Inc., Sr. Notes,
8.750% due 8/15/05 84,788
- --------------------------------------------------------------------------------
634,505
- --------------------------------------------------------------------------------
Hotels -- 1.0%
135,000 BB- HMH Properties Inc., Sr. Notes, 9.500% due 5/15/05 131,456
125,000 BB- Host Marriot Travel Plazas Inc., Sr. Secured Notes,
Series B, 9.500% due 5/15/05 121,563
15,000 BB- John Q. Hammons Hotels LP, 8.875% due 2/15/04 14,419
See Notes to Financial Statements.
18
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
Hotels -- 1.0% (continued)
$ 180,000 B- Presley Companies $ 164,250
Delaware, Sr.
Notes, 12.500% due
7/1/01
150,000 BB- Scotsman Group, Sr.
Notes, 9.500% due
12/15/00 151,125
- --------------------------------------------------------------------------------
582,813
- --------------------------------------------------------------------------------
Industrial Goods & Services -- 0.1%
50,000 B- Merit Behavioral Care
Corp., Sr. Sub. Notes,
11.500% due 11/15/05 52,438
- --------------------------------------------------------------------------------
Insurance -- 0.6%
50,000 B- American Annuity Group
Inc., Sr. Sub. Notes,
11.125% due 2/1/03 53,437
100,000 BBB Conseco Inc., Sr.
Notes, 10.500% due
12/15/04 111,125
Reliance Group Holdings Inc.,
Sr. Sub. Debentures:
148,000 BB+ 9.000% due 11/15/00 148,555
35,000 BB- 9.750% due 11/15/03 35,394
- --------------------------------------------------------------------------------
348,511
- --------------------------------------------------------------------------------
Machinery -- 0.1%
75,000 B Terex Corp. Unit, Sr.
Secured Notes, 13.750%
due 5/15/02 75,563
- --------------------------------------------------------------------------------
Manufacturing-Communications -- 0.1%
30,000 B+ Amphenol Corp., Sr.
Sub. Notes, 12.750%
due 12/15/02 33,262
- --------------------------------------------------------------------------------
Media-Cable -- 5.0%
Adelphia Communications
Corp., Sr. Notes:
125,000 B 12.500% due 5/15/02 127,500
74,226 B Series B, 9.500% due
2/15/04 66,247
200,000 B- Allbritton Communications Co.,
Sr. Sub. Debentures,
9.750% due 11/30/07 188,000
150,000 B American Media
Operation Inc., Sr.
Sub. Notes,
11.625% due 11/15/04 149,250
American Telecasting Inc.,
Sr. Discount Notes:
70,000 CCC Step bond to yield
14.500% due 6/15/04 51,275
152,000 CCC+ Step bond to yield
14.500% due 8/15/05 98,800
CF Cable Television Inc.,
Sr. Notes:
50,000 BBB- 9.125% due 7/15/07 49,937
35,000 BB+ 11.625% due 2/15/05 38,675
Cablevision Systems Corp.,
Sr. Sub. Debentures:
25,000 B 9.875% due 2/15/13 25,000
150,000 B 9.875% due 4/1/23 149,250
40,000 BB- Century Communications
Corp., Senior Notes,
9.500% due 3/1/05 40,000
100,000 B- Chancellor
Broadcasting, Sr. Sub.
Notes, 9.375% due
10/1/04 95,750
See Notes to Financial Statements.
19
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Putnam Diversified Income Portfolio
Face
Amount Rating Security Value
================================================================================
Media-Cable -- 5.0% (continued)
$ 250,000 B Charter Communications Southeast,
Secured Debentures, 14.000% due
3/15/07 $ 132,500
200,000 B3* Commodore Media Inc., Sr. Sub. Notes,
7.500% due 5/1/03 203,500
Diamond Cable Communications PLC, Sr.
Discount Notes:
100,000 CCC- Step bond to yield 13.250% due 9/30/04 72,750
125,000 B- Step bond to yield 11.750% due 12/15/05 74,375
58,711 NR Falcon Holdings Group Inc., Sr. Sub.
Notes, Series B, 11.000% due 9/15/03 56,362
25,000 B Heartland Wireless Communication Unit,
13.000% due 4/15/03 27,750
125,000 B- Intermedia Communications, Sr. Notes,
Series B, 13.500% due 6/1/05 143,125
260,000 B- International Cabletel Inc., Sr.
Deferred Notes, Series A, step bond
to yield 11.500% due 2/1/06 152,750
125,000 BB Jones Intercable Inc., Sr. Sub. Notes,
9.625% due 3/15/02 128,125
25,000 BB- K-III Communications Corp., Sr. Notes,
10.250% due 6/1/04 26,188
150,000 BB+ Lenfest Communications, Sr. Notes,
8.375% due 11/1/05 141,000
Marcus Cable Operating Co., Sr.
Discount Notes:
100,000 B+ Step bond to yield 13.500% due 8/1/04 72,500
100,000 B Step bond to yield 14.250% due 12/15/05 62,250
50,000 BBB- Telecommunications Inc., Notes, 9.250%
due 1/15/23 49,625
170,000 BB Telewest PLC, Sr. Discount Debentures,
Step bond to yield 11.000% due 10/1/07 104,125
Videotron Holdings PLC, Sr. Discount
Notes:
300,000 B+ Step bond to yield 11.000% due 8/15/05 199,500
50,000 B+ Zero Coupon due 7/1/04 36,750
150,000 B Young Broadcasting Inc., Sr. Sub. Notes,
9.000% due 1/15/06 139,500
- ----------------------------------------------------------------------------
2,902,359
- ----------------------------------------------------------------------------
Metals -- 0.3%
150,000 BB- Great Lakes Carbon Corp., Sr. Secured
Notes, 10.000% due 1/1/06 152,813
- ----------------------------------------------------------------------------
Miscellaneous -- 1.9%
52,000 NR Coinmach Corp., Sr. Notes, 11.750%
due 11/15/05 52,455
150,000 B+ Comcast Corp., Sr. Sub. Notes, 9.500%
due 1/15/08 151,500
130,000 B- Day International Group Inc., Sr.
