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[LOGO]
Travelers Series Fund Inc.
Smith Barney International
Equity Portfolio
Smith Barney Pacific
Basin Portfolio
GT Global Strategic
Income Portfolio
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SEMI-ANNUAL REPORT
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April 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Everyday.(SM)
<PAGE>
Travelers Series
Fund Inc.
[PHOTO]
Heath B.
McLendon
Chairman
Dear Shareholder:
We are pleased to provide the semi-annual report for the Travelers Series Fund
Inc. -- Smith Barney International Equity, Smith Barney Pacific Basin and GT
Global Strategic Income Portfolios ("Portfolios") for the period ended April 30,
1998. For your convenience, we have summarized the period's prevailing economic
and market conditions and outlined each Portfolio's investment strategy. A
detailed summary of performance and current holdings can be found in the
appropriate sections that follow.
Portfolio Highlights
Smith Barney International Equity Portfolio
For the six months ended April 30, 1998, the Smith Barney International Equity
Portfolio provided a total return of 12.17%. The MSCI EAFE Index had a return of
15.59% over the same period. (The Morgan Stanley Capital International ("MSCI")
EAFE Index is a composite portfolio consisting of equity total returns for the
countries of Europe, Australia, New Zealand and countries in the Far East.)
For much of the past three years the portfolio managers have materially
overweighted European stocks in the Portfolio, both in large and
mid-capitalization growth stocks. The strength of the U.S. dollar considerably
reduced unhedged returns in 1997, while the large capitalization stock market
bias so evident in the U.S. also caused large capitalization international
stocks to outperform smaller stocks. The Portfolio's emerging market (i.e.,
non-EAFE) exposure also did not contribute to returns during the year as the
emerging markets materially underperformed the developed markets.
The managers pursue a "bottom-up" approach to stock investing -- namely, they
look for promising companies and industries rather than trying to discover
investment opportunities based on the present or future condition of the global
economy, the financial markets or the performance of particular markets. They
seek companies growing at a faster rate to that of their local country. At the
same time, they strive to maintain a risk level no higher than that of the
overall international stock market through broad diversification in a variety of
markets.
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Travelers Series Fund Inc. 1
<PAGE>
In their view, three trends predominated in the international stock markets
during the latter stages of the reporting period:
o Large-capitalization stocks materially outperformed mid- and
small-capitalization stocks.
o The stock markets of relatively mature, developed economies
outperformed the more volatile and less liquid emerging markets.
o The strength of the U.S. dollar versus the currencies of the United
States' major trading partners largely negated returns earned in local
currencies.
The latter months of 1997 and early 1998 were marked by a sense of crisis in the
international markets. The Southeast Asian currency collapse radiated outward,
engulfing not only some of the strongest regional economies (such as Taiwan and
Singapore) but also ultimately crushing the Korean economy and its currency. In
Japan, the largest Asian stock market and economy and a major regional lender,
the crisis contributed to an already deteriorating local Japanese outlook.
The portfolio managers believe the Asian currency and economic collapse has
far-reaching and as yet not fully understood implications for global capital
markets. So far, rescue efforts have centered on creating stability and stemming
further precipitous declines in currencies and consumer and business confidence,
such as the feverish year-end efforts of the International Monetary Fund ("IMF")
and global banks to prevent a total collapse of the Korean financial system. In
light of this turmoil, the strength of the U.S. dollar and bond market, to some
degree, has reflected investor preferences for liquidity, stability and
strength.
But the intermediate effects of these financial woes on Asia cannot be denied:
economic contraction and decline, massive bankruptcies and debt restructurings
and reschedulings, potential labor and civil unrest, have all resulted in an
investment climate of much greater risk. Whether government and business policy
makers have the will and flexibility to make the correct rehabilitative choices
remains unanswerable and the managers believe another six to twelve months of
uncertainty in Asia appears very likely.
Moreover, European and U.S. companies may not escape untouched as their exports
to Asia decline. Furthermore, competitive Asian-produced goods are likely to
flood domestic markets now that prices (in U.S. dollars) have declined
substantially. While many U.S. companies have already used the Asian weakness as
an explanation for earnings shortfalls from consensus expectations in recent
reporting periods, the severity of the downturn should really be felt in 1998.
Yet, despite the number of bearish influences at work on the non-U.S. markets in
the past six months, there continue to be many positive developments such as:
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2 1998 Semi-Annual Report to Shareholders
<PAGE>
o The push for European monetary union has created favorable
macroeconomic conditions, the likes of which have not been seen for
two decades. Interest rates and inflation are and likely will remain
subdued, thus heightening demand for stocks from individuals and
institutions. Eleven countries have successfully reformed their
economies and qualified for the first round selections under the
European Monetary Union ("EMU").
o Corporations in Europe are restructuring with great relish, boosting
investor returns and for the first time aligning management interests
with external shareholder interests through equity incentives.
o The strengthening of the U.S. dollar against its major trading
partners of the past 30 months has improved export competitiveness for
many major European and Asian exporters and led to an upturn in the
consolidated European economy.
o Restructuring of many industries continues (such as in financial
services and pharmaceuticals), as well as improving economies of scale
and eliminating inefficient local and regional goods and service
providers. At the same time, innovative mid-size companies are finding
access to capital and an open door to technologies and processes that
lower costs for businesses and consumers.
Smith Barney Pacific Basin Portfolio
For the six months ended April 30, 1998, the Smith Barney Pacific Basin
Portfolio generated a total return of -7.21%. The Portfolio's total return
exceeded its Lipper Analytical Services Inc. fund peer group average of -8.90%
over the same period, making the Portfolio one of the best performing funds in
its class.
Asian markets (excluding Japan) rebounded sharply during the second quarter,
helping the Portfolio to catch up with its benchmark -- the MSCI All Country
Asia Pacific Index. The portfolio managers believe the worst of the financial
meltdown in Asia is over and that adjustments currently underway will lead to
economic recovery for most countries over the next 12-18 months. (The MSCI All
Country Asia Pacific Index, comprising equities in Australia, New Zealand, Japan
and the Far East, is a common benchmark against which the performance of Asian
funds is measured.)
After suffering a free-fall during the second half of 1997, Asian stock prices
continued to slide in January but finally hit bottom in February and rebounded
sharply. This rebound, while good news for battered Asian investors, was not so
much an indication of bright prospects for Asian economies as it was a relief
rally that the worst may be over. Positive political and economic developments
continued into March, and investors felt comfortable buying oversold Asian blue
chip companies.
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Travelers Series Fund Inc. 3
<PAGE>
Several events triggered the turnaround in market sentiment. First, initiatives
taken by the Korean and Thai governments in conjunction with the IMF brought
hope that necessary structural reforms would finally begin. The announcement of
the Korean bank deal in late January was an especially important signal. (The
Korean government announced that it agreed to guarantee the loans of local banks
and issue bonds, in exchange for foreign commercial banks agreeing to rollover
short-term loans to the banking system). Another important but less publicized
factor was China's decision not to devalue the renmenbi, easing fears of another
round of damaging currency falls in the region. Finally, the lack of runaway
inflation had a stabilizing effect, reducing the need for high interest rates
and keeping currencies at attractive levels in real terms.
The Japanese stock market was out of sync with the rest of Asia, rising 12% in
U.S. dollar terms during January while regional markets fell. Investors were
hopeful that the thirty trillion yen financial package (about $250-$300 billion
dollars) proposed by the government, to provide better support for depositors,
shore-up the banking system and ease capital adequacy controls, would finally
get the Japanese economy back on track. However, government unwillingness to
combine this package with tax cuts, deregulation and financial restructuring,
tarnished the long-term outlook for growth in the Japanese economy, and caused
investors to lose confidence. The stock market was flat in February and fell by
7% in March, just when the rest of Asia was rallying strongly.
The managers believe that the worst of Asia's crisis is probably over but the
pain of adjustment is only beginning to be felt. Recessions are unfolding across
Asia, with Indonesia (1998 GDP estimated to decline by 10%), Korea and Thailand
(projected -4% GDP declines each) hit the hardest by last years' contagion.
Malaysia, despite government efforts, is now expected to fall into recession and
the Philippines is struggling to maintain growth at just above zero. Hong Kong
and Singapore will be hit harder than expected, affected by the sharp slowdown
in neighboring countries, and China will not meet its 8% growth target.
Australia and New Zealand escaped the financial turmoil suffered by regional
neighbors, but their growth prospects will be undermined by slower trade.
The short-term outlook for Japan is also poor, with the economy increasingly
looking like it's headed into recession. Japan's long period of economic
stagnation and recent ineffective attempts at boosting the economy indicate that
a sustained recovery cannot be achieved without deep structural and, especially,
financial reform. This requires strong political will and the ability to suffer
through painful reforms in order to emerge with a clean, efficient and
reinvigorated economy. The Japanese government has preferred to maintain the
status quo, using low interest rates and other funds to stave off a meltdown,
but this has not solved the country's structural problems. This has important
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4 1998 Semi-Annual Report to Shareholders
<PAGE>
implications for the rest of Asia. First, a weak Japanese economy and yen pose a
double threat to Asian economies, since Japan is a major export destination as
well as the home of competitors and investors. Second, other countries would do
well to avoid the Japanese model and grasp the thorny nettles of reform as the
best way out of recession. Indeed, they will need to show progress in real
reform in order to attract the capital required for restructuring.
The portfolio managers expect most countries in Asia to suffer recession, or at
best slow growth, in 1998 as policy makers and corporations struggle through the
reform process. However, they are optimistic that these reform efforts will be
successful, and they look for growth in many countries to resume in the period
of 1999 through 2000. Going forward, we expect Asian stocks to perform strongly
next year.
First, while they remain skeptical of the Japanese government's efforts to
stimulate the economy, they find the Japanese stock market relatively less
volatile than other markets in the region at this time. Accordingly, the
managers have increased our exposure in select high quality Japanese companies.
Second, they believe that currency devaluations have made Asian products very
competitive in world markets and they expect exporters to thrive in the current
environment. In connection with this viewpoint, they have built positions in
selected exporters that are trading at very attractive levels currently and that
they expect can grow earnings by 15%-20% over the next few years.
Third, they are optimistic about the prospects for recovery in those countries
where governments are implementing reforms aggressively and working closely with
the IMF, including Thailand and Korea. At the same time, the managers are uneasy
with those countries where governments are resisting change and fighting with
the IMF, including Indonesia and Malaysia.
Fourth, the Pacific Basin is home to many world-class blue chip companies that
will survive the crisis and likely will emerge stronger as a result. However, it
is unrealistic to expect much in the way of performance from these companies
during 1998, as higher costs and slower economic growth will cause short-term
problems. The portfolio managers believe such companies will benefit in the long
run as they buy and consolidate weaker competitors, and that their shares should
be accumulated gradually. In the meantime, they have trimmed back holdings in
both Hong Kong and Singapore-based blue chips.
GT Global Strategic Income Portfolio
The investment objectives of the GT Global Strategic Income Portfolio are
primarily to seek high current income and secondarily to seek capital
appreciation. For the six months ended April 30, 1998, the Portfolio returned
5.43%, and
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Travelers Series Fund Inc. 5
<PAGE>
outperformed its Lipper Analytical Services Inc. peer group average of 3.84%
over the same period.
As you know, global and emerging market investing presents certain risks,
including risks related to currency fluctuations and political, economic and
social changes. In addition, investing in emerging market debt instruments
involves special considerations including the risk of default. These risks may
decrease the value of securities held by the Portfolio. The Portfolio may also
invest up to 50% of its total assets in debt securities rated below investment
grade. Such investments are speculative and involve a high degree of risk,
including the risk of default, and generally have more volatile prices than
higher quality securities.
After the first quarter of 1998, the portfolio managers outlook for bond markets
continues to be positive. Although the U.S. bond market may not surpass its
historic lows, the managers believe it is unlikely to reverse significantly, as
fundamentals remain positive. In Europe, they believe bonds will continue to
outperform in the near term as strong fundamentals argue for sustained lower
yields. While the portfolio managers believe that emerging bonds represent
reasonable value, they do recognize that political setbacks or adverse
developments in Eastern Asian financial markets could have an adverse impact.
They are, therefore, investing cautiously and selectively.
In closing, thank you for investing in the Smith Barney International Equity,
Smith Barney Pacific Basin and G.T. Global Strategic Income Portfolios. We look
forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 18, 1998
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6 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
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Smith Barney International Equity Portfolio
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Historical Performance
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Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $13.23 $14.84 $0.00 $0.00 12.17%++
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10/31/97 12.18 13.23 0.01 0.00 8.73
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10/31/96 10.48 12.18 0.01 0.00 16.36
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10/31/95 10.55 10.48 0.00 0.00 (0.66)
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6/16/94*-10/31/94 10.00 10.55 0.00 0.00 5.50++
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Total $0.02 $0.00
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<CAPTION>
================================================================================
Smith Barney Pacific Basin Portfolio
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Historical Performance
================================================================================
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<C> <C> <C> <C> <C> <C>
4/30/98 $ 8.04 $ 7.46 $0.00 $0.00 (7.21)%++
- --------------------------------------------------------------------------------
10/31/97 9.75 8.04 0.06 0.00 (17.02)
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10/31/96 8.95 9.75 0.03 0.00 9.26
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10/31/95 10.10 8.95 0.00 0.00 (11.39)
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6/16/94*-10/31/94 10.00 10.10 0.00 0.00 1.00++
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Total $0.09 $0.00
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<CAPTION>
================================================================================
GT Global Strategic Income Portfolio
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Historical Performance
================================================================================
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<C> <C> <C> <C> <C> <C>
4/30/98 $12.52 $13.20 $0.00 $0.00 5.43%++
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10/31/97 12.45 12.52 0.46 0.58 9.32
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10/31/96 10.77 12.45 0.42 0.00 20.07
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10/31/95 9.95 10.77 0.10 0.00 9.37
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6/16/94*-10/31/94 10.00 9.95 0.00 0.00 (0.50)++
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Total $0.98 $0.58
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</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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Travelers Series Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Average Annual Total Return+
================================================================================
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C>
Six Months Ended 4/30/98++ 12.17% (7.21)% 5.43%
- --------------------------------------------------------------------------------
Year Ended 4/30/98 17.78 (26.65) 11.39
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6/16/94* through 4/30/98 10.79 (7.06) 11.15
================================================================================
<CAPTION>
================================================================================
Cumulative Total Return+
================================================================================
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
<C> <C> <C> <C>
6/16/94* through 4/30/98 48.72% (24.71)% 50.60%
================================================================================
</TABLE>
+ 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.
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8 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
Smith Barney International Equity Portfolio vs.
MSCI EAFE-GDP Weighted Index and MSCI EAFE Index+
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June 1994 -- April 1998
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Smith Barney Morgan Stanley MSCI
International Equity EAFE-Weighted Index EAFE Index++
-------------------- ------------------- ------------
<S> <C> <C> <C>
6/16/94 $10,000 $10,000 $10,000
10/94 $10,550 $10,345 $10,443
4/95 $ 9,610 $10,585 $10,588
10/95 $10,480 $10,398 $10,436
4/96 $11,884 $11,749 $11,832
10/96 $12,194 $11,533 $11,563
4/97 $12,628 $12,015 $11,762
10/97 $13,259 $12,546 $12,133
4/30/98 $14,872 $15,118 $14,024
</TABLE>
+ 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, 1998. The Morgan Stanley Capital
International ("MSCI") EAFE-GDP Weighted Index and the MSCI EAFE Index are
composite portfolios consisting of equity total returns for the countries
of Europe, Australia, New Zealand and the Far East. The MSCI EAFE-GDP
Weighted Index is weighted based on each country's Gross Domestic Product
and the MSCI EAFE Index is weighted based on each company's market
capitalization. The indices 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.
++ It is the opinion of management that the MSCI EAFE Index is a more
appropriate broad-based benchmark for the market in which the Portfolio
invests than the MSCI EAFE-GDP Weighted Index. In future reporting, the
MSCI EAFE Index will be used as a basis of comparison of total return
performance rather than the MSCI EAFE-GDP Weighted Index.
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Travelers Series Fund Inc. 9
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
Smith Barney Pacific Basin Portfolio vs.
MSCI Pacific Index+
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June 1994 -- April 1998
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Pacific Basin MSCI Pacific Index
------------- ------------------
<S> <C> <C>
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
10/96 $ 9,779 $ 9,136
4/97 $10,264 $ 8,188
10/97 $ 8,114 $ 7,353
4/30/98 $ 7,529 $ 6,726
</TABLE>
+ 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, 1998. The Morgan Stanley Capital International
("MSCI") 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.
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10 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
GT Global Strategic Income Portfolio vs.
J.P. Morgan Global Bond Index+
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June 1994 -- April 1998
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
G.T. Global JP Morgan Global Bond
Strategic Income Index -- Unhedged
---------------- -----------------
<S> <C> <C>
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
4/96 $11,660 $12,009
10/96 $13,055 $12,716
4/97 $13,519 $12,238
10/97 $14,284 $13,161
4/30/98 $15,060 $13,319
</TABLE>
+ 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, 1998. The J.P. Morgan Global Bond Index-Unhedged 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.
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Travelers Series Fund Inc. 11
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) April 30, 1998
================================================================================
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
STOCKS -- 91.7%
================================================================================
<S> <C> <C>
Australia -- 1.9%
460,499 Coca-Cola Amatil Ltd.(a) $ 3,512,875
1,000,000 Portman Mining Ltd. 1,369,202
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4,882,077
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Austria -- 1.0%
40,000 Wolford AG(a) 2,695,892
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Brazil -- 2.9%
30,000 Telecomunicacoes Brasileiras S.A. - Telebras ADR 3,654,375
100,000 Uniao de Banco Brasileiros S.A. GDR(a) 3,975,000
- --------------------------------------------------------------------------------
7,629,375
- --------------------------------------------------------------------------------
Cayman Islands -- 2.2%
150,000 Santa Fe International Corp. 5,878,125
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Finland -- 2.5%
100,000 Nokia OYJ, Class A Shares(a) 6,687,500
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France -- 7.5%
100,000 Companie Generale de Geophyisque S.A. ADR 2,875,000
20,000 Le Carbone Lorraine(a) 8,192,362
75,000 Schlumberger Ltd.(a) 6,215,625
32,150 Sidel S.A. 2,457,542
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19,740,529
- --------------------------------------------------------------------------------
Germany -- 9.0%
50,000 Leica Camera AG 835,887
15,000 Systeme Anwendungen,
Produkte in der Datenverabeitung Preferred(a) 7,497,910
35,000 Systeme Anwendungen,
Produkte in der Datenverabeitung Preferred ADR 5,812,894
35,000 SGL Carbon AG 3,708,693
10,000 Volkswagen AG Preferred 5,895,792
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23,751,176
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Hong Kong -- 2.6%
157,869 HSBC Holdings PLC(a) 4,504,137
400,000 Hutchison Whampoa Ltd. 2,473,534
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6,977,671
- --------------------------------------------------------------------------------
Ireland -- 7.3%
288,908 Bank of Ireland 5,863,371
549,998 Independent Newspapers PLC 3,321,617
253,184 Irish Continental Group PLC 4,587,182
600,000 Irish Life PLC 5,570,224
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19,342,394
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
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12 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Israel -- 1.6%
100,000 Teva Pharmaceutical Industries Ltd. ADR(a) $ 4,275,000
- --------------------------------------------------------------------------------
Italy -- 6.4%
500,000 Alleanza Assicurazioni(a) 6,305,200
1,600,000 Istituto Nazionale delle Assicurazioni(a) 4,771,240
1,000,000 Telecom Italia Mobile S.p.A.(a) 5,727,023
- --------------------------------------------------------------------------------
16,803,463
- --------------------------------------------------------------------------------
Japan -- 7.3%
142,000 Canon, Inc. 3,363,808
59,000 Meitec 1,942,405
49,000 Noritsu Koki Co. Ltd. 1,464,845
85 NTT Data Corp.(a) 3,679,709
44,000 Sony Corp. 3,666,389
71,000 Sumitomo Realty & Development Co., Ltd. 341,216
316,000 Terumo Corp.(a) 4,634,889
- --------------------------------------------------------------------------------
19,093,261
- --------------------------------------------------------------------------------
Mexico -- 0.2%
183,170 Gruma S.A., Class B Shares+ 420,301
- --------------------------------------------------------------------------------
Netherlands -- 7.7%
161,512 Getronics N.V. 7,146,336
82,096 Hunter Douglas N.V. 4,002,205
65,793 IHC Caland N.V. 3,829,377
300,000 ING Groep N.V. Warrants, Expire 3/15/01+ 5,434,298
- --------------------------------------------------------------------------------
20,412,216
- --------------------------------------------------------------------------------
Norway -- 2.2%
180,000 Tomra Systems ASA 5,792,359
- --------------------------------------------------------------------------------
Panama -- 1.5%
100,000 Panamerican Beverages Inc., Class A Shares(a) 3,987,500
- --------------------------------------------------------------------------------
Singapore -- 0.4%
900,000 Singapore Technologies Industrial Corp.(a) 1,051,468
- --------------------------------------------------------------------------------
South Africa -- 1.8%
429,562 Dimension Data Holdings Ltd. 2,981,830
20,340 South African Breweries Ltd. 682,247
31,345 South African Breweries Ltd. ADR+(a) 1,046,139
- --------------------------------------------------------------------------------
4,710,216
- --------------------------------------------------------------------------------
Spain -- 3.1%
60,000 Banco Popular Espanol S.A. 4,920,775
75,000 Telefonica de Espana 3,129,613
75,000 Telefonica de Espana Rights, Expire 5/7/98+ 58,065
- --------------------------------------------------------------------------------
8,108,453
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Sweden -- 5.5%
50,000 Astra AB, Class A Shares(a) $ 1,027,291
66,667 Astra AB, Class B Shares(a) 1,326,655
75,000 Autoliv Inc. 2,226,562
85,000 Munters AB 961,066
100,000 Nobel Biocare AB 1,305,111
150,000 Ortivus AB-B Shares 2,519,770
100,000 Telefonaktiebolaget LM Ericsson, Class B Shares(a) 5,272,135
- --------------------------------------------------------------------------------
14,638,590
- --------------------------------------------------------------------------------
Switzerland -- 4.4%
125,000 Mettler-Toledo International Inc.+ 2,515,625
3,100 Novartis AG, Registered Shares 5,125,675
400 Roche Holding AG Genuss 4,054,937
- --------------------------------------------------------------------------------
11,696,237
- --------------------------------------------------------------------------------
United Kingdom -- 12.7%
30,000 Arm Holdings PLC+ 412,563
200,000 Bodycote International PLC 4,012,774
600,000 Boxmore International PLC 2,994,532
400,000 Compass Group PLC 6,922,035
275,000 Hays PLC 4,701,424
155,995 Misys PLC 7,459,507
359,000 Serco Group PLC 7,094,885
- --------------------------------------------------------------------------------
33,597,720
- --------------------------------------------------------------------------------
TOTAL STOCKS
(Cost-- $175,073,806) 242,171,523
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 8.3%
$21,936,000 CIBC Wood Gundy Securities Inc., 5.400% due
5/1/98; Proceeds at maturity -- $21,939,290;
(Fully collateralized by U.S. Treasury Notes,
6.375% due 8/15/99; Market value --
$22,376,213) (Cost -- $21,936,000) 21,936,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $197,009,806*) $264,107,523
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITIES VALUE
================================================================================
<S> <C> <C>
STOCKS -- 96.6%
Australia -- 7.2%
63,022 Australian Gas Light Co., Ltd. $ 468,924
54,030 Coca-Cola Amatil Ltd.(a) 412,164
50,000 Leighton Holdings Ltd. 190,710
- --------------------------------------------------------------------------------
1,071,798
- --------------------------------------------------------------------------------
Hong Kong -- 13.0%
308,000 Hong Kong and China Gas Co., Ltd. 419,493
14,000 Hong Kong China Warrants, Expire 9/30/99+ 0
5,451 HSBC Holdings PLC(a) 155,521
73,000 Hutchison Whampoa Ltd. 451,421
35,000 Shanghai Industrial Holdings Ltd.(a) 119,966
62,000 Smartone Telecommunications 162,884
175,000 VTech Holdings Ltd. 614,511
- --------------------------------------------------------------------------------
1,923,796
- --------------------------------------------------------------------------------
Indonesia -- 0.0%
69,000 PT Fiskaragung Perkasa 4,486
- --------------------------------------------------------------------------------
Japan -- 49.7%
4,200 Aiful Corp. 278,453
12,000 C. Uyemura & Co. Ltd. 317,869
200 H.I.S. Co. Ltd. 3,148
19,000 Meitec 625,521
50,000 Minebea Co., Ltd.(a) 560,055
19,000 Murata Manufacturing Co., Ltd. 557,936
5,500 Nichiei Co., Ltd. 428,744
83,000 Nikko Securities Co., Ltd.(a) 253,152
18,000 Noritsu Koki Co., Ltd. 538,107
6 NTT Data Corp. 259,745
10,000 Orix Corp. 692,499
8,000 Seven-Eleven Japan Co., Ltd. 535,836
2,100 Shohkoh Fund & Co., Ltd. 669,114
9,800 Sony Corp. 816,605
22,000 Sumitomo Realty & Development Co., Ltd. 105,729
5,000 Takefuji Corp. 262,999
32,000 Terumo Corp.(a) 469,356
- --------------------------------------------------------------------------------
7,374,868
- --------------------------------------------------------------------------------
Malaysia -- 2.4%
154,000 Kuala Lumpur Kepong Berhad 356,176
- --------------------------------------------------------------------------------
Philippines -- 1.3%
371,000 SPI Technologies Inc. 191,737
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITIES VALUE
================================================================================
<S> <C> <C>
Singapore -- 7.7%
135,000 Datacraft Asia Ltd. $ 453,600
340,000 JIT Holdings Ltd.+ 276,981
115,000 Venture Manufacturing Ltd. 417,587
- --------------------------------------------------------------------------------
1,148,168
- --------------------------------------------------------------------------------
South Korea -- 4.7%
3,400 Samsung Display Devices Co. 169,174
492 Samsung Display Devices Co. Rights, Expire 5/13/98+ 8,471
622 Samsung Fire & Marine Insurance 183,830
15,000 Youngone Corp. 342,313
- --------------------------------------------------------------------------------
703,788
- --------------------------------------------------------------------------------
Taiwan -- 3.7%
11,000 Asustek Computer Inc.+ 224,173
451,000 Bank Sinopac+ 328,253
- --------------------------------------------------------------------------------
552,426
- --------------------------------------------------------------------------------
Thailand -- 6.9%
40,000 Delta Electronics PLC 388,882
20,000 Delta Electronics PLC Rights, Expire 5/15/98+ 189,269
131,000 GSS Array Technology PLC+ 447,110
- --------------------------------------------------------------------------------
1,025,261
- --------------------------------------------------------------------------------
TOTAL STOCKS
(Cost-- $13,861,070) 14,352,504
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
FOREIGN BONDS -- 3.4%
Philippines -- 1.3%
$ 215,000 International Container Terminal, 1.750% due 3/13/04 188,125
- --------------------------------------------------------------------------------
Thailand -- 2.1%
355,000 Tipco Asphalt Co., 2.750% due 9/19/06 305,300
- --------------------------------------------------------------------------------
TOTAL FOREIGN BONDS
(Cost-- $440,851) 493,425
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $14,301,921*) $14,845,929
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
<S> <C> <C>
BONDS -- 90.0%
Algeria -- 0.6%
250,000 Algeria Tranche 1R, 6.688% due 9/4/06 $ 193,750
- --------------------------------------------------------------------------------
Argentina -- 5.8%
333,000 Argentina, 9.750% due 9/19/27(a) 316,936
205,000 Argentina - Discount, 6.875% due 3/31/23(b) 175,533
141,000 Banco Hipotecario SA, 10.000% due 4/17/03(c) 141,881
59,000 Mastellone Hermanos SA, 11.750% due 4/1/08(c) 60,918
Republic of Argentina:
194,750 FRB, 6.625% due 3/31/05(b) 178,269
775,000 Global Bond, 11.375% due 1/30/17 851,940
150,000 Par, 5.750% due 3/31/23(b) 114,282
- --------------------------------------------------------------------------------
1,839,759
- --------------------------------------------------------------------------------
Australia -- 1.8%
780,000 Australian Government, 7.500% due 9/15/09 573,611
- --------------------------------------------------------------------------------
Brazil -- 5.3%
363,000 Banco Do Brazil, 9.375% due 6/15/07 357,954
192,000 Brazil DCB L, 6.6875% due 4/15/12(b) 150,931
100,000 Comtel Brasileira Ltda, 10.750% due 9/26/04(c) 102,500
185,000 Republic of Brazil Par Z-L, 5.500% due 4/15/24(b) 134,865
1,155,923 Republic of Brazil C Bond, 8.000% due 4/15/14(d) 957,971
- --------------------------------------------------------------------------------
1,704,221
- --------------------------------------------------------------------------------
Bulgaria -- 1.3%
322,000 Bulgaria FLIRB Series A, 2.250% due 7/28/12(b) 216,143
264,000 Bulgaria IAB Series PDI, 6.5625% due 7/28/11(b) 208,726
- --------------------------------------------------------------------------------
424,869
- --------------------------------------------------------------------------------
Canada -- 1.1%
310,000 Canada Government, 8.000% due 6/1/27 287,916
60,000 Trench Electric, 10.250% due 12/15/07(c) 61,200
- --------------------------------------------------------------------------------
349,116
- --------------------------------------------------------------------------------
China -- 0.3%
100,000 Greater Beijing First, 9.500% due 6/15/07(c) 81,600
- --------------------------------------------------------------------------------
Croatia -- 0.6%
230,000 Croatia, 6.500% due 7/31/10(b) 204,700
- --------------------------------------------------------------------------------
Denmark -- 2.7%
Kingdom of Denmark Bullet:
2,200,000 7.000% due 12/15/04 354,954
3,000,000 7.000% due 11/10/24 512,480
8,000 Realkredit Danmark, 6.000% due 10/1/26 1,150
- --------------------------------------------------------------------------------
868,584
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
<S> <C> <C>
Ecuador -- 0.7% Ecuador PDI:
189,154 Bearer, 6.625% due 2/27/15(b)(d) $ 121,531
176,915 Registered, 6.625% due 2/27/15(b)(d) 113,668
- --------------------------------------------------------------------------------
235,199
- --------------------------------------------------------------------------------
Germany -- 8.4%
Bundesrepublik Deutscheland:
2,875,000 6.000% due 1/5/06 1,703,692
550,000 6.250% due 1/4/24 334,076
1,030,000 Treuhandanstalt, 7.125% due 1/29/03 631,718
- --------------------------------------------------------------------------------
2,669,486
- --------------------------------------------------------------------------------
Hong Kong -- 0.5%
100,000 GS Superhighway Holdings, 9.875% due 8/15/04(c) 86,000
100,000 Road King Infrastructure, 9.500% due 7/15/07(c) 81,100
- --------------------------------------------------------------------------------
167,100
- --------------------------------------------------------------------------------
Italy -- 2.5%
Buoni Poliennali Del Tesoro:
220,000,000 8.500% due 1/1/04 145,425
950,000,000 7.250% due 11/1/26 654,725
- --------------------------------------------------------------------------------
800,150
- --------------------------------------------------------------------------------
Jamaica -- 0.1%
37,000 Mechala Group, 12.750% due 12/30/99 34,040
- --------------------------------------------------------------------------------
Jordan -- 0.6%
250,000 Jordan Par, 5.000% due 12/23/23(b) 176,250
- --------------------------------------------------------------------------------
Malaysia -- 0.5%
Petroliam Nasional:
147,000 7.125% due 8/15/05(c) 138,915
29,000 7.625% due 10/15/26(c) 24,853
- --------------------------------------------------------------------------------
163,768
- --------------------------------------------------------------------------------
Mexico -- 4.2%
3,500,000 Mexican Cetes, zero coupon due 12/17/98 365,460
197,000 Monterrey Power SA De CV, 9.625 due 11/15/09(c) 197,000
Petroleos Mexicanos:
745,000 9.250% due 3/30/18(c) 725,474
62,000 9.500% due 9/15/27(c) 61,380
1,000 United Mexican States Value Recovery Rights,
Expire 6/30/03+ 0
- --------------------------------------------------------------------------------
1,349,314
- --------------------------------------------------------------------------------
Netherlands -- 0.5%
300,000 Netherlands Government, 5.500% due 1/15/28 146,696
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
<S> <C> <C>
New Zealand -- 1.9%
600,000 New Zealand Goverment, 8.000% due 4/15/04 $ 347,181
500,000 Federal National Mortgage Association,
7.250% due 6/20/02 272,120
- --------------------------------------------------------------------------------
619,301
- --------------------------------------------------------------------------------
Nigeria -- 0.0%
250 Central Bank of Nigeria Warrants, Expire 11/15/20+ 0
- --------------------------------------------------------------------------------
Panama -- 1.2%
147,000 Panama IRB, 3.750% due 7/17/14(b) 115,488
267,000 Panama, 8.875% due 9/30/27 266,268
- --------------------------------------------------------------------------------
381,756
- --------------------------------------------------------------------------------
Peru -- 0.6%
292,000 Peru PDI, 4.000% due 3/7/17(b) 199,108
- --------------------------------------------------------------------------------
Philippines -- 0.3%
110,000 Republic of Philippines, 8.875% due 04/15/08 108,349
- --------------------------------------------------------------------------------
Russia -- 4.5%
Ministry of Finance Russia:
95,000 3.000% due 5/14/06(c) 55,931
160,000 3.000% due 5/14/11(c) 76,501
65,000 Mosenergo Finance BV, 8.375% due 10/9/02(c) 57,525
402,679 Russian Ian, 6.71875% due 12/15/15(b) 290,180
1,483,281 Russian Principal Loan, 6.71875% due 12/15/20(b)(d) 943,154
- --------------------------------------------------------------------------------
1,423,291
- --------------------------------------------------------------------------------
South Africa -- 2.2%
124,000 Electricity Supply Comm., 11.000% due 6/1/08 21,743
Republic of South Africa:
2,200,000 12.500% due 1/15/02 434,632
1,200,000 13.000% due 8/31/10 237,459
- --------------------------------------------------------------------------------
693,834
- --------------------------------------------------------------------------------
South Korea -- 5.8%
170,000 Export-Import Bank Korea, 6.500% due 10/6/99 163,130
2,500,000 Korea Development Bank, 4.350% due 5/25/99 18,590
190,000 Korea Electric Power, 7.000% due 2/1/27 163,286
9,000,000 Pohang Iron & Steel, 2.000% due 10/9/00 60,990
1,475,000 Republic of Korea, 8.875% due 4/15/08 1,439,585
- --------------------------------------------------------------------------------
1,845,581
- --------------------------------------------------------------------------------
Sweden -- 0.6%
1,300,000 Swedish Government, 8.000% due 8/15/07 200,080
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
<S> <C> <C>
United Kingdom -- 8.8%
890,000 United Kingdom Conversion, 9.500% due 4/18/05 $ 1,781,034
555,000 United Kingdom Treasury, 7.500% due 12/07/06 1,027,129
- --------------------------------------------------------------------------------
2,808,163
- --------------------------------------------------------------------------------
United States -- 25.0%
U.S. Treasury Note:
2,110,000 6.500% due 10/15/06 2,211,808
300,000 6.625% due 5/15/07 318,072
1,880,000 U.S. Treasury Bond, 6.875% due 8/15/25 2,091,124
150,000 Accuride Corp., 9.250% due 2/1/08(c) 150,750
60,000 Allbritton Communication, 8.875% due 2/1/08 60,450
60,000 Anker Coal Group Inc., 9.750% due 10/1/07 58,350
60,000 BTI Telecom Corp., 10.500% due 9/15/07 62,400
100,000 Chancellor Media Corp., 8.125% due 12/15/07(c) 100,375
95,000 Chase Manhattan, 6.250% due 1/15/06 93,931
100,000 Drypers Corp., 10.250% due 6/15/07 104,250
60,000 Duane Reade Inc., 9.250% due 2/15/08 61,125
65,000 Eagle Family Foods, 8.750% due 1/15/08(c) 64,513
330,000 General Motors Acceptance Corp., 6.625% due 10/15/05 334,950
175,000 GlobalStar LP, 11.375% due 2/15/04 180,250
150,000 Graham Packaging, 8.750% due 01/15/08(c) 151,500
60,000 Hard Rock Hotel Inc., 9.250% due 4/1/05 61,425
150,000 Hollywood Casino Corp., 12.750% due 11/1/03 165,750
170,000 JPM Structured Note, 1.500% due 2/12/02 169,150
150,000 Lin Television, 8.375% due 3/1/08(c) 150,188
60,000 Penn International Gaming Inc., 10.625% due 12/15/04(c) 63,075
30,000 Pillowtex corp., 9.000% due 12/15/07 31,088
60,000 Revlon Consumer Products, 8.625% due 2/1/08(c) 60,000
150,000 Riddell Sports Inc., 10.500% due 07/15/07 158,810
150,000 Smithfield Foods Inc., 7.625 due 2/15/08(c) 148,500
60,000 Syratech Corp., 11.000% due 04/15/07 54,000
150,000 Trump Atlantic City, 11.250% due 5/1/06 150,000
700,000 United Stationers Supply, 8.375% due 4/15/08(c) 705,250
- --------------------------------------------------------------------------------
7,961,084
- --------------------------------------------------------------------------------
Venezuela -- 1.6%
1,250 Republic of Venezuela - Oil Warrants, Expire 4/15/20+ 0
573,000 Venezuela, 9.250% due 9/15/27 499,943
- --------------------------------------------------------------------------------
499,943
- --------------------------------------------------------------------------------
TOTAL BONDS
(Cost-- $28,176,318) 28,722,703
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
<S> <C> <C>
CONVERTIBLE BOND -- 0.3%
Russia -- 0.3%
72,000 Lukinter Finance, 3.500% due 5/6/02(c)
(Cost--$73,148) $ 86,760
================================================================================
REPURCHASE AGREEMENT -- 9.7%
$ 3,090,000 CIBC Wood Gundy Securities, 5.400% due 5/1/98;
Proceeds at maturity--$3,090,464; (Fully collateralized
by U.S. Treasury Note, 6.375% due 8/15/99;
Market value--$3,152,338) (Cost--$3,090,000) 3,090,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $31,339,466*) $31,899,463
================================================================================
</TABLE>
(a) A portion of this security is on loan (See Note 9).
(b) Represents current rate on floating rate security.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(d) Effective rate at period end including "payment in kind" bonds.
+ Non-income producing security.