Sub. Notes, 11.125% due 6/1/05 133,738
100,000 BB- Eletson Holdings, Inc., First Preferred
Mortgage Notes, 9.250% due 11/15/03 96,750
See Notes to Financial Statements.
20
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Putnam Diversified Income Portfolio
Face
Amount Rating Security Value
=============================================================================
Miscellaneous -- 1.9% (continued)
$ 150,000 B+ Exide Corp., Sr. Sub. Deferred Debenture,
step bond to yield 12.250% due 12/15/04 $ 123,375
200,000 B Herff Jones Inc., Sr. Sub. Notes, 11.000%
due 8/15/05 214,500
150,000 B- Ivac Corp., Sr. Notes, 9.250% due 12/1/02 152,250
35,000 BB Reeves Industries, Sr. Notes, 11.000% due
7/15/02 32,331
125,000 NR Selmer Co. Inc., Sr. Sub. Notes, 11.000%
due 5/15/05 131,875
25,000 BB- World Color Press Inc., Sr. Sub. Notes,
9.125% due 3/15/03 24,969
- -----------------------------------------------------------------------------
1,113,743
- -----------------------------------------------------------------------------
Paper Packaging/Products -- 1.2%
100,000 BB APP International Finance Co., Guaranteed
Secured Notes, 11.750% due 10/1/05 96,750
Domtar, Inc.:
125,000 BB- Sr. Notes, 12.000% due 4/15/01 141,563
25,000 BB Debentures, 11.250% due 9/15/17 26,500
75,000 B Gaylord Container Corp., Sr. Notes, 11.500%
due 5/15/01 77,437
25.000 B- Ivex Packing, Sr. Sub. Notes, 12.500%
due 12/15/02 26,344
175,000 B+ Repap New Brunswick, Sr. Secured Notes,
10.625% due 4/15/05 166,250
150,000 B+ Stone Consolidated Corp., Sr. Secured Notes,
10.250% due 12/15/00 156,937
Stone Container Corp., Sr. Sub. Notes:
25,000 B 11.500% due 10/1/04 25,187
25,000 B- 11.500% due 9/1/99 25,438
- -----------------------------------------------------------------------------
742,406
- -----------------------------------------------------------------------------
Plastics -- 0.3%
50,000 BB- Carlisle Plastic Inc., Sr. Extendible Reset
10.250% due 6/15/97 49,500
25,000 B+ Key Plastics, Sr. Notes,14.000% due 11/15/99 28,094
75,000 B+ Owens Illinois Inc., Sr. Sub. Notes, 9.750%
due 8/15/04 76,312
- -----------------------------------------------------------------------------
153,906
- -----------------------------------------------------------------------------
Retailers -- 3.2%
175,000 B Brylane LP/Brylane Cap. Corp., Sr. Sub. Notes
A, 10.250% due 6/15/97 163,188
190,000 B Corporate Express, Sr. Sub. Notes, 9.125%
due 3/15/04 192,375
50,000 CCC- County Seat Stores, Sr. Sub. Notes, 12.000%
due 10/1/02 42,375
175,000 BB Federated Department Stores Inc., Sr. Notes
8.125% due 10/15/02 170,406
210,000 B Finlay fine Jewelry, Sr. Notes, 10.625%
due 5/1/03 206,325
See Notes to Financial Statements.
21
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investment (unaudited)(continued) April 30, 1996
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
<S> <S> <S> <C>
==============================================================================================
Retailer -- 3.2% (continued)
$ 230,000 CCC+ Loehmann's Holdings, Sr. Sub. Notes, 13.750%
due 2/15/99 $ 230,000
150,000 B+ Mothers Work Inc., Sr. Notes, 12.625% due 8/1/05 158,063
25,000 BBB- Revco DS Inc., New Sr. Notes, 9.125% due 1/15/00 26,031
350,000 BB+ Southland Corp., First Priority, Sr. Sub. Debenture,
5.000% due 12/15/03 277,375
170,000 BB- Tultex Corp., Sr. Notes, 10.625% due 3/15/05 173,825
50,000 B- United Stationers Supply, Sr. Sub. Notes, 12.750% due 5/1/05 54,625
150,000 BB- Waban Inc., Sr. Sub. Notes, 11.000% due 5/15/04 156,375
- ----------------------------------------------------------------------------------------------
1,850,963
- ----------------------------------------------------------------------------------------------
Supermarkets -- 0.4%
250,000 NR Pagemart Nationwide Inc., Sr. Discount Notes, step bond
to yield 15.000% due 2/1/05 168,750
30,000 B+ Starter Brothers Inc., Sr. Notes, 11.000% due 3/1/01 31,275
25,000 BB+ Stop & Shop Cos. Inc., New Sr. Sub. Notes,
9.750% due 2/1/02 27,438
- ----------------------------------------------------------------------------------------------
227,463
Telecommunications -- 3.6%
100,000 CCC+ A+ Network, Inc., Sr. Sub. Notes, 11.875% due 11/1/05 101,000
250,000 NR Brooks Fiber Properties Inc., Sr. Discount Notes,
step bond to yield 10.875% due 3/1/06 138,125
250,000 B+ Callnet Enterprises Inc., Sr. Discount Notes,
zero coupon due 12/1/04 182,500
3,000 NR Celcaribe SA Unit, Sr. Secured Notes, step bond to yield
13.500% due 3/15/04 28,939
100,000 CCC Cellular Inc., Sr. Sub. Notes, step bond to yield
11.750% due 9/1/03 80,000
215,000 Caa* Cencall Communication Corp., Sr. Discount Notes,
step bond to yield 10.125% due 1/15/04 126,312
200,000 NR GST Unit Telecommunications Inc., Sr. Sub. Discount
step bond to yield 13.875% due 12/15/05 114,000
95,000 NR Hyperion Telecommunications Inc., Sr. Discount Notes,
13.000% step bond to yield 13.000% due 4/15/03 50,825
Intelcom Group Inc., Sr. Discount Notes:
200,000 NR Step bond to yield 12.500% due 5/1/06 111,000
200,000 NR Step bond to yield 13.500% due 9/15/05 124,250
MFS Communications Inc., Sr. Discount Notes:
100,000 B Step bond to yield 8.875% due 1/15/06 62,250
150,000 B Step bond to yield 9.375% due 1/15/04 114,375
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedule of Investments (unaudited)(continued) April 30, 1996
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
<S> <C> <C> <C>
================================================================================================
Telecommunications -- 3.6% (continued)
$ 180,000 B- Metrocall Inc., Sr. Sub. Notes, 10.375% due 10/1/07 $ 175,725
125,000 BB- Mobile Telecommunications Tech. Corp., Sr. Notes,
13.500% due 12/15/02 130,938
125,000 B- Mobilemedia Corp., Sr. Sub. Notes, 9.375% due 11/1/07 120,625
175,000 CCC+ Nextel Communications Inc., Sr. Discount Notes,
step bond to yield 9.750% due 8/15/04 101,500
100,000 NR Nextlink Communications LLC, Sr. Discount Notes,
12.500% due 4/15/06 101,250
175,000 CCC+ Pricellular Wireless Corp., Sr. Sub. Discount Exchange Notes,
zero coupon due 11/15/01 154,438
76,000 NR Pricellular Wire, Convertible Debenture, 10.750% due 8/15/04 64,600
25,000 BB- Roger Communications Inc., Sr. Debentures,
10.875% due 4/15/04 25,812
- ------------------------------------------------------------------------------------------------
2,108,464
- ------------------------------------------------------------------------------------------------
Telephone -- 0.3%
75,000 B+ Fonorola Inc., Sr. Notes, 12.500% due 8/15/02 80,625
180,000 B- Intercel Inc., Sr. Discount Notes, step bond to yield
12.000% due 5/1/06 99,900
- ------------------------------------------------------------------------------------------------
180,525
- ------------------------------------------------------------------------------------------------
Utility-Electric -- 1.1%
150,000 B First PV Funding Corp., Lease Obligation Bond Series 86B,
10.150% due 7/1/23 143,625
21,603 BB- Midland Funding Corp. I, Sr. Secured Lease Obligation
Bond, Series C 91, 10.330% due 7/23/02 22,656
Midland Funding Corp. II, Sub. Secured Lease Obligation Bond:
115,000 B- Series A, 11.750% due 7/23/05 121,181
75,000 B- Series B, 13.250% due 7/23/05 82,687
150,000 B+ Niagara Mohawk Power, Medium Term Note,
9.990% due 5/11/04 136,125
100,000 B Texas New Mexico Power, Secured Debentures,
12.500% due 1/15/99 109,250
- ------------------------------------------------------------------------------------------------
615,524
- ------------------------------------------------------------------------------------------------
Total Corporate Debentures
(Cost -- $19,743,709) 19,925,928
================================================================================================
See Notes to Financial Statements.