++ Represents local currency.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================
Statements of Assets and Liabilities (unaudited) April 30, 1998
==============================================================================================
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
==============================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $197,009,806, $14,301,921,
and $31,339,466) $264,107,523 $14,845,929 $31,899,463
Foreign currency (Cost-- $1,280,853,
$16,354, and $448,090) 1,278,339 16,074 446,391
Cash -- 614,770 92,125
Collateral for securities loaned (Note 9) 56,381,155 1,526,891 255,000
Receivable for securities sold 867,197 -- 1,274,673
Receivable for open forward foreign
currency contracts (Note 5) 457 705 76,769
Dividends and interest receivable 483,918 65,147 497,574
- ----------------------------------------------------------------------------------------------
Total Assets 323,118,589 17,069,516 34,541,995
- ----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities loaned (Note 9) 56,381,155 1,526,891 255,000
Payable for securities purchased 3,050,192 248,301 1,925,109
Management fees payable 186,184 11,399 21,102
Payable to bank 21,363 -- --
Payable for open forward foreign
currency contracts (Note 5) 2,481 -- 30,638
Accrued expenses 118,516 42,088 31,746
- ----------------------------------------------------------------------------------------------
Total Liabilities 59,759,891 1,828,679 2,263,595
- ----------------------------------------------------------------------------------------------
Total Net Assets $263,358,698 $15,240,837 $32,278,400
==============================================================================================
NET ASSETS:
Par value of capital shares $ 177 $ 20 $ 24
Capital paid in excess of par value 207,527,346 19,413,838 27,579,959
Undistributed (overdistributed)
net investment income 327,965 (118,970) 2,387,558
Accumulated net realized gain (loss) from
security transactions and options (11,604,229) (4,602,260) 1,723,685
Net unrealized appreciation of investments
and foreign currencies 67,107,439 548,209 587,174
- ----------------------------------------------------------------------------------------------
Total Net Assets $263,358,698 $15,240,837 $32,278,400
==============================================================================================
Shares Outstanding 17,743,287 2,042,173 2,445,721
- ----------------------------------------------------------------------------------------------
Net Asset Value $ 14.84 $ 7.46 $ 13.20
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================
Statements of Operations (unaudited)
==============================================================================================
For the Six Months Ended April 30, 1998
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
==============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,076,710 $ 114,390 --
Interest 429,712 30,747 $ 1,382,626
Less: Foreign withholding tax (103,592) (11,113) --
- ----------------------------------------------------------------------------------------------
Total Investment Income 1,402,830 134,024 1,382,626
- ----------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,001,700 69,461 123,063
Custody 62,744 33,313 16,983
Shareholder communications 13,269 2,248 2,445
Audit and legal 10,712 7,300 7,182
Directors' fees 5,656 1,953 2,074
Shareholder and system servicing fees 4,120 3,533 3,329
Registration fees 1,207 447 --
Other 5,843 3,291 1,962
- ----------------------------------------------------------------------------------------------
Total Expenses 1,105,251 121,546 157,038
- ----------------------------------------------------------------------------------------------
Net Investment Income 297,579 12,478 1,225,588
- ----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, OPTIONS AND FOREIGN
CURRENCIES (NOTES 3, 5 AND 7):
Realized Gain (Loss) From:
Security transactions
(excluding securites transactions) (8,029,064) (2,296,434) 248,873
Options purchased -- -- (30,492)
Foreign currency transactions 30,386 (75,079) (454,577)
- ----------------------------------------------------------------------------------------------
Net Realized Loss (7,998,678) (2,371,513) (236,196)
- ----------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of period 31,667,556 (861,899) (64,516)
End of period 67,107,439 548,209 587,174
- ----------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 35,439,883 1,410,108 651,690
- ----------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments, Options
and Foreign Currencies 27,441,205 (961,405) 415,494
- ----------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations $27,738,784 $ (948,927) $ 1,641,082
==============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
Smith Barney International Equity Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 297,579 $ 175,643
Net realized loss (7,998,678) (2,851,789)
Increase in net unrealized appreciation 35,439,883 16,129,028
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 27,738,784 13,452,882
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (160,617)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (160,617)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 126,915,363 155,537,213
Net asset value of shares issued
for reinvestment of dividends -- 160,617
Cost of shares reacquired (110,332,842) (93,275,280)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 16,582,521 62,422,550
- --------------------------------------------------------------------------------
Increase in Net Assets 44,321,305 75,714,815
NET ASSETS:
Beginning of period 219,037,393 143,322,578
- --------------------------------------------------------------------------------
End of period* $ 263,358,698 $219,037,393
================================================================================
* Includes undistributed net investment
income of: $ 327,965 --
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
Smith Barney Pacific Basin Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 12,478 $ (15,530)
Net realized loss (2,371,513) (1,589,752)
Increase in net unrealized appreciation
(depreciation) 1,410,108 (1,675,319)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Operations (948,927) (3,280,601)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (111,296)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (111,296)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 25,644,178 38,889,543
Net asset value of shares issued
for reinvestment of dividends -- 111,296
Cost of shares reacquired (27,678,985) (34,041,446)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (2,034,807) 4,959,393
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (2,983,734) 1,567,496
NET ASSETS:
Beginning of period 18,224,571 16,657,075
- --------------------------------------------------------------------------------
End of period* $ 15,240,837 $ 18,224,571
================================================================================
* Includes overdistributed net investment
income of: $ (118,970) $ (56,369)
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
GT Global Strategic Income Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,225,588 $ 1,524,677
Net realized gain (loss) (236,196) 1,632,260
Increase in net unrealized appreciation
(depreciation 651,690 (1,113,109)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,641,082 2,043,828
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (782,233)
Net realized gains -- (963,673)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (1,745,906)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 3,336,792 10,442,393
Net asset value of shares issued
for reinvestment of dividends -- 1,746,011
Cost of shares reacquired (1,931,165) (2,406,873)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,405,627 9,781,531
- --------------------------------------------------------------------------------
Increase in Net Assets 3,046,709 10,079,453
NET ASSETS:
Beginning of period 29,231,691 19,152,238
- --------------------------------------------------------------------------------
End of period* $ 32,278,400 $ 29,231,691
================================================================================
* Includes undistributed net investment
income of: $ 2,387,558 $ 1,616,547
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The Smith Barney International Equity, Smith Barney Pacific Basin and GT Global
Strategic Income Portfolios ("Portfolio(s)") are separate investment portfolios
of the 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, MFS Total Return, Putnam Diversified Income,
Smith Barney High Income, Smith Barney Large Cap Value (formerly known as Smith
Barney Income and Growth Portfolio), Smith Barney Money Market, Smith Barney
Large Capitalization Growth, 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 sales price was reported on that date are valued at the mean between
the bid and asked 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, which approximates value; (d) gains or losses on the sale of securities
are calculated by using the specific identification method; (e) interest income,
adjusted for amortization of premium and accretion of discount, is recorded on
an accrual basis; (f) dividend income is recorded on the ex-dividend date;
foreign dividends are recorded on the ex-dividend date or as soon as practical
after the Portfolios determine the existence of a dividend declaration after
exercising reasonable due diligence; (g) dividends and distributions to
shareholders are recorded on the ex-dividend date; (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 or expense amounts
recorded and collected or paid are adjusted when reported by
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
the custodian; (i) the character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At October 31, 1997, reclassifications
were made to the capital accounts of Smith Barney International Equity Portfolio
to reflect permanent book/tax differences and income and gains available for
distribution under income tax regulations. Accordingly, a portion of net
investment loss amounting to $51,682 was reclassified to paid-in capital. Net
investment income, net realized gains and net assets were not affected by this
change; (j) 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 (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.
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
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as investment manager of the Smith Barney International Equity ("SBIE") and
the Smith Barney Pacific Basin ("SBPB") Portfolios. Travelers Investment
Adviser, Inc., ("TIA"), an affiliate of MMC, acts as the investment manager of
the GT Global Strategic Income Portfolio ("GTGSI"). SBIE and SBPB pay MMC a
management fee calculated at the annual rate of 0.90% of the average daily net
assets of each Portfolio, respectively. GTGSI pays TIA a management fee
calculated at an annual rate of 0.80% of its average daily net assets. These
fees are calculated daily and paid monthly.
TIA has entered into a subadvisory agreement with Chancellor LGT Asset
Management, Inc. ("LGT"). Pursuant to the subadvisory agreement, LGT is
responsible for the day-to-day portfolio operations and investment decisions for
GTGSI and is compensated for such services. TIA pays LGT a monthly fee
calculated at the annual rate of 0.375% of the average daily net assets of
GTGSI.
- --------------------------------------------------------------------------------
28 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
TIA has entered into a sub-administrative services agreement with MMC. TIA pays
MMC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
Portfolios' average daily net assets.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares. SB also acts as broker for certain portfolio transactions. For the
six months ended April 30, 1998, SB received no brokerage commissions.
All officers and one Director of the Fund are employees of SB.
3. Investments
For the six months ended April 30, 1998, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<CAPTION>
SBIE SBPB GTGSI
================================================================================
<S> <C> <C> <C>
Purchases $51,104,770 $10,826,149 $33,529,747
- --------------------------------------------------------------------------------
Sales 36,001,856 10,020,245 29,026,865
================================================================================
</TABLE>
At April 30, 1998, the gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
<TABLE>
<CAPTION>
SBIE SBPB GTGSI
================================================================================
<S> <C> <C> <C>
Gross unrealized appreciation $74,823,863 $1,454,129 $1,014,900
Gross unrealized depreciation (7,726,146) (910,121) (454,903)
- --------------------------------------------------------------------------------
Net unrealized appreciation $67,097,717 $ 544,008 $ 559,997
================================================================================
</TABLE>
4. Capital Loss Carryforward
At October 31, 1997, the Fund had capital loss carryforwards available to offset
future realized capital gains, if any, for Federal income tax purposes of
approximately $3,572,000 and $2,306,000 for SBIE and SBPB, 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 amounts and
expiration of the carryforward losses are indicated below. Expiration occurs on
October 31 of the year indicated.
<TABLE>
<CAPTION>
Portfolio 2003 2004 2005
================================================================================
<S> <C> <C> <C>
SBIE $947,000 -- $2,625,000
- --------------------------------------------------------------------------------
SBPB 305,000 $452,000 1,549,000
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
5. Forward Foreign Currency Contracts
At April 30, 1998, 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 as follows:
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
========================================================================================
<S> <C> <C> <C> <C>
Smith Barney International Equity
To Sell:
Malaysian Ringgit 15,862 $ 4,237 5/4/98 $ (45)
Malaysian Ringgit 150,301 40,136 5/5/98 (873)
Malaysian Ringgit 100,341 26,788 5/6/98 (59)
- ----------------------------------------------------------------------------------------
(977)
- ----------------------------------------------------------------------------------------
To Buy:
British Pound 126,882 212,083 5/6/98 457
French Franc 715,740 119,141 5/29/98 (300)
French Franc 940,902 156,624 5/29/98 (779)
Spanish Peseta 34,090,000 223,719 5/7/98 (425)
- ----------------------------------------------------------------------------------------
(1,047)
- ----------------------------------------------------------------------------------------
Total Unrealized Loss on Forward
Foreign Currency Contracts $(2,024)
========================================================================================
Smith Barney Pacific Basin
To Buy:
Japanese Yen 32,808,000 $248,762 5/12/98 $ 705
========================================================================================
GT Global Strategic Income
To Sell:
Australian Dollar 875,000 $569,513 8/4/98 $31,612
Australian Dollar 42,000 27,336 8/4/98 877
British Pound 530,000 881,364 8/4/98 2,463
Canadian Dollar 462,000 323,015 5/4/98 (4,767)
Danish Krone 615,000 90,171 8/4/98 (2,314)
German Mark 1,499,370 839,043 8/4/98 (19,043)
German Mark 484,272 270,997 8/4/98 (997)
Japanese Yen 7,742,000 58,977 7/31/98 4,017
Japanese Yen 2,383,000 18,153 7/31/98 1,395
New Zealand Dollar 1,120,000 622,161 5/4/98 34,886
- ----------------------------------------------------------------------------------------
48,129
- ----------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
30 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
========================================================================================
<S> <C> <C> <C> <C>
To Buy:
Australian Dollar 205,000 $133,428 8/4/98 $ 63
Canadian Dollar 537,000 375,453 5/4/98 (3,517)
German Mark 144,295 80,787 8/4/98 101
German Mark 1,581,822 885,183 8/4/98 1,355
- ----------------------------------------------------------------------------------------
(1,998)
- ----------------------------------------------------------------------------------------
Total Unrealized Gain on Forward
Foreign Currency Contracts $46,131
========================================================================================
</TABLE>
6. Futures Contracts
Initial margin deposits are made upon entering into futures contracts and are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities are
also segregated up to the current market value of the futures contracts. During
the period the futures contract is open, changes in the value of the contract
are recognized as unrealized gains or losses by "marking to market" on a daily
basis to reflect the market value of the contract at the end of each day's
trading. Variation margin payments are received or made and recognized as assets
due from or liabilities due to broker, depending upon whether unrealized gains
or losses are incurred. When the contract is closed, the Portfolios record a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transactions and the Portfolios' basis in the contract.
The Portfolios enter into such contracts to hedge a portion of their portfolios.
The Portfolios bear the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At April 30, 1998, the Portfolios had no open futures contracts.
7. Option Contracts
Premiums paid when put or call options are purchased by the Portfolios represent
investments, which are marked-to-market daily and are included in the schedules
of investments. 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 transactions are greater or less
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 underlying security and
the proceeds from such sale will be decreased by the premium originally paid.
When the
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
Portfolios exercise a call option, the cost of the security which the Portfolios
purchase upon exercise will be increased by the premium originally paid.
At April 30, 1998, the Portfolios did not hold any purchased call or put
options.
When the Portfolios write a covered 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
depending upon whether the cost of the closing transaction is greater or less
than the premium originally received, without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
eliminated. When a written call option is exercised, the cost of the security
sold will be decreased by the premium originally received. When a written put
option is exercised, the amount of the premium originally received will reduce
the cost of the security which the Portfolios purchased upon exercise. When
written index options are exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of loss if the market price of the underlying security
declines.
During the period ended April 30, 1998, the Portfolios did not write any
options.
8. Reverse Repurchase Agreement
GTGSI may enter into reverse repurchase agreement transactions for leveraging
purposes. A reverse repurchase agreement involves a sale by GTGSI of securities
that it holds with an agreement by GTGSI to repurchase the same securities at an
agreed upon price and date. A reverse repurchase agreement involves the risk
that the market value of the securities sold by GTGSI may decline below the
repurchase price of the securities. GTGSI will establish a segregated account
with its custodian, in which GTGSI will maintain cash, U.S. government
securities or other liquid high grade debt obligations equal in value to its
obligations with respect to reverse repurchase agreements.
At April 30, 1998, GTGSI had no open reverse repurchase agreements.
- --------------------------------------------------------------------------------
32 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
9. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin which may vary depending on the
type of securities loaned. The custodian establishes and maintains the
collateral in segregated accounts.
The Portfolios maintain exposure for the risk of any loss in the investment of
amounts received as collateral.
At April 30, 1998, the Portfolios listed below had loaned common stock. The
market value for the securities on loan for each portfolio was as follows:
<TABLE>
<CAPTION>
Portfolio Value
================================================================================
<S> <C>
Smith Barney International Equity Portfolio $54,624,220
Smith Barney Pacific Basin Portfolio 1,443,027
GT Global Strategic Income Portfolio 240,000
================================================================================
</TABLE>
At April 30, 1998, the collateral held for the securities on loan was as
follows:
Smith Barney International Equity Portfolio
<TABLE>
<CAPTION>
Security Description Value
================================================================================
<S> <C>
Time Deposits:
UBS Grand Cayman, 5.625% due 5/1/98 $ 2,641,874
Svenska Grand Cayman, 5.625% due 5/1/98 2,641,874
Deutsche Bank G.C., 5.625% due 5/1/98 2,641,874
Commerzbank AG, Frankfurt, 5.59375% due 5/1/98 2,641,874
Bank of Montreal, 5.625% due 5/1/98 2,641,874
Repurchase Agreements:
CS First Boston, 5.570% due 5/1/98 11,154,577
Merrill Lynch, 5.625% due 5/1/98 3,816,040
J.P. Morgan Securities, 5.580% due 5/1/98 8,122,931
NationsBanc Montgomery Securities Inc., 5.6125% due 5/1/98 8,923,660
Bear Stearns, 5.600% due 5/1/98 11,154,577
- --------------------------------------------------------------------------------
Total $56,381,155
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
<TABLE>
<CAPTION>
Smith Barney Pacific Basin Portfolio
Security Description Value
================================================================================
<S> <C>
Time Deposits:
UBS Grand Cayman, 5.625% due 5/1/98 $ 71,546
Svenska Grand Cayman, 5.625% due 5/1/98 71,546
Deutsche Bank G.C., 5.625% due 5/1/98 71,546
Commerzbank AG, Frankfurt, 5.59375% due 5/1/98 71,546
Bank of Montreal, 5.625% due 5/1/98 71,546
Repurchase Agreements:
CS First Boston, 5.570% due 5/1/98 302,084
Merrill Lynch, 5.625% due 5/1/98 103,344
J.P. Morgan Securities, 5.580% due 5/1/98 219,982
NationsBanc Montgomery Securities Inc., 5.6125% due 5/1/98 241,667
Bear Stearns, 5.600% due 5/1/98 302,084
- --------------------------------------------------------------------------------
Total $1,526,891
================================================================================
<CAPTION>
GT Global Strategic Income Portfolio
Security Description Value
================================================================================
<S> <C>
Time Deposits:
UBS Grand Cayman, 5.625% due 5/1/98 $ 11,949
Svenska Grand Cayman, 5.625% due 5/1/98 11,949
Deutsche Bank G.C., 5.625% due 5/1/98 11,949
Commerzbank AG, Frankfurt, 5.59375% due 5/1/98 11,949
Bank of Montreal, 5.625% due 5/1/98 11,949
Repurchase Agreements:
CS First Boston, 5.570% due 5/1/98 50,450
Merrill Lynch, 5.625% due 5/1/98 17,259
J.P. Morgan Securities, 5.580% due 5/1/98 36,736
NationsBanc Montgomery Securities Inc., 5.6125% due 5/1/98 40,360
Bear Stearns, 5.600% due 5/1/98 50,450
- --------------------------------------------------------------------------------
Total $ 255,000
================================================================================
</TABLE>
10. 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 Portfolios. 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.
- --------------------------------------------------------------------------------
34 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
11. Securities Traded on a To-Be-Announced Basis
SBIE and GTGSI may trade securities on a "to-be-announced" ("TBA") basis. In a
TBA transaction, the Portfolios commit to purchasing or selling securities for
which specific information is not yet known at the time of the trade,
particularly the face amount and maturity date in GNMA transactions. Securities
purchased on a TBA basis are not settled until they are delivered to the
Portfolios, normally 15 to 45 days later. These transactions are subject to
market fluctuations and their current value is determined in the same manner as
for other securities.
At April 30, 1998, the Portfolios did not hold any TBA securities.
12. Capital Shares
At April 30, 1998, 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:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
================================================================================
<S> <C> <C>
Smith Barney International Equity
Shares sold 9,279,146 11,728,929
Shares issued on reinvestment -- 12,902
Shares redeemed (8,092,557) (6,948,446)
- --------------------------------------------------------------------------------
Net Increase 1,186,589 4,793,385
================================================================================
Smith Barney Pacific Basin
Shares sold 3,438,159 3,912,494
Shares issued on reinvestment -- 11,185
Shares redeemed (3,663,250) (3,364,536)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (225,091) 559,143
================================================================================
GT Global Strategic Income
Shares sold 259,254 847,390
Shares issued on reinvestment -- 147,094
Shares redeemed (148,444) (198,015)
- --------------------------------------------------------------------------------
Net Increase 110,810 796,469
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney International
Equity Portfolio 1998(1) 1997 1996 1995 1994(2)
===============================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $13.23 $12.18 $10.48 $10.55 $10.00
- -----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3) 0.02 0.01 0.02 0.03* (0.03)
Net realized and
unrealized gain (loss) 1.59 1.05 1.69 (0.10) 0.58
- -----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.61 1.06 1.71 (0.07) 0.55
- -----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.01) (0.01) -- --
- -----------------------------------------------------------------------------------------------
Total Distributions -- (0.01) (0.01) -- --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.84 $13.23 $12.18 $10.48 $10.55
- -----------------------------------------------------------------------------------------------
Total Return 12.17%++ 8.73% 16.36% (0.66)% 5.50%++
- -----------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $263,359 $219,037 $143,323 $53,538 $13,811
- -----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.98%+ 1.01% 1.10% 1.44% 1.20%+
Net investment income (loss) 0.26+ 0.09 0.23 0.25 (0.73)+
- -----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 17% 38% 41% 29% --
Average commissions per share
paid on equity transactions(4)(5) $0.02 $0.02 $0.02 $0.01 --
===============================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager waived part of its fees for the year ended October 31, 1994. If
such fees were not waived, the effect on the net investment loss and the
expense ratio would have been as follows:
<TABLE>
<CAPTION>
Per Share
Decrease to Net Expense Ratios
Investment Income Without Fee Waiver
----------------- ------------------
<S> <C> <C>
1994 $0.03 2.00%+
</TABLE>
In addition, during the years ended October 31, 1996 and 1995, the
Portfolio had earned credits from the custodian which reduced service fees
incurred. When the credits are taken into consideration the expense ratios
are 1.05% and 1.21%, respectively; prior year numbers have not been
restated to reflect these adjustments.
(4) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
(5) Trades executed in the United States and Canada have an average commission
rate of $0.06 per share. Commission on trades executed outside these
countries are generally executed as a percentage of cost or proceeds
ranging from 0.5% to 1.00%.
* 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 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney
Pacific Basin Portfolio 1998(1) 1997 1996 1995 1994(2)
===============================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.04 $9.75 $8.95 $10.10 $10.00
- -----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3) -- (0.01) 0.08 (0.04)* (0.04)
Net realized and
unrealized gain (loss) (0.58) (1.64) 0.75 (1.11) 0.14
- -----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.58) (1.65) 0.83 (1.15) 0.10
- -----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.06) (0.03) -- --
- -----------------------------------------------------------------------------------------------
Total Distributions -- (0.06) (0.03) -- --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $7.46 $8.04 $9.75 $8.95 $10.10
- -----------------------------------------------------------------------------------------------
Total Return (7.21)%++ (17.02)% 9.26% (11.39)% 1.00%++
- -----------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $15,241 $18,225 $16,657 $7,122 $4,238
Ratios to Average Net Assets:
Expenses(3) 1.56%+ 1.38% 1.34% 1.83% 1.26%+
Net investment income (loss) 0.16+ (0.08) 0.47 (0.51) (0.93)+
- -----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 69% 156% 59% 28% --
- -----------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4)(5) $0.01 $0.01 $0.02 $0.01 --
===============================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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 years ended October 31,
1996, October 31, 1995 and the period ended October 31, 1994. In addition,
the Manager 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:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Without Fee Waiver,
Decreases to Net Reimbursement and
Investment Income Custody Credits
----------------- ---------------
<S> <C> <C> <C>
1996 $0.02 1.58%
1995 0.03 2.23
1994 0.06 2.82+
</TABLE>
In addition, during the years ended October 31, 1996 and 1995, the
Portfolio had earned credits from the custodian which reduced service fees
incurred. If the credits are taken into consideration the expense ratios
are 1.17% and 1.30%, respectively; prior year numbers have not been
restated to reflect these adjustments.
(4) As of September 1995, the SEC instituted new guidelines requiring the
disclosure of average commissions per share.
(5) Trades executed in the United States and Canada have an average commission
rate of $0.06 per share. Commission on trades executed outside these
countries are generally executed as a percentage of cost or proceeds
ranging from 0.5% to 1.00%.
* 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
GT Global Strategic
Income Portfolio 1998(1) 1997(2) 1996 1995 1994(3)
===============================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.52 $12.45 $10.77 $9.95 $10.00
- -----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.47 0.75 0.74 0.64* 0.17
Net realized and
unrealized gain (loss) 0.21 0.36 1.36 0.28 (0.22)
- -----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.68 1.11 2.10 0.92 (0.05)
- -----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.46) (0.42) (0.10) --
Net realized gains -- (0.58) -- -- --
- -----------------------------------------------------------------------------------------------
Total Distributions -- (1.04) (0.42) (0.10) --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.20 $12.52 $12.45 $10.77 $9.95
- -----------------------------------------------------------------------------------------------
Total Return 5.43%++ 9.32% 20.07% 9.37% (0.50)%++
- -----------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $32,278 $29,232 $19,152 $8,397 $2,624
- -----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 1.02%+ 1.07% 1.23% 1.47% 1.07%+
Net investment income 7.96+ 6.05 6.87 6.44 4.58+
- -----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 111% 161% 192% 295% 56%
===============================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(4) The Manager waived all or part of its fees for the years ended October 31,
1996, October 31, 1995 and the period ended October 31, 1994. In addition,
the Manager 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:
<TABLE>
<CAPTION>
Expense Ratios
Without Fee Waiver,
Per Share Decreases Reimbursement and
to Net Investment Income Custody Credits
------------------------ ---------------
<S> <C> <C>
1996 $0.02 1.38%
1995 0.04 1.93
1994 0.13 4.53+
</TABLE>
In addition, during the years ended October 31, 1996 and 1995, the
Portfolio had earned credits from the custodian which reduced service fees
incurred. If the credits are taken into consideration the expense ratios
are 1.11% 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.
- --------------------------------------------------------------------------------
38 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On February 20, 1998 a special meeting of shareholders of the Fund was held
for the purpose of voting on the following matters:
1. To elect Directors of the Fund; and
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage Shares Voted Percentage
Name of Directors For Shares Voted Against Shares Voted
================================================================================
<S> <C> <C> <C> <C>
Victor K. Atkins 231,059,252.884 97.271% 6,481,382.874 2.729%
Abraham E. Cohen 231,294,945.547 97.371 6,245,690.211 2.629
Robert A. Frankel 230,999,179.846 97.246 6,541,455.912 2.754
Rainer Greeven 231,468,718.650 97.444 6,071,917.108 2.556
Susan M. Heilbron 231,485,321.942 97.451 6,055,313.816 2.549
Heath B. McLendon 231,463,894.239 97.442 6,076,741.519 2.558
James M. Shuart 231,410,828.580 97.419 6,129,807.178 2.581
================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental policies of the Portfolios in order to modernize them in view of
certain regulatory, business or industry developments that have occurred since
original adoption of these policies by the Portfolios. The following chart
demonstrates that all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates
the elimination of the policy; and "R" indicates the reclassification of the
policy from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Directors).
<TABLE>
<CAPTION>
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
======================================================================================
<S> <C> <C> <C> <C>
"E" Ability to Pledge Assets Approved Approved Approved
- --------------------------------------------------------------------------------------
"M" Underwriting of Securities Approved Approved Approved
- --------------------------------------------------------------------------------------
"M" Lending by the Fund Approved Approved Approved
- --------------------------------------------------------------------------------------
"M" Real Estate Approved Approved Approved
- --------------------------------------------------------------------------------------
"R" Unseasoned Issues N/A N/A Approved
- --------------------------------------------------------------------------------------
"R" Margin and the Short Sales of Securities N/A N/A Approved
- --------------------------------------------------------------------------------------
"E" Purchases of Certain Securities N/A N/A Approved
- --------------------------------------------------------------------------------------
"R" Exercising Control or Management N/A N/A Approved
- --------------------------------------------------------------------------------------
"R" Investments in Oil, Gas and
Mineral Exploration N/A N/A Approved
- --------------------------------------------------------------------------------------
"M" Diversification Approved Approved N/A
- --------------------------------------------------------------------------------------
"M" Senior Securities Approved Approved N/A
- --------------------------------------------------------------------------------------
"M" Industry Concentration Approved Approved N/A
- --------------------------------------------------------------------------------------
"M" Borrowing Approved Approved N/A
- --------------------------------------------------------------------------------------
"R" Purchases of Securities of Other
Investment Companies Approved Approved N/A
======================================================================================
</TABLE>
N/A - Not Applicable
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
================================================================================
Additional Shareholder Information (unaudited) (continued)
================================================================================
The information below reports the lowest percentage of shares voting for
the proposals, the highest percentage of shares voting against and abstaining by
shareholders of the Portfolios on all proposals.
<TABLE>
<CAPTION>
Smith Barney International Equity Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
14,963,608.345 91.088% 239,676.481 1.459% 1,224,303.703 7.453%
================================================================================
<CAPTION>
Smith Barney Pacific Basin Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
1,761,748.030 90.533% 39,155.690 2.012% 145,071.713 7.455%
================================================================================
<CAPTION>
GT Global Strategic Income Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
2,208,033.665 93.265% 27,866.658 1.177% 131,575.953 5.558%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
40 1998 Semi-Annual Report to Shareholders
<PAGE>
Travelers Series SMITH BARNEY
Fund Inc. ------------
A Member of TravelersGroup[LOGO]
Directors Investment Managers
Victor K. Atkins Mutual Management Corp.
A. E. Cohen Travelers Investment Advisers, Inc.
Robert A. Frankel
Rainer Greeven Distributor
Susan M. Heilbron Smith Barney Inc.
Heath B. McLendon, Chairman
James M. Shuart Custodian
The Chase Manhattan Bank
Officers
Annuity Administration
Heath B. McLendon Travelers Annuity Investor Services
President and 5 State House Square
Chief Executive Officer 1 Tower Square
Hartford, CT 06183
Lewis E. Daidone
Senior Vice President
and Treasurer This report is submitted for the general
information of the shareholders of
Jeffrey J. Russell Travelers Series Fund Inc. -- Smith
Vice President Barney International Equity, Smith
Barney Pacific Basin and GT Global
Bruce D. Sargent Strategic Income Portfolios. It is not
Vice President authorized for distribution to prospective
investors unless accompanied or preceded
Irving P. David by a current Prospectus for the Portfolios,
Controller which contains information concerning
the Portfolios' investment policies and
Christina T. Sydor expenses as well as other pertinent
Secretary information.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0802 6/98
[GRAPHIC]
Travelers Series Fund Inc.
Smith Barney High Income
Portfolio
Putnam Diversified Income
Portfolio
- ------------------
SEMI-ANNUAL REPORT
- ------------------
April 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
<PAGE>
Travelers Series
Fund Inc.
[PHOTO]
HEATH B. MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the semi-annual report for the Travelers Series Fund
Inc. - Smith Barney High Income and Putnam Diversified Income Portfolios
("Portfolios") for the six months ended April 30, 1998. In this report, we
summarize the period's prevailing economic and market conditions and outline the
investment strategy employed by each Portfolio. A detailed summary of
performance and current holdings can be found in the appropriate sections that
follow.
Portfolio Highlights
Smith Barney High Income Portfolio
The Smith Barney High Income Portfolio seeks high current income. Capital
appreciation is a secondary objective. For the six months ended April 30, 1998,
the Smith Barney High Income Portfolio returned 5.21%. This return compares
favorably with its Lipper Analytical Services, Inc. ("Lipper") peer group
average of 3.65% for the same period. (Lipper is an independent fund-tracking
organization.)
The high yield bond market generated positive performance during the six months
ended April 30, 1998. In the first quarter of 1998, the high yield bond market
continued to generate competitive performance returns. The lower-quality issues
generally outperformed the higher-quality issues, as the performance of the
lower-quality issues tends to correlate more closely to the U.S. stock market.
During the first quarter of 1998, the U.S. stock market rose by 10% to 15%
depending upon which stock market index was used. A strong U.S. economy, ample
liquidity in the financial markets and moderate inflation continued to fuel the
stock markets. Interest rates remained confined to a narrow range with little
change in the rates of intermediate- and long-term U.S. Treasury securities. The
Federal Reserve Board ("Fed") continued to remain on the sidelines, and
short-term interest rates stayed unchanged at 5.50%.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
While the Asian crisis did not dampen U.S. economic growth, it did keep pressure
on worldwide inflation with price declines on a number of important global
commodities such as oil. The net result was extremely positive for U.S.
financial markets, particularly the U.S. stock market. The U.S. bond market was
stuck in a narrow trading range and we believe the bond market will probably
continue to trade in a narrow range as long as the Fed's monetary policy remains
on hold. However, in recent weeks, the Fed has grown more concerned over strong
U.S. economic growth and the possibility that inflation may be increasing. Yet
the evidence so far suggests otherwise, with most statistics indicating
relatively tame inflation during the first quarter of 1998.
During the first three months of 1998, the stock markets exhibited high
volatility with most major indices again moving toward record highs. Despite
record new issuance, the high yield bond market also generated strong
performance results in the first quarter. In the view of the portfolio manager,
this was likely in reaction to the continued strength in the U.S. stock markets.
The manager continues to believe that the U.S. economy's outlook remains mixed
and that many consumer-sensitive industries will continue to experience fierce
price competition. In addition, the significant problems in Asia could also put
severe pressure on commodity goods prices as troubled Asian companies attempt to
increase their exports to the rest of the world to make up for the expected
economic declines in their own region. Moreover, the manager believes that a
slowdown in overall world economic growth may occur in the coming months as the
severe economic decline in Asia sharply reduces demand for many U.S. and
European products. Consequently, the first half of 1998 could experience a
slight increase in the default rates of select high yield credits, especially
weaker, more vulnerable companies that are having difficulty competing. Given
the increased uncertainty over Asia, the manager expects stock market volatility
to further rise in the coming months.
The portfolio manager will therefore still avoid these areas of the U.S. economy
where consumer spending is weak as well as industries facing heavy pricing
competition. His emphasis will be on industries that are experiencing strong
growth such as telecommunications, media and cable television. He also plans on
owning stronger rated B and BB bonds and avoiding the weaker, lower tier issues
that are generally in the CCC/Caa rating category. The portfolio manager
believes his investment strategy is a prudent course of action given the higher
risks and volatility he expects in the world's financial markets going forward.
- --------------------------------------------------------------------------------
2 1998 Semi-Annual Report to Shareholders
<PAGE>
Putnam Diversified Income Portfolio
As the Putnam Diversified Income Portfolio began its fiscal year last October,
Putnam was reasonably optimistic about prospects for fixed-income markets around
the world. Less than one month into the period, however, several Asian economies
experienced economic meltdowns, sparking the largest single-day point decline in
the history of the Dow Jones Industrial Average ("DJIA"). (The DJIA is a
price-weighted average of 30 actively traded blue chip stocks, primarily
industrials.) This event, combined with continued economic weakness and
uncertainty in Asia, put the world's financial markets, and investors' nerves,
on edge.
For the six months ending April 30, 1998, the Putnam Diversified Income
Portfolio returned 4.14%. This return compares favorably with its Lehman
Brothers Aggregate Bond Index, which posted a total return of 3.59% over the
same period. (The Lehman Brothers Aggregate Bond Index is an unmanaged index
composed of the Lehman Intermediate Government/Corporate Bond Index and the
Mortgage-Back Securities Index and includes U.S. Treasury issues, agency issues,
corporate bond issues and mortgage-backed securities.)
While this backdrop has created a tumultuous environment for many markets, two
of the three key sectors in which the Portfolio invests - U.S. taxable
investment-grade securities and high-yield bonds - actually fared quite well
during the reporting period. International bond markets obviously faced tougher
times, but strategic portfolio shifts allowed Putnam to soften the blow of
Asia's currency and debt crises. As of April 30, 1997, 37% of the Portfolio's
holdings were allocated to U.S. government and mortgage securities, 38% to
high-yield bonds, and 19% to international bonds.
Throughout the period, the Asian crisis actually boosted performance in the
domestic bond market. Nervous international investors flocked to the high credit
quality and attractive yields offered by U.S. bonds, bidding up the prices of
U.S. Treasurys dramatically. While this flight to quality was good news for the
Portfolio, Putnam's focus on mortgage-backed securities, which also performed
well early in the period, meant the Portfolio did not take full advantage of the
Treasury rally. Toward the end of the period, the momentum of Treasurys slowed,
while the performance of mortgage-backed securities began to lag as well.
Putnam's decision to focus on mortgage-backed securities was based on the
interest-rate climate during the period under review. When interest rates are
falling, mortgage-backed securities present a higher prepayment risk - that is,
the chance that homeowners will refinance or pay off their mortgage loans early,
which dampens the value of these securities. To compensate investors for this
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
prepayment risk, mortgage-backed securities generally carry a higher yield than
most other U.S. government issues. The Portfolio's emphasis on mortgage-backed
securities was designed to take advantage of those higher yield opportunities.
The Asian currency and debt crisis took its toll on many international markets,
hitting the emerging markets especially hard. As investors deserted these bonds
in favor of more established markets, emerging markets plunged in October,
although they posted handsome gains for most of calendar 1997. After that rather
brief swoon, however, these bonds staged a remarkable recovery. In a situation
similar to the U.S. Treasury rally, this rebound helped the Portfolio; but
because this portion of the Portfolio was positioned defensively, it did not
take full advantage of the emerging-markets comeback.
In Europe, bond markets turned in robust returns as a result of sluggish
economic growth in Germany and expectations that the European Economic and
Monetary Union ("EMU") would begin as scheduled in January 1999. (The EMU will
unify the monetary policy and interest rates of 11 European countries.) Europe's
peripheral markets, such as Spain, Italy and Sweden, posted the best
performance, but the Portfolio's underweight position in these areas dragged
performance somewhat. The Portfolio benefited from a significant position in the
United Kingdom, where the bond market was buoyed by slowing economic growth and
low inflation. Putnam's decision to underweight Japanese government bonds meant
the Portfolio had only minimal exposure to these bonds, which were hurt by the
country's troubled political and economic climate and increasing concerns about
the long-term health of its economy.
The high-yield bond market was the strongest-performing sector of the domestic
bond market in the first calendar quarter of 1998, propelled by the same forces
that pushed U.S. Treasury bonds and many stocks higher. These forces included
solid economic growth and low inflation, which kept the Fed from increasing
interest rates.
Leading the way among high-yield bond issues were companies in the
telecommunications, cable TV and broadcasting industries - following a pattern
that has prevailed for well over a year. New issuance in the high-yield bond
market has continued at a record-breaking pace, driven by favorable interest
rates, expanding businesses and strong investor demand. Another factor boosting
the high-yield bond market has been the tremendous amount of merger and
acquisition activity. Larger, more creditworthy companies that have completed
cost-cutting programs are buying smaller high-yield bond issuers in an effort to
further grow their businesses or add niche products. This consolidation trend
was evident in many industries, including consumer products, telecommunications
and cable TV.
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
Putnam generally believes that the U.S. economy, driven by consumer demand, is
poised for continued strong growth with relatively low inflation going forward.
As a result, Putnam expects that the demand for high-yield bonds will remain
strong in the months ahead as investor confidence remains high.
However, Putnam is more cautious about international bond markets and the
outlook for global economic growth. Valuations in most foreign markets appear
stretched, particularly after the global flight to quality that has driven bond
yields lower worldwide. Putnam will continue to monitor the Asian turbulence
closely, realizing that its impact may be greater than previously forecast. The
Portfolio's ability to invest across multiple fixed-income sectors should enable
Putnam to position the portfolio defensively while still taking advantage of
attractive income opportunities. (Of course, no guarantees can be made that this
strategy will ultimately be successful.)
In closing, thank you for your investment in the Travelers Series Fund Inc. -
Smith Barney High Income and Putnam Diversified Income Portfolios. We look
forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 18, 1998
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney High Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $13.25 $13.94 $0.00 $0.00 5.21%++
- --------------------------------------------------------------------------------
10/31/97 12.09 13.25 0.66 0.06 16.24
- --------------------------------------------------------------------------------
10/31/96 11.26 12.09 0.50 0.00 12.17
- --------------------------------------------------------------------------------
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 $1.38 $0.06
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $12.31 $12.82 $0.00 $0.00 4.14%++
- --------------------------------------------------------------------------------
10/31/97 11.99 12.31 0.56 0.09 8.44
- --------------------------------------------------------------------------------
10/31/96 11.46 11.99 0.39 0.13 9.43
- --------------------------------------------------------------------------------
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 $1.04 $0.22
================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Return+
- --------------------------------------------------------------------------------
Smith Barney High Putnam Diversified
Income Portfolio Income Portfolio
================================================================================
<S> <C> <C>
Six Months Ended 4/30/98++ 5.21% 4.14%
- --------------------------------------------------------------------------------
Year Ended 4/30/98 15.59 11.58
- --------------------------------------------------------------------------------
6/16/94* through 4/30/98 12.51 9.69
================================================================================
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
Smith Barney High Putnam Diversified
Income Portfolio Income Portfolio
================================================================================
<S> <C> <C>
6/16/94* through 4/30/98 57.89% 42.86%
================================================================================
</TABLE>
+ 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.
- --------------------------------------------------------------------------------
6 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney High Income Portfolio vs.
Salomon Brothers Intermediate High Yield Index+
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
June 1994 - April 1998
Salomon Brothers
Smith Barney Intermediate
High Income Portfolio High Yield Index
--------------------- ----------------
<S> <C> <C>
6/16/94 10,000 10,000
10/94 10,070 10,113
10/95 11,510 11,723
10/96 12,912 12,690
10/97 15,008 14,580
4/30/98 15,789 15,479
</TABLE>
+ 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, 1998. 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 as 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Putnam Diversified Income Portfolio vs. Lehman Brothers
Aggregate Bond Index and Salomon Brothers
Non-U.S. World Government Bond Index+
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
June 1994 - April 1998
Salomon Brothers
Non-U.S. Lehman Brothers
Putnam Diversified World Government Aggregate
Income Portfolio Bond Index Bond Index
<S> <C> <C> <C>
6/16/94 10,000 10,000 10,000
10/94 10,180 10,554 10,052
10/95 11,560 12,155 11,626
10/96 12,650 12,818 12,305
10/97 13,706 14,410 13,399
4/30/98 14,286 14,263 13,880
</TABLE>
+ Hypothetical illustration of $10,000 invested in shares of the Putnam
Diversified 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, 1998. 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 - Unhedged 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 as 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 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
CORPORATE BONDS AND NOTES -- 91.9%
Automotive Suppliers -- 0.7%
$ 1,125,000 B- Eagle-Picher Industrial, Inc., Sr. Sub. Notes,
9.375% due 3/1/08 $ 1,148,906
- --------------------------------------------------------------------------------
Cable Television -- 8.4%
1,475,000 BB- Century Communications, Sr. Notes,
8.750% due 10/1/07 1,534,000
1,025,000 B2* Comcast UK Cable, Sr. Discount Debentures,
step bond to yield 10.729% due 11/15/07 849,469
CSC Holdings, Sr. Sub. Debentures:
2,325,000 BB- 9.875% due 2/15/13 2,563,312
800,000 BB- 10.500% due 5/15/16 939,000
Marcus Cable Capital Corp., Sr. Discount Notes:
525,000 B2* Step bond to yield 11.325% due 8/1/04 502,687
275,000 B3* Step bond to yield 12.747% due 12/15/05 250,937
Rogers Cablesystems:
1,000,000 BB+ Debentures, 10.000% due 3/15/05 1,110,000
1,000,000 BB+ Sr. Secured Debentures, 10.000% due 12/1/07 1,110,000
1,000,000 BB- Sr. Sub. Debentures, 11.000% due 12/1/15 1,180,000
650,000 BB- Rogers Communications, Sr. Notes,
8.875% due 7/15/07 656,500
2,800,000 B United International Holdings, Inc., Sr.
Discount Notes, step bond to yield
10.718% due 2/15/08 1,767,500
450,000 BBB- Videotron (Le Groupe), Sr. Notes,
10.625% due 2/15/05 504,563
- --------------------------------------------------------------------------------
12,967,968
- --------------------------------------------------------------------------------
Capital Goods -- 4.2%
525,000 B- Alvey Systems, Inc., Sr. Sub. Notes,
11.375% due 1/31/03 549,281
1,000,000 B- Axiohm Transaction Services, Sr. Sub. Notes,
9.750% due 10/1/07 1,027,500
2,000,000 B Goss Graphic Systems, Inc., Sr. Sub. Notes,
12.000% due 10/15/06 2,260,000
950,000 B3* Interlake Corp., Sr. Sub. Debentures,
12.125% due 3/1/02 980,875
1,100,000 B2* Intertek Finance, PLC, Sr. Sub. Notes,
10.250% due 11/1/06 1,170,125
550,000 B+ Park-Ohio Industries, Sr. Sub. Notes,
9.250% due 12/1/07(a) 570,625
- --------------------------------------------------------------------------------
6,558,406
- --------------------------------------------------------------------------------
Cellular -- 3.3%
1,950,000 B3* Clearnet Communications, Inc., Sr. Discount Notes,
step bond to yield 12.627% due 12/15/05 1,633,125
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Cellular -- 3.3% (continued)
$ 1,000,000 B- Millicom International Cellular S.A., Sr.