23
</TABLE>
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Shares Security Value
<S> <C> <C>
==================================================================================================================
Miscellaneous -- 1.4%
Cablevision System Co.:
264 Series G, Preferred Stock $ 26,664
1,014 Series L, Preferred Stock 99,372
500 Cablevision Systems, Class A, Common Stock 24,875
1,500 El Paso Electric Co., Series A, Preferred Stock,
Payment-in-kind 153,000
1,325 Grand Union Co., Common Stock 8,281
1,250 Granite Broadcasting, Preferred Stock 83,750
150 Heartland Wireless Communications Inc. Warrants,
Expire 4/26/00 750
495 Intelcom Group Inc. Warrants, Expire 9/15/05 5,445
125 Intermedia Communications Inc. Warrants, Expire 6/1/00 3,750
1,544 K-III Communications Corp., Series B, Preferred Stock,
Payment-in-kind 157,446
75 Louisiana Casino Cruises Warrants, Expire 12/1/98 1
201 Petracomm Holdings Warrants, Expire 8/1/05+ 1,432
221 President Riverboat Casinos Inc., Warrants, Expire 9/30/99 221
825 SD Warren Convertible Preferred Stock 14.000% 28,050
850 SD Warren Holding Corp., Preferred Stock 25,075
85 SD Warren Holdings Corp., Series B, Warrants,
Expire 12/15/06+ 1,105
165 Time Warner Inc., Preferred Stock 165,000
318 Total Renal Care Holdings Inc., Common Stock 12,164
300 Wireless One Inc. Warrants, Expire 10/15/03 1,800
- ------------------------------------------------------------------------------------------
Total Miscellaneous (Cost -- $794,833) 798,181
==========================================================================================
TOTAL HIGH YIELD SECTOR
(Cost -- $20,538,542) 20,724,109
==========================================================================================
FACE
AMOUNT(a) SECURITY VALUE
==========================================================================================
INTERNATIONAL SECTOR -- 29.5%
==========================================================================================
FOREIGN GOVERNMENT AGENCIES & OBLIGATIONS -- 29.5%
Argentina -- 0.9%
Republic of Argentina:
382,000 5.000% due 3/31/23 208,190
443,000 6.875% due 3/31/23 305,670
- ------------------------------------------------------------------------------------------
513,860
- ------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited)(continued) April 30, 1996
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Face
Amount Security Value
<S> <C> <C>
============================================================================================
Australia -- 2.5%
Australian Government:
1,263,000 8.750% due 1/15/01 $ 1,007,317
415,000 9.000% due 9/15/04 333,059
155,000 12.000% due 11/15/01 140,613
- --------------------------------------------------------------------------------------------
1,480,989
- --------------------------------------------------------------------------------------------
Brazil -- 1.0%
Republic of Brazil:
15,000 6.500% due 4/15/06 11,400
77,001 C Bond, 4.000% due 4/15/14 46,297
428,000 Sinking Fund, 5.188% due 4/15/06 325,280
202,740 Variable Sinking Fund, 6.375% due 1/1/01 185,760
- --------------------------------------------------------------------------------------------
568,737
- --------------------------------------------------------------------------------------------
Canada -- 1.5%
Canadian Government:
865,000 7.500% due 3/1/01 645,812
210,000 8.750% due 12/1/05 164,059
80,000 9.000% due 12/1/04 63,371
- --------------------------------------------------------------------------------------------
873,242
- --------------------------------------------------------------------------------------------
Denmark -- 2.2%
Danish Government:
1,130,000 7.000% due 12/15/04 191,598
1,545,000 8.000% due 5/15/03 279,263
4,415,000 9.000% due 11/15/00 834,687
- --------------------------------------------------------------------------------------------
1,305,548
- --------------------------------------------------------------------------------------------
Ecuador -- 0.2%
198,000 Ecuador Discount Notes, 6.813% due 2/28/25 111,128
- --------------------------------------------------------------------------------------------
France -- 2.2%
French BTAN Treasury Bill:
2,390,000 5.750% due 3/12/98 472,710
3,805,000 7.750% due 4/12/00 801,970
- --------------------------------------------------------------------------------------------
1,274,680
- --------------------------------------------------------------------------------------------
Germany -- 6.5%
Bundesobligation:
185,000 5.750% due 8/22/00 124,298
2,305,000 5.875% due 5/15/00 1,555,905
795,000 Deutsche Republic, 6.875% due 5/12/05 538,916
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedule of Investments (unaudited)(continued) April 30, 1996
Putnam Diversified Income Portfolio
Face
Amount(a) Security Value
================================================================================
Germany -- 6.5%
2,207,000 Treuhandanstalt,
7.125% due 1/29/03 $ 1,538,828
- --------------------------------------------------------------------------------
3,757,947
- --------------------------------------------------------------------------------
Great Britain -- 4.0%
325,000 United Kingdom Treasury:
325,000 7.250% due 3/30/98 492,877
155,000 7.500% due 12/7/06 223,754
135,000 8.000% due 12/7/00 207,392
345,000 9.500% due 1/15/99 549,094
530,000 9.750% due 8/27/02 874,352
- --------------------------------------------------------------------------------
2,347,469
- --------------------------------------------------------------------------------
Italy -- 2.1%
Italian Government:
560,000,000 10.500% due 7/15/00 375,131
1,305,000,000 10.500% due 9/1/05 877,275
- --------------------------------------------------------------------------------
1,252,406
- --------------------------------------------------------------------------------
Mexico -- 0.8%
618,000 Mexico Discount,
Brady Floater Bond,
6.766% due 12/31/19 492,855
- --------------------------------------------------------------------------------
Panama -- 0.1%
61,000 Panama Frn, 6.750% due
5/10/02 55,015
- --------------------------------------------------------------------------------
Philippines -- 0.1%
77,000 Philippine Government,
6.250% due 12/1/17 60,925
- --------------------------------------------------------------------------------
Poland -- 0.2%
96,000 Polish Government,
6.875% due 10/27/24 89,280
- --------------------------------------------------------------------------------
Spain -- 3.4%
Spanish Government:
87,100,000 8.400% due 4/30/01 684,382
43,600,000 10.150% due 1/31/06 363,400
103,700,000 12.250% due 3/25/00 917,725
- --------------------------------------------------------------------------------
1,965,507
- --------------------------------------------------------------------------------
Sweden -- 1.8%
6,400,000 Swedish Government
10.250% due 5/5/00 1,035,470
- --------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT
AGENCIES & OBLIGATIONS
(Cost -- $17,369,421) 17,185,058
================================================================================
See Notes to Financial Statements.
26
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (unaudited) (continued) April 30, 1996
Putnam Diversified Income Portfolio
Shares Security Value
================================================================================
Options -- 0.0%
1,300,000 USD Call/CHF 1.23 5/9/96
(Cost -- $10,790) $ 16,380
================================================================================
Total International Sector
(Cost -- $17,380,211) 17,201,438
================================================================================
Face
Amount(a) Security Value
================================================================================
Repurchase Agreement -- 7.8%
$ 4,543,000 J.P. Morgan, 5.310% due 5/1/96; Proceeds at
maturity -- $4,543,670; Fully collater-
alized by U.S. Treasury Bonds,
9.125% due 5/15/09; (Market Value --
$4,487,236) (Cost -- $4,543,000) 4,543,000
- --------------------------------------------------------------------------------
(a) Represents local currency.
+ Security exempt from registration under Rule 144A of Securities Act of
1933. These securities may be resold in transactions exempt from
registration, generally to qualified institutuional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See page 28 for description of Bond Ratings.
See Notes to Financial Statements.
27
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (continued) April 30, 1996
All ratings are by Standard & Poor's Corporation ("Standard & Poor's"), except
those identified by an asterisk (*) are rated by Moody's Investors
Services("Moody's"). The definitions of the applicable rating symbols are set
forth below:
Standard & Poor's--Ratings from "AA" to "CCC" may be modified by the addition of
a plus (+) or a minus (-) sign to show relative standings within the major
rating categories
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differs from the highest rated issue only in a small
degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
BB -- Bonds rated "BB" have less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments.
B -- Bonds rated "B" have a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal.
CCC -- Bonds rated "CCC" are regarded, on balance, as predominately
speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation.
Moody's - Numerical modifiers 1, 2, and 3 may be applied to each generic rating
from "Aa" to "B", where 1 is the highest and 3 the lowest rating
within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in "Aaa" securities.
A -- Bonds that are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade which suggest a
susceptibility to impairment some time in the future.
Baa -- Bonds that are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative
characteristics as well.
Ba -- Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa -- Bonds that are rated "Caa" are of poor standing. These issues may be
in default, or present elements of danger may exist with respect to
principal or interest.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
28
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Statements of Assets and Liabilities (unaudited) April 30, 1996
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
===============================================================================
ASSETS:
Investments, at value (Cost -- $43,839,844 $43,961,550 $58,245,347
and $58,503,057, respectively)
Cash 616 --
Dividends and interest receivable 815,228 1,079,821
Receivable for Fund shares sold 209,335 --
Receivable for securities sold -- 657,807
Receivable for open foreign exchange contracts -- 152,025
Other receivables 57,091 610
- -------------------------------------------------------------------------------
Total Assets 45,043,820 60,135,610
- -------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 140,000 2,100,265
Management fees payable 118,042 121,291
Payable for open foreign exchange contracts -- 36,868
Accrued expenses 14,812 27,074
- -------------------------------------------------------------------------------
Total Liabilities 272,854 2,285,498
- -------------------------------------------------------------------------------
Total Net Assets $44,770,966 $57,850,112
===============================================================================
NET ASSETS:
Par value of capital shares $ 39 $ 51
Capital paid in excess of par value 43,115,070 56,342,284
Undistributed net investment income 1,211,419 1,552,901
Accumulated net realized gain on security
transactions 322,732 130,491
Net unrealized appreciation (depreciation)
of investments, options and foreign currencies 121,706 (175,615)
- -------------------------------------------------------------------------------
Total Net Assets $44,770,966 $57,850,112
===============================================================================
Shares Outstanding 3,919,912 5,116,811
- -------------------------------------------------------------------------------
Net Asset Value $11.42 $11.31
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
29
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Statements of Operations (unaudited) For the Six Months Ended April 30, 1996
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
===============================================================================
INVESTMENT INCOME:
Interest $1,653,298 $1,873,570
Dividends 69,300 7,968
- -------------------------------------------------------------------------------
Total Investment Income 1,722,598 1,881,538
- -------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 98,877 170,649
Audit and legal 7,000 7,750
Shareholder and system servicing fees 4,250 3,004
Shareholder communications 3,200 5,000
Custody 2,800 18,500
Pricing service fees 1,500 5,000
Directors' fees 1,250 1,909
Registration fees 2,825 --
Other 2,000 4,343
- -------------------------------------------------------------------------------
Total Expenses 123,702 216,155
Less: Management fee waiver (8,345) --
- -------------------------------------------------------------------------------
Net Expenses 115,357 216,155
- -------------------------------------------------------------------------------
Net Investment Income 1,607,241 1,665,383
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS AND FOREIGN CURRENCIES
(NOTE 3 and NOTE 5):
Realized Gain (Loss) From:
Security transactions (excluding
short-term securities) 342,851 130,982
Options purchased -- (15,102)
Foreign currency transactions -- 25,633
- -------------------------------------------------------------------------------
Net Realized Gain 342,851 141,513
- -------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments, Options and
Foreign Currencies:
Beginning of period 365,931 472,261
End of period 121,706 (175,615)
- -------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (244,225) (647,876)
- -------------------------------------------------------------------------------
Net Gain (Loss) on Investments, Options and
Foreign Currencies 98,626 (506,363)
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations $1,705,867 $1,159,020
===============================================================================
30
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Schedules of Investments (continued) April 30, 1996
For the Six Months Ended April 30, 1996 (unaudited)
and the Year Ended October 31, 1995
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Portfolio Income Portfolio
---------------------- ------------------------
1996 1995 1996 1995
=========================================================================================
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 1,607,241 $ 835,839 $ 1,665,383 $ 1,228,004
Net realized gain (loss) 342,851 (13,404) 141,513 473,641
Increase in net unrealized
appreciation (depreciation) (244,225) 433,954 (647,876) 498,067
- -----------------------------------------------------------------------------------------
Increase in Net Assets
From Operations 1,705,867 1,256,389 1,159,020 2,199,712
- -----------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (1,234,142) (101,352) (1,394,283) (78,180)
Net realized gains -- -- (450,182) --
- -----------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,234,142) (101,352) (1,844,465) (78,180)