Discount Notes, step bond to yield 12.844%
due 6/1/06 $ 773,750
1,700,000 B2* Nextel Communications Inc., Sr. Discount Notes,
step bond to yield 11.214% due 8/15/04 1,642,625
Telesystems International Wireless, Sr.
Discount Notes:
1,075,000 B Step bond to yield 12.127% due 6/30/07 752,500
500,000 CCC+ Step bond to yield 10.514% due 11/1/07 319,375
- --------------------------------------------------------------------------------
5,121,375
- --------------------------------------------------------------------------------
Chemicals -- 0.7%
500,000 B1* NL Industries, Sr. Secured Notes,
11.750% due 10/15/03 555,000
600,000 B Unifrax Investment Corp., Sr. Notes, 10.500%
due 11/1/03 627,000
- --------------------------------------------------------------------------------
1,182,000
- --------------------------------------------------------------------------------
Computers/Components/Distributors -- 6.0%
650,000 B Celestica International, Sr. Sub. Notes,
10.500% due 12/31/06 715,000
1,350,000 B Fairchild Semiconductor Corp., Sr. Sub. Notes,
10.125% due 3/15/07 1,400,625
Unisys Corp., Sr. Notes:
2,000,000 B+ 12.000% due 4/15/03 2,265,000
3,200,000 B+ 11.750% due 10/15/04 3,696,000
1,150,000 B- Viasystems Inc., Sr. Sub. Notes, 9.750%
due 6/1/07 1,204,625
- --------------------------------------------------------------------------------
9,281,250
- --------------------------------------------------------------------------------
Drug Retailers/Wholesalers -- 0.7%
1,000,000 B- Pharmaceutical Fine Chemicals, Sr. Sub. Notes,
9.750% due 11/15/07(a) 1,033,750
- --------------------------------------------------------------------------------
Engineering & Construction -- 0.3%
425,000 BB- CIA Latino Americana, Sr. Notes, 11.625%
due 6/1/04 434,563
- --------------------------------------------------------------------------------
Environmental Services -- 0.4%
500,000 B+ Allied Waste, Sr. Sub. Notes, 10.250%
due 12/1/06 555,000
- --------------------------------------------------------------------------------
Filmed Entertainment -- 0.7%
1,500,000 B- PX Escrow Corp., Sr. Discount Notes, step
bond to yield 9.245% due 2/1/06 1,070,625
- --------------------------------------------------------------------------------
Finance -- 1.9%
Amresco, Inc., Sr. Sub. Notes:
1,250,000 B 10.000% due 3/15/04 1,298,438
700,000 B 9.875% due 3/15/05 721,000
850,000 B- Outsourcing Solutions, Sr. Sub. Notes,
11.000% due 11/1/06 936,062
- --------------------------------------------------------------------------------
2,955,500
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Food Wholesalers -- 0.2%
$ 300,000 B+ Ameriserv Food Distributors, Sr. Notes,
8.875% due 10/15/06 $ 309,375
- --------------------------------------------------------------------------------
Forest Products -- 2.1%
375,000 CCC+ Riverwood International, Sr. Sub. Notes,
10.875% due 4/1/08 379,688
2,600,000 B+ SD Warren Co., Sr. Sub. Notes, 12.000%
due 12/15/04 2,886,000
- --------------------------------------------------------------------------------
3,265,688
- --------------------------------------------------------------------------------
Gaming -- 0.9%
450,000 B Aztar Corp., Sr. Sub. Notes, 13.750%
due 10/1/04 519,188
200,000 Ba1* Mohegan Tribal Gaming Authority, Sr.
Secured Notes, 13.500% due 11/15/02 258,250
500,000 B Showboat Inc., Sr. Sub. Notes, 13.000%
due 8/1/09 608,125
- --------------------------------------------------------------------------------
1,385,563
- --------------------------------------------------------------------------------
Homebuilders -- 0.9%
1,200,000 BB+ Trizec Finance, Sr. Notes, 10.875%
due 10/15/05 1,360,500
- --------------------------------------------------------------------------------
Infrastructure -- 0.5%
850,000 BB GS Superhighway Holdings, Sr. Notes,
10.250% due 8/15/07 701,250
- --------------------------------------------------------------------------------
Leisure Time -- 0.5%
850,000 B- Premier Parks Inc., Sr. Notes, 9.250%
due 4/1/06 862,750
- --------------------------------------------------------------------------------
Lodging -- 2.3%
700,000 B- Courtyard by Marriott, Sr. Secured Notes,
10.750% due 2/1/08 772,625
500,000 B2* Extended Stay America, Sr. Sub. Notes,
9.150% due 3/15/08 504,375
HMH Properties, Sr. Notes:
1,500,000 BB- 9.500% due 5/15/05 1,620,000
625,000 BB- 8.875% due 7/15/07 690,625
- --------------------------------------------------------------------------------
3,587,625
- --------------------------------------------------------------------------------
Medical Products -- 0.9%
850,000 B- Fisher Scientific International Inc., Sr. Sub.
Notes, 9.000% due 2/1/08(a) 854,250
500,000 B- Graphic Controls Corp., Sr. Sub. Notes,
12.000% due 9/15/05 561,250
- --------------------------------------------------------------------------------
1,415,500
- --------------------------------------------------------------------------------
Metals and Mining -- 2.9%
1,600,000 B- Haynes International, Inc., Sr. Notes, 11.625%
due 9/1/04 1,796,000
400,000 BB- J. Ray McDermott SA, Sr. Sub. Notes, 9.375%
due 7/15/06 433,000
1,250,000 B2* Kaiser Aluminum and Chemical, Sr. Sub. Notes,
12.750% due 2/1/03 1,334,375
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Metals and Mining -- 2.9% (continued)
$ 350,000 B2* Koppers Industry Inc., Sr. Sub. Notes,
9.875% due 12/1/07 $ 370,125
600,000 B WHX Corp., Sr. Notes, 10.500% due 4/15/05 613,500
- --------------------------------------------------------------------------------
4,547,000
- --------------------------------------------------------------------------------
Nursing Homes -- 3.9%
1,700,000 B2* Integrated Health Services Inc., Sr. Sub. Notes,
9.250% due 1/15/08 1,763,750
2,400,000 B- Magellan Health Services, Sr. Sub. Notes,
9.000% due 2/15/08(a) 2,391,000
1,475,000 B- Paragon Health Networks, Sr. Sub. Notes,
9.500% due 11/1/07(a) 1,519,250
400,000 B2* Sun Healthcare Group Inc., Sr. Sub. Notes,
9.375% due 5/1/08(a) 403,000
- --------------------------------------------------------------------------------
6,077,000
- --------------------------------------------------------------------------------
Oil and Gas/Oil Services -- 9.6%
500,000 B Canadian Forest Oil Ltd., Sr. Sub. Notes,
8.750% due 9/15/07 505,000
2,100,000 B+ Clark USA, Sr. Notes, 10.875% due 12/1/05 2,307,375
525,000 B2* Coho Energy, Inc., Sr. Sub. Notes,
8.875% due 10/15/07 493,500
1,550,000 B+ Dawson Production Services, Sr. Notes,
9.375% due 2/1/07 1,588,750
750,000 CCC+ Deeptech International, Sr. Notes, 12.000%
due 12/15/00 832,500
1,050,000 Ba2* Gulf Canada Resources Ltd., Sub. Debentures,
9.625% due 7/1/05 1,140,562
450,000 B+ ICO Inc., Sr. Notes, 10.375% due 6/1/07 469,125
Ocean Energy Inc.:
1,300,000 B Sr. Sub. Notes, 10.375% due 10/15/05 1,436,500
350,000 BB- Sr. Sub. Debentures, 9.750% due 10/1/06 385,000
1,000,000 BB- Sr. Sub. Notes, 8.875% due 7/15/07 1,052,500
Parker Drilling Corp.:
650,000 B+ Debentures, 9.750% due 11/15/06(a) 695,500
1,350,000 B+ Sr. Notes, 9.750% due 11/15/06 1,444,500
650,000 BB Pride Petroleum, Sr. Notes, 9.375% due 5/1/07 695,500
1,000,000 BB- Santa Fe Energy Resources, Sr. Sub. Debentures,
11.000% due 5/15/04 1,087,500
675,000 B2* Stone Energy Corp., Sr. Sub. Notes,
8.750% due 9/15/07 685,125
- --------------------------------------------------------------------------------
14,818,937
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Packaged and Branded Food -- 2.9%
$ 600,000 B- B&G Foods Inc., Sr. Sub. Notes, 9.625%
due 8/1/07 $ 612,000
1,250,000 B Imperial Holly Corp., Sr. Sub. Notes,
9.750% due 12/15/07 1,265,625
1,000,000 BB+ Keebler Corp., Sr. Sub. Notes, 10.750%
due 7/1/06 1,138,750
925,000 B Purina Mills Inc., Sr. Sub. Notes, 9.000%
due 3/15/10 959,687
450,000 B2* Van de Kamp, Inc., Sr. Sub. Notes, 12.000%
due 9/15/05 504,000
- --------------------------------------------------------------------------------
4,480,062
- --------------------------------------------------------------------------------
Packaging -- 1.4%
1,025,000 B Huntsman Packaging Corp., Sr. Sub. Notes,
9.125% due 10/1/07 1,046,781
550,000# B Impress Metal Packaging, Sr. Sub. Notes,
9.875% due 5/29/07 327,946
750,000 B- Tekni-Plex, Inc., Sr. Sub. Notes, 9.250%
due 3/1/08 765,000
- --------------------------------------------------------------------------------
2,139,727
- --------------------------------------------------------------------------------
Pharmaceuticals -- 0.8%
1,150,000 BB ICN Pharmaceuticals, Inc., Sr. Notes, 9.250%
due 8/15/05 1,220,438
- --------------------------------------------------------------------------------
Property/Casualty Insurance -- 1.2%
1,350,000 BB+ SIG Capital Trust, Notes, 9.500% due 8/15/27 1,392,188
450,000 BB- Veritas Capital Trust, Trust Certificates,
10.000% due 1/1/28(a) 473,063
- --------------------------------------------------------------------------------
1,865,251
- --------------------------------------------------------------------------------
Radio and Television Broadcasting -- 2.3%
750,000 B3* SFX Entertainment Inc., Sr. Sub. Notes,
9.125% due 2/1/08(a) 733,125
TV Azteca SA de CV:
1,000,000 Ba3* Debentures, 10.125% due 2/15/04 1,046,250
1,700,000 Ba3* Sr. Notes, 10.500% due 2/15/07 1,806,250
- --------------------------------------------------------------------------------
3,585,625
- --------------------------------------------------------------------------------
Shipping -- 1.8%
500,000 B+ American Reefer Co. Ltd., First Mortgage Note,
10.250% due 3/1/08(a) 503,750
450,000 BB Enterprises Shipholding, Sr. Notes, 8.875%
due 5/1/08(a) 447,750
Sea Containers Ltd.:
350,000 BB- Sr. Notes, 7.875% due 2/15/08(a) 346,063
1,000,000 BB- Sr. Sub. Debentures, 12.500% due 12/1/04(a) 1,130,000
400,000 B+ TBS Shipping International Ltd., First
Mortgage Notes, 10.000% due 5/1/05(a) 375,000
- --------------------------------------------------------------------------------
2,802,563
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Specialty Retailers -- 0.4%
$ 550,000 B- Advance Stores, Sr. Sub. Notes, 10.250%
due 4/15/08(a) $ 559,625
- --------------------------------------------------------------------------------
Telecommunications -- 18.6%
1,250,000 NR Allegiance Telecom, Inc., Sr. Discount Notes,
step bond to yield 11.715% due 2/15/08 718,750
350,000 NR American Mobile Satellite, Sr. Notes,
12.250% due 4/1/08(a) 362,250
Colt Telecom Group:
1,250,000 NR Sr. Sub. Notes, step bond to yield
11.726% due 12/15/06 996,875
200,000 # B Sr. Notes, 10.125% due 11/30/07 361,149
Esprit Telecom Group, Sr. Notes:
575,000 B- 11.500% due 12/15/07 632,500
1,050,000# B- 11.500% due 12/15/07 640,707
350,000 NR Facilicom International Inc., Sr. Notes,
10.500% due 1/15/08(a) 361,375
1,150,000 NR Firstworld Communications, Sr. Discount Notes,
step bond to yield 12.975% due 4/15/08(a) 615,250
1,225,000 B2* Fonorola Inc., Sr. Secured Notes, 12.500%
due 8/15/02 1,368,937
1,250,000 B Hermes Europe Railtel, Sr. Notes, 11.500%
due 8/15/07 1,421,875
1,600,000 B Intermedia Communications of Florida, Sr.
Discount Notes, step bond to yield 11.212%
due 5/15/06 1,306,000
Iridium LLC Capital Corp.:
925,000 B- Notes, 13.000% due 7/15/05 1,022,125
2,775,000 B- Sr. Notes, 14.000% due 7/15/05 3,142,687
1,650,000 B Level 3 Communications, Sr. Notes, 9.125%
due 5/1/08(a) 1,637,625
1,200,000 B+ McLeod, Inc., Sr. Discount Notes, step bond
to yield 10.642% due 3/1/07 900,000
1,525,000 NR Metronet Communications, Sr. Notes,
12.000% due 8/15/07(a) 1,759,469
350,000 B Netia Holdings, Sr. Notes, 10.250%
due 11/1/07(a) 360,500
1,300,000 B Nextlink Communications, Sr. Notes,
12.500% due 4/15/06 1,504,750
100,000 NR Orbital Imaging Corp., Sr. Notes, 11.625%
due 3/1/05 109,750
1,000,000 B3* Pagemart Nationwide Inc., Sr. Discount Notes,
step bond to yield 12.278% due 2/1/05 885,000
1,775,000 Caa2* Pagemart Wireless, Sr. Discount Notes, step
bond to yield 11.250% due 2/1/08 1,091,625
1,000,000 B- Primus Telecom Group, Sr. Notes, 11.750%
due 8/1/04 1,110,000
500,000 B- Psinet Inc., Sr. Notes, 10.000% due 2/15/05(a) 515,000
Qwest Communications Inc.:
2,100,000 B+ Sr. Discount Notes, step bond to yield
9.248% due 10/15/07 1,501,500
400,000 B+ Sr. Notes, 10.875% due 4/1/07 466,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Telecommunications -- 18.6% (continued) RCN Corp.:
$ 2,500,000 B3* Sr. Discount Notes, step bond to yield
10.553% due 10/15/07 $ 1,662,500
600,000 B3* Sr. Notes, 10.000% due 10/15/07 637,500
490,000 B- RSL Communications Ltd., Sr. Notes,
12.250% due 11/15/06 557,988
850,000 B- Satelites Mexicanos SA, Sr. Notes, 10.125%
due 11/1/04(a) 868,063
550,000 NR Wam!Net Inc., Sr. Discount Notes, step bond
to yield 13.250% due 3/1/05 347,875
- --------------------------------------------------------------------------------
28,865,625
- --------------------------------------------------------------------------------
Textiles -- 0.3%
700,000# B Texon International, Sr. Notes, 10.000%
due 2/1/08(a) 398,857
- --------------------------------------------------------------------------------
Thrifts -- 4.9%
2,875,000 B First Nationwide Holdings, Sr. Notes,
12.500% due 4/15/03 3,291,875
1,075,000 B2* Ocwen Capital Trust, Notes, 10.875% due 8/1/27 1,182,500
1,000,000 BB- Ocwen Federal Bank, Sub. Debentures,
12.000% due 6/15/05 1,102,500
1,400,000 BB- Ocwen Financial Corp., Notes, 11.875%
due 10/1/03 1,606,500
375,000 B- Saul BF REIT, Sr. Notes, 9.750% due 4/1/08(a) 374,063
- --------------------------------------------------------------------------------
7,557,438
- --------------------------------------------------------------------------------
Transportation Equipment Lessors -- 1.5%
1,550,000 BB Airplanes Pass Through Trust Corporate
Collateralized Mortgage Obligation, Trust
Certificates, Series D, 10.875% due 3/15/19 1,746,184
575,000 BB Morgan Stanley Aircraft Finance, Sr. Sub. Notes,
8.700% due 3/15/23 577,875
- --------------------------------------------------------------------------------
2,324,059
- --------------------------------------------------------------------------------
Utilities -- 3.8%
Aes Corp., Sr. Sub. Notes:
325,000 Ba1* 10.250% due 7/15/06 357,500
300,000 Ba1* 8.375% due 8/15/07 306,000
1,400,000 Ba1* 8.500% due 11/1/07 1,445,500
Calpine Corp., Sr. Notes:
1,000,000 Ba2* 10.500% due 5/15/06 1,102,500
850,000 Ba2* 8.750% due 7/15/07 877,625
500,000 BB+ Cleveland Electric, Sr. Notes, 7.430%
due 11/1/09(a) 516,875
850,000 BB+ El Paso Electric Co., First Mortgage Bond,
8.900% due 2/1/06 944,563
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Utilities -- 3.8% (continued)
$ 15,323 BB Midland Cogeneration Venture Limited Partnership,
Midland Funding, Debentures, Series C,
10.330% due 7/23/02 $ 16,492
325,000 BBB- Niagara Mohawk Power, First Mortgage Bond,
7.750% due 5/15/06 341,656
- --------------------------------------------------------------------------------
5,908,711
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost-- $137,582,418) 142,348,512
<CAPTION>
================================================================================
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
EXCHANGEABLE PREFERRED STOCK -- 2.6%
Radio and Television Broadcasting -- 2.4%
3,345 Time Warner, Inc., Series M, 10.250% 3,750,581
- --------------------------------------------------------------------------------
Thrifts -- 0.2%
10,100 California Federal Capital, Series A, 9.125% 277,750
- --------------------------------------------------------------------------------
TOTAL EXCHANGEABLE PREFERRED STOCK
(Cost-- $3,965,319) 4,028,331
================================================================================
WARRANTS -- 0.3%
Cable Television -- 0.0%
1,075 Australis Holdings, Expire 10/30/01(b) 0
1,950 UIH Australia, Expire 5/15/06(b) 29,250
750 Wireless One Inc., Expire 10/15/03(b) 188
- --------------------------------------------------------------------------------
29,438
- --------------------------------------------------------------------------------
Cellular -- 0.0%
4,950 Clearnet Communications, Expire 9/15/05(a)(b) 29,700
200 Nextel Communications, Inc., Expire 4/25/99(b) 928
- --------------------------------------------------------------------------------
30,628
- --------------------------------------------------------------------------------
Telecommunications -- 0.3%
1,250 Colt Telecom, Expire 12/31/06(b) 125,000
875 Globalstar LP, Expire 2/15/04(a)(b) 122,938
925 Iridium LLC Corp., Expire 7/15/05(b) 129,500
15,250 Metronet Communications, Expire 8/15/07(a)(b) 30,500
1,000 Primus Telecommunications, Expire 8/1/04(b) 38,000
700 RSL Communications Ltd., Expire 11/15/06(a)(b) 28,000
- --------------------------------------------------------------------------------
473,938
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost-- $301,806) 534,004
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 5.2%
$ 8,060,000 Goldman Sachs, 5.480% due 5/1/98;
Proceeds at maturity-- $8,061,225;
(Fully collateralized by U.S. Treasury Notes,
6.750% due 5/31/99; Market value-- $8,224,729)
(Cost-- $8,060,000) $ 8,060,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $149,909,543**) $154,970,847
================================================================================
</TABLE>
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(b) Nonincome producing security.
# Represents local currency.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
U.S. GOVERNMENT SECTOR -- 37.1%
U.S. Treasury Obligations -- 16.3%
$ 95,000 AAA U.S. Treasury Notes, 5.625% due 12/31/99(a) $ 95,102
210,000 AAA U.S. Treasury Notes, 5.500% due 2/29/00(a) 209,691
1,235,000 AAA U.S. Treasury Notes, 5.500% due 3/31/00(a) 1,233,369
4,285,000 AAA U.S. Treasury Notes, 6.625% due 6/30/01(a) 4,405,237
328,000 AAA U.S. Treasury Notes, 5.750% due 11/30/02(a) 329,023
280,000 AAA U.S. Treasury Notes, 5.500% due 2/28/03(a) 278,104
360,000 AAA U.S. Treasury Notes, 5.500% due 3/31/03 357,638
3,665,000 AAA U.S. Treasury Notes, 6.875% due 5/15/06(a) 3,924,848
106,000 AAA U.S. Treasury Notes, 5.500% due 2/15/08 104,649
1,585,000 AAA U.S. Treasury Bond, 6.500% due 11/15/26(a) 1,688,056
3,915,000 AAA U.S. Treasury Bond, 6.375% due 8/15/27(a) 4,132,674
6,880,000 AAA U.S. Treasury Bond, 6.125% due 11/15/27(a) 7,046,220
- --------------------------------------------------------------------------------
23,804,611
- --------------------------------------------------------------------------------
U.S. Government Agency Obligations -- 17.1%
252,717 AAA Federal Home Loan Mortgage Corp.,
7.143% due 7/1/27 252,717
131,680 AAA Federal National Mortgage Association,
7.837% due 5/1/25 136,617
7,057,684 AAA Government National Mortgage Association,
7.500% due 6/15/23 through 11/15/27 7,261,302
1,154 AAA Government National Mortgage Association,
6.000% due 11/20/27 1,171
2,801,939 AAA Government National Mortgage Association,
6.500% due 1/15/28 through 2/15/28 2,778,288
2,128,290 AAA Government National Mortgage Association,
8.000% due 10/15/24 through 3/15/28 2,210,077
7,866,562 AAA Government National Mortgage Association,
7.000% due 4/15/26 through 4/15/28 7,961,212
38,000 AAA Government National Mortgage Association,
5.500% due 4/20/28 38,118
1,645,000 AAA Government National Mortgage Association,
7.000%(b) 1,662,979
1,605,000 AAA Government National Mortgage Association,
8.000%(b) 1,664,176
348,013 AAA Government National Mortgage Association II,
7.000% due 7/20/24 354,537
737,158 AAA Government National Mortgage Association
Platinum, 7.000% due 11/15/26 749,136
- --------------------------------------------------------------------------------
25,070,330
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations -- 3.7%
552,000 AAA Chemical Master Credit Card Trust,
6.230% due 6/15/03 556,614
250,000 BBB Commercial Mortgage Acceptance Corp.,
7.110% due 12/15/30 250,703
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Collateralized Mortgage Obligations -- 3.7% (continued)
$ 95,000 AAA Contimortgage Home Equity Loan Trust,
7.670% due 3/15/25 $ 95,831
First Union-Lehman Brothers Commercial Mortgage:
290,000 AAA 6.600% due 5/18/07 293,896
560,000 AAA 6.650% due 6/18/08 568,487
415,000 BBB 7.120% due 11/18/12 414,157
251,114 AAA GMAC Commercial Mortgage Securities Inc.,
6.240% due 3/18/28 253,625
535,000 AAA Green Tree Financial Corp., 6.240% due 11/1/16 534,080
188,051 AAA Green Tree Recreational, Equipment & Consumer,
6.550% due 7/15/28 189,260
795,000 AAA Mortgage Capital Funding Inc., 6.663%
due 1/18/08 810,403
149,000 BBB Merrill Lynch Mortgage Investors Inc.,
7.116% due 2/15/30 149,000
PNC Mortgage Securities Corp.:
455,578 AAA 6.600% due 7/25/27 456,717
694,974 AAA 7.250% due 7/25/27 706,919
170,714 AAA Rural Housing Trust, 6.330% due 4/1/26 170,271
- --------------------------------------------------------------------------------
5,449,963
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECTOR
(Cost-- $53,733,017) 54,324,904
================================================================================
HIGH YIELD SECTOR -- 40.9%
CORPORATE DEBENTURES -- 37.9%
Advertising -- 0.8%
275,000 B Adams Outdoor Advertising Ltd., Sr. Notes,
10.750% due 3/15/06 302,500
450,000 B1* Lamar Advertising Co., Guaranteed Notes,
9.625% due 12/1/06 479,250
300,000 B- Outdoor Communications, Sr. Sub. Notes,
9.250% due 8/15/07 313,875
Outdoor Systems, Sr. Sub. Notes:
15,000 B1* 9.375% due 10/15/06 15,862
100,000 B1* 10.875% due 6/15/07 103,750
- --------------------------------------------------------------------------------
1,215,237
- --------------------------------------------------------------------------------
Aerospace -- 0.4%
40,000 NR Argo-Tech Corp., Company Guaranteed,
8.625% due 10/1/07 40,950
300,000 B1* BE Aerospace, Sr. Sub. Notes, 8.000%
due 3/1/08(c) 298,500
50,000 B+ Derlan Manufacturing, Sr. Notes, 10.000%
due 1/15/07 52,750
20,000 B+ Hawk Corp., Sr. Notes, 10.250% due 12/1/03 21,525
50,000 NR K&F Industries, Sr. Sub. Notes, 9.250%
due 10/15/07 52,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Aerospace -- 0.4% (continued)
$ 45,000 B2* L3 Communications Corp., Sr. Sub. Notes,
10.375% due 5/1/07 $ 49,612
20,000 B Moog Inc., Sr. Sub. Notes, 10.000% due 5/1/06 20,800
75,000 BB Sequa Corp., Sr. Notes, 9.625% due 10/15/99 77,531
- --------------------------------------------------------------------------------
613,668
- --------------------------------------------------------------------------------
Agriculture -- 0.1%
25,574 NR Premium Standard Farms Inc., Sr. Secured Notes,
11.000% due 9/17/03 27,619
110,000 BB+ Smithfield Foods Inc., Sr. Sub. Notes,
7.625% due 2/15/08(c) 108,900
- --------------------------------------------------------------------------------
136,519
- --------------------------------------------------------------------------------
Airlines -- 0.3%
90,000 Ba2* Calair LLC/Calair Corp., Company Guaranteed,
8.125% due 4/1/08(c) 90,000
150,000 B- Canadian Airlines, Secured Notes, 10.000%
due 5/1/05 151,500
Trans World Airlines Inc.:
70,000 NR 11.500% due 12/15/04 74,375
90,000 NR 11.375% due 3/1/06(c) 90,000
- --------------------------------------------------------------------------------
405,875
- --------------------------------------------------------------------------------
Automotive -- 0.5%
35,000 B Blue Bird Body Co., Sr. Sub. Notes,
10.750% due 11/15/06 38,806
25,000 NR Cambridge Industries Inc., Company
Guaranteed Notes, 10.250% due 7/15/07 26,187
25,000 B Delco Remy International Inc., Company
Guaranteed, 10.625% due 8/1/06 27,562
95,000 BB+ Lear Corp., Sub. Notes, 9.500% due 7/15/06 104,975
120,000 NR Motors & Gear, Sr. Notes, 10.750% due 11/15/06 130,950
300,000 NR Navistar International Inc., Sr. Sub. Notes,
8.000% due 2/1/08 299,625
60,000 B- Safety Components International Inc., Sr.
Sub. Notes, 10.125% due 7/15/07 62,775
- --------------------------------------------------------------------------------
690,880
- --------------------------------------------------------------------------------
Banking -- 0.9%
200,000 B+ Chevy Chase Savings Bank, Sub. Debenture,
9.250% due 12/1/05 206,500
30,000 BB Colonial Capital II, Company Guaranteed,
8.920% due 1/15/27 32,850
500,000 B First Nationwide Parent Holdings Ltd., Sr. Notes,
12.500% due 4/15/03 572,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Banking -- 0.9% (continued)
$ 30,000 B+ Imperial Credit Industries, Sr. Notes,
9.875% due 1/15/07 $ 29,475
Korean Development Bank, Bonds:
100,000 BB+ 7.125% due 9/17/01 94,750
25,000 BB+ 7.375% due 9/17/04 23,000
45,000 BB+ North Fork Bancorp, Sr. Notes, 8.700%
due 12/15/26 48,262
30,000 B2* Ocwen Capital Trust, Guaranteed Notes,
10.875% due 8/1/27 33,000
45,000 BB- Ocwen Federal Bank, Sub. Debenture,
12.000% due 6/15/05 49,612
25,000 BB- Ocwen Financial Corp., Notes, 11.875%
due 10/1/03 28,687
60,000 B- Provident Capital Trust, Guaranteed Notes,
8.600% due 12/1/26 63,675
35,000 Caa* Resource America Inc., Sr. Notes,
12.000% due 8/1/04 36,837
30,000 Baa* Riggs Capital Trust, 8.625% due 12/31/26(c) 31,912
40,000 BB- Webster Capital Trust Inc., Bonds, 9.360%
due 1/29/27(c) 44,600
- --------------------------------------------------------------------------------
1,295,660
- --------------------------------------------------------------------------------
Beverages -- 0.2%
325,000 NR Canandaigua Brands, Sr. Sub. Notes,
8.750% due 12/15/03 335,968
- --------------------------------------------------------------------------------
Broadcasting -- 1.2%
85,000 B- Acme Television Financial, Sr. Discount Notes,
step bond to yield 10.875% due 9/30/04 69,912
90,000 NR Allbritton Communication, Sr. Sub. Notes,
8.875% due 2/1/08 90,675
55,000 BB- Antenna TV SA, Sr. Notes, 9.000% due 8/1/07 56,100
200,000 B- Benedek Communications, Sr. Discount Notes,
step bond to yield 13.893% due 5/15/06 160,000
155,000 B- Capstar Broadcasting, Sr. Discount Notes,
step bond to yield 12.750% due 2/1/09 116,637
40,000 B+ Central Europe Media Enterprises, Sr. Notes,
9.375% due 8/15/04 39,700
60,000 BB- Globo Communicacoes Parts, Company Guaranteed,
10.500% due 12/20/06(c) 61,275
15,000 B- Gray Communications System, Guaranteed Notes,
10.625% due 10/1/06 16,462
Jacor Communications Co., Company Guaranteed:
30,000 NR 9.750% due 12/15/06 32,700
140,000 NR 8.750% due 6/15/07 146,300
183,000 NR Petracom Holdings Inc., Sr. Discount Notes,
zero coupon due 2/1/03 183,146
180,000 NR Radio One Inc., Sr. Sub. Notes, 7.000%
due 5/15/04 183,825
100,000 BB+ Rogers Cablesystems of America Inc.,
10.125% due 9/1/12 109,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Broadcasting -- 1.2% (continued)
$ 80,000 B3* SFX Entertainment Inc., Sr. Sub. Notes,
9.125% due 2/1/08 $ 78,200
60,000 B Spanish Broadcasting Systems Inc., Sr. Notes,
11.000% due 3/15/04 65,850
300,000 B2* Sullivan Broadcasting Inc., Sr. Sub. Notes,
10.250% due 12/15/05 324,000
25,000 Ba3* TV Azteca SA, Guaranteed Sr. Notes,
10.500% due 2/15/07 26,562
55,000 B UIH Australia Pacific Inc., Sr. Discount Notes,
step bond to yield 12.775% due 5/15/06 39,187
- --------------------------------------------------------------------------------
1,800,031
- --------------------------------------------------------------------------------
Building/Construction -- 0.4%
50,000 B American Architectural, Sr. Notes,
11.750% due 12/1/07(c) 52,500
55,000 B Atrium Inc., Sr. Sub. Notes, 10.500%
due 11/15/06 58,437
90,000 B- Brand Scaffold Services Inc., Sr. Notes,
10.250% due 2/15/08(c) 93,037
20,000 BB Building Materials Corp., Sr. Notes,
8.625% due 12/15/06 20,650
25,000 BB- Johns Manville International Group, Sr. Notes,
10.875% due 12/15/04 28,062
150,000 Ba2* Southdown Inc., Sr. Sub. Notes, 10.000%
due 3/1/06 166,687
150,000 BB- Triangle Pacific Corp., Sr. Notes, 10.500%
due 8/1/03 158,812
50,000 CC Waxman Industries Inc., Sr. Secured
Deferred Notes, step bond to yield 12.750%
due 6/1/04 38,437
- --------------------------------------------------------------------------------
616,622
- --------------------------------------------------------------------------------
Capital Goods -- 0.3%
330,000 NR MCII Holdings, Sr. Discount Notes, step
bond to yield 12.109% due 11/15/02 311,850
110,000 B Morris Materials Handling, Sr. Notes, 9.500%
due 4/1/08(c) 108,350
20,000 NR Roller Bearing Co. Inc., Sr. Sub. Notes,
9.625% due 6/15/07 20,600
- --------------------------------------------------------------------------------
440,800
- --------------------------------------------------------------------------------
Casinos -- 1.4%
150,000 B+ Argosy Gaming Co., Company Guaranteed Notes,
13.250% due 3/15/04 169,125
55,000 B+ Aututote Corp., Guaranteed Notes, 10.875%
due 8/1/04 59,056
60,000 B+ Casino America Inc., Sr. Notes,12.50%
due 8/1/03 67,350
275,000 B+ Coast Hotels Casinos Inc., Guaranteed Notes,
13.000% due 12/15/02 315,562
386,600 NR Colorado Gaming Entertainment Co., Sr. Notes,
12.000% due 6/1/03 418,011
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Casinos -- 1.4% (continued)
$ 75,000 BB Empress River Casino Financial Corp.,
Guaranteed Sr. Notes, 10.750% due 4/1/02 $ 81,937
1,000 B Greath Bay Property Funding, 1st Mortgage
Notes, 10.875% due 1/15/04 835
125,000 B+ Lady Luck Gaming Financial Corp., Guaranteed
1st Mortgage Notes, 11.875% due 3/1/01 129,843
22,000 NR Louisiana Casino Cruises, 1st Mortgage Notes,
11.500% due 12/1/98 22,357
125,000 B+ Mohegan Tribal Gaming, Sr. Notes,
13.500% due 11/15/02 161,406
75,000 BB- Players International Inc., Sr. Notes,
10.875% due 4/15/05 81,843
175,000 Caa* PRT Funding Corp., Sr. Notes, 11.625%
due 4/15/04 120,531
185,000 B1* Trump Atlantic City Funding Inc., 1st
Mortgage Notes, 11.250% due 5/1/06 185,000
230,000 NR Trump Castle Funding, 10.250% due 4/30/03(c) 232,300
- --------------------------------------------------------------------------------
2,045,156
- --------------------------------------------------------------------------------
Chemicals -- 0.9%
125,000 BB- Acetex Corp., Sr. Notes, 9.750% due 10/1/03 129,531
100,000 B+ Huntsman Corp., Sr. Sub. Notes, 9.094%
due 7/1/07(c) 100,250
200,000 BB- ISP Holding Inc., Sr. Notes, 9.750%
due 2/15/06 212,500
50,000 NR Koppers Industry Inc., Sr. Sub. Notes,
9.875% due 12/1/07 52,875
75,000 B NL Industries, Sr. Notes, step bond to yield
11.551% due 10/15/05 76,500
200,000 NR PCI Chemicals, Sr. Notes, 9.250% due 10/15/07 201,750
30,000 B+ Pioneer Americas Acquisition, Guaranteed Notes,
9.250% due 10/15/07 30,450
Polymer Group Inc., Sr. Sub. Notes:
75,000 B 9.000% due 7/1/07(c) 77,625
70,000 B 8.750% due 3/1/08 71,225
115,000 B2* Polytama International Finance, Guaranteed
Secured Notes, 11.250% due 6/15/07 66,700
25,000 BB- Sifto Canada Inc., Guaranteed Secured Notes,
8.500% due 7/15/00 26,000
80,000 B- Sovereign Specialty Chemicals, Sr. Sub. Notes,
9.500% due 8/1/07(c) 84,600
105,000 NR Sterling Chemicals Holdings Inc., Sr.
Secured Discount Notes, step bond to
yield 13.500% due 8/15/08 60,900
65,000 BB- Trikem SA, Bonds, 10.625% due 7/24/07(c) 59,800
- --------------------------------------------------------------------------------
1,250,706
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Conglomerates -- 0.1%
$ 25,000 NR CIA Latino Americana, Guaranteed Notes,
11.625% due 6/1/04(c) $ 25,562
45,000 NR DESC, SA, Company Guaranteed, 8.750%
due 10/15/07(c) 44,100
110,000 NR McAndrews & Forbes Holdings, Debentures,
13.000% due 3/1/99 110,000
- --------------------------------------------------------------------------------
179,662
- --------------------------------------------------------------------------------
Consumer Products -- 0.7%
70,000 NR Carson Inc., Sr. Sub. Notes, 10.375% due 11/1/07 71,137
60,000 B2* Chattem Inc., Sr. Sub. Notes, 8.875%
due 4/1/08(c) 60,600
150,000 Ba3* Coty Inc., Sr. Sub. Notes, 10.250% due 5/1/05 159,750
French Fragrance Inc., Sr. Notes:
30,000 B+ 10.375% due 5/15/07 32,175
40,000 B+ 10.375% due 5/15/07(c) 42,900
15,000 NR Hedstrom Holdings Inc., Sr. Discount Notes,
step bond to yield 12.000% due 6/1/09 9,300
110,000 NR Interact Systems Inc., Sr. Discount Notes,
step bond to yield 14.000% due 8/1/03 43,862
100,000 B Packaged Ice, Sr. Notes, 9.750% due 2/1/05 102,000
325,000 B- Revlon Consumer Products Corp., Sr. Notes,
8.625% due 2/1/08(c) 325,000
45,000 B- Sealy Mattress Co., Sr. Sub. Notes,
9.875% due 12/15/07(c) 47,700
80,000 B Selmer Co. Inc., Sr. Sub. Notes, 11.000%
due 5/15/00 88,500
- --------------------------------------------------------------------------------
982,924
- --------------------------------------------------------------------------------
Consumer Services -- 0.2%
25,000 NR Amscam Holdings Inc., Sr. Sub. Notes,
9.875% due 12/15/07 26,093
252,000 B+ Coinmach Corp., Sr. Notes, 11.750% due 11/15/05 282,240
85,000 Caa* Icon Fitness Corp., Sr. Discount Notes,
step bond to yield 14.000% due 11/15/06 45,050
- --------------------------------------------------------------------------------
353,383
- --------------------------------------------------------------------------------
Containers -- 0.2%
50,000 B AEP Industries Inc., Sr. Sub. Notes,
9.875% due 11/15/07(c) 52,875
50,000 BB+ Owen-Illinois Inc., Sr. Notes, 8.100%
due 5/15/07 52,937
30,000 BB- Printpack Inc., Sr. Notes, 9.875% due 8/15/04 32,025
60,000 NR Radnor Holdings Inc., Sr. Notes, 10.000%
due 12/1/03 63,000
105,000 Ba3* Vicap SA, Guaranteed Sr. Notes, 10.250%
due 5/15/02(c) 109,462
- --------------------------------------------------------------------------------
310,299
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Defense -- 0.2%
$ 150,000 B+ Alliant Tech Systems Inc., Sr. Sub. Notes,
11.750% due 3/1/03 $163,875
55,000 B+ Tracor Inc., Sr. Sub. Debentures, 8.500%
due 3/1/07 60,087
50,000 BBB United Defense Industries Inc., Sr. Sub. Notes,
8.750% due 11/15/07 51,125
- --------------------------------------------------------------------------------
275,087
- --------------------------------------------------------------------------------
Electric -- 0.1%
105,000 B- Panda Global, Guaranteed Notes, 12.500%
due 4/15/04 100,668
- --------------------------------------------------------------------------------
Electronics -- 0.2%
80,000 Ba1* AES Corp., Sr. Sub. Notes, 8.375% due 8/15/07 81,600
70,000 B1* DII Group Inc., Sr. Sub. Notes, 8.500%
due 9/15/07 70,525
35,000 B- HCC Industries, Company Guaranteed, 10.750%
due 5/15/07 36,662
60,000 Ba1* Samsung Electric, Company Guaranteed Notes,
9.750% due 5/1/03(c) 60,150
- --------------------------------------------------------------------------------
248,937
- --------------------------------------------------------------------------------
Energy -- 0.4%
60,000 B2* Coho Energy Inc., Sr. Sub. Notes, 8.875%
due 10/15/07 56,400
80,000 B Dailey International Inc., Sr. Notes, 9.500%
due 2/15/08 80,600
80,000 BB+ Market Hub Partners, Sr. Notes, 8.250%
due 3/1/08 81,600
80,000 B3* Michael Petroleum, Sr. Notes, 11.500%
due 4/1/05(c) 79,400
100,000 CC Petsec Energy Inc., Sr. Sub. Notes, 9.500%
due 6/15/07 101,500
45,000 BB Pride International Inc., Sr. Notes, 9.375%
due 5/1/07 48,150
Trico Marine Services Inc., Sr. Notes:
60,000 BB- 8.500% due 8/1/05(c) 60,300
100,000 BB- 8.500% due 8/1/05 101,000
- --------------------------------------------------------------------------------
608,950
- --------------------------------------------------------------------------------
Entertainment -- 2.4%
200,000 B AMC Entertainment Inc., Sr. Notes, 9.500%
due 3/15/09 210,750
45,000 B- ATC Group Services Inc., Sr. Sub. Notes,
12.000% due 1/15/08(c) 45,731
175,000 B Cinemark USA Inc., Sr. Sub. Notes, 9.625%
due 8/1/08 183,750
200,000 B- Fitzgeralds Gaming Corp., Company Guaranteed,
12.250% due 12/15/04(c) 203,250
Fox Kids Worldwide Inc.:
210,000 B1* Sr. Discount Notes, step bond to yield
10.250% due 11/1/07(c) 134,137
275,000 B1* Sr. Notes, 9.250% due 11/1/07(c) 272,250
220,000 B1* Fox/Liberty Networks, Sr. Notes, 8.875%
due 8/15/07 225,500
60,000 B+ Paragon Corp., Sr. Notes, 9.625% due 4/1/08(c) 61,050
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Entertainment -- 2.4% (continued)
Premier Parks Inc.:
$ 500,000 B- Sr. Discount Notes, step bond to yield
10.000% due 4/1/08 $ 319,375
250,000 B+ Sr. Notes, 12.000% due 8/15/03 277,812
50,000 B+ Sr. Notes, 9.750% due 1/15/07 54,000
50,000 B- PX Escrow Corp., Sr. Discount Notes, step
bond to yield 9.625% due 2/1/06(c) 35,687
250,000 BB Regal Cinemas Inc., Sr. Sub. Notes, 8.500%
due 10/1/07 254,375
110,000 B- Silver Cinemas, Sr. Sub. Notes, 10.500%
due 4/15/05(c) 112,475
400,000 B- Six Flags Theme Parks Inc., Sr. Sub.