- -----------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
(NOTE 8):
Net proceeds from
sales of shares 22,864,348 17,271,651 25,555,880 22,758,517
Net asset value of shares issued
for reinvestment of dividends 1,234,142 85,584 1,844,465 78,180
Cost of shares reacquired (249,062) (1,457,780) (378,517) (207,951)
- -----------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 23,849,428 15,899,455 27,021,828 22,628,746
- -----------------------------------------------------------------------------------------
Increase in Net Assets 24,321,153 17,054,492 26,336,383 24,750,278
NET ASSETS:
Beginning of period 20,449,813 3,395,321 31,513,729 6,763,451
- -----------------------------------------------------------------------------------------
End of period* $44,770,966 $20,449,813 $57,850,112 $31,513,729
=========================================================================================
* Includes undistributed
net investment income of: $ 1,211,419 $ 838,320 $ 1,552,901 $ 1,271,270
=========================================================================================
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
The Smith Barney High Income and Putnam Diversified Income Portfolios
("Portfolios") are separate investment portfolios of the Smith Barney/Travelers
Series Fund Inc. ("Fund"). The Fund, a Maryland corporation, is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company and consists of these Portfolios and ten other
separate investment portfolios: AIM Capital Appreciation, Alliance Growth, Van
Kampen American Capital Enterprise, Smith Barney Income and Growth, Smith Barney
International Equity, Smith Barney Pacific Basin, TBC Managed Income, GT Global
Strategic Income, MFS Total Return and Smith Barney Money Market Portfolios.
Shares of the Fund are offered only to insurance company separate accounts which
fund certain variable annuity and variable life insurance contracts. The
financial statements and financial highlights for the other portfolios are
presented in separate semi-annual reports.
The significant accounting policies consistently followed by the Portfolios
are: (a) security transactions are accounted for on trade date; (b) securities
traded on national securities markets are valued at the closing prices on such
markets; securities for which no sales price was reported and U.S. Government
and Government Agency obligations are valued at the mean between the bid and ask
prices; fixed income investments that have a maturity of more than 60 days are
valued at prices based on market quotations for securities of similar type,
yield and maturity; (c) securities maturing within 60 days or less are valued at
cost plus accreted discount, or minus amortized premium, as applicable; (d)
dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities are recorded as soon as the Portfolio is
informed of the ex-dividend date; (e) interest income, adjusted for accretion of
original issue discount, is recorded on the accrual basis; (f) gains or losses
on the sale of securities are calculated by using the specific identification
method; (g) direct expenses are charged to each Portfolio; (h) dividends and
distributions to shareholders are recorded on the ex-dividend date; (i) the
accounting records of the Portfolios are maintained in U.S. dollars. All assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars based on the rate of exchange of such currencies against U.S. dollars on
the date of valuation. Purchases and sales of securities, and income and
expenses are translated at the rate of exchange quoted on the respective date
that such transactions are recorded. Differences between income and expense
amounts recorded and collected or paid are adjusted when reported by the
custodian bank; (j) in
32
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited) (continued)
accordance with Statement of Position 93-2 Determination, Disclosure, and
------------------------------
Financial Statement Presentation of Income, Capital Gain, and Return of Capital
- -------------------------------------------------------------------------------
Distributions by Investment Companies, book and tax basis differences relating
- -------------------------------------
to shareholder distributions and other permanent book and tax differences are
reclassified to undistributed net investment income. As of October 31, 1995, the
cumulative effect of such differences, totaling $2,495 and $3,941, were
reclassified to undistributed net investment income from paid-in capital for the
Smith Barney High Income and Putnam Diversified Income Portfolios, respectively.
Net investment income, net realized gains, and net assets were not affected by
this change; (k) the Portfolios intend to comply with the requirements of the
Internal Revenue Code of 1986, as amended, pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; and (l) estimates and
assumptions are required to be made regarding assets, liabilities and changes in
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ from
these amounts.
2. Management Agreement and Transactions with Affiliated Persons
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The Smith
Barney High Income ("SBHI") and Putnam Diversified Income Portfolios ("PDIP")
pay SBMFM a management fee calculated at an annual rate of 0.60% and 0.75% of
the average daily net assets, of each Portfolio, respectively. All fees are
calculated daily and paid monthly. SBHI is managed by the Greenwich Street
Advisors Division of SBMFM. SBMFM waived a portion of its management fees for
SBHI for the six months ended April 30, 1996.
SBMFM has entered into a sub-advisory agreement with Putnam Investment
Management, Inc. ("PIM"). Pursuant to the sub-advisory agreement, PIM is
responsible for the day-to-day portfolio operations and investment decisions for
PDIP. SBMFM will pay PIM a monthly fee calculated at the annual rate of 0.35% of
the average daily net assets of PDIP.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares.
All officers and two Directors of the Fund are employees of SB.
33
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited) (continued)
3. Investments
During the six months ended April 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were:
Smith Barney Putnam
High Diversified
Income Income
=======================================================================
Purchases $36,297,663 $84,979,802
- -----------------------------------------------------------------------
Sales 16,317,659 60,789,024
=======================================================================
At April 30, 1996, the aggregate gross unrealized appreciation and
depreciation of investments for tax purposes were as follows:
Smith Barney Putnam
High Diversified
Income Income
==========================================================================
Gross unrealized appreciation $ 524,051 $ 591,517
Gross unrealized depreciation (402,345) (849,227)
- --------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 121,706 $(257,710)
==========================================================================
4. Capital Loss Carryforwards
At October 31, 1995, SBHI had for Federal income tax purposes approximately
$20,119 of unused loss carryforwards available to offset future capital gains.
To the extent that these carryforward losses are used to offset capital gains,
it is possible that the gains so offset will not be distributed. The amount and
expiration of the carryover amounts are indicated below. Expiration occurs on
October 31 of the year indicated:
2002 2003
==========================================================================
SBHI $6,715 $13,404
==========================================================================
5. Option Contracts
Premiums paid when put or call options are purchased by the Portfolios,
represent investments, which are marked-to-market daily. When a purchased option
expires, the Portfolios will realize a loss in the amount of the premium paid.
When the Portfolios enter into closing sales transaction, the Portfolios will
realize a gain or loss depending on whether the proceeds from the closing sales
transaction are greater or lesser than the premium paid for the option. When the
Portfolios exercise a put option, they will realize a gain or loss from the sale
of the
34
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited) (continued)
underlying security and the proceeds from such sale will be decreased by the
premium originally paid. When the Portfolios exercise a call option, the cost of
the security which the Portfolios purchase upon exercise will be increased by
the premium originally paid.
When the Portfolios write a call or put option, an amount equal to the
premium received by the Portfolios is recorded as a liability, the value of
which is marked-to-market daily. When a written option expires, the Portfolios
realize a gain equal to the amount of the premium received. When the Portfolios
enter into a closing purchase transaction, the Portfolios realize a gain (or
loss if the cost of the closing purchase transaction exceeds the premium
received when the option was sold) without regard to any unrealized gain or loss
on the underlying security, and the liability related to such option is
eliminated. When a call option is exercised the cost of the security sold will
be increased by the premium originally received. When a put option is exercised,
the amount of the premium originally received will reduce the cost of the
security which the Portfolios purchased upon exercise.
6. Forward Foreign Currency Contracts
At April 30, 1996, the PDIP had open forward foreign currency contracts as
described below. The Portfolio bears the market risk that arises from changes in
foreign currency exchange rates. The unrealized gain (loss) on the contracts is
reflected in the accompanying financial statements as follows:
Unrealized
Local Market Settlement Gain
Foreign Currency Currency Value Date (Loss)
=============================================================================
To Buy:
Canadian Dollar 522,700 $ 383,915 6/12/96 $ (1,842)
German Deutschemark 2,524,500 1,646,127 6/12/96 (45,250)
Danish Krone 1,900 321 6/12/96 (7)
Spanish Peseta 14,155,000 111,133 6/12/96 (3,557)
French Franc 4,185,000 808,335 6/12/96 (16,145)
Italian Lira 553,630,000 353,844 6/12/96 2,591
Japanese Yen 558,958,500 5,335,865 6/12/96 76,608
Swedish Krona 2,530,000 372,207 6/12/96 (2,775)
- -----------------------------------------------------------------------------
9,011,747 9,623
- -----------------------------------------------------------------------------
35
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited)(continued)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Market Settlement Unrealized
Foreign Currency Value Date Loss
==============================================================================
Cross Forwards:**
Buy Danish Krone vs
German Deutschemark 262,397 6/12/96 $ (14,090)
Buy British Pound vs
German Deutschemark 507,203 6/12/96 (208)
- ------------------------------------------------------------------------------
769,600 (14,298)
- ------------------------------------------------------------------------------
Market Value and Unrealized
Loss on Forward Foreign
Currency Contracts $ 9,781,347 $ (4,675)
==============================================================================
**Local Currency on Cross Forwards Buy Sell
- ------------------------------------------------------------------------------
Buy Danish Krone vs German Deutschemark 1,551,420 400,000
Buy British Pound vs German Deutschemark 338,000 778,267
Unrealized
Local Market Settlement Gain
Foreign Currency Currency Value Date (Loss)
==============================================================================
To Sell:
Austrian Dollar 1,466,500 $1,153,108 6/12/96 $ (22,550)
Canadian Dollar 705,000 517,811 6/12/96 (1,592)
German Deutschemark 4,531,500 2,954,812 6/12/96 87,409
Spanish Peseta 166,227,000 1,305,073 6/12/96 18,257
British Pound 527,000 790,816 6/12/96 11,265
Italian Lira 488,330,000 312,109 6/12/96 (1,760)
Japanese Yen 36,000,000 343,659 6/12/96 2,728
Swedish Krona 6,827,000 1,004,369 6/12/96 12,885
- ------------------------------------------------------------------------------
$ 8,381,757 $ 106,642
- ------------------------------------------------------------------------------
Cross Forwards:**
Sell German Deutschemark
vs Danish Krone 260,824 6/12/96 $ 15,662
Sell German Deutschemark
vs British Pound 507,477 6/12/96 (66)
- ------------------------------------------------------------------------------
768,301 15,596
- ------------------------------------------------------------------------------
Market Value and Unrealized Loss
on Forward Foreign Currency
Contracts $ 9,150,058 $ 122,238
==============================================================================
Total Market Value and Unrealized
Loss on Forward Foreign
Currency Contracts $ 18,931,405 $ 117,563
==============================================================================
**Local Currency on Cross Forwards Buy Sell
- ------------------------------------------------------------------------------
Sell German Deutschemark vs Danish Krone 1,551,420 400,000
Sell German Deutschemark vs British Pound 338,000 778,267
</TABLE>
36
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Notes to Financial Statements (unaudited) (continued)
7. Repurchase Agreements
The Portfolios purchase (and their custodian takes possession of) U.S.