Discount Notes, step bond to yield 7.958%
due 6/15/05 447,000
100,000 B- United Artists Theaters, Sr. Sub. Notes,
9.750% due 4/15/08(c) 101,375
600,000 BB- Viacom Inc., Sub. Debenture, 8.000% due 7/7/06 610,500
- --------------------------------------------------------------------------------
3,549,017
- --------------------------------------------------------------------------------
Environment -- 0.1%
130,000 B+ Allied Waste Industry Inc., Sr. Discount Notes,
step bond to yield 11.300% due 6/1/07 95,387
65,000 B+ Allied Waste North America Inc., Guaranteed
Notes, 10.250% due 12/1/06 72,150
- --------------------------------------------------------------------------------
167,537
- --------------------------------------------------------------------------------
Financial Services -- 0.8%
65,000 BB- Aames Financial Corp., Guaranteed Notes,
9.125% due 11/1/03 65,325
45,000 BB Albank Capital Trust, Guaranteed Notes,
9.270% due 6/6/27 50,647
55,000 BB+ Conti Financial Corp., Sr. Notes, 8.375%
due 8/15/03 57,956
60,000 B1* Delta Financial Corp., Sr. Notes, 9.500%
due 8/1/0459,700
30,000 BB Dime Capital Trust I, Bank Guaranteed,
9.330% due 5/6/27 34,275
30,000 B+ Dollar Financial Corp., Sr. Notes, 10.875%
due 11/15/06 32,850
30,000 Ba1* Greenpoint Capital Trust, Guaranteed Notes,
9.100% due 6/1/27 33,037
60,000 B+ Imperial Credit Capital Trust, Company
Guaranteed, 10.250% due 6/15/32(c) 59,550
40,000 B- Nationwide Credit, Sr. Notes, 10.250%
due 1/15/08(c) 40,900
30,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes,
11.000% due 11/1/06 33,037
450,000 B- Republic of Korea, Unsubordinated, 8.875%
due 4/15/08 442,687
45,000 NR Sovereign Capital Trust, Company Guaranteed,
9.000% due 4/1/07 48,825
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Financial Services -- 0.8% (continued)
$ 150,000 BB+ Tanger Properties L.P., Guaranteed Notes,
8.750% due 3/11/01 $ 155,062
- --------------------------------------------------------------------------------
1,113,851
- --------------------------------------------------------------------------------
Foods -- 0.7%
Ameriserve Food Distribution Inc.,
Guaranteed Notes:
95,000 B+ 8.750% due 10/15/06 97,968
45,000 B- 10.125% due 7/15/07 48,656
Aurora Foods Inc., Sr. Sub. Notes:
20,000 B 9.875% due 2/15/07 21,400
130,000 B- 9.875% due 2/15/07 139,100
250,000 B FRD Acquisition, Sr. Notes, 12.500% due 7/15/04 276,250
20,000 NR Leiner Health Products Group, Sr. Sub. Notes,
9.625% due 7/10/07 21,725
40,000 B+ NBTY Inc., Sr. Sub. Notes, 8.625% due 9/15/07 41,200
15,000 NR Nebco Evans Holding Co., Sr. Discount Notes,
step bond to yield 12.375% due 7/15/07 10,181
120,000 B Purina Mills Inc., Sr. Sub. Notes, 9.000%
due 3/15/10(c) 124,500
170,000 B- RAB Enterprises, Sr. Notes, 10.500%
due 5/1/05(c) 171,700
45,000 B Southern Foods Group, Sr. Sub. Notes,
9.875% due 9/1/07(c) 47,700
15,000 NR Windy Hill Pet Food Co., Sr. Sub. Notes,
9.750% due 5/15/07 15,862
- --------------------------------------------------------------------------------
1,016,242
- --------------------------------------------------------------------------------
Gaming -- 0.2%
30,000 B1* Penn National Gaming, Sr. Notes, 10.625%
due 12/15/04(c) 31,537
200,000 B Showboat Marina, 1st Mortgage Notes,
13.500% due 3/15/03 238,250
- --------------------------------------------------------------------------------
269,787
- --------------------------------------------------------------------------------
Gas & Oil Exploration -- 0.3%
Benton Oil Gas Co., Sr. Notes:
100,000 B+ 11.625% due 5/1/03 108,000
15,000 B+ 9.375% due 11/1/07 15,037
Chesapeake Energy Corp., Guaranteed Notes:
130,000 B+ 9.625% due 5/1/05(c) 131,625
50,000 B+ 9.125% due 4/15/06 49,625
Southwest Royalties Inc., Guaranteed Notes:
40,000 NR 10.500% due 10/15/04 36,050
20,000 B 10.500% due 10/15/04 18,025
128,094 B- Transtexas Gas Corp., Sr. Sub. Notes,
13.750% due 12/31/01 143,625
- --------------------------------------------------------------------------------
501,987
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Health Care -- 1.8%
$ 80,000 B Alaris Medical System Inc., Company Guaranteed,
9.750% due 12/1/06 $ 84,900
100,000 B Dade International Inc., Sr. Sub. Notes,
11.125% due 5/1/06 111,375
125,000 B2* Extendicare Health Services, Sr. Sub. Notes,
9.350% due 12/15/07(c) 130,156
150,000 Ba3* Frensenius Medical Capital Trust II,
Guaranteed Notes, 7.875% due 2/1/08(c) 150,750
100,000 NR Genesis Eldercare Co., Sr. Sub. Notes,
9.000% due 8/1/07 102,750
50,000 B2* Genesis Health Ventures, Sr. Sub. Notes,
9.250% due 10/1/06 51,625
300,000 B- Graphic Controls Corp., Sr. Sub. Notes,
12.000% due 9/15/05 336,750
150,000 BB ICN Pharmaceuticals Inc., Sr. Notes,
9.250% due 8/15/05 159,187
105,000 CC Imagyn Medical Technology, Guaranteed Notes,
12.500% due 4/1/04 60,900
55,000 B- Kinetic Concepts, Guaranteed Notes,
9.625% due 11/1/07 56,100
170,000 B- Magellan Health Services, Sr. Sub. Notes,
9.000% due 2/15/08(c) 169,362
120,000 B- Paracelsus Health, Sr. Sub. Notes, 10.000%
due 8/15/06 124,800
310,000 B- Paragon Health, Sr. Sub. Notes, step bond
to yield 9.843% due 11/1/07 201,887
50,000 NR Pharmaceutical Fine Chemicals Inc., Sr.
Sub. Notes, 9.750% due 11/15/07(c) 51,687
100,000 BB- Quorum Health Group, Sr. Sub. Notes,
8.750% due 11/1/05 105,000
115,000 B2* Sun Healthcare Group Inc., Sr. Sub. Notes,
9.500% due 7/1/07(c) 120,750
Tenet Healthcare Corp.:
50,000 BB+ Sr. Notes, 9.625% due 9/1/02 56,437
45,000 BB+ Sr. Notes, 8.000% due 1/15/05 46,237
100,000 BB- Sr. Sub. Notes, 10.125% due 3/1/05 111,375
245,000 BB- Sr. Sub. Notes, 8.625% due 1/15/07 254,800
100,000 NR Wright Medical Technology Inc., Sr. Sub. Notes,
11.750% due 7/1/00 98,750
- --------------------------------------------------------------------------------
2,585,578
- --------------------------------------------------------------------------------
Hotels -- 0.2%
250,000 BB- Host Marriott Travel Plaza, Sr. Notes,
9.500% due 5/15/05 270,937
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Industrial Goods & Services -- 0.3%
$ 280,000 BB- Cathay International Ltd., Sr. Notes,
13.000% due 4/15/08(c) $282,100
35,000 NR Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 38,500
70,000 B Flextronics International, Sr. Sub. Notes,
8.750% due 10/15/07 70,787
45,000 B- Panaco Inc., Guaranteed Notes, 10.625%
due 10/1/04 45,562
- --------------------------------------------------------------------------------
436,949
- --------------------------------------------------------------------------------
Insurance -- 0.1%
148,000 BB+ Reliance Group Holdings Inc., Sr. Notes,
9.000% due 11/15/00 155,585
- --------------------------------------------------------------------------------
Lodging -- 0.2%
40,000 B Bluegreen Corp., Sr. Notes, 10.500%
due 4/1/08(c) 40,100
85,000 B- Club Regina Resorts Inc., Units, 13.000%
due 12/1/04(c) 90,950
90,000 B1* Prime Hospitality Corp., Sr. Sub. Notes,
9.750% due 4/1/07 96,750
- --------------------------------------------------------------------------------
227,800
- --------------------------------------------------------------------------------
Media - Cable -- 3.1%
Adelphia Communications Corp. Sr. Notes:
100,000 B 10.250% due 7/15/00 104,500
25,000 B 12.500% due 5/15/02 25,968
7,493 B 9.500% due 2/15/04 Payment-in-Kind 7,886
40,000 NR Azteca Holdings, Sr. Notes, 11.000% due 6/15/02 41,700
140,000 BB- Century Communication Corp., Sr. Notes,
9.500% due 3/1/05 150,850
190,000 Ba3* Chancellor Media Corp., Sr. Sub. Notes,
9.375% due 10/1/04 199,025
250,000 B Charter Communications Southeast Holdings,
Sr. Discount Notes, step bond to yield
14.000% due 3/15/07 201,250
305,000 B- Citadel Broadcasting, Sr. Sub. Notes, 10.250%
due 7/1/07 337,025
250,000 BB+ Comcast Corp., Sr. Sub. Debentures, 9.500%
due 1/15/08 264,687
200,000 B2* Comcast UK Cable, Debenture, step bond
to yield 10.435% due 11/15/07 165,750
CSC Holdings Inc., Sr. Sub. Notes:
25,000 BB- 9.875% due 2/15/13 27,562
100,000 BB- 10.500% due 5/15/16 117,375
150,000 BB- 9.875% due 4/1/23 166,687
Diamond Cable Communication PLC, Sr.
Discount Notes:
100,000 B Step bond to yield 10.920% due 9/30/04 92,750
225,000 B Step bond to yield 11.468% due 12/15/05 179,437
255,000 B- Step bond to yield 10.253% due 2/15/07 181,050
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Media - Cable -- 3.1% (continued)
$ 310,000 NR Diva Systems Corp., Units, step bond to yield
12.625% due 3/1/08(c) $ 170,500
200,815 B3* Falcon Holding Group L.P., Sr. Sub. Notes,
11.000% due 9/15/03 Payment-In-Kind 215,625
60,000 BB- Globo Communicacoes Par, Sr. Notes,
10.625% due 12/5/08(c) 60,975
80,000 B2* Innova S. de R.L., Sr. Notes, 12.875%
due 4/1/07 86,700
500,000 B- International Cabletel Inc., Sr. Notes,
step bond to yield 11.173% due 2/1/06 400,625
100,000 B+ Jones Intercable, Sr. Sub. Debentures,
10.500% due 3/1/08 109,250
215,000 NR Knology Holdings Inc., Units, step bond
to yield 11.875% due 10/15/07 130,075
140,000 B Marcus Cable Capital Corp., Sr. Discount Notes,
step bond to yield 11.174% due 8/1/04 134,050
305,000 B- NTL Inc., Sr. Notes, 10.000% due 2/15/07 329,400
50,000 B2* Pegasus Media & Communications, Notes,
12.500% due 7/1/05 57,375
50,000 BBB Telecommunication Inc., Notes, 9.250%
due 1/15/23 56,312
115,000 BBB Time Warner Inc., Debentures, 8.180%
due 8/15/07 126,931
220,000 B UIH Australia Inc., Sr. Discount Notes,
step bond to yield 14.000% due 5/15/06 156,750
220,000 NR United International Holdings Inc.,
Sr. Discount Notes, step bond to yield
10.750% due 2/15/08 138,875
Wireless One Inc.:
55,000 CC Sr. Discount Notes, step bond to yield
13.500% due 10/15/03 14,300
100,000 CC Units, 13.500% due 8/1/06 25,000
- --------------------------------------------------------------------------------
4,476,245
- --------------------------------------------------------------------------------
Metals -- 0.7%
25,000 B+ Acindar Industria Argentina, Bonds,
11.250% due 2/15/04 26,250
140,000 Ba3* Ameristeel Corp., Sr. Notes, 8.750%
due 4/15/08(c) 141,400
150,000 NR Anker Coal Group Inc., Sr. Notes, 9.750%
due 10/1/07 145,875
50,000 B2* Armco Inc., Sr. Notes, 9.000% due 9/15/07 52,000
60,000 B Continental Global Group, Sr. Notes, 11.000%
due 4/1/07 63,900
150,000 BB- Great Lakes Carbon Corp., Sr. Notes,
10.000% due 1/1/06 163,312
150,000 BB Hylsa SA DA CV, Bonds, 9.250% due 9/15/07(c) 149,625
100,000 B1* UCAR Global Enterprises Inc., Sr. Sub. Notes,
12.000% due 1/15/05 112,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Metals -- 0.7% (continued)
$ 100,000 B Weirton Steel Corp., Sr. Notes, 11.375%
due 7/1/04 $ 107,000
80,000 B- WHX Corp., Sr. Sub. Notes, 10.500%
due 4/15/05(c) 81,800
- --------------------------------------------------------------------------------
1,043,412
- --------------------------------------------------------------------------------
Miscellaneous -- 2.0%
45,000 B2* Abraxas Petroleum Corp., Sr. Notes,
11.500% due 11/1/04 46,800
120,000 B- Decora Industries, Secured Notes, 11.000%
due 5/15/05(c) 117,150
80,000 BB- Espirito Santo-Escelsa, Sr. Notes, 10.000%
due 7/15/07(c) 77,200
100,000 B+ Global Health Sciences, Sr. Notes, 11.000%
due 5/1/08(c) 101,500
70,000 B- Gothic Productions, Sr. Notes, 11.125%
due 5/1/05(c) 70,350
170,000 B Grove Worldwide, Sr. Sub. Notes, 9.250%
due 5/1/08(c) 170,000
190,000 BB GS Superhighway, Sr. Notes, 9.875% due 8/15/04 163,400
240,000 B IPC Information Systems, Sr. Discount Notes,
step bond to yield 10.875% due 5/1/08 177,000
Iron Mountain Inc.:
50,000 B- Company Guaranteed, 10.125% due 10/1/06 54,750
125,000 B- Guaranteed Notes, 8.750% due 9/30/09 128,750
Isle of Capri Capital Corp., 1st Mortgage Notes:
300,000 B- 13.000% due 8/31/04 310,125
50,000 NR 13.000% due 8/31/04 51,687
50,000 B- Jackson Products Inc., Guaranteed Notes,
9.500% due 4/15/05(c) 50,500
125,000 B Johnstown America Industries, Guaranteed Notes,
11.750% due 8/15/05 140,000
250,000 B+ Kitty Hawk Inc., Guaranteed Notes, 9.950%
due 11/15/04 258,750
100,000 BB- MDC Holdings Inc., Notes, 11.125%
due 12/15/03 110,375
30,000 BB Newport News Shipbuilding, Sr. Notes,
8.625% due 12/1/06 31,425
120,000 NR Ocean Energy Inc., Guaranteed Notes,
8.875% due 7/15/07 126,300
110,000 NR Orbital Imaging Corp., Units, 11.625%
due 3/1/05 120,725
30,000 BBB Perez Companc, Bonds, 9.000% due 1/30/04 30,337
117,000 B- Pierce Leahy Corp., Sr. Sub. Notes,
11.125% due 7/15/06 132,502
15,000 B+ Pogo Producing Co., Sr. Sub. Notes, 8.750%
due 5/15/07 15,450
60,000 CC Presley Co., Sr. Notes, 12.500% due 7/1/01 57,750
305,000 BBB SB Treasury Co., Bonds, 9.400% due 12/29/49 314,531
40,000 B- Williams Scotsman Inc., Sr. Notes, 9.875%
due 6/1/07 42,400
80,000 NR XCL Ltd. Unit, Sr. Secured Discount Notes,
13.500% due 5/1/04(c) 104,000
- -------------------------------------------------------------------------------
3,003,757
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Oil & Gas -- 1.0%
- --------------------------------------------------------------------------------
$ 45,000 B+ DI Industries, Sr. Notes, 8.875% due 7/1/07 $ 46,237
70,000 B- Ram Energy Inc., Sr. Notes, 11.500%
due 2/15/08 70,000
Transamerica Energy Corp.:
855,000 B+ Sr. Discount Notes, step bond to yield
13.000% due 6/15/02 724,612
380,000 NR Sr. Notes, 11.500% due 6/15/02 374,300
320,000 B3* Sr. Secured Discount Notes, 13.000%
due 6/15/02 271,200
30,000 NR Wiser Oil Co., Sr. Sub. Notes, 9.500%
due 5/15/07 28,950
- --------------------------------------------------------------------------------
1,515,299
- --------------------------------------------------------------------------------
Paper -- 1.5%
350,000 NR APP Global Finance Ltd., Company Guaranteed
Notes, 3.500% due 4/30/03(c) 350,875
105,000 NR APP Global Financial V Ltd., Secured Notes,
2.000% due 7/25/00(c) 109,725
150,000 B- APP Finance II Maturitius Ltd., Bonds,
12.000% due 12/29/49 126,750
85,000 B- Florida Coast Paper LLC., 1st Mortgage,
12.750% due 6/1/03 92,862
80,000 B Huntsman Packaging Corp., Sr. Sub. Notes,
9.125% due 10/1/07 81,700
130,000 B- Impac Group Inc., Sr. Sub. Notes, 10.125%
due 3/15/08(c) 132,112
250,000 B- Indah Kiat Finance, Guaranteed Notes,
10.000% due 7/1/07 208,125
135,000 NR MAXXAM Group Holdings Inc., Sr. Notes,
12.000% due 8/1/03 148,331
130,000 B- Pindo Deli Finance Mauritius, Guaranteed Notes,
10.750% due 10/1/07 106,925
335,000 CC Repap New Brunswick, Sr. Notes, 10.625%
due 4/15/05 348,400
Riverwood International Corp.:
50,000 B- Sr. Notes, 10.250% due 4/1/06 51,812
320,000 CC Sr. Sub. Notes, 10.875% due 4/1/08 324,000
60,000 B- Stone Container Corp., Units, Sr.
Sub. Debentures, 10.750% due 4/1/02 61,950
150,000 B- Tjiwi Kimia Finance Mauritius,
Guaranteed Notes, 10.000% due 8/1/04 124,125
- --------------------------------------------------------------------------------
2,267,692
- --------------------------------------------------------------------------------
Publishing -- 0.6%
Affinity Group, Inc.:
110,000 NR Sr. Notes, 11.000% due 4/1/07 117,562
150,000 B Sr. Sub. Notes, 11.500% due
10/15/03 Payment-In-Kind 159,187
150,000 B1* American Media Operation Inc., Sr.
Sub. Notes, 11.625% due 11/15/04 163,125
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Publishing -- 0.6% (continued)
$ 150,000 B+ Garden State Newspapers, Sr. Sub. Notes,
8.750% due 10/1/09 $ 153,937
75,000 BB- Hollinger International, Guaranteed Notes,
9.250% due 3/15/07 78,562
200,000 B- Perry-Judd, Sr. Sub. Notes, 10.625% due
12/15/07 211,250
30,000 NR Von Hoffman Press Inc., Sr. Sub. Notes,
10.375% due 5/15/07(c) 32,287
25,000 BB- World Color Press Inc., Sr. Sub. Notes,
9.125% due 3/15/03 26,156
- --------------------------------------------------------------------------------
942,066
- --------------------------------------------------------------------------------
Railroads -- 0.1% TFM SA de CV:
120,000 B- Guaranteed Notes, step bond to yield
11.767% due 6/15/09 77,400
25,000 B3* Sr. Notes, 11.500% due 10/1/06 25,625
- --------------------------------------------------------------------------------
103,025
- --------------------------------------------------------------------------------
Retailers -- 0.8%
225,000 B+ Brylane Capital Corp., Sr. Sub. Notes, 10.000%
due 9/1/03 237,656
50,000 B- Color Spot Nurseries Inc., Sr. Sub. Notes,
10.500% due 12/15/07 50,062
150,000 B Corporate Express, Sr. Sub. Notes, 9.125%
due 3/15/04 154,500
90,000 B- Eye Care Centers of America, Sr. Sub. Notes,
9.125% due 5/1/08(c) 90,225
150,000 B- Mothers Work, Inc., Sr. Notes, 12.625%
due 8/1/05 161,812
105,000 NR Sassco Fashions Ltd., Sr. Notes, 12.750%
due 3/31/04 111,168
45,000 BB- Specialty Retailers Inc., Sr. Notes, 8.500%
due 7/15/05 46,125
United Stationer Supply, Sr. Sub. Notes:
67,000 B 12.750% due 5/1/05 76,128
110,000 B 8.375% due 4/15/08 110,825
15,000 B- William Carter, Sr. Sub. Notes, 10.375%
due 12/1/06 16,106
90,000 B Zale Corp., Sr. Notes, 8.500% due 10/1/07 91,575
- --------------------------------------------------------------------------------
1,146,182
- --------------------------------------------------------------------------------
Supermarkets -- 0.3%
90,000 B+ Fleming Cos. Inc., Guaranteed Notes,
10.500% due 12/1/04 94,500
350,000 BB+ Southland Corp., 2nd Priority Sr. Sub.
Debentures, 4.500% due 6/15/04 290,062
80,000 B- Stater Brothers Holdings Inc., Sr. Sub. Notes,
9.000% due 7/1/04 83,800
- --------------------------------------------------------------------------------
468,362
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Technology -- 0.8%
$ 50,000 NR Bell Technology Ltd., Units, 13.000%
due 5/1/05(c) $ 50,500
60,000 B- Details Inc., Sr. Sub. Notes, 10.000%
due 11/15/05 62,100
Fairchild Semiconductor, Sr. Sub. Notes:
260,000 B 10.125% due 3/15/07 269,750
215,901 NR 11.750% due 3/14/08 Payment-In-Kind(c) 247,206
50,000 NR Integrated Device Technology, Sub. Notes,
5.500% due 6/1/02 45,312
30,000 NR National Semiconductor Inc., Sub. Debentures,
6.500% due 10/1/02(c) 28,725
130,000 B- PSINET Inc., Sr. Notes, 10.000% due 2/15/05 133,900
ViaSystems Inc., Sr. Sub. Notes:
80,000 B- 9.750% due 6/1/07 83,800
140,000 B- 9.750% due 6/1/07(c) 146,650
20,000 NR Wavetek Corp., Sr. Sub. Notes, 10.125%
due 6/15/07 20,850
170,000 B Zilog Inc., Sr. Notes, 9.500% due 3/1/05(c) 149,600
- --------------------------------------------------------------------------------
1,238,393
- --------------------------------------------------------------------------------
Telecommunications -- 8.0%
20,000 B2* Advanstar Communications, Sr. Sub. Notes,
9.250% due 5/1/08(c) 20,050
300,000 NR Allegiance Telecom Inc., Units, step bond
to yield 11.641% due 2/15/08(c) 172,500
150,000 NR Amer Mobile, Units, 12.250% due 4/1/08(c) 155,250
110,000 B3* Barak I.T.C, Sr. Discount Notes, step bond
to yield 12.500% due 11/15/07 66,000
Celcaribe SA:
250,000 NR Sr. Notes, step bond to yield 11.841%
due 3/15/04 258,750
3,000 NR Units, step bond to yield 9.611% due 3/15/04 63,450
510,000 NR Cellnet Data System Inc., Units, step bond
to yield 14.000% due 10/1/07 267,750
55,000 B2* Cencall Communications, Sr. Discount Notes,
step bond to yield 13.045% due 1/15/04 53,625
Centennial Cellular Corp., Sr. Notes:
100,000 Ba3* 8.875% due 11/1/01 103,250
200,000 Ba3* 10.125% due 5/15/05 223,250
65,000 NR Colt Telecom, Sr. Discount Notes, step bond
to yield 12.000% due 12/15/06 51,837
120,000 BB+ Comcast Cellular Holdings, Sr. Notes, 9.500%
due 5/1//07 125,400
35,000 NR Concentric Network Corp., Units, 12.750%
due 12/15/07(c) 42,700
90,000 NR Conecel Holdings Ltd., Units, 14.000%
due 10/1/00(c) 98,325
30,000 NR Consorcio Ecuatoriano TE, Notes, 14.000%
due 5/1/02 30,037
75,000 NR Dobson Communication Corp., Sr. Notes,
11.750% due 4/15/07 82,312
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
34 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Telecommunications -- 8.0% (continued)
$ 390,000 NR DTI Holdings Inc., Unit, step bond to yield
12.214% due 3/1/08(c) $ 229,125
100,000 B2* Echostar DBS Corp., Company Guaranteed,
12.500% due 7/1/02 112,500
250,000 NR Econophone Inc., Sr. Discount Notes, step
bond to yield 11.000% due 2/15/08 144,687
65,000 B+ Esat Telecom Group PLC, Sr. Notes, step bond
to yield 13.513% due 2/1/07 48,831
60,000 B- Esprit Telecom Group PLC, Sr. Notes,
11.500% due 12/15/07 66,000
260,000 NR FirstWorld Communications, Unit, step bond
to yield 13.000% due 4/15/08 139,100
75,000 BB- Fonorola Inc., Sr. Notes, 12.500% due 8/15/02 83,812
GST Telecom, Sr. Discount Notes:
20,000 NR Step bond to yield 14.752% due 12/15/05(c) 31,400
350,000 NR Step bond to yield 14.606% due 5/1/08(c) 211,750
360,000 NR GST USA Inc., Guaranteed Notes, step
bond to yield 13.875% due 12/15/05 295,650
Heartland Wireless Communications, Sr. Notes:
100,000 Ca* 14.000% due 10/15/04 23,000
25,000 Ca* Units, 13.000% due 4/15/03 5,250
70,000 B Hermes Europe Railtel BV, Sr. Notes,
11.500% due 8/15/07 79,625
Hyperion Telecommunications:
50,000 B Sr. Notes, 12.250% due 9/1/04 55,500
80,000 B Step bond to yield 13.467% due 4/15/03 60,700
ICG Services, Sr. Discount Notes:
480,000 NR Step bond to yield 9.692% due 2/15/08(c) 312,600
310,000 NR Step bond to yield 9.875% due 5/1/08 191,425
70,000 NR IDT Corp., Sr. Notes, 8.750% due 2/15/06(c) 69,475
140,000 B3* IXC Communications Inc., Sr. Sub. Notes,
9.000% due 4/15/08 139,300
Intelcom Group(USA) Inc.:
200,000 NR Company Guaranteed, step bond to yield
12.500% due 5/1/06 161,000
200,000 NR Sr. Discount Notes, step bond to yield
13.236% due 9/15/05 172,250
120,000 B Intercel Inc., Sr. Discount Notes, step bond
to yield 12.000% due 5/1/06 91,350
Intermedia Communication Inc., Sr. Notes:
235,000 B 8.875% due 11/1/07 243,225
125,000 B 8.500% due 1/15/08 126,875
45,000 NR International Wireless Communications,
Sr. Discount Notes, zero coupon due 8/15/01 15,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Telecommunications -- 8.0% (continued)
$ 315,000 Caa3* Ionica PLC, Sr. Discount Notes, step bond
to yield 19.543% due 5/1/07 $ 138,600
Iridium LLC Capital Corp., Sr. Notes:
20,000 B- 11.250% due 7/15/05(c) 20,600
10,000 B- 13.000% due 7/15/05 11,050
150,000 B- 14.000% due 7/15/05 169,875
250,000 NR KMC Telecommunications Holding Inc., Units,
step bond to yield 12.388% due 2/15/08(c) 152,500
240,000 NR Long Distance International Inc., Sr. Notes,
12.250% due 4/15/08(c) 241,800
125,000 CCC+ McCaw International Ltd., Sr. Notes, step
bond to yield 13.000% due 4/15/07 86,250
Metrocall Inc., Sr. Sub. Notes:
180,000 B3* 10.375% due 10/1/07 187,200
20,000 NR 9.750% due 11/1/07 20,400
50,000 NR Metronet Communications, Sr. Discount Notes,
step bond to yield 10.750% due 11/1/07 33,625
35,000 NR MGC Communications Inc., Sr. Notes,
13.000% due 10/1/04 36,662
70,000 B3* Microcell Telecommunications, Sr. Discount
Notes, step bond to yield 11.405% due 6/1/06 52,587
585,000 B- Millicom International Cellular SA, Sr. Sub.
Discount Notes, step bond to yield
12.422% due 6/1/06 452,643
100,000 B- Mobile Telecom Technology, Sr. Notes,
13.500% due 12/15/02 117,000
Netia Holdings BV, Guaranteed Notes:
40,000 B 10.250% due 11/1/07(c) 41,200
20,000 B3* 11.250% due 11/1/07(c) 14,250
Nextel Communications, Sr. Discount Notes:
675,000 B3* Step bond to yield 12.982% due 8/15/04 652,218
390,000 B- Step bond to yield 10.650% due 9/15/07 263,250
160,000 B3* Step bond to yield 9.750% due 10/31/07 105,200
340,000 B2* Step bond to yield 11.132% due 2/15/08(c) 217,175
510,000 CC Nextel International Inc., Sr. Discount Notes,
step bond to yield 12.125% due 4/15/08(c) 314,925
140,000 B3* Omnipoint Corp., Sr. Notes, 11.625% due 8/15/06 152,600
210,000 B3* Orbcomm Global, Sr. Notes, 14.000% due 8/15/04 246,225
40,000 NR Paging Network, Sr. Notes, 13.500% due 6/6/05(c) 40,100
40,000 B3* Pagemart Nationwide, Inc., Sr. Discount Notes,
step bond to yield 12.591% due 2/1/05 35,400
160,000 NR Powercel Inc., Sr. Notes, 11.125% due 6/1/07 178,000
76,000 NR Pricellular Wire, Debentures, 10.750%
due 8/15/04(c) 83,980
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
36 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Telecommunications -- 8.0% (continued)
$ 125,000 B+ Qwest Communications International Inc.,
Sr. Discount Notes, 9.470% due 10/15/07 $ 89,375
220,000 NR RCN Corp., Sr. Discount Notes, step bond
to yield 11.125% due 10/15/07 146,300
230,000 NR Rhythms Netcon, Units, step bond to yield
13.500% due 5/15/08 119,600
RSL Communications:
100,000 B- Sr. Discount Notes, step bond to yield
10.125% due 3/1/08(c) 62,000
70,000 B- Sr. Notes, 9.125% due 3/1/08(c) 70,350
90,000 B- Satellites Mexicanos SA, Sr. Notes,
10.125% due 11/1/04(c) 91,912
300,000 B+ Sprint Spectrum Finance Corp., Sr. Notes,
11.000% due 8/15/06 343,500
25,000 CC Sygnet Wireless Inc., Sr. Notes, 11.500%
due 10/1/06 27,687
50,000 B- Telesystem International Wireless Inc., Sr.
Discount Notes, 10.500% due 11/1/07 31,937
250,000 CC Teligent Inc., Sr. Notes, 11.500% due 12/1/07 260,625
45,000 B Transtel SA, Sr. Notes, 12.500% due 11/1/07 43,143
400,000 NR Viatel Inc., Units, step bond to yield
10.879% due 4/15/08(c) 242,500
Winstar Communications Inc.:
300,000 NR Sr. Sub. Discount Notes, step bond to yield
14.000% due 10/15/05(c) 429,000
130,000 NR Sr. Sub. Notes, 15.000% due 3/1/07 172,250
60,000 CC Winstar Equipment Corp., Guaranteed Sr.
Secured Notes, 12.500% due 3/15/04 68,400
500,000 BBB Worldcom Inc., Sr. Notes, 7.750% due 4/1/27 554,375
- --------------------------------------------------------------------------------
11,742,935
- --------------------------------------------------------------------------------
Telephone -- 0.6%
110,000 NR BTI Telecom Corp., Sr. Notes, 10.500%
due 9/15/07 114,400
E. Spire Communication:
60,000 NR Sr. Notes, 13.750% due 7/15/07 70,800
500,000 NR Sr. Sub. Notes, step bond to yield 13.297%
due 11/1/05 418,750
70,000 NR Facilicom International Inc., Sr. Notes,
10.500% due 1/15/08(c) 72,275
150,000 B+ Flag Ltd., Sr. Notes, 8.250% due 1/30/08(c) 153,375
- --------------------------------------------------------------------------------
829,600
- --------------------------------------------------------------------------------
Textiles -- 0.5%
50,000 NR Carter Holdings Inc., Sr. Sub. Notes,
12.000% due 10/1/08 53,625
25,000 B- Gear For Sports Inc., Sr. Sub. Notes,
9.625% due 3/1/07 26,468
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Textiles -- 0.5% (continued)
$ 30,000 NR Glenoit Corp., Sr. Sub. Notes, 11.000%
due 4/15/07 $ 32,775
400,000 BB- Guess Inc., Sr. Sub. Notes, 9.500%
due 8/15/03 412,000
70,000 CC Polysindo International Finance, Guaranteed
Secured Notes, 11.375% due 6/15/06 41,650
170,000 B+ Tultex Corp., Sr. Notes, 10.625% due 3/15/05 176,800
- --------------------------------------------------------------------------------
743,318
- --------------------------------------------------------------------------------
Transportation -- 0.2%
40,000 B+ Coach USA Inc., Guaranteed Notes, 9.375%
due 7/1/07 41,450
100,000 Ba2* Eletson Holdings, 1st Mortgage Notes,
9.250% due 11/15/03 103,250
40,000 NR International Shipholding, Sr. Notes, 7.750%
due 10/15/07 39,700
60,000 B+ MC Shipping Inc., Sr. Notes, 11.250%
due 3/1/08 60,525
- --------------------------------------------------------------------------------
244,925
- --------------------------------------------------------------------------------
Utilities - Electric -- 1.1%
85,000 BB- AES China Generating Co., Notes, 10.125%
due 12/15/06 82,237
125,000 BB+ California Energy Inc., Sr. Notes, 9.875%
due 6/30/03 135,000
70,000 BB CMS Energy Corp., Sr. Notes, 8.125%
due 5/15/02 71,925
165,000 B Costilla Energy Inc., Sr. Notes, 10.250%
due 10/1/06 169,537
57,000 BB- First PV Funding, Debentures, 10.150%
due 1/15/16 60,063
200,000 BB+ Long Island Lighting Co., Debentures,
9.000% due 11/1/22 227,500
183,887 BB- Midland Cogeneration Venture, Sr. Secured
Lease Obligation Bond, 10.330% due 7/23/02 197,908
15,939 B Midland Funding Corp. I, Sr. Secured Lease
Obligation Bond, Series C-91, 10.330%
due 7/23/02 17,154
Midland Funding Corp. II, Sr. Secured Lease
Obligation Bonds:
115,000 B Series A, 11.750% due 7/23/06 136,850
75,000 BB- Series B, 13.250% due 7/23/06 94,312
Niagara Mohawk Power, Notes:
100,000 Ba2* 5.875% due 9/1/02 97,375
150,000 Ba2* 9.990% due 5/11/04 151,875
Northeast Utilities, Notes:
106,667 BB 8.830% due 3/1/05 106,933
17,831 BB+ 8.580% due 12/1/06 17,786
- --------------------------------------------------------------------------------
1,566,455
- --------------------------------------------------------------------------------
TOTAL CORPORATE DEBENTURES
(Cost-- $53,881,461) 55,533,968
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
38 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
COMMON STOCK -- 0.2%
Agriculture -- 0.0%
2,203 PSF Holding LLC $ 66,076
- --------------------------------------------------------------------------------
Consumer Products -- 0.1%
3,020 Chattem Inc. 83,805
910 Hedstrom Holdings Inc. 1,137
- --------------------------------------------------------------------------------
84,942
- --------------------------------------------------------------------------------
Electric --0.0%
78 El Paso Electric Co. 8,211
- --------------------------------------------------------------------------------
Foods -- 0.0%
25 Amerking Inc. 1,250
- --------------------------------------------------------------------------------
Telecommunications -- 0.1%
3,650 American Mobil Satellite Corp. 39,237
1,881 Nextel Communications Inc. 53,961
- --------------------------------------------------------------------------------
93,198
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $175,918) 253,677
================================================================================
PREFERRED STOCK -- 2.7%
Banking -- 0.2%
5,400 California Fed Preferred Cap Corp.,
Series A, 9.125% 148,500
3,500 Chevy Chase Preferred Capital Corp., Series A,
Exchangeable 178,500
- --------------------------------------------------------------------------------
327,000
- --------------------------------------------------------------------------------
Broadcasting -- 0.6%
4 American Radio System Corp., Series B, 11.375% 484
479 Capstar Broadcasting Partners, Sr. Preferred,
12.000%(c) 56,522
899 Chancellor Media Corp., Exchangeable,
12.000%(c) 107,880
2,450 Citadel Broadcasting Co., Exchangeable,
Series B, 13.250% 298,900
1,265 SFX Broadcasting Inc., Payment-in-kind,
Exchangeable, 12.625% 149,902
210 Spanish Broadcasting Systems, Inc.,
Payment-in-Kind 220,861
- --------------------------------------------------------------------------------
834,549
- --------------------------------------------------------------------------------
Communications -- 0.0%
680 Echostar Communications, Payment-in-Kind 76,840
- --------------------------------------------------------------------------------
Electric -- 0.0%
2,401 Public Service Co. 62,426
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Foods -- 0.1%
1,170 Amerking Inc., Sr. Preferred 13.000% $ 31,590
900 Nebco Evans Holdings Inc., Payment-in-Kind,
Exchanges 11.250%(c) 93,150
- --------------------------------------------------------------------------------
124,740
- --------------------------------------------------------------------------------
Heath Care -- 0.1%
800 Fresensius Medical Care 84,000
- --------------------------------------------------------------------------------
Media - Cable -- 0.6%
2,432 CSC Holdings Inc. 280,350
489 Time Warner Inc. 548,291
- --------------------------------------------------------------------------------
828,641
- --------------------------------------------------------------------------------
Miscellaneous -- 0.0%
635 Chesapeake Energy Inc., Payment-in-Kind(c) 31,035
- --------------------------------------------------------------------------------
Publishing -- 0.0%
750 Von Hoffman Inc.(c) 24,750
- --------------------------------------------------------------------------------
Refining -- 0.1%
135 Transamerica Refunding Corp., 16.000%
due 6/30/00(c) 144,112
- --------------------------------------------------------------------------------
Telecommunications -- 1.0%
134 Dobson Communications, Payment-in-Kind(c) 146,370
229 Intermedia Communications Inc., Payment-in-Kind 281,128
147 IXC Communications Inc.(c) 179,174
919 Nextel Communications Inc. 103,838
530 Nextel Communications Inc., Series E(c) 567,100
2,268 Nextlink Communications Inc., Payment-in-Kind 141,730
- --------------------------------------------------------------------------------
1,419,340
- --------------------------------------------------------------------------------
Textile -- 0.0%
19 Anvil Holdings Inc., Sr. Preferred,
Series BV 13.000% 475
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost-- $3,700,171) 3,957,908
================================================================================
WARRANTS -- 0.1%
Broadcasting -- 0.0%
201 Petracom Holdings Inc., Expire 2/1/03(c) 1,608
75 Spanish Broadcasting Systems Inc., Expire
6/30/99(c) 15,375
- --------------------------------------------------------------------------------
16,983
- --------------------------------------------------------------------------------
Casinos -- 0.0%
75 Louisiana Casino Cruises Inc., Expire 12/1/98(c) 0
- --------------------------------------------------------------------------------
Chemicals -- 0.0%
40 Sterling Chemicals Holdings Inc., Expire
8/15/08(c) 1,040
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
40 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Health Care -- 0.0%
105 Urohealth Systems Inc., Expire 4/1/04(c) $ 1
- --------------------------------------------------------------------------------
Media Cable -- 0.0%
330 UIH Australia Inc., Expire 5/15/06(c) 4,950
300 Wireless One Inc., Expire 10/15/03(c) 75
- --------------------------------------------------------------------------------
5,025
- --------------------------------------------------------------------------------
Miscellaneous -- 0.0%
221 President Riverboat Inc., Expire 9/30/99(c) 110
- --------------------------------------------------------------------------------
Telecommunications -- 0.1%
65 Colt Telecom, Expire 12/15/06(c) 6,500
65 Esat Inc., Expire 2/1/07(c) 2,275
40 Globalstar LP Inc., Expire 2/15/04(c) 5,620
150 Heartland Wireless Inc., Expire 4/26/00 (c) 1
395 Hyperion Communications Inc., Expire 4/1/01(c) 27,650
495 Intelcom Group Inc., Expire 9/15/05(c) 16,335
110 Interact Systems Inc., Expire 8/1/03(c) 27
125 Intermedia Communications Inc.,
Expire 6/1/00(c) 16,875
45 International Wireless Inc., Expire 8/15/01(c) 45
35 MGC Communications Inc., Expire 10/1/04 (c) 1,750
110 Orion Network System, Expire 1/31/07(c) 1,320
40 Paging Network Brasi Inc., Expire 6/6/05(c) 0
- --------------------------------------------------------------------------------
78,398
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(Coat-- $56,429) 101,557
================================================================================
TOTAL HIGH YIELD SECTOR
(Cost-- $57,813,979) 59,847,110
================================================================================
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT+ SECURITY VALUE
================================================================================
<S> <C> <C>
INTERNATIONAL SECTOR -- 18.7%
FOREIGN BONDS -- 18.7%
Argentina -- 1.3%
2,455,000 Republic of Argentina, 5.750% due 3/31/23 1,870,403
- --------------------------------------------------------------------------------
Brazil -- 0.4%
692,939 Republic of Brazil - C bond, 7.283%
due 4/15/14 573,407
- --------------------------------------------------------------------------------
France -- 0.1%
Ivory Coast:
800,000 PDI, 2.000% due 3/31/18(a) 52,510
800,000 Floating Rate bond, 2.000% due 3/31/18(a) 44,534
- --------------------------------------------------------------------------------
97,044
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT+ SECURITY VALUE
================================================================================
<S> <C> <C>
Germany -- 4.2%
- --------------------------------------------------------------------------------
5,815,000 DBR Unity Fund, 8.000% due 1/21/02(a) $ 3,610,517
4,690,000 Deutschland Republic, 5.625% due 1/21/02(a) 2,616,154
- --------------------------------------------------------------------------------
6,226,671
- --------------------------------------------------------------------------------
Great Britain -- 4.8%
United Kingdom Treasury:
3,015,000 7.250% due 12/7/07(a) 5,559,330
705,000 8.000% due 6/7/21(a) 1,509,908
- --------------------------------------------------------------------------------
7,069,238
- --------------------------------------------------------------------------------
Mexico -- 1.4%
2,527,000 Mexico Par, 6.250% due 12/31/19 2,136,893
- --------------------------------------------------------------------------------
Peru -- 0.6%
1,400,000 Peru PDI, 4.000% due 3/7/17 954,625
- --------------------------------------------------------------------------------
Philippines -- 0.5%
861,000 Philippines, 5.250% due 12/1/17 765,213
- --------------------------------------------------------------------------------
Poland -- 1.2%
1,978,000 Poland PDI, 3.750% due 10/27/14 1,809,870
- --------------------------------------------------------------------------------
Russia -- 1.5%
3,410,000 Russia Principal Loan, 6.719% due 12/15/20 2,156,825
- --------------------------------------------------------------------------------
South Africa -- 1.9%
14,183,000 Republic of South Africa, 13.000%
due 8/31/10(a) 2,806,567
- --------------------------------------------------------------------------------
Turkey -- 0.8%
Turkish Treasury Bill:
90,940,000,000 Zero Coupon due 6/4/98 334,680
115,790,000,000 Zero Coupon due 6/17/98 418,390
111,450,000,000 Zero Coupon due 7/29/98 355,788
- --------------------------------------------------------------------------------
1,108,858
- --------------------------------------------------------------------------------
TOTAL INTERNATIONAL SECTOR
(Cost-- $27,132,402) 27,575,614
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
42 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 3.3%
$ 4,802,000 S.G. Warburg & Co. Inc., 5.510% due 5/1/98;
Proceeds at Maturity-- $4,802,735; (Fully
Collateralized by U.S. Treasury Bonds,
7.250% due 8/15/22; Market value-- $4,861,941)
(Cost-- $4,802,000) $ 4,802,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $143,481,398**) $146,549,628
================================================================================
</TABLE>
(a) Security is segregated for forward exchange contracts and/or for securities
traded on a "to-be-announced" basis or when issued basis, and/or options,
futures and extended settlements.
(b) Security is traded on a "to-be-announced" basis (see Note 9).
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, generally to qualified institutional buyers.
+ Represents local currency.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
================================================================================
Bond Ratings (unaudited)
================================================================================
All ratings are by Standard & Poor's Ratings Services ("Standard & Poor's"),
except that those identified by an asterisk (*) are rated by Moody's Investors
Service Inc.("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Ratings from "AA" to "CC" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standings within the major
rating categories
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds 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 bonds in this
category than in higher rated categories.
BB, B, -- Bonds rated "BB", "B", "CCC", and "CC" are regarded, on balance, as
CCC, predominantly speculative with respect to capacity to pay interest
and CC and repay principal in accordance with the terms of the obligation.
"BB" represents the lowest degree of speculation and "CC" the
highest degree of speculation. While such bonds will likely have
some quality and protective characteristics, these are outweighed
by large uncertainties or major risk exposures to adverse
conditions.
Moody's-- Numerical modifiers 1, 2, and 3 may be applied to each generic rating
from "Aa" to "Ca", 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 adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact
have speculative characteristics as well.
Ba -- Bonds that 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 that are rated "B" generally lack characteristics of
desirable investments. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long
period of time may be small.
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.
Ca -- Bonds that are rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
NR -- Indicates that the bond is not rated by Standard & Poor's or
Moody's.
- --------------------------------------------------------------------------------
44 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Assets and Liabilities (unaudited) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
===============================================================================================
<S> <C> <C>
ASSETS:
Investments, at value (Cost $149,909,543
and $143,481,398, respectively) $154,970,847 $146,549,628
Cash 500 --
Dividends and interest receivable 2,790,872 2,436,819
Receivable for securities sold 2,506,079 5,651,946
Receivable for closed forward foreign currency contracts -- 121,923
Receivable for open forward foreign currency contracts (Note 5) 659 399,197
Other receivables -- 28,850
- -----------------------------------------------------------------------------------------------
Total Assets 160,268,957 155,188,363
- -----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,804,787 5,123,041
Management fees payable 232,414 88,275
Payable for open forward foreign currency contracts (Note 5) 13,743 661,847
Payable for closed forward foreign currency contracts -- 744,744
Payable to bank -- 485,276
Payable to broker-variation margin -- 65,950
Accrued expenses 18,780 51,320
- -----------------------------------------------------------------------------------------------
Total Liabilities 2,069,724 7,220,453
- -----------------------------------------------------------------------------------------------
Total Net Assets $158,199,233 $147,967,910
===============================================================================================
NET ASSETS:
Par value of capital shares $ 113 $ 115
Capital paid in excess of par value 136,588,699 133,120,972
Undistributed net investment income 15,080,969 9,339,924
Accumulated net realized gain from security transactions,
options and foreign currencies 1,480,617 2,793,403
Net unrealized appreciation of investments,
futures contracts and foreign currencies 5,048,835 2,713,496
- -----------------------------------------------------------------------------------------------
Total Net Assets $158,199,233 $147,967,910
===============================================================================================
Shares Outstanding 11,345,888 11,542,369
- -----------------------------------------------------------------------------------------------
Net Asset Value $13.94 $12.82
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<PAGE>
================================================================================
Statements of Operations (unaudited)
================================================================================
For the Six Months Ended April 30, 1998
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
========================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Interest $6,516,206 $5,736,949
Dividends 263,374 189,966
Less: Foreign withholding tax -- (11,704)
- ----------------------------------------------------------------------------------------
Total Investment Income 6,779,580 5,915,211
- ----------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 423,656 504,119
Shareholder communications 11,542 14,876
Audit and legal 10,033 11,405
Pricing service fees 6,834 22,315
Directors' fees 4,880 3,819
Shareholder and system servicing fees 3,935 3,472
Custody 2,827 29,753
Registration fees -- 1,488
Other 1,593 1,438
- ----------------------------------------------------------------------------------------
Total Expenses 465,300 592,685
- ----------------------------------------------------------------------------------------
Net Investment Income 6,314,280 5,322,526
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, OPTIONS, FUTURES CONTRACTS
AND FOREIGN CURRENCIES (NOTES 3, 4, 5 AND 7):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) (521,046) 1,402,023
Options purchased -- 29,825
Foreign currency transactions 63,286 (1,326,545)
- ----------------------------------------------------------------------------------------
Net Realized Gain (Loss) (457,760) 105,303
- ----------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments,
Futures Contracts and Foreign Currencies:
Beginning of period 3,717,845 2,616,438
End of period 5,048,835 2,713,496
- ----------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 1,330,990 97,058
- ----------------------------------------------------------------------------------------
Net Gain on Investments, Options, Futures Contracts
and Foreign Currencies 873,230 202,361
- ----------------------------------------------------------------------------------------
Increase in Net Assets From Operations $7,187,510 $5,524,887
========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
46 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
Smith Barney High Income Portfolio 1998 1997
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 6,314,280 $ 8,737,397
Net realized gain (loss) (457,760) 1,991,107
Increase in net unrealized appreciation 1,330,990 3,028,895
- -----------------------------------------------------------------------------------
Increase in Net Assets From Operations 7,187,510 13,757,399
- -----------------------------------------------------------------------------------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- (3,902,709)
Net realized gains -- (325,225)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (4,227,934)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 28,652,853 46,549,788
Net asset value of shares issued
for reinvestment of dividends -- 4,227,935
Cost of shares reacquired (1,367,228) (2,536,014)
- -----------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 27,285,625 48,241,709
- -----------------------------------------------------------------------------------
Increase in Net Assets 34,473,135 57,771,174
NET ASSETS:
Beginning of period 123,726,098 65,954,924
===================================================================================
End of period* $158,199,233 $123,726,098
===================================================================================
* Includes undistributed net investment income of: $15,080,969 $8,703,403
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 47
<PAGE>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
Putnam Diversified Income Portfolio 1998 1997
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 5,322,526 $ 7,040,767
Net realized gain (loss) 105,303 (507,432)
Increase in net unrealized appreciation 97,058 1,679,994
- -----------------------------------------------------------------------------------
Increase in Net Assets From Operations 5,524,887 8,213,329
- -----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (4,024,282)
Net realized gains -- (649,717)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (4,673,999)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 10):
Net proceeds from sale of shares 21,932,339 34,247,136
Net asset value of shares issued
for reinvestment of dividends -- 4,673,999
Cost of shares reacquired (1,090,376) (1,935,399)
- -----------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 20,841,963 36,985,736
- -----------------------------------------------------------------------------------
Increase in Net Assets 26,366,850 40,525,066
NET ASSETS:
Beginning of period 121,601,060 81,075,994
===================================================================================
End of period* $147,967,910 $121,601,060
===================================================================================
* Includes undistributed net investment income of: $9,339,924 $5,343,943
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
48 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The Smith Barney High Income and Putnam Diversified Income Portfolios
("Portfolio(s)") are separate investment portfolios of the 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 eleven other
separate investment portfolios: AIM Capital Appreciation, Alliance Growth, Van
Kampen American Capital Enterprise, Smith Barney Large Cap Value (formerly Smith
Barney Income and Growth), Smith Barney International Equity, Smith Barney
Pacific Basin, TBC Managed Income, GT Global Strategic Income, MFS Total Return,
Smith Barney Money Market and Smith Barney Large Capitalization Growth
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 agencies
and obligations are valued at the mean between the bid and ask prices; (c)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (d) dividend income is
recorded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Portfolio determines the
existence of a dividend declaration after exercising reasonable due diligence;
(e) interest income, adjusted for accretion of original issue discount, is
recorded on an accrual basis; (f) gains or losses on the sale of securities are
calculated by using the specific identification method; (g) dividends and
distributions to shareholders are recorded on the ex-dividend date; (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 or expense
amounts recorded and collected or paid are adjusted when reported by the
custodian bank; (i) the character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At October 31, 1997, reclassifications
were made to the Portfolios' capital accounts to reflect permanent book/tax
differences and income and gains available for distribution under income tax
regulations. Net investment
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 49
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
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.
In addition, Putnam Diversified Income and Smith Barney High Income Portfolios
may enter into foreign currency 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 or closed.
2. Management Agreement and Transactions with Affiliated Persons
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as the investment manager of the Smith Barney High Income Portfolio
("SBHI"). Travelers Investment Adviser, Inc. ("TIA"), an affiliate of MMC, acts
as the investment manager of the Putnam Diversified Income Portfolio ("PDIP").
SBHI pays MMC a management fee calculated at an annual rate of 0.60% of the
average daily net assets of the Portfolio. PDIP pays TIA a management fee
calculated at an annual rate of 0.75% of the average daily net assets of the
Portfolio. These fees are calculated daily and paid monthly.
TIA 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 and is
compensated for such service at the annual rate of 0.35% of the average daily
net assets of PDIP. This fee is calculated daily and paid monthly.
TIA has entered into a Sub-Administrative Services Agreement with MMC. TIA pays
MMC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of PDIP.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares.
All officers and one Director of the Fund are employees of SB.
- --------------------------------------------------------------------------------
50 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
3. Investments
During the six months ended April 30, 1998, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<CAPTION>
SBHI PDIP
================================================================================
<S> <C> <C>
Purchases $75,121,836 $162,154,685
- --------------------------------------------------------------------------------
Sales 40,974,629 137,811,328
================================================================================
</TABLE>
At April 30, 1998, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
<CAPTION>
SBHI PDIP
===============================================================================
<S> <C> <C>
Gross unrealized appreciation $5,553,473 $5,379,069
Gross unrealized depreciation (492,169) (2,310,839)
- -------------------------------------------------------------------------------
Net unrealized appreciation $5,061,304 $3,068,230
===============================================================================
</TABLE>
4. Option Contracts
Premiums paid when put or call options are purchased by the Portfolios,
represent investments, which are marked-to-market daily and are included in the
schedules of investments. 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 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.
At April 30, 1998, there were no open purchased call options.
When the Portfolios write a covered 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. When the Portfolios enter into a closing purchase transaction,
the Portfolios realize a gain or loss depending upon whether the cost of the
closing transaction is greater or less than the premium originally received
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised, the cost of the security sold will be decreased by the premium
originally received. When a
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 51
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
written put option is exercised, the amount of the premium originally received
will reduce the cost of the security which the Portfolios purchased upon
exercise. When written index options are exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of loss if the market price of the underlying security
declines.
The following covered call option transactions occurred in PDIP during the six
months ended April 30, 1998:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
=================================================================================
<S> <C> <C>
Options written, outstanding at October 31, 1997 1,010 $12,575
Options written during the six months ended April 30, 1998 6,766 37,953
Options cancelled in closing purchase transactions (7,776) (50,528)
- ---------------------------------------------------------------------------------
Options written, outstanding at April 30, 1998 0 $0
=================================================================================
</TABLE>
There were no open covered call option written contracts as of April 30, 1998.
5. Foreign Currency Exchange Contracts
At April 30, 1998, the Portfolios had open foreign currency exchange contracts
as described below. The Portfolios record realized gains or losses at the time
the forward contract is offset by entry into a closing transaction or settlement
of the contract. 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:
Smith Barney High Income Portfolio
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
===================================================================================
<S> <C> <C> <C> <C>
To Buy:
British Pound 199,260 $ 332,737 5/26/98 $ 659
German Mark 2,385,589 1,331,932 6/2/98 (13,743)
- -----------------------------------------------------------------------------------
Net Unrealized Loss on Forward
Foreign Currency Contracts $(13,084)
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
52 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
===============================================================================================
<S> <C> <C> <C> <C> <C>
To Buy:
Australian Dollar 23,519 $15,286 6/17/98 $(152)
Danish Krone 4,101,553 600,169 6/17/98 (1,938)
French Franc 1,258,100 209,659 6/17/98 1,602
German Mark 11,448,388 6,390,750 6/17/98 30,436
Italian Lira 8,149,067,960 4,602,173 6/17/98 44,328
Japanese Yen 954,805,530 7,229,540 6/17/98 (345,079)
Mexican Peso 1,821,000 214,230 5/11/98 12,050
Mexican Peso 1,467,500 172,580 5/12/98 10,841
New Zealand Dollar 445,000 245,112 6/17/98 (3,644)
South Korean Won 958,631,500 623,705 3/11/98 57,006
Spanish Peseta 155,004,080 1,018,825 6/17/98 8,039
Swedish Krona 12,806,632 1,655,331 6/17/98 54,785
Swiss Franc 1,346,150 901,701 6/17/98 (29,246)
- -----------------------------------------------------------------------------------------------
(160,972)
===============================================================================================
To Sell:
British Pound 4,139,500 6,906,188 6/17/98 (130,240)
German Mark 22,144,545 12,361,585 6/17/98 (106,805)
French Franc 658,000 109,654 6/17/98 (1,697)
Italian Lira 4,929,152,700 2,783,731 6/17/98 (26,163)
Japanese Yen 431,545,925 3,267,554 6/17/98 141,634
New Zealand Dollar 377,200 207,766 6/17/98 7,992
South African Rand 4,594,600 890,513 6/17/98 (16,883)
Swiss Franc 1,348,850 903,510 6/17/98 30,484
- -----------------------------------------------------------------------------------------------
(101,678)
Net Unrealized Loss on Forward
Foreign Currency Contracts $(262,650)
===============================================================================================
</TABLE>
6. 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.
7. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 53
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolios record 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. The Portfolios enter
into such contracts to hedge a portion of their portfolios. The Portfolios bear
the market risk that arises from changes in the value of the financial
instruments and securities indices (futures contracts).
At April 30, 1998, the PDIP had the following open futures contracts:
<TABLE>
<CAPTION>
# of Basis Market Unrealized
Contracts to Buy Contracts Expiration Value Value Gain (Loss)
======================================================================================
<S> <C> <C> <C> <C> <C>
Euro Deutschemark 3-Month 20 3/99 $2,646,582 $2,632,907 $(13,675)
- --------------------------------------------------------------------------------------
Contracts to Sell
Euro Lira 3-Month 20 3/99 2,685,865 2,683,703 2,162
U.S. Treasury 10-Year Note 67 6/98 7,535,345 7,524,938 10,407
- --------------------------------------------------------------------------------------
12,569
Net Unrealized Loss $ (1,106)
======================================================================================
</TABLE>
8. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin which may vary between 2% and 5%
depending on the type of securities loaned. The custodian establishes and
maintains the collateral in segregated accounts. The Portfolios maintain
exposure for the risk of any losses in the investment of amounts received as
collateral.
At April 30, 1998, the Portfolios had no securities on loan.
9. Securities Traded on a When-Issued or To-Be-Announced Basis
PDIP may trade securities on a when-issued basis or on a to-be-announced ("TBA")
basis.
In a when-issued transaction the securities are purchased or sold by the
Portfolio with payment and delivery taking place in the future in order to
secure what is considered to be an advantageous price and yield to the
- --------------------------------------------------------------------------------
54 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
Portfolio at the time of entering into the transaction. Purchasing such
securities involves the risk of loss if the value of the securities declines
prior to settlement.
In a TBA transaction, the Portfolio commits to purchasing or selling securities
for which specific information is not yet known at the time of the trade,
particularly the face amount and maturity date. Securities purchased on a TBA
basis are not settled until they are delivered to the Portfolio, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
At April 30, 1998, PDIP held three TBA securities with a cost of $3,326,436.
10. Capital Shares
At April 30, 1998, 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:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
====================================================================================
<S> <C> <C>
Smith Barney High Income Portfolio
Shares sold 2,108,029 3,725,306
Shares issued on reinvestment -- 358,299
Shares redeemed (99,651) (202,326)
- ------------------------------------------------------------------------------------
Net Increase 2,008,378 3,881,279
====================================================================================
Putnam Diversified Income Portfolio
Shares sold 1,746,569 2,882,116
Shares issued on reinvestment -- 403,976
Shares redeemed (85,656) (165,387)
- ------------------------------------------------------------------------------------
Net Increase 1,660,913 3,120,705
====================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 55
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney High Income Portfolio 1998(1) 1997 1996 1995 1994(2)
================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $13.25 $12.09 $11.26 $10.07 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.40 0.88 1.14 0.93 0.29
Net realized and unrealized
gain (loss) 0.29 1.00 0.19 0.48 (0.22)
- ----------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.69 1.88 1.33 1.41 0.07
- ----------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.66) (0.50) (0.22) --
Net realized gains -- (0.06) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.72) (0.50) (0.22) --
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.94 $13.25 $12.09 $11.26 $10.07
- ----------------------------------------------------------------------------------------------------------------
Total Return 5.21%++ 16.24% 12.17% 14.30% 0.70%++
- ----------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $158,199 $123,726 $65,955 $20,450 $3,395
- ----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.66%+ 0.70% 0.84% 0.70% 0.69%+
Net investment income 8.93+ 9.36 9.79 9.54 7.55+
- ----------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 32% 89% 104% 57% 15%
================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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 $17,664 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:
<TABLE>
<CAPTION>
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- -------------------
1995 1994 1995 1994
----- ----- ---- -----
<S> <C> <C> <C>
$0.04 $0.07 1.07% 2.60%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
56 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Putnam Diversified Income Portfolio 1998(1) 1997 1996(2) 1995 1994(3)
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $12.31 $11.99 $11.46 $10.18 $10.00
- --------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(4) 0.27 0.67 0.78 0.79 0.23
Net realized and unrealized
gain (loss) 0.24 0.30 0.27 0.58 (0.05)
- --------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.51 0.97 1.05 1.37 0.18
- --------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.56) (0.39) (0.09) --
Net realized gains -- (0.09) (0.13) -- --
- --------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.65) (0.52) (0.09) --
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.82 $12.31 $11.99 $11.46 $10.18
- --------------------------------------------------------------------------------------------------------------------
Total Return 4.14%++ 8.44% 9.43% 13.55% 1.80%++
- --------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $147,968 $121,601 $81,076 $31,514 $6,763
- --------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.88%+ 0.88% 0.96% 0.97% 0.98%+
Net investment income 7.91+ 6.99 7.57 7.53 6.14+
- --------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 102% 253% 255% 276% 20%
=====-==============================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(4) 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 $19,028 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:
<TABLE>
<CAPTION>
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- --------------------
1995 1994 1995 1994
----- ----- ---- ------
<S> <C> <C> <C>
$0.04 $0.07 1.31% 2.92%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 57
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On February 20, 1998 a special meeting of shareholders of the Fund was held for
the purpose of voting on the following matters:
1. To elect Directors of the Fund; and
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies. The results of
the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage of Shares Voted Percentage of
Name of Directors For Shares Voted Against Shares Voted
==============================================================================================
<S> <C> <C> <C> <C>
Victor K. Atkins 231,059,252.884 97.271% 6,481,382.874 2.729%
Abraham E. Cohen 231,294,945.547 97.371 6,245,690.211 2.629
Robert A. Frankel 230,999,179.846 97.246 6,541,455.912 2.754
Rainer Greeven 231,468,718.650 97.444 6,071,917.108 2.556
Susan M. Heilbron 231,485,321.942 97.451 6,055,313.816 2.549
Heath B. McLendon 231,463,894.239 97.442 6,076,741.519 2.558
James M. Shuart 231,410,828.580 97.419 6,129,807.178 2.581
=============================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental policies of the Portfolios in order to modernize them in view of
certain regulatory, business or industry developments that have occurred since
original adoption of these policies by the Portfolios. The following chart
demonstrates that all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates the
elimination of the policy; and "R" indicates the reclassification of the policy
from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Directors).
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
========================================================================================
<S> <C> <C>
E Ability to Pledge Assets N/A Approved
- ----------------------------------------------------------------------------------------
M Underwriting of Securities Approved Approved
- ----------------------------------------------------------------------------------------
M Lending by the Fund Approved Approved
- ----------------------------------------------------------------------------------------
M Real Estate Approved Approved
- ----------------------------------------------------------------------------------------
E Purchases of Certain Securities N/A Approved
- ----------------------------------------------------------------------------------------
R Margin and the Short Sales of Securities Approved Approved
- ----------------------------------------------------------------------------------------
R Purchases of Restricted and Illiquid Securities N/A Approved
- ----------------------------------------------------------------------------------------
R Exercising Control or Management N/A Approved
- ----------------------------------------------------------------------------------------
R Investments in Oil, Gas and Mineral Explo N/A Approved
- ----------------------------------------------------------------------------------------
M Diversification Approved Approved
- ----------------------------------------------------------------------------------------
M Senior Securities Approved Approved
- ----------------------------------------------------------------------------------------
M Industry Concentration Approved N/A
- ----------------------------------------------------------------------------------------
M Borrowing Approved Approved
- ----------------------------------------------------------------------------------------
R Purchases of Securities of Other Investments Cos Approved N/A
========================================================================================
</TABLE>
N/A - Not Applicable
- --------------------------------------------------------------------------------
58 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited) (continued)
================================================================================
The information below reports the lowest percentage of shares voting for the
proposals, the highest percentage of shares voting against and abstaining by
shareholders of each Portfolio on all of the items in Proposal 2. Smith Barney
High Income Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
===================================================================================
<S> <C> <C> <C> <C> <C>
9,266,616.993 92.783% 66,824.316 0.669% 653,960.633 6.548%
===================================================================================
</TABLE>
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
===================================================================================
<S> <C> <C> <C> <C> <C>
9,754,069.919 94.544% 112,947.300 1.095% 449,969.233 4.361%
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 59
<PAGE>
[This page intentionally left blank]
<PAGE>
Travelers Series SMITH BARNEY
Fund Inc. ------------
A Member of TravelersGroup[LOGO]
Directors
Investment Managers
Victor K. Atkins
A.E. Cohen Mutual Management Corp.
Robert A. Frankel Travelers Investment Adviser, Inc.
Rainer Greeven
Susan M. Heilbron Distributor
Heath B. McLendon, Chairman
James M. Shuart Smith Barney Inc.
Officers Custodian
Heath B. McLendon PNC Bank, N.A.
President and Chief Executive Officer
Annuity Administration
Lewis E. Daidone
Senior Vice President and Treasurer Travelers Annuity Investor Services
5 State House Square
John C. Bianchi 1 Tower Square
Vice President Hartford, CT 06183
Bruce D. Sargent This report is submitted for the general
Vice President information of the shareholders of
Travelers Series Fund Inc. -- Smith
Thomas M. Reynolds Barney High Income and Putnam
Controller Diversified Income Portfolios. It is not
authorized for distribution to
Christina T. Sydor prospective investors unless accompanied
Secretary 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.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0805 6/98
<PAGE>
[GRAPHIC]
Travelers Series Fund Inc.
Smith Barney Large Cap Value Portfolio
Alliance Growth Portfolio
Van Kampen American
Capital Enterprise Portfolio
-------------------------------------------------
SEMI-ANNUAL REPORT
-------------------------------------------------
April 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every Day.(SM)
<PAGE>
Travelers Series
Fund Inc.
[PHOTO] Heath B. McLendon
Chairman
Dear Shareholder:
We are pleased to provide the semi-annual report of the Travelers Series Fund
Inc. -- Smith Barney Large Cap Value Portfolio (formerly known as Smith Barney
Income and Growth Portfolio), Alliance Growth Portfolio and Van Kampen American
Capital Enterprise Portfolio ("Portfolios") for the six months ended April 30,
1998. In this report, we summarize the period's prevailing economic and market
conditions and 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.
Portfolio Highlights
Smith Barney Large Cap Value Fund
For the six months ended April 30, 1998, the Smith Barney Large Cap Value
Portfolio ("Portfolio") had a total return of 17.71% which compared favorably to
the total return of 17.34% for its Lipper Analytical Services, Inc. ("Lipper")
growth fund peer group average over the same period. (Lipper is a major
fund-tracking organization.)
The Portfolio's managers typically choose large-capitalization companies that
have an above-market dividend yield and are undervalued by the marketplace. The
managers look to find a fundamental improvement underway, such as a new product
or new management, the positive effect of which has not yet been reflected in
the stock price.
The managers were impressed by the coming together of several positive events
sustaining this bull market, notwithstanding the fact that by many traditional
yardsticks, valuations are obviously trending higher. Specifically, the economy
continues to sustain its momentum, which points to ongoing growth in corporate
profits. What had previously been perceived as the Asian crisis (which had been
predicted to lead to the inevitable unraveling of all of the world's global
economies) is now being welcomed, at least from the perspective of the U.S.,
almost as the salvation of what otherwise might have become an overheated
economy for the Federal Reserve Board ("Fed") regulators.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
Currently the Fed is unsettling to bond and stock investors alike with
threatening overtures of raising rates. In fact, the inflation news remains
surprisingly positive. Indeed, the markets recently rallied strongly as the
Employment Cost Index, allegedly one of Fed Chairman Greenspan's favorite
indices, came in short of popular expectations. Meanwhile, the demographics of
demand from the aging baby boomers both in the U.S., (and now overseas) continue
to create a positive demand for stocks just as supply is being contained by a
lack of initial public offerings, relatively speaking. Although the managers are
sensitive to the potential for short-term concerns about rates that can unsettle
the stock market, they nevertheless believe that the fundamentals are powerful
enough to allow the market to continue to go up.
The managers continue to be fully invested in the Portfolio, as is their custom.
The Portfolio enjoys an approximate 43% yield pick-up to the Standard & Poor's
500 Index, which should help to cushion volatility in a more difficult
environment and meanwhile acts as an ongoing way to enhance return potential.
Alliance Growth Portfolio
For the six months ended April 30, 1998, the Alliance Growth Portfolio
("Portfolio") generated a total return of 18.88%, outperforming the total return
of 17.34% for its Lipper growth fund peer group average.
The Portfolio's fiscal year ended on October 31, 1997, just days after the sharp
sell-off and equally rapid rebound marking the collapse of a number of Asian
currencies and securities markets. After holding up somewhat better than the
averages during the decline, the Portfolio lagged well behind in the initial
stage of recovery that was concentrated in very large capitalization stocks.
Since the initial month of recovery, the Portfolio has generally performed well
relative to the averages as the market has broadened out and the environment has
been more favorable to its style of investing that stresses large- and mid-cap
stocks but underweights the very largest companies that are most heavily
represented in the popular averages.
The chaos in Asian markets and economies appears not to have had any lasting
negative effect on the U.S. market. Paradoxically, it may have even had a
favorable impact in that it removed, for at least a few months, any likelihood
that the Fed would move to raise interest rates. Economic overheating and
resultant higher interest rates were what many investors had feared most. With
the sudden weakness in Asia, a weaker economy seemed more likely. As the first
quarter of 1998 unfolded it offered an unusually favorable climate for stocks.
Corporate earnings continued to grow, unemployment moved to the lowest level in
years and, at the same time, inflation and interest rates moved lower.
- --------------------------------------------------------------------------------
2 1998 Semi-Annual Report to Shareholders
<PAGE>
It is of course possible that the months ahead may continue to provide a balmy
climate for the stock market. Relative to Asia and Europe, the U.S. is still
primarily a domestic economy. The impact of bank failures or corporate
insolvencies in Asia should also fall much more heavily on Japanese and European
organizations rather than on American institutions.
One risk is that this is as good as it can get. The managers think that perhaps
we have seen the maximum benefit of lower commodity prices and Fed forbearance.
Perhaps the U.S. economy will finally slow and corporate profits will weaken. If
not, perhaps the Fed will decide that it is time to cool things down. At the
risk of appearing to repeat the same cautions with a foolish degree of
consistency, the managers once again note that stock market returns have been
far above long-term norms for an unusually long period of time. They would not
be surprised to see the market become less of a one way street in the months
ahead. That said, they do not believe that there is great short-term risk in the
market. Weakness from here would probably once again provide a buying
opportunity.
The managers' greater concern is that a continuation of favorable conditions may
lead to speculative overoptimism with an inevitably painful result. A more
moderate result is of course possible, and perhaps even likely. Although they
expect more modest returns than those achieved in recent years, they view the
longer-term outlook for both the U.S. economy and stock market to be quite
favorable. They are not inclined to change the areas of emphasis that have
predominated for several years now. Financial services and technology still look
most promising and they continue to underweight the commodity cyclical areas of
the economy. The pace of consolidation in financial services has quickened led
by huge combinations. They expect this trend to continue. In the technology
sector, they have continued to move away from PC-oriented chip and box companies
and toward those more involved in networking and telecommunications. There are
clearly revolutionary changes going on in all of communications as digital
technologies replace traditional analog ones. Greater capacity at lower cost is
making possible new uses. Digital communications traffic is growing at an
accelerating rate. Changing technology and regulation are creating new winners
and losers. This is arguably the world's largest industry and also its fastest
growing. The managers think that companies such as WorldCom and Cisco will
continue to lead the way for some time to come.
Van Kampen American Capital Enterprise Portfolio
For the six months ended April 30, 1998, the Van Kampen American Capital
Enterprise Portfolio ("Portfolio") generated a total return of 19.31%, which
compares favorably to the total return of 17.34% for its Lipper growth fund peer
group average.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
The Portfolio is managed with a consistent investment philosophy: to own
companies with positive future fundamentals at attractive current prices.
Although this philosophy may sound simplistic, the managers believe that the
best total return potential is usually achieved by a primary focus on
disciplined stock selection. In selecting stocks, the managers of the Portfolio
generally look for at least one of the following fundamental characteristics:
o Consistent earnings growth
o Accelerating earnings growth
o Better-than expected fundamentals
o An underlying change in a company, industry, or regulatory environment
As long as the original criteria for purchasing a particular stock hold true and
its value remains relatively attractive, the stock usually stays in the
Portfolio. Today, high valuations are prevalent throughout much of the stock
market, so the managers are monitoring stock prices even more closely than
usual. Despite these constraints, they have been able to identify many suitable
securities to own in the Portfolio.
Favorable market and economic conditions once again aided the Portfolio's
performance. The Portfolio had modest turnover during the reporting period, with
the most notable change being a decrease in its holdings in technology. In
February, the technology industry began to suffer from an excess of personal
computers. Manufacturers such as Compaq and IBM, which sell computers to
retailers and wholesalers for distribution, had to reduce production of new
computers until inventory supply becomes more balanced with demand.
Consequently, the manufacturers of semiconductors, which are a critical
component of computers, had to reduce production as well. The managers decreased
the Portfolio's holdings in personal computers and semiconductors during the
reporting period, although this situation appears to be on its way toward some
resolution. Computer software remains the Portfolio's largest concentration
within technology, as these stocks were less affected by inventory issues.
The Portfolio maintained a significant position in consumer distribution or
retail, which contributed to positive performance. The confluence of several
factors made this sector attractive. On one hand, the U.S. is experiencing low
unemployment and rising disposable incomes, which have historically been
favorable to retail sales. On the other hand, retail management has shown
greater discipline about issues such as pricing and expansion. While the
emergence of an economic boom/bust scenario could be crippling to retailers, the
managers believe the continued slow but steady growth of the economy supports
strong future fundamentals for this sector. The Portfolio includes substantial
positions in grocery stores, including Safeway and Kroger, as well as general
retailers such as Dayton Hudson, TJDX Companies, and Ross Stores.
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
At the time of the last report on October 31, 1997, the effects of the Asian
economic crisis were unclear but ominous. Today, its effects are still
uncertain, but the outlook is more positive. While the Asian crisis has had a
severe impact on a few segments of the U.S market, so far it appears to be
fairly contained. The stock market was reaching new highs at the end of the
reporting period, and the managers expect a continuation of controlled but
slowing economic growth and low inflation. They believe these conditions should
benefit the Portfolio, and the portfolio management team is optimistic about
adding value over the long-term based on their disciplined investment management
philosophy.
In closing, thank you for investing in the Travelers Series Fund Inc. - Smith
Barney Large Cap Value Portfolio, Alliance Growth Portfolio and Van Kampen
American Capital Enterprise Portfolio. We look forward to continuing to help you
pursue your financial goals.
Sincerely,
/s/ Heath B. Mclendon
Heath B. McLendon
Chairman
May 22, 1998
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Smith Barney Large Cap Value Portfolio
- --------------------------------------------------------------------------------
Historical Performance
================================================================================
Net Asset Value
-------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $17.90 $21.07 $0.00 $0.00 17.71%++
- --------------------------------------------------------------------------------
10/31/97 14.84 17.90 0.18 0.17 23.38
- --------------------------------------------------------------------------------
10/31/96 12.12 14.84 0.17 0.05 24.55
- --------------------------------------------------------------------------------
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 $0.41 $0.22
================================================================================
<CAPTION>
================================================================================
Alliance Growth Portfolio
- --------------------------------------------------------------------------------
Historical Performance
================================================================================
Net Asset Value
-------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $20.82 $24.75 $0.00 $0.00 18.88%++
- --------------------------------------------------------------------------------
10/31/97 16.30 20.82 0.02 0.62 32.59
- --------------------------------------------------------------------------------
10/31/96 13.28 16.30 0.09 0.32 26.55
- --------------------------------------------------------------------------------
10/31/95 10.65 13.28 0.02 0.10 26.18
- --------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.65 0.00 0.00 6.50++
================================================================================
Total $0.13 $1.04
================================================================================
<CAPTION>
================================================================================
Van Kampen American Capital Enterprise Portfolio
- --------------------------------------------------------------------------------
Historical Performance
================================================================================
Net Asset Value
-------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $19.89 $23.73 $0.00 $0.00 19.31%++
- --------------------------------------------------------------------------------
10/31/97 15.37 19.89 0.05 0.00 29.81
- --------------------------------------------------------------------------------
10/31/96 12.89 15.37 0.04 0.40 23.35
- --------------------------------------------------------------------------------
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 $0.11 $0.43
================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
6 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Average Annual Total Return+
================================================================================
Smith Barney Alliance Van Kampen
Large Cap Growth American Capital
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
<S> <C> <C> <C>
Six Months Ended 4/30/98++ 17.71% 18.88% 19.31%
- --------------------------------------------------------------------------------
Year Ended 4/30/98 30.38 53.25 43.12
- --------------------------------------------------------------------------------
6/16/94* through 4/30/98 22.64 28.98 26.34
================================================================================
<CAPTION>
================================================================================
Cumulative Total Return+
================================================================================
Smith Barney Alliance Van Kampen
Large Cap Growth American Capital
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
<S> <C> <C> <C>
6/16/94* through 4/30/98 120.49% 168.05% 147.36%
================================================================================
</TABLE>
+ Assumes the reinvestment of all dividend and capital gain distributions, if
any, at net asset value.
* Commencement of operations.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
Smith Barney Large Cap Value Portfolio vs. S&P 500 Index+
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
June 1994 -- April 1998
Smith Barney
Large Cap Value Portfolio S&P 500 Index
------------------------- -------------
<S> <C> <C>
6/16/94 10,000 10,000
10/94 10,140 10,324
4/95 10,982 11,404
10/95 12,189 13,053
4/96 13,943 14,684
10/96 15,181 16,018
4/97 16,911 18,374
10/97 18,731 21,159
4/98 22,049 25,920
</TABLE>
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Large Cap Value Portfolio (formerly known as 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, 1998. The Standard & Poor's 500 Index ("S&P 500 Index")
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.
- --------------------------------------------------------------------------------
8 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
Alliance Growth Portfolio vs. S&P 500 Index
and Russell 1000 Index+
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
June 1994 -- April 1998
Alliance S&P 500 Index Russell 1000 Index
-------- ------------- ------------------
<S> <C> <C> <C>
6/16/94 10,000 10,000 10,000
10/94 10,650 10,324 10,191
4/95 11,475 11,404 11,050
10/95 13,428 13,053 12,612
4/96 15,557 14,684 14,327
10/96 17,007 16,018 15,501
4/97 17,491 18,374 17,529
10/97 22,549 21,159 20,236
4/98 26,805 25,920 24,485
</TABLE>
+ 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, 1998. The Standard & Poor's 500 Index ("S&P 500 Index")
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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
Van Kampen American Capital Enterprise Portfolio vs.