Government Securities from banks and securities dealers subject to agreements to
resell the securities to the sellers at a future date (generally, the next
business day) at an agreed-upon higher repurchase price. The Portfolios require
continual maintenance of the market value of the collateral in amounts at least
equal to the repurchase price.
8. Capital Shares
At April 30, 1996, the Fund had six billion shares of $0.00001 par value
capital stock authorized. Each share of a Portfolio represents an equal
proportionate interest in that Portfolio with each share of the same Portfolio
and has an equal entitlement to any dividends and distributions made by the
Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1996 October 31, 1995
=================================================================
Smith Barney High Income
Shares sold 2,015,067 1,615,645
Shares issued on reinvestment 111,284 8,805
Shares redeemed (22,018) (146,026)
- -----------------------------------------------------------------
Net Increase 2,104,333 1,478,424
=================================================================
Putnam Diversified Income
Shares sold 2,237,568 2,096,498
Shares issued on reinvestment 163,407 7,771
Shares redeemed (33,448) (19,661)
- -----------------------------------------------------------------
Net Increase 2,367,527 2,084,608
=================================================================
37
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Financial Highlights
For a share of capital stock outstanding throughout each period:
Smith Barney High Income Portfolio 1996(1) 1995 1994(2)
===============================================================================
Net Asset Value, Beginning of Period $ 11.26 $ 10.07 $ 10.00
- -------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.56 0.93 0.29
Net realized and unrealized gain (loss) 0.10 0.48 (0.22)
- -------------------------------------------------------------------------------
Total Income from Operations 0.66 1.41 0.07
- -------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.50) (0.22) --
- -------------------------------------------------------------------------------
Total Distributions (0.50) (0.22) --
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.42 $ 11.26 $ 10.07
- -------------------------------------------------------------------------------
Total Return 5.96%++ 14.30% 0.70%++
- -------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 44,771 $20,450 $ 3,395
- -------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.70%+ 0.70% 0.69%+
Net investment income 4.83+ 9.54 7.55+
- -------------------------------------------------------------------------------
Portfolio Turnover Rate 45.93% 56.94% 14.74%
===============================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The manager has waived all or part of its fees for the six months ended
April 30, 1996, the year ended October 31, 1995. In addition, for the
period ended October 31, 1994 the manager waived all of its fees and
reimbursed expenses of $13,857. If such fees and expenses were not waived
or reimbursed, the per share decreases in net investment income and the
ratios of expenses to average net assets would have been as follows:
Per Share Decreases Expense Ratios
in Net Investment Income Without Fee Waivers*
------------------------------ ------------------------------
1996 1995 1994 1996 1995 1994
$0.003 $0.04 $0.07 0.74%+ 1.07% 2.60%+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
38
<PAGE>
Smith Barney/Travelers Series Fund Inc.
Financial Highlights (continued)
For a share of capital stock outstanding throughout each period:
Putnam Diversified Income Portfolio 1996(1) 1995 1994(2)
================================================================================
Net Asset Value, Beginning of Period $ 11.46 $ 10.18 $ 10.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.32 0.79 0.23
Net realized and unrealized gain (loss) 0.05 0.58 (0.05)
- --------------------------------------------------------------------------------
Total Income from Operations 0.37 1.37 0.18
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.39) (0.09) --
Net realized gains (0.13) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.52) (0.09) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.31 $ 11.46 $ 10.18
- --------------------------------------------------------------------------------
Total Return 3.23%++ 13.55% 1.80%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $57,850 $31,514 $ 6,763
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.95%+ 0.97% 0.98%+
Net investment income 7.30 + 7.53 6.14 +
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 144.17% 275.71% 20.02%
================================================================================
(1) For the six months ended April 30, 1996 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994 and has also reimbursed
expenses of $19,028 for the period ended October 31, 1994. If such fees and
expenses were not waived or reimbursed, the per share decreases in net
investment income and the ratios of expenses to average net assets would
have been as follows:
Per Share Decreases Expense Ratios
in Net Investment Income Without Fee Waivers
------------------------ ------------------------
1995 1994 1995 1994
---- ---- ---- ----
$0.04 $0.07 1.31% 2.92%+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
39
<PAGE>
SMITH BARNEY/TRAVELERS
SERIES FUND INC.
DIRECTORS
Victor K. Atkins
Jessica M. Bibliowicz
Alger B. Chapman
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
James M. Shuart
OFFICERS
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
John C. Bianchi
Vice President
James B. Conheady
Vice President
Martin Hanley
Vice President
Jeffrey J. Russel
Vice President
Bruce D. Sargent
Vice President
Phyllis Zahorodny
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
- ------------
A Member of TravelersGroup[LOGO]
INVESTMENT MANAGER
Smith Barney Mutual Funds
Management Inc.
DISTRIBUTOR
Smith Barney Inc.
CUSTODIAN
PNC Bank, N.A.
ANNUITY ADMINISTRATION
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Smith Barney/Travelers Series Fund Inc.-- Smith Barney High Income and Putnam
Diversified Income Portfolios. It is not authorized for distribution to
prospective investors unless accompanied or preceded by a current Prospectus for
the Portfolios, which contains information concerning the Portfolio's investment
policies and expenses as well as other pertinent information.
SMITH BARNEY/TRAVELERS
SERIES FUND INC.
388 Greenwich Street
New York, New York 10013
IN0805 6/96
New York, New York 10013
IN0802 6/96