S&P 500 Index+
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
June 1994 -- April 1998
Van Kampen
American Capital
Enterprise Portfolio S&P 500 Index
-------------------- -------------
<S> <C> <C>
6/16/94 10,000 10,000
10/94 10,380 10,324
4/95 11,160 11,404
10/95 12,948 13,053
4/96 14,933 14,684
10/96 15,972 16,018
4/97 17,283 18,374
10/97 20,733 21,159
4/98 24,736 25,920
</TABLE>
+ 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, 1998. The Standard & Poor's 500 Index
("S&P 500 Index") 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.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
COMMON STOCK -- 95.9%
Capital Goods -- 8.5%
120,000 Emerson Electric Co. $ 7,635,000
80,000 General Electric Co. 6,810,000
200,000 Whirlpool Corp. 14,400,000
50,000 Xerox Corp. 5,675,000
- --------------------------------------------------------------------------------
34,520,000
- --------------------------------------------------------------------------------
Communication Equipment & Services -- 7.2%
120,000 AT&T Corp. 7,207,500
50,000 BellSouth Corp. 3,209,375
170,000 GTE Corp. 9,934,375
130,000 Sprint Corp. 8,880,625
- --------------------------------------------------------------------------------
29,231,875
- --------------------------------------------------------------------------------
Conglomerates -- 1.3%
100,000 National Service Industries, Inc. 5,412,500
- --------------------------------------------------------------------------------
Consumer Cyclicals -- 9.3%
150,000 Dow Jones & Co., Inc. 7,303,125
150,000 Ford Motor Co. 6,871,875
160,000 Hudson's Bay Co. 3,478,747
200,000 The Limited, Inc. 6,712,500
100,000 Masco Corp. 5,800,000
150,000 Stanley Works, Inc. 7,678,125
- --------------------------------------------------------------------------------
37,844,372
- --------------------------------------------------------------------------------
Consumer Staples -- 9.6%
50,000 AMP, Inc. 1,965,625
150,000 Conagra Corp. 4,378,125
100,000 Giant Foods, Inc., Class A Shares 3,725,000
150,000 Quaker Oats Corp. 7,800,000
100,000 Sara Lee Corp. 5,956,250
150,000 Seagram Co. Ltd. 6,403,125
120,000 Unilever NV, NY Shares 8,955,000
- --------------------------------------------------------------------------------
39,183,125
- --------------------------------------------------------------------------------
Energy -- 13.3%
100,000 Ashland, Inc. 5,287,500
80,000 Chevron Corp. 6,615,000
100,000 Dresser Industries, Inc. 5,287,500
100,000 E.I. duPont de Nemours & Co. 7,281,250
60,000 Exxon Corp. 4,376,250
80,000 Honeywell, Inc. 7,450,000
100,000 Mobil Corp. 7,900,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Energy -- 13.3% (continued)
3,188 Raytheon Co., Class A Shares $ 175,938
300,000 The Williams Cos., Inc. 9,487,500
- --------------------------------------------------------------------------------
53,860,938
- --------------------------------------------------------------------------------
Financial Services -- 20.4%
39,312 Associates First Capital Corp., Class A Shares 2,938,628
110,000 Banc One Corp. 6,469,375
40,000 Chase Manhattan Corp. 5,542,500
50,000 Chubb Corp. 3,946,875
100,000 Dun & Bradstreet Corp. 3,550,000
80,000 First Chicago NBD Corp. 7,430,000
50,000 Hartford Financial Services Group, Inc. 5,537,500
60,000 Marsh & McLennan Cos., Inc. 5,467,500
60,000 Mid Ocean Ltd. 4,522,500
100,000 NationsBank Corp. 7,575,000
240,000 Provident Cos., Inc. 9,375,000
75,000 St. Paul Cos., Inc. 6,356,250
80,000 Toronto-Dominion Bank 3,655,000
150,000 Washington Mutual, Inc. 10,509,375
- --------------------------------------------------------------------------------
82,875,503
- --------------------------------------------------------------------------------
Health Care -- 10.3%
100,000 Abbott Laboratories, Inc. 7,312,500
125,000 American Home Products Corp. 11,640,625
120,000 Baxter International, Inc. 6,652,500
100,000 Bristol-Myers Squibb Co. 10,587,500
80,000 Eli Lilly & Co. 5,565,000
- --------------------------------------------------------------------------------
41,758,125
- --------------------------------------------------------------------------------
Raw and Intermediate Materials -- 6.7%
110,000 Ball Corp. 4,248,750
120,000 Imperial Chemicals Corp. 8,722,500
150,000 International Paper Co. 7,828,125
100,000 Reynolds Metals Co. 6,600,000
- --------------------------------------------------------------------------------
27,399,375
- --------------------------------------------------------------------------------
Technology -- 2.8%
60,000 Lockheed Martin Corp. 6,682,500
100,000 Pitney Bowes, Inc. 4,800,000
- --------------------------------------------------------------------------------
11,482,500
- --------------------------------------------------------------------------------
Utilities -- 6.5%
100,000 Boston Edison Co. 4,075,000
150,000 Duke Energy Corp. 8,681,250
200,000 El Paso Natural Gas Co. 7,387,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
<S> <C> <C>
Utilities -- 6.5% (continued)
55,134 Enron Global Power & Pipelines, LLC $ 2,711,904
100,000 Keyspan Energy Corp. 3,412,500
- --------------------------------------------------------------------------------
26,268,154
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $304,979,383) 389,836,467
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.1%
$16,858,000 Goldman, Sachs & Co., 5.473% due 5/1/98; Proceeds
at maturity-- $16,860,563; (Fully collateralized
by U.S. Treasury Notes, 6.750% due 5/31/99;
Market value-- $17,202,542) (Cost-- $16,858,000) 16,858,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $321,837,383*) $406,694,467
================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
COMMON STOCK -- 95.2%
Aerospace & Defense -- 0.3%
44,000 Allied Signal Inc. $ 1,927,750
- --------------------------------------------------------------------------------
Airlines -- 2.9%
163,000 Continental Airlines, Inc., Class B Shares+ 9,596,625
47,900 Delta Airlines, Inc. 5,568,375
40,300 Northwest Airlines Corp., Class A Shares+ 2,115,750
26,500 UAL Corp.+ 2,310,469
27,000 USAir Group, Inc.+ 1,920,375
- --------------------------------------------------------------------------------
21,511,594
- --------------------------------------------------------------------------------
Banks -- 6.0%
113,304 Chase Manhattan Corp. 15,699,685
50,000 Citicorp, Inc. 7,525,000
146,000 First Union Corp. 8,814,750
172,000 NationsBank Corp. 13,029,000
- --------------------------------------------------------------------------------
45,068,435
- --------------------------------------------------------------------------------
Broadcasting -- 0.3%
71,000 CBS Corp. 2,529,375
- --------------------------------------------------------------------------------
Commercial Services -- 2.4%
738,250 Cendant Corp. 18,456,250
- --------------------------------------------------------------------------------
Computer -- 0.4%
59,000 EMC Corp.+ 2,721,375
- --------------------------------------------------------------------------------
Computer Services -- 4.2%
377,600 Ceridian Corp.+ 21,358,000
246,375 Sterling Commerce, Inc.+ 10,486,336
- --------------------------------------------------------------------------------
31,844,336
- --------------------------------------------------------------------------------
Containers -- 1.2%
147,000 Sealed Air Corp.+ 9,215,062
- --------------------------------------------------------------------------------
Diversified -- 2.3%
333,000 Republic Industries, Inc.+ 9,261,563
144,398 Tyco International Ltd. 7,869,691
- --------------------------------------------------------------------------------
17,131,254
- --------------------------------------------------------------------------------
Drugs -- 5.3%
128,000 Bristol-Myers Squibb & Co. 13,552,000
113,400 Merck & Co., Inc. 13,664,700
76,000 Pfizer Inc. 8,649,750
50,000 Schering-Plough Corp. 4,006,250
- --------------------------------------------------------------------------------
39,872,700
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Electrical Equipment -- 0.3%
- --------------------------------------------------------------------------------
108,000 Fore Systems, Inc.+ $ 2,470,500
- --------------------------------------------------------------------------------
Electronic Components -- 2.8%
132,300 SCI Systems, Inc.+ 5,449,106
97,900 Solectron Corp.+ 4,338,194
177,000 Texas Instruments, Inc. 11,339,063
- --------------------------------------------------------------------------------
21,126,363
- --------------------------------------------------------------------------------
Electronics -- 5.2%
535,950 Cisco Systems Inc.+ 39,258,337
- --------------------------------------------------------------------------------
Financial Services -- 8.0%
106,600 American Express Co. 10,873,200
129,000 The CIT Group, Inc., Class A Shares 4,571,437
10,300 Household International Inc. 1,353,806
556,575 MBNA Corp. 18,853,978
51,200 Morgan Stanley, Dean Witter, Discover & Co. 4,038,400
114,600 Newcourt Credit Group Inc. 5,629,725
930,450 Telecom-TCI Ventures, Class A Shares+ 15,177,966
- --------------------------------------------------------------------------------
60,498,512
- --------------------------------------------------------------------------------
Hospital Supplies & Services -- 0.6%
70,600 Medtronic, Inc. 3,715,325
102,000 Quest Medical Inc.+ 981,750
- --------------------------------------------------------------------------------
4,697,075
- --------------------------------------------------------------------------------
Insurance -- 4.8%
108,000 Acceptance Insurance Cos. Inc.+ 2,463,750
178,675 American International Group, Inc. 23,506,930
60,800 The PMI Group Inc. 4,940,000
11,100 Progressive Corp. 1,503,356
131,600 20th Century Industries 3,750,600
- --------------------------------------------------------------------------------
36,164,636
- --------------------------------------------------------------------------------
Manufacturing -- 2.1%
20,500 Mannesmann AG 16,153,246
- --------------------------------------------------------------------------------
Media Group -- 1.0%
79,000 The News Corp. Ltd. ADR 2,157,688
70,106 Reuters Group PLC 4,543,745
6,900 Reuters Holdings PLC ADR 447,206
- --------------------------------------------------------------------------------
7,148,639
- --------------------------------------------------------------------------------
Miscellaneous -- 3.4%
95,400 Boston Scientific Corp.+ 6,898,612
5,400 Carnival Corp., Class A Shares 375,638
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Miscellaneous -- 3.4% (continued)
44,400 Harley Davidson Inc. $ 1,598,400
62,000 Loral Space & Communications+ 1,941,375
61,100 Royal Caribbean Cruises Ltd. 4,177,712
85,000 Sanmina Corp.+ 7,650,000
138,900 Union Pacific Corp. 3,316,238
- --------------------------------------------------------------------------------
25,957,975
- --------------------------------------------------------------------------------
Oil Related -- 7.3%
88,000 Apache Corp. 3,113,000
110,000 BJ Services Co.+ 4,125,000
247,800 Dresser Industries, Inc. 13,102,425
1,947,500 Gulf Canada Resources Ltd.+ 10,346,094
142,200 Halliburton Co. 7,821,000
54,000 Nabors Industries, Inc.+ 1,360,125
215,000 Noble Drilling Corp.+ 6,947,188
80,600 Santa Fe International Corp. 3,158,513
90,000 Transocean Offshore, Inc. 5,028,750
- --------------------------------------------------------------------------------
55,002,095
- --------------------------------------------------------------------------------
Real Estate -- 6.1%
180,900 Arden Realty Group, Inc. 5,076,506
84,500 Boston Properties Inc. 2,793,781
140,000 Entertainment Properties Trust 2,756,250
84,400 Equity Office Properties Trust 2,400,125
140,000 Excel Legacy Corp.+ 735,000
140,000 Excel Realty Trust Inc. 3,745,000
270,300 Humphrey Hospitality Trust, Inc. 2,905,725
93,000 JP Realty Inc. 2,249,438
250,000 Koger Equity Inc. 5,359,375
131,900 Macerich Co. 3,701,444
114,000 Prentiss Properties Trust 2,892,750
35,000 SL Green Realty Corp. 840,000
138,000 Spieker Properties, Inc. 5,468,250
70,641 Starwood Hotels & Resorts 3,545,304
40,000 Sun Communities Inc. 1,400,000
- --------------------------------------------------------------------------------
45,868,948
- --------------------------------------------------------------------------------
Retail -- 2.9%
154,850 The Home Depot Inc. 10,781,431
327,800 The Limited Inc. 11,001,787
- --------------------------------------------------------------------------------
21,783,218
- --------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment -- 0.3%
44,000 Xilinx Inc.+ 2,013,000
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Software -- 1.0%
- --------------------------------------------------------------------------------
114,000 Networks Associates Inc.+ $ 7,809,000
- --------------------------------------------------------------------------------
Technology-- 2.8%
787,400 Sterling Software Inc.+ 20,816,887
- --------------------------------------------------------------------------------
Telecommunication Equipment -- 0.5%
39,000 Ericsson LM Telephone ADR 2,006,062
29,000 Tellabs, Inc.+ 2,055,375
- --------------------------------------------------------------------------------
4,061,437
- --------------------------------------------------------------------------------
Telecommunications -- 8.1%
153,000 ADC Telecommunications, Inc.+ 4,580,438
67,400 Colt Telecommunications Group PLC ADR+ 5,804,825
195,700 Electric Lightwave, Inc.+ 3,742,762
263,700 Nextel Communications Inc.+ 7,564,894
27,675 Tele-Communications, Inc., Class A Shares+ 892,519
300,180 Tele-Communications Liberty Media Group,
Class A Shares+ 9,962,224
57,000 Telecomuncacoes Brasileiras SA ADR 6,943,312
128,500 Teleport Communications Group, Inc., Class A Shares+ 6,922,937
247,100 Viacom, Inc., Non-voting Class B Shares+ 14,331,800
- --------------------------------------------------------------------------------
60,745,711
- --------------------------------------------------------------------------------
Tobacco -- 3.7%
113,800 Loews Corp. 11,387,113
447,400 Philip Morris Cos., Inc. 16,693,613
- --------------------------------------------------------------------------------
28,080,726
- --------------------------------------------------------------------------------
Utilities - Telephone -- 9.0%
394,000 MCI Communications Corp. 19,823,125
94,000 Millicom International Cellular SA+ 3,677,750
93,800 Telephone & Data Systems, Inc. 4,455,500
933,845 Worldcom, Inc.+ 39,951,056
- --------------------------------------------------------------------------------
67,907,431
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $519,552,081) 717,841,867
================================================================================
CONVERTIBLE PREFERRED STOCK -- 1.7%
Drugs -- 0.1%
24,400 Gensia Inc., Exchangeable $3.75 616,100
- --------------------------------------------------------------------------------
Electronics -- 0.2%
920,000 Altera Corp., 5.75% due 6/15/02 1,469,700
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Miscellaneous -- 1.0%
- --------------------------------------------------------------------------------
60,000 Automatic Common Exchange Security Trust 6.50% $ 1,560,000
225,000 The Trust Automatic Common Exchange Securities 5,878,125
- --------------------------------------------------------------------------------
7,438,125
- --------------------------------------------------------------------------------
Telecommunications -- 0.4%
22,000 Worldcom Inc. 8.00% 3,260,125
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost-- $10,398,337) 12,784,050
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
CONVERTIBLE BOND -- 0.3%
Computers -- 0.3%
$2,905,000 HMT Technology Corp., 5.75% due 1/15/04*
(Cost-- $2,952,567) 2,541,875
================================================================================
SHORT-TERM INVESTMENTS -- 2.8%
6,000,000 Farmer Mac Discount Note, 5.42% due 5/20/98 5,982,837
9,200,000 Federal Home Loan Mortgage Corp. Discount Note,
5.45% due 5/1/98 9,200,000
6,000,000 Federal National Mortgage Association Discount Note,
5.42% due 5/18/98 5,984,643
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost-- $21,167,480) 21,167,480
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $554,070,465**) $754,335,272
================================================================================
</TABLE>
+ Non-income producing security.
* Security is exempt from registration under Rule 144a of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
COMMON STOCK -- 95.3%
Advertising -- 1.0%
57,800 Omnicom Group Inc. $ 2,738,274
- --------------------------------------------------------------------------------
Aircraft & Aerospace -- 1.1%
29,000 United Technologies Corp. 2,854,687
- --------------------------------------------------------------------------------
Airlines -- 1.4%
11,200 AMR Corp.+ 1,706,600
32,700 Continental Airlines, Inc., Class B Shares+ 1,925,212
- --------------------------------------------------------------------------------
3,631,812
- --------------------------------------------------------------------------------
Automotive -- 0.7%
41,800 Ford Motor Co. 1,914,962
- --------------------------------------------------------------------------------
Banking - Major -- 3.6%
16,600 BankAmerica Corp. 1,411,000
23,000 BankBoston Corp. 2,482,563
30,100 Chase Manhattan Corp. 4,170,730
12,400 U.S. Bancorp 1,574,800
- --------------------------------------------------------------------------------
9,639,093
- --------------------------------------------------------------------------------
Broadcast Media & Cable Television -- 4.1%
86,900 CBS Inc. 3,095,812
73,200 Chancellor Media Corp.+ 3,472,425
6,968 Clear Channel Communications, Inc.+ 656,734
25,700 Jacor Communications Inc.+ 1,461,688
27,300 Time Warner Inc. 2,143,050
- --------------------------------------------------------------------------------
10,829,709
- --------------------------------------------------------------------------------
Chemicals -- 1.6%
53,100 Crompton & Knowles Corp. 1,589,680
22,500 Cytec Industries, Inc.+ 1,231,875
19,500 E.I. duPont de Nemours 1,419,844
- --------------------------------------------------------------------------------
4,241,399
- --------------------------------------------------------------------------------
Commercial Services -- 2.3%
64,625 Accustaff Inc. 2,318,421
81,705 Cendant Corp.+ 2,042,625
42,400 Metamor Worldwide, Inc.+ 1,621,800
- --------------------------------------------------------------------------------
5,982,846
- --------------------------------------------------------------------------------
Distribution/Wholesale -- 0.8%
45,700 Brightpoint Inc.+ 891,150
51,800 SYSCO Corp. 1,233,487
- --------------------------------------------------------------------------------
2,124,637
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Diversified Operations/Manufacturing -- 2.9%
14,600 Aeroquip - Vickers Inc. $ 928,012
23,400 Lear Corp.+ 1,253,363
31,200 Textron, Inc. 2,441,400
54,800 Tyco International Ltd. 2,986,600
- --------------------------------------------------------------------------------
7,609,375
- --------------------------------------------------------------------------------
Electronics - Semiconductors/Components -- 0.9%
33,200 Maxim Integrated Products, Inc.+ 1,340,450
23,700 Xilinx, Inc.+ 1,084,275
- --------------------------------------------------------------------------------
2,424,725
- --------------------------------------------------------------------------------
Energy - Oil & Gas Companies -- 1.3%
11,600 British Petroleum ADR 1,096,200
21,000 Texaco, Inc. 1,291,500
33,400 YPF Sociedad Anonima ADR 1,164,825
- --------------------------------------------------------------------------------
3,552,525
- --------------------------------------------------------------------------------
Energy - Oilfield Services -- 1.7%
22,100 Cooper Cameron Corp.+ 1,468,268
24,600 Smith International, Inc.+ 1,445,250
29,900 Weatherford Enterra, Inc.+ 1,496,869
- --------------------------------------------------------------------------------
4,410,387
- --------------------------------------------------------------------------------
Environmental Production/Services -- 1.9%
102,000 U.S.A. Waste Service, Inc.+ 5,004,375
- --------------------------------------------------------------------------------
Financial Services -- 4.5%
13,969 Associates First Capital Corp. 1,044,193
27,700 Bear Stearns Cos. Inc. 1,580,630
36,300 Fannie Mae 2,173,463
41,500 FirstPlus Financial Group, Inc.+ 2,012,750
7,400 Household International, Inc. 972,638
14,000 Merrill Lynch & Co., Inc. 1,228,500
51,100 Money Store, Inc. 1,679,913
18,400 Washington Mutual Inc. 1,289,150
- --------------------------------------------------------------------------------
11,981,237
- --------------------------------------------------------------------------------
Health Care - Hospital/Medical Services -- 7.6%
49,000 ESC Medical Systems Ltd.+ 1,592,500
23,700 Guidant Corp. 1,584,938
38,500 Health Care & Retirement Corp.+ 1,568,875
46,168 Health Management Association, Inc.+ 1,454,291
90,700 Healthsouth Corp.+ 2,738,006
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Health Care - Hospital/Medical Services -- 7.6% (continued)
30,100 Lincare Holdings, Inc.+ $ 2,441,863
32,300 Tenet Healthcare Corp. 1,209,231
64,414 Total Renal Care Holdings, Inc.+ 2,133,714
33,000 Universal Health Services Inc., Class B Shares+ 1,899,563
50,900 Wellpoint Health Networks Inc.+ 3,671,163
- --------------------------------------------------------------------------------
20,294,144
- --------------------------------------------------------------------------------
Health Care - Pharmaceuticals -- 6.5%
12,900 Abbott Laboratories 943,312
48,200 Bristol-Myers Squibb Co. 5,103,175
26,300 McKesson Corp. 1,859,081
9,000 Merck & Co., Inc. 1,084,500
44,900 Mylan Laboratories Inc. 1,217,913
9,300 Pfizer, Inc. 1,058,456
44,900 Schering-Plough Corp. 3,597,613
53,400 Watson Pharmaceuticals, Inc.+ 2,296,200
- --------------------------------------------------------------------------------
17,160,250
- --------------------------------------------------------------------------------
Hotels/Motels -- 0.3%
20,100 Promus Hotel Corp.+ 908,269
- --------------------------------------------------------------------------------
Insurance -- 6.0%
18,800 Allstate Corp. 1,809,500
23,700 AMBAC Inc. 1,343,494
33,700 CMAC Investment Corp. 2,175,756
114,100 Conseco, Inc.+ 5,662,213
14,000 MGIC Investment Corp. 882,000
46,700 Sunamerica, Inc. 2,332,081
40,400 Torchmark Corp. 1,800,325
- --------------------------------------------------------------------------------
16,005,369
- --------------------------------------------------------------------------------
Manufacturing -- 2.6%
44,000 Dana Corp. 2,601,500
21,600 Eaton Corp. 1,995,300
30,000 Hexcel Corp. 838,125
21,000 Illinois Tool Works Co. 1,480,500
- --------------------------------------------------------------------------------
6,915,425
- --------------------------------------------------------------------------------
Newspapers -- 2.2%
26,100 Gannett Inc. 1,773,169
29,300 New York Times Co., Class A Shares 2,078,469
29,600 Tribune Co. 1,953,600
- --------------------------------------------------------------------------------
5,805,238
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Paper & Related Products -- 0.9%
23,100 Bowater Inc. $ 1,292,156
23,400 Fort James Corp. 1,161,225
- --------------------------------------------------------------------------------
2,453,381
- --------------------------------------------------------------------------------
Pipelines -- 1.5%
67,200 El Paso Natural Gas Co. 2,482,200
28,600 Enron Corp. 1,406,763
- --------------------------------------------------------------------------------
3,888,963
- --------------------------------------------------------------------------------
Retail - Apparel -- 1.0%
26,700 Liz Claiborne, Inc. 1,313,306
22,300 Tommy Hilfiger Corp.+ 1,360,300
- --------------------------------------------------------------------------------
2,673,606
- --------------------------------------------------------------------------------
Retail - Consumer Electronics -- 0.5%
26,000 Maytag Corp. 1,339,000
- --------------------------------------------------------------------------------
Retail - Department/Discount -- 5.9%
20,000 Consolidated Stores Corp. 800,000
31,300 Costco Cos. Inc. 1,748,888
33,500 Dayton Hudson Corp. 2,924,969
39,300 Family Dollar Stores, Inc. 1,336,200
26,000 Lowe's Cos. Inc. 1,818,375
36,000 Proffitt's Inc.+ 1,431,000
53,900 Ross Stores, Inc. 2,496,244
69,800 TJX Co. 3,088,650
- --------------------------------------------------------------------------------
15,644,326
- --------------------------------------------------------------------------------
Retail - Food/Drugs -- 3.8%
14,100 CVS Corp. 1,039,875
34,000 General Nutrition Co.+ 1,219,750
55,100 Kroger, Inc.+ 2,307,313
43,300 Rite Aid Corp. 1,391,013
106,795 Safeway, Inc.+ 4,084,909
- --------------------------------------------------------------------------------
10,042,860
- --------------------------------------------------------------------------------
Retail - Packaged Goods -- 1.9%
23,000 Colgate-Palmolive Co. 2,062,813
81,700 Dial Corp. 1,991,438
16,900 Kimberly-Clark Corp. 857,675
- --------------------------------------------------------------------------------
4,911,926
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Retail - Restaurants -- 1.9%
92,700 Brinker International Inc.+ $ 2,224,800
27,300 Cracker Barrel Old Country Store, Inc. 1,003,275
55,400 Foodmaker Inc.+ 1,052,600
28,200 Landry's Seafood Restaurant+ 803,700
- --------------------------------------------------------------------------------
5,084,375
- --------------------------------------------------------------------------------
Retail - Specialty -- 1.4%
20,000 Avon Products, Inc. 1,643,750
18,000 Bed Bath & Beyond Inc. 886,500
38,800 Borders Group Inc. 1,246,450
- --------------------------------------------------------------------------------
3,776,700
- --------------------------------------------------------------------------------
Technology - Computers & Office Equipment -- 2.6%
28,700 Gateway 2000, Inc.+ 1,684,331
22,800 International Business Machine Corp. 2,641,950
9,700 Sanmina Corp.+ 873,000
44,400 SCI Systems Inc.+ 1,828,725
- --------------------------------------------------------------------------------
7,028,006
- --------------------------------------------------------------------------------
Technology - Computer Software -- 8.7%
35,800 BMC Software, Inc. 3,349,538
51,550 Cadence Design Systems, Inc.+ 1,871,909
22,500 Check Point Software Technologies Ltd.+ 660,938
22,650 Citrix Systems Inc.+ 1,407,131
36,550 Computer Associates International Inc. 2,140,459
38,600 Computer Sciences Corp. 2,036,150
48,400 Compuware Corp.+ 2,365,550
75,800 EMC Corp.+ 3,496,275
18,600 Microsoft Corp.+ 1,676,325
37,200 Network Associates, Inc.+ 2,548,200
59,200 Sterling Software Inc.+ 1,565,100
- --------------------------------------------------------------------------------
23,117,575
- --------------------------------------------------------------------------------
Technology - Semiconductors -- 1.1%
22,966 Analog Devices, Inc. 894,239
24,600 Linear Technology Co. 1,980,300
- --------------------------------------------------------------------------------
2,874,539
- --------------------------------------------------------------------------------
Technology - Telecommunications Equipment -- 3.0%
19,700 Adaptec Inc. 466,644
20,500 Cisco Systems Inc.+ 1,501,625
20,200 Conversion Technologies International, Inc.+ 956,975
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
================================================================================
Schedules of Investments (unaudited) (continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Technology - Telecommunications Equipment-- 3.0% (continued)
14,000 Lucent Technologies Inc. $ 1,065,750
29,600 Nokia Corp. ADR 1,979,500
28,700 Tellabs, Inc.+ 2,034,113
- --------------------------------------------------------------------------------
8,004,607
- --------------------------------------------------------------------------------
Tobacco -- 2.7%
189,200 Philip Morris Co. 7,059,525
- --------------------------------------------------------------------------------
Transportation - Air Freight -- 0.5%
34,300 Airborne Freight Corp. 1,359,138
- --------------------------------------------------------------------------------
Utilities - Electric/Gas -- 0.4%
19,000 CMS Energy Corp. 830,062
5,200 GPU, Inc. 206,050
- --------------------------------------------------------------------------------
1,036,112
- --------------------------------------------------------------------------------
Utilities - Telephone -- 2.5%
39,700 Ameritech Corp. 1,689,730
20,100 Bell Atlantic Corp. 1,880,606
31,600 SBC Communications Inc. 1,309,425
31,600 U.S. West Communications Inc. 1,666,900
- --------------------------------------------------------------------------------
6,546,661
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $181,631,195) 252,870,038
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 4.7%
$12,645,000 U.S. Treasury Bills, 4.32% to 5.03% due 5/7/98 to 7/2/98
(Cost-- $12,576,714) 12,576,755
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $194,207,909*) $265,446,793
================================================================================
</TABLE>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Assets and Liabilities (unaudited) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $321,837,383,
$554,070,465 and $194,207,909,
respectively) $406,694,467 $754,335,272 $265,446,793
Cash 318 50,226 15,552
Dividends and interest receivable 492,781 617,142 170,893
Receivable for securities sold -- -- 47,628
- --------------------------------------------------------------------------------
Total Assets 407,187,566 755,002,640 265,680,866
- --------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 230,775 474,982 332,221
Payable for securities purchased -- 4,359,647 --
Accrued expenses 33,121 35,528 24,396
- --------------------------------------------------------------------------------
Total Liabilities 263,896 4,870,157 356,617
- --------------------------------------------------------------------------------
Total Net Assets $406,923,670 $750,132,483 $265,324,249
================================================================================
NET ASSETS:
Par value of shares of beneficial
interest $ 193 $ 303 $ 112
Capital paid in excess of par value 295,471,456 478,969,152 172,284,310
Undistributed net investment income 7,312,466 4,114,084 1,053,102
Accumulated net realized gain
on security transactions 19,282,471 66,784,137 20,747,841
Net unrealized appreciation
of investments 84,857,084 200,264,807 71,238,884
- --------------------------------------------------------------------------------
Total Net Assets $406,923,670 $750,132,483 $265,324,249
================================================================================
Shares Outstanding 19,314,143 30,313,028 11,181,450
- --------------------------------------------------------------------------------
Net Asset Value $21.07 $24.75 $23.73
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
================================================================================
Statements of Operations (unaudited)
================================================================================
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1998
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,680,484 $ 4,194,391 $ 1,001,933
Interest 450,047 1,194,037 309,464
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 4,130,531 5,388,428 1,311,397
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,115,322 2,521,009 785,104
Audit and legal 11,551 11,604 7,439
Registration fees 8,852 -- --
Directors' fees 6,118 10,413 3,224
Shareholder communications 5,935 22,026 5,455
Custody 5,388 14,318 4,281
Shareholder and system servicing fees 4,463 3,968 5,828
Other 1,342 1,044 12,870
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 1,158,971 2,584,382 824,201
- ------------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 2,971,560 2,804,046 487,196
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions:
Proceeds from sales 51,187,730 106,960,001 130,973,750
Cost of securities sold 42,632,466 85,379,762 122,821,738
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain 8,555,264 21,580,239 8,152,012
- ------------------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period 40,791,822 112,515,767 38,536,804
End of period 84,857,084 200,264,807 71,238,884
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 44,065,262 87,749,040 32,702,080
- ------------------------------------------------------------------------------------------------------------------------------------
Net Gain on Investments 52,620,526 109,329,279 40,854,092
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 55,592,086 $112,133,325 $ 41,341,288
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
Smith Barney Large Cap Value Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,971,560 $ 4,343,100
Net realized gain 8,555,264 10,733,184
Increase in net unrealized appreciation 44,065,262 24,630,552
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 55,592,086 39,706,836
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (1,809,911)
Net realized gains -- (1,779,060)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (3,588,971)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 67,146,975 112,644,265
Net asset value of shares issued
for reinvestment of dividends -- 3,588,971
Cost of shares reacquired (3,148,195) (3,730,616)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 63,998,780 112,502,620
- --------------------------------------------------------------------------------
Increase in Net Assets 119,590,866 148,620,485
NET ASSETS:
Beginning of period 287,332,804 138,712,319
- --------------------------------------------------------------------------------
End of period* $406,923,670 $287,332,804
================================================================================
* Includes undistributed net investment income of: $7,312,466 $4,340,906
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
Alliance Growth Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,804,046 $ 1,309,831
Net realized gain 21,580,239 45,285,163
Increase in net unrealized appreciation 87,749,040 69,278,096
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 112,133,325 115,873,090
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (322,517)
Net realized gains -- (12,082,073)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (12,404,590)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 96,259,352 139,218,982
Net asset value of shares issued
for reinvestment of dividends -- 12,404,591
Cost of shares reacquired (2,786,209) (5,161,944)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 93,473,143 146,461,629
- --------------------------------------------------------------------------------
Increase in Net Assets 205,606,468 249,930,129
NET ASSETS:
Beginning of period 544,526,015 294,595,886
- --------------------------------------------------------------------------------
End of period* $750,132,483 $544,526,015
================================================================================
* Includes undistributed net investment income of: $4,114,084 $1,310,038
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
Van Kampen American Capital Enterprise Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 487,196 $ 615,283
Net realized gain 8,152,012 13,001,084
Increase in net unrealized appreciation 32,702,080 23,155,657
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 41,341,288 36,772,024
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (361,911)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (361,911)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 29,059,177 58,656,790
Net asset value of shares issued
for reinvestment of dividends -- 361,911
Cost of shares reacquired (1,659,161) (2,536,998)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 27,400,016 56,481,703
- --------------------------------------------------------------------------------
Increase in Net Assets 68,741,304 92,891,816
NET ASSETS:
Beginning of period 196,582,945 103,691,129
- --------------------------------------------------------------------------------
End of period* $265,324,249 $196,582,945
================================================================================
* Includes undistributed net investment income of: $1,053,102 $565,906
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The Smith Barney Large Cap Value Portfolio (formerly known as Smith Barney
Income and Growth Portfolio), Alliance Growth Portfolio and Van Kampen American
Capital Enterprise Portfolio ("Portfolio(s)") are separate investment portfolios
of the 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 ten 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, Smith Barney Large Capitalization Growth 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 agencies
and obligations are valued at the mean between bid and ask prices; (c)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (d) dividend income is
recorded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Portfolios determine the
existence of a dividend declaration after exercising reasonable due diligence;
(e) interest income is recorded on an 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) 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 or expense amounts recorded and collected or paid are
adjusted when reported by the custodian bank; (i) the character of income and
gains to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. At October 31,
1997, reclassifications were made to the capital accounts of the Alliance Growth
Portfolio to reflect
- --------------------------------------------------------------------------------
30 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Net investment income, net realized gains and net
assets were not affected by this adjustment; (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.
2. Management Agreement and Transactions with Affiliated Persons
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as the investment manager of the Smith Barney Large Cap Value Portfolio
("SBLCV"). Travelers Investment Adviser, Inc. ("TIA"), an affiliate of MMC, acts
as the investment manager of the Alliance Growth ("AGP") and the Van Kampen
American Capital Enterprise ("VKACEP") Portfolios. SBLCV pays MMC a management
fee calculated at an annual rate of 0.65% of the average daily net assets of the
Portfolio. AGP and VKACEP pay TIA a management fee calculated at an annual rate
of 0.80% and 0.70%, respectively, of the average daily net assets of each
Portfolio. These fees are calculated daily and paid monthly.
TIA 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 and
are compensated for such services at an annual rate of 0.375% and 0.325% of the
average daily net assets of AGP and VKACEP, respectively. These fees are
calculated daily and paid monthly.
TIA has entered into a sub-administrative services agreement with MMC. TIA pays
MMC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of AGP and VKACEP.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares. For the six months ended April 30, 1998, SB received brokerage
commissions of $83,530.
All officers and one director of the Fund are employees of SB.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
3. Investments
During the six months ended April 30, 1998, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were:
<TABLE>
<CAPTION>
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
================================================================================
<S> <C> <C> <C>
Purchases $116,346,624 $252,647,123 $ 84,591,091
- --------------------------------------------------------------------------------
Sales 51,187,730 106,960,001 59,743,097
================================================================================
</TABLE>
At April 30, 1998, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
<CAPTION>
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
================================================================================
<S> <C> <C> <C>
Gross unrealized appreciation $86,518,437 $207,783,665 $72,153,542
Gross unrealized depreciation (1,661,353) (7,518,858) (914,658)
- --------------------------------------------------------------------------------
Net unrealized appreciation $84,857,084 $200,264,807 $71,238,884
================================================================================
</TABLE>
4. 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.
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolios record a realized gain or
loss equal to the
- --------------------------------------------------------------------------------
32 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
difference between the proceeds from (or cost of) the closing transactions and
the Portfolios' basis in the contract.
Only AGP and VKACEP may enter into such contracts to hedge a portion of their
portfolios. The Portfolios bear the market risk that arises from changes in the
value of the financial instruments and securities indices (futures contracts).
At April 30, 1998, AGP and VKACEP had no open futures contracts.
6. Options Contracts
AGP and VKACEP may purchase put or call options. Premiums paid when put or call
options are purchased represent investments, which are marked-to-market daily
and are included in the schedule of investments. When a purchased option
expires, a loss will be realized in the amount of the premium paid. When a
closing sales transaction is entered into, a gain or loss will be realized
depending on whether the proceeds from the closing sales transaction are greater
or less than the premium paid for the option. When a put option is exercised, a
gain or loss will be realized from the sale of the underlying security and the
proceeds from such sale decrease by the premium originally paid. When a call
option is exercised, the cost of the security purchased upon exercise will be
increased by the premium originally paid.
At April 30, 1998, AGP and VKACEP had no open purchased put or call option
contracts.
When AGP and VKACEP write a covered call or put option, an amount equal to the
premium received is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, a gain equal to the
amount of the premium received is realized. When a closing purchase transaction
is entered into, a gain or loss is realized depending upon whether the cost of
the closing transaction is greater or less than the premium originally received,
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised, the cost of the security sold will be decreased by the premium
originally received. When a written put option is exercised, the amount of the
premium originally received will reduce the cost of the security purchased upon
exercise. When written index options are exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
in writing a put option is that the Portfolios are exposed to the risk of a loss
if the market price of the underlying security declines.
During the six months ended April 30, 1998, AGP and VKACEP did not write any
options.
7. Lending of Portfolio Securities
SBLCV and AGP have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin depending on the type of
securities loaned. The custodian establishes and maintains the collateral in
segregated accounts. The Portfolios maintain exposure for the risk of any losses
in the investment of amounts received as collateral.
At April 30, 1998, there were no securities on loan.
8. Capital Shares
At April 30, 1998, the Fund had six billion shares 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 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:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
================================================================================
<S> <C> <C>
Smith Barney Large Cap Value
Shares sold 3,428,266 6,685,160
Shares issued on reinvestment -- 235,342
Shares redeemed (163,916) (219,187)
- --------------------------------------------------------------------------------
Net Increase 3,264,350 6,701,315
================================================================================
<CAPTION>
Alliance Growth
Shares sold 4,286,130 7,641,028
Shares issued on reinvestment -- 734,869
Shares redeemed (126,514) (294,993)
- --------------------------------------------------------------------------------
Net Increase 4,159,616 8,080,904
================================================================================
<CAPTION>
Van Kampen American Capital Enterprise
Shares sold 1,377,938 3,263,315
Shares issued on reinvestment -- 22,619
Shares redeemed (80,146) (146,973)
- --------------------------------------------------------------------------------
Net Increase 1,297,792 3,138,961
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
34 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
For a share of capital stock outstanding throughout each period:
Smith Barney Large Cap
Value Portfolio 1998(1) 1997 1996 1995 1994(2)
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 17.90 $ 14.84 $ 12.12 $ 10.14 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.11 0.25 0.32 0.28 0.11
Net realized and unrealized gain 3.06 3.16 2.62 1.76 0.03
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 3.17 3.41 2.94 2.04 0.14
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.18) (0.17) (0.06) --
Net realized gains -- (0.17) (0.05) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.35) (0.22) (0.06) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 21.07 $ 17.90 $ 14.84 $ 12.12 $ 10.14
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 17.71%++ 23.38% 24.55% 20.21% 1.40%++
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 406,924 $ 287,333 $ 138,712 $ 39,364 $ 6,377
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.67%+ 0.69% 0.73% 0.73% 0.73%+
Net investment income 1.73+ 2.01 2.35 2.70 2.82+
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 15% 46% 32% 38% 2%
- ---------------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4) $ 0.06 $ 0.06 $ 0.06 $ 0.07 --
=================================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -----------------
<S> <C> <C>
1995 $0.02 0.94%
1994 0.05 2.08+
</TABLE>
(4) As of September 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
<TABLE>
<CAPTION>
For a share of capital stock outstanding throughout each period:
Smith Barney Large Cap
Alliance Growth Portfolio 1998(1) 1997 1996 1995 1994(2)
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 20.82 $ 16.30 $ 13.28 $ 10.65 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.09 0.05 0.04 0.14 0.06
Net realized and unrealized gain 3.84 5.11 3.39 2.61 0.59
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 3.93 5.16 3.43 2.75 0.65
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.02) (0.09) (0.02) --
Net realized gains -- (0.62) (0.32) (0.10) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.64) (0.41) (0.12) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 24.75 $ 20.82 $ 16.30 $ 13.28 $ 10.65
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 18.88%++ 32.59% 26.55% 26.18% 6.50%++
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 750,132 $ 544,526 $ 294,596 $ 111,573 $ 17,086
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.82%+ 0.82% 0.87% 0.90% 0.88%+
Net investment income 0.89+ 0.32 0.39 1.24 1.47+
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 18% 66% 88% 78% 37%
- ---------------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4) $ 0.07 $ 0.05 $ 0.05 $ 0.06 --
=================================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -----------------
<S> <C> <C>
1995 $0.01 0.97%
1994 0.03 1.76+
</TABLE>
(4) As of September 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 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
<TABLE>
<CAPTION>
For a share of capital stock outstanding throughout each period:
Van Kampen American
Capital Enterprise Portfolio 1998(1) 1997 1996 1995 1994(2)
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 19.89 $ 15.37 $ 12.89 $ 10.38 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.04 0.06 0.05 0.03 0.03
Net realized and
unrealized gain 3.80 4.51 2.87 2.53 0.35
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 3.84 4.57 2.92 2.56 0.38
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.05) (0.04) (0.02) --
Net realized gains -- -- (0.40) (0.03) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.05) (0.44) (0.05) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.73 $ 19.89 $ 15.37 $ 12.89 $ 10.38
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 19.31%++ 29.81% 23.35% 24.74% 3.80%++
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $ 265,324 $ 196,583 $ 103,691 $ 32,447 $ 5,734
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.73%+ 0.74% 0.83% 0.88% 0.84%+
Net investment income 0.43+ 0.41 0.53 0.65 0.79+
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 28% 75% 112% 180% 55%
- ---------------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4) $ 0.06 $ 0.05 $ 0.06 $ 0.05 --
=================================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ -----------------
<S> <C> <C>
1995 $0.06 1.26%
1994 0.07 2.66+
</TABLE>
(4) As of September 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On February 20, 1998, a special meeting of shareholders of the Fund was held for
the purpose of voting on the following matters:
1. To elect Directors of the Fund;
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies;
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage of Shares Voted Percentage of
Name of Directors For Shares Voted Against Shares Voted
================================================================================
<S> <C> <C> <C> <C>
Victor K. Atkins 231,059,252.884 97.271% 6,481,382.874 2.729%
Abraham E. Cohen 231,294,945.547 97.371 6,245,690.211 2.629
Robert A. Frankel 230,999,179.846 97.246 6,541,455.912 2.754
Rainer Greeven 231,468,718.650 97.444 6,071,917.108 2.556
Susan M. Heilbron 231,485,321.942 97.451 6,055,313.816 2.549
Heath B. McLendon 231,463,894.239 97.442 6,076,741.519 2.558
James M. Shuart 231,410,828.580 97.419 6,129,807.178 2.581
================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental policies of the Portfolios in order to modernize them in view of
certain regulatory, business or industry developments that have occurred since
original adoption of these policies by the Portfolios. The following chart
demonstrates that all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates the
elimination of the policy; and "R" indicates the reclassification of the policy
from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Directors).
<TABLE>
<CAPTION>
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C> <C>
M Diversification Approved Approved Approved
- --------------------------------------------------------------------------------
M Senior Securities Approved Approved Approved
- --------------------------------------------------------------------------------
M Industry Concentration Approved N/A N/A
- --------------------------------------------------------------------------------
M Borrowing Approved Approved Approved
- --------------------------------------------------------------------------------
E Ability to Pledge Assets Approved N/A Approved
- --------------------------------------------------------------------------------
M Lending Approved Approved Approved
- --------------------------------------------------------------------------------
M Underwriting of Securities Approved Approved Approved
- --------------------------------------------------------------------------------
M Real Estate Approved Approved Approved
- --------------------------------------------------------------------------------
R Purchases of Securities of Other
Investment Companies Approved N/A N/A
================================================================================
</TABLE>
N/A - Not Applicable
- --------------------------------------------------------------------------------
38 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited) (continued)
================================================================================
The information below reports the lowest percentage of shares voting for the
proposals and the highest percentage of shares voting against and abstaining by
shareholders of each Portfolio on all of the items in Proposal 2.
Smith Barney Large Cap Value Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
15,590,693.876 92.786% 143,274.594 0.853% 1,068,889.138 6.361%
================================================================================
<CAPTION>
Alliance Growth Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
24,932,459.967 92.109% 336,789.214 1.245% 1,799,083.611 6.646%
================================================================================
<CAPTION>
Van Kampen American Capital Enterprise Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
9,382,225.077 92.297% 115,598.826 1.137% 667,483.709 6.566%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
[This page intentionally left blank]
<PAGE>
Travelers Series SMITH BARNEY
Fund Inc. --------------------------------
A Member of TravelersGroup[LOGO]
Directors Investment Managers
Victor K. Atkins Mutual Management Corp.
A.E. Cohen Travelers Investment Adviser, Inc.
Robert A. Frankel
Rainer Greeven Distributor
Susan M. Heilbron Smith Barney Inc.
Heath B. McLendon, Chairman
James M. Shuart Custodian
PNC Bank, N.A.
Officers
Heath B. McLendon Annuity Administration
President and Travelers Annuity Investor Services
Chief Executive Officer 5 State House Square
1 Tower Square
Lewis E. Daidone Hartford, CT 06183
Senior Vice President and
Treasurer
James B. Conheady This report is submitted for the general
Vice President information of the shareholders of
Travelers Series Fund Inc. - Smith
Bruce D. Sargent Barney Large Cap Value Portfolio,
Vice President Alliance Growth Portfolio and Van Kampen
American Capital Enterprise Portfolio.
Thomas M. Reynolds It is not authorized for distribution to
Controller prospective investors unless accompanied
or preceded by a current Prospectus for
Christina T. Sydor the Fund, which contains information
Secretary concerning the Fund's investment
policies and expenses as well as other
pertinent information.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0802 6/98
<PAGE>
================================================================================
[PHOTO]
Travelers Series Fund Inc.
MFS Total Return Portfolio
TBC Managed Income
Portfolio
Smith Barney Money
Market Portfolio
------------------
SEMI-ANNUAL REPORT
------------------
April 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
<PAGE>
Travelers Series
Fund Inc.
[PHOTO]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the semi-annual report for the Travelers Series Fund
Inc. - MFS Total Return, TBC Managed Income and Smith Barney Money Market
Portfolios ("Portfolios") for the period ended April 30, 1998. For your
convenience, we have summarized the period's prevailing economic and market
conditions and outlined each Portfolio's investment strategy. A detailed summary
of performance and current holdings can be found in the appropriate sections
that follow.
Portfolio Highlights
MFS Total Return Portfolio
The primary investment objective of the MFS Total Return Portfolio ("Portfolio")
is to obtain above-average income (compared to a portfolio entirely invested in
stocks) consistent with the prudent employment of capital. While current income
is the primary objective, the Portfolio's managers believe there should also be
a reasonable opportunity for growth of capital and income since many of the
securities offering a better-than-average yield may also possess growth
potential.
For the six months ended April 30, 1998 the Portfolio provided a total return of
11.82%. This compares to the 22.50% return for the Standard and Poor's 500
Composite Index ("S&P 500"), a popular, unmanaged index of common stock total
return performance, and to the 3.64% return for the Lehman Brothers Government
Corporate Bond Index, an unmanaged, market-value-weighted index of U.S. Treasury
and government-agency securities (excluding mortgage-backed securities) and
investment-grade domestic corporate debt. As a balanced fund, a large portion of
the Portfolio's total assets are invested in both stocks and bonds. In addition,
the Portfolio purchases preferred stocks and convertible bonds, which in many
cases can provide similar returns to common stocks but with less risk.
In general, the Portfolio has been helped by the strong pace of economic
activity and low levels of inflation during the past six months. This strong
macroeconomic environment has lead to higher corporate profits and rising stock
prices. Investors have responded by pouring money into the stock market, which
in turn has served to drive stock prices even higher.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
Within the Portfolio, the managers' allocations remained conservative. For most
of the period, the Portfolio's stock weighting was between 55% and 58%. In
addition, the managers' stock selection process remains conservative, as they
have added to their existing holdings in utility stocks and insurance company
stocks.
In selecting stocks for the Portfolio, the portfolio managers look for large
companies with solid market positions or franchises that are "undervalued"
relative to their peer group in the S&P 500. Generally, the stocks in the
portfolio have lower levels of volatility then the overall stock market.
Financial services companies have a lot of characteristics the managers seek.
Their valuations relative to the S&P 500 are low, but their earnings visibility
is higher than that of the average company. Many of the earnings growth rates of
these companies are in the double digits, and their yields are attractive. Add
to that the huge consolidation that's going on in financial services, and the
managers think this remains a great sector.
The portfolio managers also see some attractive valuations in the utilities and
communications sectors. On the electric side, they think growth is modest but
valuations are good relative to the S&P 500. In telecommunications, they see
lots of consolidation, solid long-term growth rates and decent valuations.
While many of their stock picks have helped the overall Portfolio, some groups
have lagged during the reporting period. For example, the Portfolio's energy
stocks underperformed during the past six months. Oil supplies loosened up
during the period causing the price of oil to fall. This lead to
lower-than-expected earnings and weaker-than-expected stock appreciation. The
Portfolio's managers believe that energy stocks are undervalued and they remain
an integral part of the Portfolio.
The bond allocation is overweighted in the corporate bond sector. The managers
believe that as long as the economy is sound and inflation remains low, these
issues should do well.
Looking ahead, the biggest risk the managers have identified is probably
valuation levels. There has been a deceleration in earnings growth in the S&P
500 over the past several months, brought about in part by the Asian crisis but
also because this economic expansion is in its latter stages. Still, stock
prices have continued to go up, which means there has been higher priced but
decelerating earnings growth. As a result, the portfolio managers finally
believe the valuation risk in the markets are greater today than in the past.
- --------------------------------------------------------------------------------
2 1998 Semi-Annual Report to Shareholders
<PAGE>
TBC Managed Income Portfolio
The TBC Managed Income Portfolio's investment objective is to seek high current
income consistent with what The Boston Company Asset Management, LLC, believes
to be prudent risk of capital through investments in corporate debt obligations
(such as bonds, debentures, obligations convertible into common stocks and money
market instruments); preferred stocks; and obligations issued or guaranteed by
the U.S. government and its agencies or instrumentalities.
For the six months ended April 30, 1998, the Portfolio had a total return of
3.98% versus the total return of 3.59% for the Lehman Brothers Aggregate Bond
Index, an unmanaged bond index made up of more than 5,900 issues of U.S.
Treasuries and agencies, corporate bonds, mortgage-backed, and asset-backed
securities. In general the Portfolio's performance was helped by its allocation
in corporate bonds (both high yield and investment grade) and mortgage-backed
securities.
During the previous six months, the Portfolio's managers have maintained
approximately a 48% allocation in corporate securities. Approximately 22% of the
Portfolio was allocated to high yield bonds and the rest of the corporate bonds
were investment grade. As of April 30, 1998, industrials made up 24.3% of the
Portfolio and financial services 10.0%. The Portfolio has benefited from the
strong corporate allocation as corporate bonds have outperformed U.S. Treasuries
on a duration-adjusted basis. In particular, the Portfolio's finance holdings
have done well in this low interest-rate environment. Brokerage houses have seen
their spreads tighten, as their financial results have been strong. With the
Asian markets stabilizing, the fundamental environment for most companies has
remained quite positive, which is expected to provide continued support for
corporate bonds in the coming months. Credit fundamentals in the high yield bond
market remained positive throughout the reporting period. Companies in the
telecommunications and media sector benefited from strong product demand and
increased merger activity. The Portfolio benefited from the rating upgrades of
Tenet Healthcare, Niagara, Mohawk, Nextel Communications and McLeod
Communications.
Mortgage-backed securities outperformed comparable U.S. Treasuries by
approximately 50 basis points over the course of the period, with returns being
tempered by the highest prepayment speeds observed since 1993. The managers
increased the Portfolio's exposure to agency pass-throughs after the mortgage
spread to U.S. Treasuries widened. The managers continue to seek relative value
between all of the bond market sectors with a particular focus on corporate
bonds and mortgage-backed securities while emphasizing security selection within
these bond market sectors as their primary means for adding value.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
Smith Barney Money Market Portfolio
The Smith Barney Money Market Portfolio seeks maximum current income and
preservation of capital. Investors should be aware that their investment in the
Portfolio is neither insured nor guaranteed by the U.S. government. The
Portfolio will seek to maintain a stable net asset value of $1.00 per share;
however, there is no assurance that it will be able to do so at all times.
The U.S. economy continues to grow steadily as the seventh year of economic
expansion concludes. Toward the end of 1997, it looked as if the turmoil in Asia
would cause a considerable downturn in U.S. economic growth. This fostered
concern about weaker exports, a stronger U.S. dollar and a possible Federal
Reserve Board ("Fed") monetary policy easing. Nevertheless, one month into the
second quarter of 1998, U.S. economic growth remains strong and any talk of
lower rates appeared to be premature.
In his semi-annual address to Congress in February 1998, Fed Chairman Alan
Greenspan eliminated any near-term easing prospects for interest rates.
Greenspan noted that "the key question going forward is whether the weakness in
Asia will be sufficient to check inflationary tendencies that might otherwise
result from the strength of domestic spending and tightening labor markets." As
a result, the Fed has kept short-term interest rates steady. The last time the
Fed changed the federal-funds rate was in March 1997. (The federal-funds rate is
the interest rate banks charge each other for overnight loans and a closely
watched indicator of the direction of interest rates.) The combination of firm
economic growth and relatively no inflation has left little need for a change in
monetary policy. Fed officials have more recently chosen to take a
"wait-and-see" approach.
In the U.S., the Portfolio's managers continue to see strong consumer demand,
solid job growth and a robust housing market. All of which is supported by a
strong stock market, rising personal incomes and unseasonably warm weather. As
of this writing, the U.S. unemployment rate stands at 4.7%. This low employment
has led to a shortage of qualified workers and has caused wages to rise. The
Employment Cost Index, a broad measure of wages, salaries and benefit costs,
rose only 0.7% in the first quarter of 1998 after rising 1% in the fourth
quarter of 1997. For the first quarter 1998, GDP grew at a 4.2% annual rate,
following a 3.7% pace in 1997.
We have yet to see higher consumer prices because global competition has left
little room for manufacturers to pass on any higher production costs. Wage gains
have provided a boost to U.S. consumption.
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
The short-term yield curve remains fairly flat and is priced to no action by the
Fed. (The yield curve shows the difference between short- and long-term yields.)
The difference in yields between overnight investments and one-year certificates
of deposit has narrowed to less than 35 basis points. The Portfolio's managers
continue to buy securities primarily with a maturity between three and six
months and they are maintaining an average maturity in the Portfolio in the
mid-50 day range.
In closing, thank you for investing in the Travelers Series Fund Inc. - MFS
Total Return, TBC Managed Income and Smith Barney Money Market Portfolios. We
look forward to helping you pursue your investment goals.
Sincerely,
/s/ Heath B. McLendon
- --------------------------
Heath B. McLendon
Chairman
May 22, 1998
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
<TABLE>
<CAPTION>
================================================================================
MFS Total Return Portfolio
- --------------------------------------------------------------------------------
Historical Performance
================================================================================
Net Asset Value
--------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $15.31 $17.12 $0.00 $0.00 11.82%++
- --------------------------------------------------------------------------------
10/31/97 13.13 15.31 0.29 0.18 20.64
- --------------------------------------------------------------------------------
10/31/96 11.53 13.13 0.27 0.08 17.16
- --------------------------------------------------------------------------------
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 $0.61 $0.26
================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
TBC Managed Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
================================================================================
Net Asset Value
--------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $11.55 $12.01 $0.00 $0.00 3.98%++
- --------------------------------------------------------------------------------
10/31/97 11.06 11.55 0.49 0.00 9.19
- --------------------------------------------------------------------------------
10/31/96 11.16 11.06 0.46 0.15 4.61
- --------------------------------------------------------------------------------
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 $1.08 $0.15
================================================================================
</TABLE>
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
<TABLE>
<CAPTION>
================================================================================
Average Annual Total Return+
================================================================================
MFS Total TBC Managed
Return Income
Portfolio Portfolio
================================================================================
<S> <C> <C>
Six Months Ended 4/30/98++ 11.82% 3.98%
- --------------------------------------------------------------------------------
Year Ended 4/30/98 24.51 11.20
- --------------------------------------------------------------------------------
6/16/94* through 4/30/98 16.91 7.93
================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
Cumulative Total Return+
================================================================================
MFS Total TBC Managed
Return Income
Portfolio Portfolio
================================================================================
<S> <C> <C>
6/16/94* through 4/30/98 83.16% 34.38%
================================================================================
</TABLE>
+ Assumes the reinvestment of all dividends and capital gains distributions
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 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
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 1998
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
Lehman Brothers
MFS Total Government Corporate
Return Portfolio S&P 500 Index Bond Index
---------------- ------------- ---------
<S> <C> <C> <C>
6/16/94 $10,000 $10,000 $10,000
10/94 $ 9,980 $10,324 $10,075
4/95 $10,614 $11,404 $10,777
10/95 $11,589 $13,053 $11,704
4/96 $12,740 $14,684 $11,709
10/96 $13,577 $16,018 $12,335
4/97 $14,711 $18,374 $12,496
10/97 $16,380 $21,159 $13,423
4/30/98 $18,317 $25,920 $13,911
</TABLE>
+ 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, 1998. The Standard & Poor's 500 Composite Stock Index
("S&P 500 Index") 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
================================================================================
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 1998
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
Lehman Brothers
TBC Managed Aggregate
Income Portfolio Bond Index
----------------- ---------------
<S> <C> <C>
6/16/94 $10,000 $10,000
10/94 $10,040 $10,052
4/95 $10,533 $10,757
10/95 $11,313 $11,626
4/96 $11,289 $11,687
10/96 $11,835 $12,305
4/97 $12,084 $12,515
10/97 $12,923 $13,399
4/30/98 $13,438 $13,880
</TABLE>
+ 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, 1998. 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.
- --------------------------------------------------------------------------------
8 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
COMMON STOCK -- 51.7%
Aerospace -- 3.0%
47,300 The B.F. Goodrich Co. $ 2,545,331
30,200 General Dynamics Corp. 1,275,950
19,400 Lockheed Martin Corp. 2,160,675
16,006 Raytheon Co., Class A Shares 883,331
34,900 Raytheon Co., Class B Shares 1,978,394
42,800 TRW Inc. 2,260,375
6,500 United Technologies Corp. 639,844
- --------------------------------------------------------------------------------
11,743,900
- --------------------------------------------------------------------------------
Automotive -- 1.1%
36,900 Ford Motor Co. 1,690,481
10,300 Lear Corp. 551,694
65,700 Volvo Aktiebolaget, ADR 1,954,575
- --------------------------------------------------------------------------------
4,196,750
- --------------------------------------------------------------------------------
Banks & Credit Companies -- 4.7%
2,800 Bank of Boston Corp. 302,225
38,200 Bank of New York Co., Inc. 2,256,187
3,384 Chase Manhattan Corp. 468,896
9,900 Fleet Financial Corp. 855,112
11,500 J.P. Morgan & Co. 1,509,375
61,300 National City Corp. 4,245,025
30,400 NationsBank Corp. 2,302,800
19,800 Northern Trust Corp. 1,445,400
32,200 Norwest Corp. 1,277,937
64,500 PNC Bank Corp. 3,898,219
- --------------------------------------------------------------------------------
18,561,176
- --------------------------------------------------------------------------------
Building -- 0.1%
7,700 Sherwin Williams Co. 274,313
3,200 Stanley Works, Inc. 163,800
- --------------------------------------------------------------------------------
438,113
- --------------------------------------------------------------------------------
Business Machines -- 1.2%
9,300 Digital Equipment Corp.+ 517,312
37,000 International Business Machines Corp. 4,287,375
- --------------------------------------------------------------------------------
4,804,687
- --------------------------------------------------------------------------------
Business Services -- 0.2%
20,607 Service Corp. 850,039
- --------------------------------------------------------------------------------
Cellular Phones -- 0.2%
16,100 Telephone Data Systems Inc. 764,750
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Chemicals -- 0.5%
21,100 Air Products & Chemical Inc. $ 1,834,381
3,600 Dow Chemical Co. 348,075
- --------------------------------------------------------------------------------
2,182,456
- --------------------------------------------------------------------------------
Communication Services -- 3.6%
48,900 American Telephone & Telegraph Corp. 2,937,056
13,000 Bell Atlantic Corp. 1,216,312
20,800 BellSouth Corp. 1,335,100
68,800 GTE Corp. 4,020,500
51,024 SBC Communications Inc. 2,114,307
38,700 Sprint Corp. 2,643,694
- --------------------------------------------------------------------------------
14,266,969
- --------------------------------------------------------------------------------
Computer Software - Systems -- 0.3%
33,700 Alcatel Alsthom, ADR 1,221,625
- --------------------------------------------------------------------------------
Conglomerates -- 1.4%
95,600 Allied Signal Inc. 4,188,475
27,400 Tyco International Ltd. 1,493,300
- --------------------------------------------------------------------------------
5,681,775
- --------------------------------------------------------------------------------
Consumer Goods & Services -- 0.1%
10,000 RJR Nabisco Holdings, Inc. 278,125
- --------------------------------------------------------------------------------
Consumer Products -- 1.9%
3,700 Colgate Palmolive Co. 331,844
63,300 Philip Morris Cos. Inc. 2,361,881
40,600 Rubbermaid Inc. 1,162,175
- --------------------------------------------------------------------------------
3,855,900
- --------------------------------------------------------------------------------
Electrical Equipment - Utilities -- 1.0%
31,900 Cooper Industries Inc. 2,133,313
42,900 General Electric Co. 3,651,862
34,000 Hubbell Inc., Class B Shares 1,676,625
- --------------------------------------------------------------------------------
7,461,800
- --------------------------------------------------------------------------------
Electronics -- 0.2%
19,000 Analog Devices Inc.+ 739,813
- --------------------------------------------------------------------------------
Entertainment -- 0.6%
37,900 Viacom Inc.+ 2,198,200
- --------------------------------------------------------------------------------
Financial Institutions -- 3.1%
22,400 A.G. Edwards Inc. 1,008,000
12,400 American Express Co. 1,264,800
15,495 Associates First Capital Corp. 1,158,251
9,600 Beneficial Corp. 1,251,600
35,200 Fannie Mae 2,107,600
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Financial Institutions -- 3.1% (continued)
36,600 Federal Home Loan Mortgage Corp. $ 1,695,037
31,266 First Union Corp. 1,887,685
7,000 Merrill Lynch & Co. Inc. 614,250
16,100 Morgan Stanley Dean Witter Corp. 1,269,888
- --------------------------------------------------------------------------------
12,257,111
- --------------------------------------------------------------------------------
Food & Beverages -- 0.5%
6,800 General Mills Inc. 459,425
22,600 McCormick & Co., Inc. 774,050
14,600 PepsiCo Inc. 579,438
- --------------------------------------------------------------------------------
1,812,913
- --------------------------------------------------------------------------------
Forest & Paper Products -- 1.0%
26,000 Champion International Corp. 1,399,125
44,000 Weyerhaeuser Co. 2,535,500
- --------------------------------------------------------------------------------
3,934,625
- --------------------------------------------------------------------------------
Health Care -- 2.8%
1 Astra AB, ADR 21
9,900 Baxter International Inc. 548,831
58,000 Bristol-Myers Squibb Co. 6,140,750
33,800 Glaxo Holdings PLC 1,911,812
16,300 Smithkline Beecham, ADR 970,869
18,900 United Healthcare Corp. 1,327,725
- --------------------------------------------------------------------------------
10,900,008
- --------------------------------------------------------------------------------
Health Care Products -- 1.4%
42,800 American Home Products Corp. 3,985,750
51,400 Columbia HCA Healthcare 1,692,987
- --------------------------------------------------------------------------------
5,678,737
- --------------------------------------------------------------------------------
Insurance -- 5.3%
2,700 Allstate Corp. 259,875
900 Annuity & Life Holdings, Ltd. 21,487
40,500 Chubb Corp. 3,196,969
14,900 Cigna Corp. 3,083,369
41,100 Equitable Cos., Inc. 2,522,512
31,050 Jefferson-Pilot Corp. 1,822,247
43,900 Lincoln National Corp. 3,898,869
33,000 Provident Co. 1,289,063
57,600 Torchmark Corp. 2,566,800
18,100 Transamerica Corp. 2,090,550
- --------------------------------------------------------------------------------
20,751,741
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Machinery - Diversified -- 0.3%
13,500 Deere & Co. $ 788,906
9,300 York International Corp. 458,606
- --------------------------------------------------------------------------------
1,247,512
- --------------------------------------------------------------------------------
Metals & Minerals -- 0.5%
23,500 Aluminum Co. of America 1,821,250
- --------------------------------------------------------------------------------
Oil Production -- 6.2%
24,000 Amoco Corp. 1,062,000
21,000 Atlantic Richfield Co. 1,638,000
25,400 Baker Hughes Inc. 1,028,700
70,135 British Petroleum Co. PLC, ADR 6,627,757
34,600 Exxon Corp. 2,523,638
17,400 Mobil Corp. 1,374,600
56,200 Occidental Petroleum Corp. 1,654,387
31,800 Royal Dutch Petroleum Co., ADR 1,798,688
45,800 Texaco Inc. 2,816,700
31,100 Unocal Corp. 1,273,156
68,000 USX-Marathon Group Inc. 2,435,250
- --------------------------------------------------------------------------------
24,232,876
- --------------------------------------------------------------------------------
Photographic Products -- 0.2%
12,700 Eastman Kodak Co. 916,781
- --------------------------------------------------------------------------------
Pollution Control -- 0.5%
58,800 Browning-Ferris Industries Inc. 2,006,550
- --------------------------------------------------------------------------------
Railroads -- 0.7%
8,500 Burlington Northern Santa Fe Corp. 841,500
18,300 Canadian National Railway Co. 1,190,644
21,300 Norfolk Southern Corp. 712,219
- --------------------------------------------------------------------------------
2,744,363
- --------------------------------------------------------------------------------
Real Estate Investment Trust -- 1.1%
29,400 Arden Realty Group Inc. 825,037
25,000 Boston Properties Inc. 826,562
26,700 Hospitality Properties Trust Corp. 857,738
28,700 Prime Group Realty Trust 600,906
38,000 Trinet Corporate Realty Trust, Inc. 1,360,875
- --------------------------------------------------------------------------------
4,471,118
- --------------------------------------------------------------------------------
Retail -- 2.1%
3,700 CVS Corp. 272,875
36,700 J.C. Penney & Co. Inc. 2,607,994
6,800 May Department Stores Co. 419,475
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Retail -- 2.1% (continued)
100,300 Rite Aide Corp. $ 3,222,138
31,300 Sears, Roebuck & Co. 1,856,481
- --------------------------------------------------------------------------------
8,378,963
- --------------------------------------------------------------------------------
Special Products & Services -- 0.3%
9,000 Xerox Corp. 1,021,500
- --------------------------------------------------------------------------------
Supermarkets -- 0.5%
17,000 Fred Meyer Inc. 762,875
30,300 Safeway Inc. 1,158,975
- --------------------------------------------------------------------------------
1,921,850
- --------------------------------------------------------------------------------
Utilities - Electric -- 3.9%
47,200 Carolina Power & Light Co. 2,032,550
21,000 Cinergy Corp. 732,375
25,000 CMS Energy Corp. 1,092,188
54,900 Coastal Corp. 3,921,919
9,600 FPL Group, Inc. 595,800
17,800 GPU Inc. 705,325
20,000 New Century Energies, Inc. 950,000
49,000 PacifiCorp 1,139,250
38,200 Pinnacle West Capital Co. 1,690,350
10,000 Sierra Pacific Resources 350,000
47,600 Southern Co. 1,261,400
18,800 Texas Utilities Co. 752,000
- --------------------------------------------------------------------------------
15,223,157
- --------------------------------------------------------------------------------
Utilities - Gas -- 1.2%
24,200 Columbia Energy Group 1,966,250
8,900 Eastern Enterprises 377,138
34,000 Keyspan Energy Corp. 1,160,250
29,000 UGI Corp. 804,750
8,000 Williams Cos., Inc. 253,000
- --------------------------------------------------------------------------------
4,561,388
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $163,381,927) 203,128,521
================================================================================
CONVERTIBLE PREFERRED STOCK -- 0.8%
Banks -- 0.2%
7,400 McKesson Corp., 5.000% 717,800
- --------------------------------------------------------------------------------
Consumer Goods & Services -- 0.4%
31,500 Newell Financial Trust, 5.250% 1,799,438
- --------------------------------------------------------------------------------
Financial Institutions -- 0.1%
2,400 Finova Finance Trust, 5.500% 187,800
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
================================================================================
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Restaurants & Lodging -- 0.1%
6,700 Host Marriott Finance Trust, 6.750% $ 400,325
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost -- $2,615,995) 3,105,363
================================================================================
PREFERRED STOCK -- 0.2%
Banking -- 0.1%
7,400 WBK Trust STRYPES 252,525
- --------------------------------------------------------------------------------
Printing & Publishing -- 0.1%
400 NB Capital Corp., 8.350% 416,500
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $631,990) 669,025
================================================================================
FOREIGN COMMON STOCK -- 2.9%
Germany -- 1.1%
42,500 Henkel KGAA 3,315,687
28,900 Hoechst AG 1,164,374
- --------------------------------------------------------------------------------
4,480,061
- --------------------------------------------------------------------------------
Netherlands -- 1.6%
17,500 Akzo Nobel NV 3,559,762
40,100 ING Groep NV 2,605,855
- --------------------------------------------------------------------------------
6,165,617
- --------------------------------------------------------------------------------
United Kingdom -- 0.2%
67,392 Diageo PLC 805,089
- --------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(Cost -- $9,028,936) 11,450,767
</TABLE>
<TABLE>
<CAPTION>
================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
================================================================================
<S> <C> <C> <C>
CORPORATE BONDS -- 18.9%
Airlines -- 0.7%
Continental Airlines Inc.:
$ 500,000 B+ 9.500% due 12/15/01 532,500
384,438 BBB+ 9.500% due 10/15/13 446,295
150,000 AA+ 6.648% due 3/15/19 150,345
Jet Equipment Trust:
250,000 A2* 9.410% due 6/15/10++ 300,250
189,766 A3* 8.640% due 11/1/12++ 214,114
300,000 Baa2* 11.440% due 11/1/14++ 381,240
100,000 Baa1* 10.690% due 5/1/15++ 129,080
535,000 BB Northwest Airlines Inc., 7.625% due 3/15/05 532,325
- --------------------------------------------------------------------------------
2,686,149
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Automotive -- 0.3%
Ford Motor Co.:
$ 446,000 A 6.125% due 4/28/03 $ 444,885
745,000 A 6.625% due 2/15/28 722,650
- --------------------------------------------------------------------------------------------
1,167,535
- --------------------------------------------------------------------------------------------
Bank/Finance -- 3.6%
Bear, Stearns & Co. Inc.:
450,000 A 6.200% due 3/30/03 447,750
140,000 A 6.750% due 12/15/07 141,925
400,000 BB+ Capital One Financial Corp., 7.250% due 12/1/03 405,000
197,000 BBB- Chase Manhattan Co., 6.375% due 2/15/08 196,261
400,000 BB Colonial Capital II, 8.920% due 1/15/27 438,000
1,370,000 BB+ Contifinancial Corp. 7.500% due 3/15/02 1,366,575
390,000 BBB+ Fairfax Financial Co., 7.375% due 4/15/18 390,975
500,000 BBB- First Empire Capital Trust, 8.234% due 2/1/27 537,500
4,000,000 A+ Goldman Sachs Group, 5.900% due 1/15/03 3,925,000
300,000 NR Greenpoint Capital Trust I, 9.100% due 6/1/27 330,375
Lehman Brothers Inc.:
1,225,000 A 6.500% due 4/15/08 1,217,344
900,000 A 7.500% due 8/1/26 960,750
600,000 BBB MBNA Capital Trust Trust Corp., 8.278% due 12/1/26 619,500
400,000 BBB MBNA Corp., 6.963% due 9/12/02 407,000
400,000 A+ Nationwide Mutual Insurance Co., 7.500% due 2/15/24 398,500
200,000 BBB+ Paine Webber Group Inc., 6.550% due 4/15/08 199,250
500,000 BBB- Providian National, 8.500% due 3/15/03 500,625
150,000 BB- Riggs Cap Trust II, 8.875% due 3/15/27 162,000
400,000 BB- Riggs National Bank Corp., 8.500% due 2/1/06 423,500
200,000 A Societe Generale Real Estate, 7.640% due 12/29/49 197,750
400,000 A State Street Bank, 7.940% due 12/30/26 420,000
600,000 BBB- Washington Mutual Capital Trust, 8.375% due 6/1/27 654,750
- --------------------------------------------------------------------------------------------
14,340,330
- --------------------------------------------------------------------------------------------
Building & Construction -- 0.5%
American Standard Inc.:
148,000 BB- 7.125% due 2/15/03 147,075
148,000 BB- 7.625% due 2/15/10 147,630
200,000 BBB- Georgia-Pacific Corp., 9.875% due 11/1/21 226,500
1,500,000 B+ Nortek Inc., 9.250% due 3/15/07 1,548,750
100,000 BBB- Owens-Corning Fiberglass Corp., 8.875% due 6/1/02 108,750
- --------------------------------------------------------------------------------------------
2,178,705
- --------------------------------------------------------------------------------------------
Chemicals -- 0.0%
100,000 BBB Solutia Inc., 7.375% due 10/15/27 103,000
- --------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Collateralized Mortgage Obligations -- 0.6%
$ 389,901 Baa2*BCF LLC, 7.750% due 9/25/26++ $ 384,158
1,690,599 AAA Beneficial Mortgage Corp., 5.584% due 9/28/37 1,693,981
94,892 BBB+ Continental Airlines Inc., 10.220% due 7/2/14 115,532
- --------------------------------------------------------------------------------------------
2,193,671
- --------------------------------------------------------------------------------------------
Consumer Products -- 0.3%
400,000 BBB- Fingerhut Cos., 7.375% due 9/15/99 403,500
84,000 BBB- Kroger Co., 6.375% due 3/1/08 82,740
55,000 A Lowe's Cos., 6.875% due 2/15/38 55,137
200,000 B+ Marsh Supermarket Inc., 8.875% due 8/1/07 207,000
280,000 BBB Nabisco Inc., 6.375% due 2/1/35 274,400
130,000 A Philip Morris Cos. Inc., 7.750% due 1/15/27 137,963
200,000 B Polymer Group Inc., 9.000% due 7/1/07 207,000
- --------------------------------------------------------------------------------------------
1,367,740
- --------------------------------------------------------------------------------------------
Electrical Equipment -- 0.4%
1,500,000 B- Williams Scotsman Inc., 9.875% due 6/1/07 1,590,000
- --------------------------------------------------------------------------------------------
Entertainment/Media -- 3.8%
590,000 BBB+ Airtouch Communications Inc., 6.650% due 5/1/08 588,973
2,100,000 BB- Century Communications Corp., zero coupon due 1/15/08 924,000
200,000 B Chancellor Media Co., 8.750% due 6/15/07 208,500
Continental Cablevision:
250,000 BBB+ 8.875% due 9/15/05 282,187
1,131,000 BBB+ 11.000% due 6/1/07 1,245,514
400,000 BBB+ 9.000% due 9/1/08 465,500
40,000 B Fox/Liberty Networks LLC, 8.875% due 8/15/07 41,000
1,500,000 B FrontierVision Holdings, 11.000% due 10/15/06 1,668,750
403,000 BBB- Hearst Argyle TV Inc., 7.500% due 11/15/27 409,549
News America Holdings:
160,000 BBB- 8.000% due 10/14/16 173,200
1,000,000 BBB- 8.875% due 4/26/23 1,181,250
90,000 BBB- 6.750% due 1/9/38 89,325
200,000 BBB- 7.750% due 12/1/45 209,250
200,000 B Outdoor Systems Inc., 8.875% due 6/15/07 207,500
Tele-Communications Inc.:
595,000 BBB- 6.340% due 2/1/02 589,794
240,000 BB+ 8.000% due 8/1/05 260,700
400,000 BB+ 9.650% due 3/31/27 449,500
Time Warner Inc.:
1,000,000 BBB- 6.100% due 12/30/01 993,750
70,000 BBB- 8.110% due 8/15/06 76,475
150,000 BBB- 9.125% due 1/15/13 179,625
1,822,000 BBB- 9.150% due 2/1/23 2,234,227
430,000 BBB- 6.950% due 1/15/28 419,788
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Entertainment/Media -- 3.8% (continued)
$ 2,000,000 BBB+ US West Capital Funding Inc., 7.300% due 1/15/07 $ 2,132,500
100,000 BBB- Worldcom Inc., 8.875% due 1/15/06 109,000
- --------------------------------------------------------------------------------------------
15,139,857
- --------------------------------------------------------------------------------------------
Energy -- 0.2%
600,000 BB+ McDermott Inc., 9.375% due 3/15/02 633,000
- --------------------------------------------------------------------------------------------
Forest & Paper Products -- 0.2%
400,000 BBB- Boise Cascade Corp., 7.430% due 10/10/05 413,500
200,000 B+ U.S. Timberlands Co. LP, 9.625% due 11/15/07 208,750
- --------------------------------------------------------------------------------------------
622,250
- --------------------------------------------------------------------------------------------
Gaming -- 0.3%
Circus Circus Enterprises:
500,000 BBB- 6.450% due 2/1/06 485,625
230,000 BBB- 7.000% due 11/15/36 227,700
400,000 BBB- 6.700% due 11/15/2096 404,000
- --------------------------------------------------------------------------------------------
1,117,325
- --------------------------------------------------------------------------------------------
Industrial -- 0.4%
60,000 BBB- Burlington Industries Inc., 7.250% due 8/1/27 61,425
591,228 BBB+ Federal Express Corp., 7.650% due 1/15/14 628,919
391,880 NR Jasmine Submarine Telecom, 8.483% due 5/30/11 337,017
400,000 BBB+ Northrop-Grumman Corp., 9.375% due 10/15/24 472,000
- --------------------------------------------------------------------------------------------
1,499,361
- --------------------------------------------------------------------------------------------
Insurance -- 0.5%
267,000 A Equitable Life Assurance, 7.700% due 12/1/15 287,025
400,000 BB- Providian Capital I, 9.525% due 2/1/27 442,500
1,000,000 NR Safeco Capital Trust I, 8.072% due 7/15/37 1,050,000
- --------------------------------------------------------------------------------------------
1,779,525
- --------------------------------------------------------------------------------------------
Medical Services -- 0.2%
Columbia Healthcare Corp.:
100,000 BBB 6.500% due 3/15/99 98,750
160,000 BBB 6.875% due 7/15/01 154,800
80,000 BBB 7.690% due 6/15/25 71,100
Tenet Healthcare Corp.:
60,000 BB- 8.625% due 12/1/03 62,400
400,000 BB+ 8.000% due 1/15/05 411,000
- --------------------------------------------------------------------------------------------
798,050
- --------------------------------------------------------------------------------------------
Oil -- 2.9%
60,000 B Belco Oil & Gas Corp., 8.875% due 9/15/07 60,900
60,000 BB Clark R&M Inc., 8.375% due 11/15/07 60,600
60,000 B+ Cliffs Drilling Co., 10.250% due 5/15/03 65,100
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Oil -- 2.9% (continued)
$ 4,450,000 BBB- Coastal Corp., 7.420% due 2/15/37 $ 4,700,312
520,000 BB- Gulf Canada Resources Ltd., 9.250% due 1/15/04 545,350
60,000 B- KCS Energy Inc., 8.875% due 1/15/08 59,100
322,000 BBB Lasmo Inc., 7.300% due 11/15/27 330,050
200,000 BBB Occidental Petroleum Corp., 7.200% due 4/1/28 199,500
500,000 BB+ ORYX Energy Co., 8.375% due 7/15/04 538,125
670,000 BBB Petro Geo-Services, 7.125% due 3/30/28 668,325
30,000 B+ Snyder Oil Corp., 8.750% due 6/15/07 30,750
3,000,000 BBB Sun Co. Inc., 9.000% due 11/1/24 3,596,250
200,000 A- Transocean Offshore Inc., 8.000% due 4/15/27 227,000
115,000 BBB Ultramar Diamond Shamrock, 7.200% due 10/15/17 118,019
60,000 B+ Vintage Petroleum, Inc., 8.625% due 2/1/09 62,550
60,000 B- Wiser Oil Co., 9.500% due 5/15/07 57,900
- --------------------------------------------------------------------------------------------
11,319,831
- --------------------------------------------------------------------------------------------
Restaurants & Lodging -- 0.2%
350,000 BBB Hilton Hotels Corp., 7.950% due 4/15/07 367,500
400,000 BBB+ Mirage Resorts Inc., 8.750% due 8/1/07 400,000
- --------------------------------------------------------------------------------------------
767,500
- --------------------------------------------------------------------------------------------
Utilities -- 3.8%
Beaver Valley II Funding Corp.:
1,425,000 BB- 8.250% due 6/1/03 1,601,345
80,000 BB- 8.625% due 6/1/07 88,300
70,000 BB+ CalEnergy Co. Inc., 7.630% due 10/15/07 70,175
300,000 BB+ California Energy Co., step bond to yield 9.640% due 1/15/04 324,000
Cleveland Electric Illuminating Co.:
200,000 BB+ 7.430% due 11/1/09 206,750
500,000 BB+ 7.880% due 11/1/17 531,875
100,000 BB+ 9.000% due 7/1/23 109,625
400,000 BBB- Commonwealth Edison Co., 7.625% due 1/15/07 423,500
900,000 BB Connecticut Lighting & Power Co., 7.875% due 6/1/01 919,125
240,000 BBB+ Consumer Energy Co., 6.375% due 2/1/08 236,400
400,000 A- Empresa National Electrical, 7.325% due 2/1/37 404,000
First PV Funding:
192,000 BB- 10.150% due 1/15/16 202,320
250,000 BB- 10.300% due 1/15/16 264,063
Long Island Lighting Co.:
700,000 BB+ 7.000% due 3/1/04 719,250
165,000 BB+ 7.500% due 3/1/07 172,219
820,000 BB+ 9.000% due 11/1/22 932,750
1,400,000 BB+ 8.200% due 3/15/23 1,522,500
109,000 B Midland Funding II, 11.750% due 7/23/05 129,710
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATINGS SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Utilities -- 3.8% (continued)
Niagara Mohawk Power Corp.:
$ 200,000 BBB- 7.750% due 5/15/06 $ 210,250
1,030,000 BB- 8.770% due 1/1/18 1,091,800
140,000 BBB- Niagara Power Corp., 8.500% due 7/1/23 148,225
175,000 B+ North Atlantic Energy, 9.050% due 6/1/02 176,969
Salton Sea Funding:
100,000 BBB- 7.370% due 5/30/05 103,375
1,100,000 BBB- 7.840% due 5/30/10 1,163,250
1,831,799 BBB- Seabrook, 7.830% due 1/2/19 1,919,520
400,000 BBB Texas Gas Transmission Corp., 7.250% due 7/15/27 410,000
120,000 BBB Texas Utilities Electric Co., 7.170% due 8/1/07 117,300
400,000 BB+ Toledo Edison Co., 7.875% due 8/1/04 420,000
60,000 BBB- United Illuminating Co., 6.250% due 12/15/02 59,550
100,000 BBB Utilicorp United Inc., 8.450% due 11/15/99 103,125
65,000 BBB U.S. Cellular Corp., 7.250% due 8/15/07 67,113
- --------------------------------------------------------------------------------------------
14,848,384
- --------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $73,266,519) 74,152,213
============================================================================================
CONVERTIBLE CORPORATE BOND -- 0.3%
2,015,000 AAA Deutsche Bank Finance BV, zero coupon bond
to yield 4.557% due 2/12/17++
(Cost -- $925,096) 1,032,687
============================================================================================
FOREIGN BONDS -- 1.1%
Emerging Market - Government -- 0.6%
1,400,000 BB+ Republic of Korea, 8.875% due 4/15/08 1,377,250
800,000 BB+ Republic of Panama, 8.250% due 4/22/08 792,000
- --------------------------------------------------------------------------------------------
2,169,250
- --------------------------------------------------------------------------------------------
United States -- 0.0%
140,000 BBB+ UPM Kymmene Co., 7.450% due 11/26/27 141,400
- --------------------------------------------------------------------------------------------
Uruguay -- 0.5%
425,000 NR Banco Comerical, 8.250% due 2/5/07 418,183
1,450,000 Ba1* Banco Montevideo, 8.400% due 4/30/08 1,437,312
- --------------------------------------------------------------------------------------------
1,855,495
- --------------------------------------------------------------------------------------------
Venezuela -- 0.0%
210,000 BBB+ Corp. of Andina de Formento, 7.100% due 2/1/03 215,775
- --------------------------------------------------------------------------------------------
TOTAL FOREIGN BONDS
(Cost -- $4,391,189) 4,381,920
============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
============================================================================================
<S> <C> <C>
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 14.9%
- --------------------------------------------------------------------------------------------
$ 5,036,000 U.S. Treasury Bond, 6.125% due 11/15/27 $ 5,157,670
90,000 U.S. Treasury Note, 8.500% due 2/15/00 94,388
400,000 U.S. Treasury Note, 6.625% due 3/31/02 413,360
10,400,000 U.S. Treasury Note, 6.250% due 8/31/02 10,627,760
13,100,000 U.S. Treasury Note, 5.500% due 1/31/02 13,013,802
400,000 U.S. Treasury Note, 7.875% due 11/15/04 446,224
10,293,000 U.S. Treasury Note, 6.500% due 10/15/06 10,789,637
1,957,000 U.S. Treasury Note, 6.125% due 8/15/07 2,009,037
148,000 U.S. Treasury Note, 5.500% due 2/15/08 146,114
100,000 U.S. Treasury Note, 9.875% due 11/15/15 141,816
4,475,714 Federal National Mortgage Association, 6.500% due 3/1/13 4,493,898
240,242 Government National Mortgage Association,
7.500% due 8/15/25 246,998
926,924 Government National Mortgage Association,
8.000% due 10/15/25 962,546
367,949 Government National Mortgage Association,
7.500% due 3/15/26 378,296
235,557 Government National Mortgage Association,
7.500% due 4/15/26 242,181
844,762 Government National Mortgage Association,
8.000% due 6/15/26 877,227
2,090,086 Government National Mortgage Association,
8.000% due 7/15/26 2,170,411
41,329 Government National Mortgage Association,
7.500% due 8/15/26 42,492
480,315 Government National Mortgage Association,
7.500% due 10/15/26 493,822
751,382 Government National Mortgage Association,
7.500% due 11/15/26 772,511
875,859 Government National Mortgage Association,
8.000% due 12/15/26 909,519
290,785 Government National Mortgage Association,
7.500% due 2/15/27 298,963
517,735 Government National Mortgage Association,
7.500% due 4/15/27 532,294
982,929 Government National Mortgage Association,
7.500% due 6/15/27 1,010,570
190,503 Government National Mortgage Association,
7.500% due 9/15/27 195,860
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
============================================================================================
<S> <C> <C>
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 14.9% (continued)
$ 1,382,040 Government National Mortgage Association,
7.000% due 4/15/28 $ 1,399,316
700,000 Government National Mortgage Association 30 Year,
8.000% due 6/20/25 718,872
- --------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(Cost -- $58,485,986) 58,585,584
============================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $312,727,638) 356,506,080
============================================================================================
SHORT-TERM SECURITIES -- 9.2%
13,110,000 Federal Home Loan Discount Note, 5.450% due 5/1/98 13,110,000
3,959,000 Federal Home Loan Discount Note, 5.400% due 5/8/98 3,954,843
9,000,000 Federal Home Loan Discount Note, 5.420% due 5/15/98 8,981,030
10,300,000 Federal National Mortgage Association, 5.420% due 5/11/98 10,284,492
- --------------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES
(Cost -- $36,330,366) 36,330,365
============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $349,058,004**) $392,836,445
============================================================================================
</TABLE>
+ Non-income producing security.
++ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
** Aggregate cost for Federal income tax purposes is substantially the same.
STRYPES -- Structured yield product exchangeable for common stock.
See page 31 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
============================================================================================
CORPORATE BONDS -- 40.5%
============================================================================================
<S> <C> <C> <C>
Banking -- 3.2%
$ 250,000 BBB- Capital One Bank, 6.830% due 8/16/99 $ 251,250
80,000 A1* Citicorp, 8.000% due 2/1/03 85,500
250,000 BBB+ First National Bank of Boston, 7.375% due 9/15/06 265,625
50,000 Ba3* First Nationwide Bank, 10.625% due 10/1/03+ 56,063
95,000 A3* First Security Corp., 6.875% due 11/15/06 97,256
295,000 A3* Great Western Financial Trust II, Inc., 8.206% due 2/1/27 314,544
90,000 A NationsBank Corp., 6.800% due 3/15/98 90,000
350,000 NR Zurich Capital, 8.376% due 6/1/37+ 382,813
- --------------------------------------------------------------------------------------------
1,543,051
- --------------------------------------------------------------------------------------------
Financial Services -- 10.0%
50,000 B+ Dollar Financial Group, 10.875% due 11/15/06 54,750
170,000 A Equitable Companies Inc., 7.000% due 4/1/28 169,788
285,000 NR Finova Capital Corp., 6.220% due 3/1/00 285,000
91,000 A1* First Union Capital I, Inc., 7.935% due 1/15/27 97,029
115,000 A1* First Union Capital II, Inc., 7.850% due 1/1/27 121,325
180,000 A3* Fleet Financial Group, 7.125% due 4/15/06 187,200
55,000 A+ Ford Motor Credit Co., 7.400% due 11/1/46 58,438
General Motors Acceptance Corp.:
45,000 A 7.125% due 5/1/01 46,238
105,000 B 6.875% due 7/15/01 107,231
50,000 BBB+ H.F. Ahmanson & Co., 7.650% due 4/15/00 51,125
155,000 A Household Financial Co., 6.580% due 5/17/99 155,680
Jefferson-Pilot Corp.:
140,000 AA- 8.140% due 1/15/46+ 146,825
100,000 AA- 8.285% due 3/1/46+ 106,625
Lehman Brothers Holdings, Inc.:
200,000 A 6.125% due 2/1/01 200,000
560,000 A 6.250% due 4/1/03 559,300
200,000 A 8.500% due 5/1/07 227,000
20,000 A Lincoln National Corp., 7.250% due 5/15/05 21,025
152,000 NR Merrill Lynch & Co., Inc., 7.120% due 6/18/29 159,268
PaineWebber Group Inc.:
35,000 BBB+ 7.625% due 10/15/08 37,231
220,000 BBB+ 7.390% due 1/17/17 225,775
190,000 BBB+ 8.060% due 1/17/17 208,763
115,000 BBB+ 7.810% due 2/13/17 122,475
345,000 NR Safeco Capital Trust Inc., 8.072% due 7/15/37 362,250
315,000 A- Sears Roebuck Acceptance, 6.000% due 3/20/03 311,850
175,000 A+ Sun Hung Kai Finance Corp., 5.625% due 11/24/98 173,691
425,000 AA Sun Life Canada, 8.526% due 5/29/49 469,625
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
============================================================================================
<S> <C> <C> <C>
Financial Services -- 10.0% (continued)
$ 150,000 A3* Washington Mutual CapitaI I, 8.375% due 6/1/27 $ 163,688
- --------------------------------------------------------------------------------------------
4,829,195
- --------------------------------------------------------------------------------------------
Health Care -- 0.3%
Tenet Healthcare Corp.:
50,000 Ba1* 8.625% due 12/1/03 51,938
110,000 Ba1* 8.000% due 1/15/05 113,025
- --------------------------------------------------------------------------------------------
164,963
- --------------------------------------------------------------------------------------------
Industrial -- 24.3%
150,000 B- ADV Accessory Systems, 9.750% due 10/1/07+ 153,750
85,000 BBB- Abitibi-Consolidated Inc., 7.500% due 4/1/28 85,213
475,000 B- Alliance Laundry Systems LLC, 9.625% due 5/1/08 479,750
50,000 B2* Amphenol Corp., 9.875% due 5/15/07 54,000
95,000 B BE Aerospace, Inc., 9.875% due 2/1/06 101,413
190,000 A- The B.F. Goodrich Co., 7.000% due 4/15/28 190,475
200,000 B Brill Media Co. LLC, 7.500% due 12/15/07+ 189,000
205,000 BBB+ Brunswick Corp., 7.125% due 8/1/27 209,100
280,000 BBB- Burlington Industries Inc., 7.250% due 8/1/27 286,650
150,000 B Canadian Forest Oil Ltd., 8.750% due 9/15/07 151,500
50,000 A- Carpenter Technology Corp., 7.440% due 8/16/99 50,875
115,000 B2* Chancellor Radio Broadcasting, Inc., 9.375% due 10/1/04 120,463
120,000 BB- Chesapeake Energy Corp., 7.875% due 3/15/04+ 113,100
115,000 BBB- Coastal Corp., 8.125% due 9/15/02 122,763
75,000 BB+ Comcast Cellular Holdings, 9.500% due 5/1/07 78,375
55,000 B- Compass Aerospace Corp., 10.125% due 4/15/05 55,275
150,000 B Dyncorp, Inc., 9.500% due 3/1/07 154,688
145,000 B- Eagle-Picher Industries, 9.375% due 3/1/08 148,081
160,000 BBB+ Embotelladora Andina SA, 7.000% due 10/1/07 156,800
180,000 B Fedders North America, 9.375% due 8/15/07 183,825
190,000 BB Ferrellgas Inc., 10.000% due 8/1/01 200,688
135,000 B Finlay Enterprises, Inc., 9.000% due 5/1/08 135,675
90,000 BBB- Fort James Corp., 6.875% due 9/15/07 91,575
100,000 B+ GCI Inc., 9.750% due 8/1/07 106,000
210,000 B+ Global Health Sciences Inc., 11.000% due 5/1/08 213,150
100,000 Ba2* Gulf Canada Resources Ltd., 9.625% due 7/1/05 108,625
50,000 B HS Resources, Inc., 9.250% due 11/15/06 51,500
210,000 BBB- Hearst-Argyle Television, Inc., 7.500% due 11/15/27 213,413
45,000 BBB+ Hilton Hotels Corp., 7.375% due 6/1/02 45,844
280,000 BB ICN Pharmaceuticals Inc., 9.250% due 8/15/05 297,150
310,000 AA- Ingersoll-Rand Corp., 6.255% due 2/15/01 311,550
190,000 B+ Insilco Corp., 10.250% due 8/15/07 199,738
300,000 B- Iridium LLC/Capital Corp., 11.250% due 7/15/05+ 309,000
100,000 BB Iron Mountain Inc., 10.125% due 10/1/06 109,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
============================================================================================
<S> <C> <C> <C> <C>
Industrial -- 24.3% (continued)
$ 275,000 B Jacor Communications Co., 8.750% due 6/15/07+ $287,375
120,000 B+ Keystone Consolidated Industries, 9.625% due 8/1/07 123,000
130,000 B- Kindercare Learning Centers, 9.500% due 2/15/09 133,413
70,000 B3* KSL Recreation Group, Inc., 10.250% due 5/1/07+ 76,213
125,000 AAA Lin Television Corp., 8.375% due 3/1/08 125,156
205,000 A3* Lockheed Martin Corp., 7.750% due 5/1/26 229,344
75,000 B1* Lodgenet Entertainment, Inc., 10.250% due 12/15/06 78,000
200,000 BB+ Loewen Group International, Inc., 7.500% due 4/15/01 203,250
150,000 B McLeod USA Inc., 9.250% due 7/15/07 159,750
240,000 B+ Mediacom LLC, 8.500% due 4/15/08 237,600
60,000 B+ Muzak Corp., 10.000% due 10/1/03 62,550
280,000 BBB Nabisco Inc., 6.000% due 2/15/11 277,900
Navistar International Corp.:
140,000 BB- 7.000% due 2/1/03 140,000
75,000 BB- 8.000% due 2/1/08 74,906
75,000 BBB News America Holdings Inc., 7.500% due 3/1/00 76,875
30,000 BBB Noble Drilling Corp., 9.125% due 7/1/06 33,300
35,000 BBB Norcen Energy Resources, Inc., 7.375% due 5/15/06 36,838
55,000 B- Numatics Corp., 9.625% due 6/15/07 55,825
150,000 B Orion Network Systems, Inc., 11.250% due 1/15/07 172,875
40,000 BBB- Oryx Energy Co., 10.000% due 4/1/01 43,700
150,000 B1* Physician Sales & Service, 8.500% due 10/1/07+ 156,563
70,000 B+ Pioneer Americas, 9.250% due 6/15/07+ 70,175
40,000 B+ Plastic Containers Inc., 10.000% due 12/15/06 43,500
190,000 B- Protection One, Inc., Sr. Discount Notes, step bond to yield
13.625% due 6/30/05 204,488
33,000 BB Rayovac Corp., 10.250% due 11/1/06+ 36,630
Raytheon Co.:
240,000 B- 5.950% due 3/15/01 239,400
375,000 Baa1* 6.450% due 8/15/02 378,750
150,000 B+ Regal Cinemas Inc., 8.500% due 10/1/07 152,625
170,000 B- Reliant Building Products, 10.875% due 5/1/04 175,100
185,000 B Revlon Consumer Product, 8.125% due 2/1/06 184,538
265,000 B- Revlon Worldwide Corp., Series B, zero coupon due 3/15/01+ 204,050
Royal Caribbean Cruises Ltd.:
85,000 BBB- 7.125% due 9/18/02 86,913
180,000 BBB- 7.500% due 10/15/27 183,600
280,000 B- Silver Cinemas Inc., 10.500% due 4/15/05 286,300
50,000 A Sony Corp., 6.125% due 3/4/03 50,063
275,000 BB- Standard Commercial Tobacco, 8.875% due 8/1/05 278,781
50,000 B+ Tracor, Inc., 8.500% due 3/1/07 54,625
85,000 B- United Artists Theaters Co., 9.750% due 4/15/08 86,169
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING SECURITY VALUE
============================================================================================
<S> <C> <C> <C> <C>
Industrial -- 24.3% (continued)
$ 500,000 B- United International Holdings, Sr. Discount Notes,
step bond to yield, 10.750% due 2/15/08+ $ 315,625
70,000 B1 U.S. Can Corp., 10.125% due 10/15/06+ 74,725
110,000 BBB USA Waste Services Inc., 7.125% due 10/1/07+ 114,400
160,000 Baa3* Westpoint Stevens Inc., 8.750% due 12/15/01 173,600
WMX Technologies, Inc.
42,000 A2* 6.625% due 7/15/02 42,105
95,000 A2* 7.700% due 10/1/02 99,394
- --------------------------------------------------------------------------------------------
11,798,493
- --------------------------------------------------------------------------------------------
Retail -- 0.2%
80,000 Baa2* Federated Department Stores, 8.125% due 10/15/02 85,600
- --------------------------------------------------------------------------------------------
Telecommunications -- 1.4%
95,000 A- Cable & Wireless Communications Corp., 6.375% due 3/06/03 95,119
125,000 Baa3* Century Communications Corp., 9.500% due 8/15/00 131,250
350,000 B3* Nextel Communications, Sr. Discount Notes, step bond
to yield 9.750% due 10/31/07 230,125
410,000 Caa2* 21st Century Telephone Group, Sr. Discount Notes, step
bond to yield 12.250% due 2/15/08 239,850
- --------------------------------------------------------------------------------------------
696,344
- --------------------------------------------------------------------------------------------
Utilities - Electrical -- 0.9%
330,000 B- Avon Energy Partners Holdings, 6.370% due 12/11/02 333,901
103,000 BB CMS Energy Corp., 8.125% due 5/15/02 105,833
- --------------------------------------------------------------------------------------------
439,734
- --------------------------------------------------------------------------------------------
Yankee Bond With Coupon -- 0.2%
155,000 BB- Rogers Communications Inc., 2.000% due 11/26/05 93,000
- --------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $19,071,669) 19,650,380
============================================================================================
FIXED RATE MORTGAGE PASS-THROUGH SECURITIES -- 0.8%
2,821,939 Credit Suisse-First Boston Commercial Mortgage Trust
Series 1997-C2, 1.215% due 11/17/22 223,110
2,077,061 First Union-Lehman Brothers Commercial Mortgage Trust,
Series 1997-C1, 1.307% due 4/18/27 151,885
- --------------------------------------------------------------------------------------------
TOTAL FIXED RATE MORTGAGE
PASS-THROUGH SECURITIES
(Cost -- $369,530) 374,995
============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
============================================================================================
<S> <C> <C>
ASSET-BACKED SECURITIES -- 6.9%
Asset Securitization Corp.:
$ 97,109 Series 1996-MD6-A1A, 6.720% due 11/13/26 $ 98,597
195,000 Series 1996-MD6-A1C, 7.040% due 11/13/26 203,105
158,000 Series 1997-D4-A1D, 7.490% due 4/14/27 168,986
123,000 Associates 97-2 A4, 6.475% due 3/15/28 123,269
441,000 CIT Holdings 97-A4, 6.200% due 2/15/06 443,481
188,337 Case Equipment Loan Trust, 5.740% due 8/15/02 187,984
85,784 Centrex Auto Trust, Series 1996-B-A, 6.150% due 9/15/04 86,321
80,057 Fleetwood Credit Corp., Grantor Trust,
Series 1997-A-A, 6.640% due 9/15/12 81,823
410,000 Green Tree Home Improvement Loan Trust,
Series 1996-4 A-7, 7.900% due 6/15/27 432,345
310,000 Lehman Brothers Inc., 98-C1 A-2, 6.400% due 2/18/30 312,325
Morgan Stanley Capital I:
270,000 Series 1997-C1-A1C, 7.630% due 12/15/06 292,113
150,000 Series 1998-WF1-A2, 6.550% due 3/15/30 151,273
130,000 National City Capital Trust I, 6.750% due 6/1/29 130,481
Oakwood Mortgage:
138,000 97-C A-6, 7.350% due 11/15/27 141,666
148,000 98-A A-3, 6.050% due 5/15/28 146,821
The Money Store Inc., Home Equity Loan:
64,000 6.890% due 3/15/16 64,540
72,000 7.600% due 7/15/21 74,523
49,000 7.800% due 10/15/21 50,901
153,000 7.690% due 5/15/24 160,260
- --------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost -- $3,311,388) 3,350,814
============================================================================================
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 30.5%
1,176,000 U.S. Treasury Note, 5.875% due 11/15/99 1,180,998
781,000 U.S. Treasury Note, 5.375% due 1/31/00 778,407
161,474 Federal Home Loan Mortgage Corp.,
9.500% due 7/25/22 172,223
1,928,000 Federal Home Loan Mortgage Corp.,
7.000% due 5/1/28++ 1,952,698
192,635 Federal National Mortgage Association, 7.500% due 8/1/03 198,234
134,752 Federal National Mortgage Association, 6.500% due 11/1/03 137,194
8,269 Federal National Mortgage Association, 7.500% due 4/1/05 8,466
223,570 Federal National Mortgage Association, 7.500% due 7/1/09 230,067
43,895 Federal National Mortgage Association, 7.500% due 6/1/10 45,171
185,323 Federal National Mortgage Association, 6.000% due 12/1/10 182,716
77,000 Federal National Mortgage Association, 6.864% due 6/17/11 78,684
62,818 Federal National Mortgage Association, 7.500% due 11/1/11 64,644
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
============================================================================================
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 30.5% (continued)
$ 482,000 Federal National Mortgage Association, 6.500% due 4/1/13++ $ 483,957
1,529,000 Federal National Mortgage Association, 7.000% due 5/1/13++ 1,555,268
237,662 Federal National Mortgage Association, 7.536% due 6/1/16 241,525
55,484 Federal National Mortgage Association, 7.000% due 7/1/22 56,126
156,320 Federal National Mortgage Association, 7.000% due 7/1/23 158,127
101,969 Federal National Mortgage Association, 9.000% due 8/1/26 107,896
1,186,000 Federal National Mortgage Association, 6.500% due 5/1/30++ 1,172,658
1,163,000 Federal National Mortgage Association, 7.000% due 6/1/28++ 1,174,630
233,319 Government National Mortgage Association,
8.000% due 7/15/17 243,161
447,151 Government National Mortgage Association,
7.000% due 9/15/23 452,741
232,101 Government National Mortgage Association,
7.000% due 11/15/23 235,003
403,453 Government National Mortgage Association,
7.500% due 12/15/23 416,312
173,972 Government National Mortgage Association,
8.000% due 6/15/27 180,658
297,652 Government National Mortgage Association,
8.000% due 7/15/27 309,091
1,972,000 Government National Mortgage Association,
6.500% due 5/1/28++ 1,952,280
1,000,000 Government National Mortgage Association,
7.500% due 5/1/28++ 1,026,560
- --------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost -- $14,690,390) 14,795,495
============================================================================================
PREFERRED STOCK -- 0.3%
Financial Services -- 0.3%
2,300 Eagle Picher Holdings
(Cost -- $129,662) 132,811
============================================================================================
WARRANTS -- 0.0%
150 Orion Network Systems, Expires 1/15/07#
(Cost -- $105) 150
============================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $37,572,744) 38,304,645
============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
TBC MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
============================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 21.0%
$ 10,168,000 Citibank, 5.490% due 5/1/98; Proceeds at maturity--
$10,169,551; (Fully collateralized by U.S. Treasury Note,
6.625% due 7/31/01; Market value-- $10,376,056)
(Cost -- $10,168,000) $10,168,000
============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $47,740,744**) $48,472,645
============================================================================================
</TABLE>
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
++ Security is traded on a "to-be-announced" basis (See Note 10).
# Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Page 31 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
SMITH BARNEY MONEY MARKET PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.9%
$ 3,000,000 Federal Home Loan Mortgage Corp. matures 7/2/98
(Cost --$2,972,100) 5.50% $ 2,972,100
============================================================================================
COMMERCIAL PAPER -- 67.8%
4,000,000 Abbey National PLC matures 7/17/98 5.59 3,952,773
1,000,000 A.I. Credit matures 7/24/98 5.50 987,517
2,000,000 Alliance & Leicester Bank PLC matures 7/8/98 5.55 1,979,336
4,000,000 American Express Credit Corp. matures 5/20/98 5.55 3,988,368
1,000,000 Banca Commerciale Italiana matures 6/15/98 5.58 993,125
1,000,000 BankAmerica Corp. matures 7/10/98 5.64 989,345
3,000,000 Bank Austriengellschaft (Bank Austria)
matures 6/17/98 5.57 2,978,498
4,195,000 Bank Brussells Lambert mature 5/13/98 to 6/18/98 5.52 to 5.62 4,176,349
2,000,000 Bear Stearns matures 7/8/98 5.60 1,979,071
3,000,000 Cades matures 5/20/98 5.51 2,991,395
2,000,000 Creditanstalt Finance Inc. matures 7/7/98 5.55 1,979,639
2,000,000 Credito Italiano Delaware, Inc. matures 5/21/98 5.80 1,993,733
2,000,000 Cregem North America matures 6/24/98 5.57 1,983,530
2,000,000 Dresdner US Finance matures 5/18/98 5.53 1,994,806
2,000,000 E.I. duPont de Nemours & Co. matures 5/8/98 5.54 1,997,861
4,000,000 Ford Motor Credit matures 6/11/98 5.54 3,974,990
4,000,000 General Electric Capital Corp.
mature 5/26/98 to 7/6/98 5.59 to 5.80 3,965,895
2,198,000 Generale Bank matures 5/6/98 5.54 2,196,327
4,000,000 Goldman, Sachs & Co. mature 5/14/98 to 7/6/98 5.53 to 5.70 3,983,885
3,000,000 Halifax Building Society matures 7/7/98 5.53 2,969,571
2,000,000 J.P. Morgan & Co. matures 5/18/98 5.56 1,994,796
2,000,000 Merrill Lynch & Co., Inc. matures 5/11/98 5.55 1,996,967
2,000,000 NationsBank matures 8/20/98 5.53 1,966,823
3,365,000 Province De Quebec matures 6/30/98 5.54 3,334,266
2,000,000 San Paolo US Finance Inc. matures 7/8/98 5.56 1,979,298
4,000,000 Svenska Handelsbanken matures 5/27/98 5.55 3,984,024
1,760,000 USAA Capital Corp. matures 5/21/98 5.53 1,754,622
- --------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $69,066,810) 69,066,810
============================================================================================
DOMESTIC BANK OBLIGATIONS -- 7.9%
3,000,000 BankAmerica National Trust Savings Assoc.
mature 5/29/98 to 7/22/99 5.50 to 5.54 2,999,998
2,000,000 Citibank mature 9/23/98 5.56 2,000,000
3,000,000 Harris Bank matures 5/11/98 5.52 3,000,000
- --------------------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $7,999,998) 7,999,998
============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Schedules of Investments (unaudited)(continued) April 30, 1998
============================================================================================
SMITH BARNEY MONEY MARKET PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 19.7%
$ 1,000,000 ABN AMRO Bank (Chicago) matures 10/9/98 5.58% $ 1,000,034
3,000,000 Bank of Montreal matures 5/18/98 5.52 3,000,000
3,000,000 Bank Nationale De Paris (San Francisco)
mature 7/27/98 to 10/5/98 5.53 to 5.64 3,000,170
2,000,000 Bayerische Vereinsbank matures 8/17/98 5.57 2,000,059
1,000,000 Commerzbank matures 7/7/98 5.52 1,000,531
2,000,000 Credit Suisse matures 10/21/98 5.67 2,000,672
2,000,000 Creditanstalt Bankverein matures 7/6/98 5.57 2,000,072
2,000,000 Hessiche Landesbank matures 6/9/98 5.84 2,000,138
3,000,000 Societe Generale (New York) mature
5/1/98 to 8/25/98 5.52 to 5.54 3,000,016
1,000,000 Toronto Dominion Bank matures 6/18/98 5.50 1,000,353
- --------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $20,002,045) 20,002,045
============================================================================================
REPURCHASE AGREEMENT -- 1.7%
1,771,000 Morgan Stanley Dean Witter Discover, 5.50% due 5/1/98;
Proceeds at maturity -- $1,771,271;
(Fully collateralized by U.S. Treasury Bills due 10/29/98;
Market value-- $1,821,520) (Cost -- $1,771,000) 1,771,000
============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $101,811,953**) $101,811,953
============================================================================================
</TABLE>
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Bond Ratings (unaudited)
================================================================================
All ratings are by Standard & Poor's Ratings Services ("Standard & Poor's"),
except that those identified by an asterisk (*) are rated by Moody's Investors
Service Inc. ("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 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 bonds
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 bonds in this category than in higher
rated categories.
BB, B -- Bonds rated "BB" and "B" are regarded, on balance, as predominantly
and speculative with respect to capacity to pay interest and repay
CCC principal in accordance with the terms of the obligation. "BB"
represents a lower degree of speculation than "B," and "CCC" the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighted by large
uncertainties or major risk exposure to adverse conditions.
Moody's-- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "A" to "Caa," where 1 is the highest and 3 the lowest rating within its
generic category.
A -- Bonds that are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds 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 adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba -- Bonds that 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 thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds that are rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
================================================================================
Statements of Assets and Liabilities (unaudited) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
Smith Barney
MFS Total TBC Managed Money
Return Income Market
Portfolio Portfolio Portfolio
=====================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $312,727,638 and
$37,572,744, respectively) $356,506,080 $38,304,645 --
Short-term investments, at value
(Cost -- $36,330,366, $10,168,000
and $101,811,953, respectively) 36,330,365 10,168,000 $101,811,953
Cash -- -- 363
Receivable for securities sold 2,077,767 970,897 --
Dividends and interest receivable 2,691,746 418,447 517,765
Receivable for closed forward
foreign contracts 1,947 -- --
Receivable for open forward
foreign currency contracts (Note 5) 1,203 -- --
- -------------------------------------------------------------------------------------
Total Assets 397,609,108 49,861,989 102,330,081
- -------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 7,536,271 10,540,314 --
Management fees payable 254,034 75,929 326,808
Payable to bank 46,840 2,585 --
Dividends payable -- -- 212,285
Accrued expenses 33,580 137,944 11,551
- -------------------------------------------------------------------------------------
Total Liabilities 7,870,725 10,756,772 550,644
- -------------------------------------------------------------------------------------
Total Net Assets $389,738,383 $39,105,217 $101,779,437
=====================================================================================
NET ASSETS:
Par value of capital shares $ 228 33 $ 1,018
Capital paid in excess of par value 308,701,726 35,311,591 101,778,419
Undistributed net investment income 12,274,897 2,750,877 --
Accumulated net realized gain
from security transactions 24,953,313 310,815 --
Net unrealized appreciation of
investments and foreign currencies 43,808,219 731,901 --
- -------------------------------------------------------------------------------------
Total Net Assets $389,738,383 $39,105,217 $101,779,437
=====================================================================================
Shares Outstanding 22,770,376 3,255,580 101,779,437
- -------------------------------------------------------------------------------------
Net Asset Value $17.12 $12.01 $1.00
- -------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Operations (unaudited)
================================================================================
For the Six Months Ended April 30, 1998
<TABLE>
<CAPTION>
Smith Barney
MFS Total TBC Managed Money
Return Income Market
Portfolio Portfolio Portfolio
============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 4,721,238 $1,132,960 $ 3,088,183
Dividends 2,036,380 -- --
Less: Foreign withholding tax (15,270) -- --
- --------------------------------------------------------------------------------------------
Total Investment Income 6,742,348 1,132,960 3,088,183
- --------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 1,289,580 114,099 304,462
Custody 28,634 4,463 10,022
Shareholder communications 24,000 2,014 13,548
Audit and legal 13,000 8,609 12,578
Pricing service fees 7,235 11,939 --
Directors' fees 4,692 2,152 2,762
System servicing fees 4,500 3,155 3,717
Registration fees -- 2,728 1,107
Other 3,380 1,211 1,975
- --------------------------------------------------------------------------------------------
Total Expenses 1,375,021 150,370 350,171
- --------------------------------------------------------------------------------------------
Net Investment Income 5,367,327 982,590 2,738,012
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized Gain From:
Security transactions
(excluding short-term securities*) 13,328,169 239,013 50
Foreign currency transactions 1,947 -- --
- --------------------------------------------------------------------------------------------
Net Realized Gain 13,330,116 239,013 50
- --------------------------------------------------------------------------------------------
Changes in Net Unrealized Appreciation
of Investments and Foreign Currencies:
Beginning of period 26,417,291 581,871 --
End of period 43,808,219 731,901 --
- --------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 17,390,928 150,030 --
- --------------------------------------------------------------------------------------------
Net Gain on Investments 30,721,044 389,043 50
- --------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $36,088,371 $1,371,633 $2,738,062
============================================================================================
</TABLE>
* Represents only gains from the sale of short-term securities for the SB Money
Market Portfolio.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
================================================================================
Statements of Charges in Net Assets
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
MFS Total Return Portfolio 1998 1997
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 5,367,327 $ 6,906,142
Net realized gain 13,330,116 11,632,148
Increase in net unrealized appreciation 17,390,928 15,804,047
- -----------------------------------------------------------------------------------
Increase in Net Assets From Operations 36,088,371 34,342,337
- -----------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (3,166,892)
Net realized gains -- (1,937,784)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (5,104,676)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 90,106,300 98,021,137
Net asset value of shares issued
for reinvestment of dividends -- 5,104,675
Cost of shares reacquired (41,418) (3,307,736)
- -----------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 90,064,882 99,818,076
- -----------------------------------------------------------------------------------
Increase in Net Assets 126,153,253 129,055,737
NET ASSETS:
Beginning of period 263,585,130 134,529,393
===================================================================================
End of period* $ 389,738,383 $ 263,585,130
===================================================================================
* Includes undistributed net investment income of: $ 12,274,897 $ 6,905,623
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
34 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Charges in Net Assets (continued)
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
TBC Managed Income Portfolio 1998 1997
=================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 982,590 $ 1,765,010
Net realized gain 239,013 420,487
Increase in net unrealized appreciation 150,030 292,261
- ---------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,371,633 2,477,758
- ---------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (1,060,922)
- ---------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (1,060,922)
- ---------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 7,843,675 7,828,206
Net asset value of shares issued
for reinvestment of dividends -- 1,060,922
Cost of shares reacquired (1,889,079) (2,059,096)
- ---------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 5,954,596 6,830,032
- ---------------------------------------------------------------------------------
Increase in Net Assets 7,326,229 8,246,868
NET ASSETS:
Beginning of period 31,778,988 23,532,120
- ---------------------------------------------------------------------------------
End of period* $ 39,105,217 $ 31,778,988
=================================================================================
* Includes undistributed net investment income of: $ 2,750,877 $ 1,768,287
=================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
================================================================================
Statements of Charges in Net Assets (continued)
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
Smith Barney Money Market Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,738,012 $ 5,355,692
Net realized gain 50 47
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 2,738,062 5,355,739
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income (2,738,012) (5,355,692)
Net realized gains (50) (47)
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (2,738,062) (5,355,739)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 162,959,141 199,654,882
Net asset value of shares issued
for reinvestment of dividends 2,748,411 5,314,435
Cost of shares reacquired (175,096,143) (192,951,787)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (9,388,591) 12,017,530
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (9,388,591) 12,017,530
NET ASSETS:
Beginning of period 111,168,028 99,150,498
- -------------------------------------------------------------------------------
End of period $ 101,779,437 $ 111,168,028
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
36 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The MFS Total Return, TBC Managed Income and Smith Barney Money Market
Portfolios ("Portfolio(s)") are separate investment portfolios of the 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: Alliance Growth, AIM Capital Appreciation, GT
Global Strategic Income, Putnam Diversified Income, Smith Barney High Income,
Smith Barney Large Cap Value (formerly known as Smith Barney Income and Growth
Portfolio), Smith Barney International Equity, Smith Barney Pacific Basin, Smith
Barney Large Capitalization Growth 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; the MFS Total Return and TBC Managed Income Portfolios
use the amortized cost method for valuing securities with maturities less than
60 days, accordingly, the cost of securities plus accreted discount or minus
amortized premium, approximates value; (c) 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 agencies and
obligations are valued at the mean between the bid and ask prices; (d) dividend
income is recorded on the ex-dividend date; foreign dividends are recorded on
the ex-dividend date or as soon as practical after the Portfolio determines the
existence of a dividend declaration after exercising reasonable due diligence;
(e) gains or losses on the sale of securities are calculated by using the
specific identification method; (f) interest income, adjusted for amortization
of premium and accretion of discount, is recorded on an accrual basis; (g)
dividends and distributions to shareholders are recorded on the ex-dividend
date; (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 or expense amounts recorded and collected or paid are adjusted
when reported by the custodian bank; (i) the character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from generally accepted accounting
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
principles. At October 31, 1997, reclassifications were made to the capital
accounts of the MFS Total Return Portfolio and the TBC Managed Income Portfolio
to reflect permanent book/tax differences and income and gains available for
distributions under income tax regulations. Accordingly, a portion of
undistributed net investment income amounting to $2,784 was reclassified to
paid-in capital for the TBC Managed Income Portfolio. 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.
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
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as investment manager of the Smith Barney Money Market Portfolio ("SBMM").
Travelers Investment Adviser, Inc. ("TIA"), an affiliate of MMC, acts as the
investment manager of the MFS Total Return ("MFSTR") and the TBC Managed Income
("TBCMI") Portfolios. Effective March 27, 1998, the management fee SBMM pays MMC
was decreased from an annual rate of 0.60% to 0.50% of the average daily net
assets of the Portfolio. MFSTR and TBCMI pay TIA a management fee calculated at
an annual rate of 0.80% and 0.65%, respectively, of the average daily net assets
of each Portfolio. These fees are calculated daily and paid monthly.
TIA has sub-advisory agreements with Massachusetts Financial Services Company
("MFS") and The Boston Company Asset Management, Inc. ("TBC"). Pursuant to each
sub-advisory agreement, MFS and TBC are responsible for the day-to-day portfolio
operations and investment decisions for MFSTR and TBCMI, respectively, and are
compensated for such services at an annual rate of 0.375% and 0.30%,
respectively, of the average daily net assets of MFSTR and TBCMI. These fees are
calculated daily and paid monthly.
- --------------------------------------------------------------------------------
38 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
TIA has entered into a sub-administrative services agreement with MMC. TIA pays
MMC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of MFSTR and TBCMI.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares.
All officers and one Director of the Fund are employees of SB.
4. Investments
During the six months ended April 30, 1998, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<CAPTION>
MFSTR TBCMI
================================================================================
<S> <C> <C>
Purchases $263,666,636 $43,788,890
- --------------------------------------------------------------------------------
Sales 170,345,088 36,438,639
================================================================================
</TABLE>
At April 30, 1998, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
<CAPTION>
MFSTR TBCMI
================================================================================
<S> <C> <C>
Gross unrealized appreciation $44,954,445 $810,078
Gross unrealized depreciation (1,176,004) (78,177)
- -------------------------------------------------------------------------------
Net unrealized appreciation $43,778,441 $731,901
================================================================================
</TABLE>
5. Forward Foreign Currency Contracts
At April 30, 1998, MFSTR 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 on the contracts reflected
in the accompanying financial statements were as follows:
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain
===================================================================================
<S> <C> <C> <C> <C>
MFS Total Return Portfolio
To Sell:
Swiss Franc 228,274 $227,071 5/4/98 $1,203
- -----------------------------------------------------------------------------------
Total Unrealized Gain on Forward
Foreign Currency Contracts $1,203
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
6. 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.
7. Futures Contracts
MFSTR has the ability to enter into futures contracts.
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the 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. MFSTR enters into such
contracts to hedge a portion of its portfolio. The Portfolio bears the market
risk that arises from changes in the value of the financial instruments and
securities indices (futures contracts).
At April 30, 1998, MFSTR had no open futures contracts.
8. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin which may vary between 2% and 5%
depending on the type of securities loaned. The custodian establishes and
maintains the collateral in segregated accounts.
At April 30, 1998, the Portfolios had no securities on loan.
- --------------------------------------------------------------------------------
40 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
9. Options Contracts
Premiums paid when put or call options are purchased by the Portfolios represent
investments, which are marked-to-market daily and are included in the schedule
of investments. When a purchased option expires, the Portfolios will realize a
loss in the amount of the premium paid. When the Portfolios enter into a closing
sales transaction, the Portfolios will realize a gain or loss depending on
whether the proceeds from the closing sales transaction are greater or less than
the premium paid for the option. When the Portfolios exercise a put option, they
will realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When
the Portfolios exercise a call option, the cost of the security which the
Portfolios purchase upon exercise will be increased by the premium originally
paid.
At April 30, 1998, the Portfolios had no open purchased put or call option
contracts.
When the Portfolios write a covered 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. When the Portfolios enter into a closing purchase transaction,
the Portfolios realize a gain or loss depending upon whether the cost of the
closing transaction is greater or less than the premium originally received
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised, the cost of the security sold will be decreased by the premium
originally received. When a put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Portfolios
purchased upon exercise. When the written index options are exercised,
settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of a loss if the market price of the underlying security
declines.
During the period ended April 30, 1998, the Portfolios did not write any
options.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
10. Securities Traded on a To-Be-Announced Basis
The Portfolios may trade securities on a "to-be-announced" ("TBA") basis. In a
TBA transaction, the Portfolios commits to purchasing or selling securities for
which specific information is not yet known at the time of the trade,
particularly the face amount and maturity date in GNMA transactions. Securities
purchased on a TBA basis are not settled until they are delivered to the
Portfolios normally 15 to 45 days later. These transactions are subject to
market fluctuations and their current value is determined in the same manner as
for other securities.
At April 30, 1998, TBCMI held seven TBA securities with a cost of $9,274,542.
11. Capital Shares
At April 30, 1998, 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 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:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
================================================================================
<S> <C> <C>
MFS Total Return Portfolio
Shares sold 5,552,192 6,821,186
Shares issued on reinvestment -- 383,810
Shares redeemed (2,611) (230,566)
- --------------------------------------------------------------------------------
Net Increase 5,549,581 6,974,430
================================================================================
TBC Managed Income Portfolio
Shares sold 665,273 710,326
Shares issued on reinvestment -- 98,782
Shares redeemed (161,139) (184,846)
- --------------------------------------------------------------------------------
Net Increase 504,134 624,262
================================================================================
SB Money Market Portfolio
Shares sold 162,959,141 199,654,882
Shares issued on reinvestment 2,748,411 5,314,435
Shares redeemed (175,096,143) (192,951,787)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (9,388,591) 12,017,530
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
42 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
MFS Total Return Portfolio 1998(1) 1997 1996 1995 1994(2)
=========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.31 $13.13 $11.53 $9.98 $10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.14 0.38 0.33 0.45 0.13
Net realized and unrealized gain (loss) 1.67 2.27 1.62 1.15 (0.15)
- -------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.81 2.65 1.95 1.60 (0.02)
- -------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.29) (0.27) (0.05) --
Net realized gains -- (0.18) (0.08) -- --
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.47) (0.35) (0.05) --
- -------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $17.12 $15.31 $13.13 $11.53 $9.98
- -------------------------------------------------------------------------------------------------------------------------
Total Return 11.82%++ 20.64% 17.16% 16.12% (0.20)%++
- -------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $389,738 $263,585 $134,529 $49,363 $8,504
- -------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.85%+ 0.86% 0.91% 0.95% 0.93%+
Net investment income 3.32+ 3.54 3.82 4.40 3.51+
- -------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 99% 139% 104% 18%
- -------------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions(4) $0.06 $0.06 $0.06 $0.04 --
=========================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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:
<TABLE>
<CAPTION>
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
------------------- -----------------
<S> <C> <C>
1995 $0.01 1.06%
1994 0.06 2.51+
</TABLE>
(4) As of September 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
TBC Managed Income Portfolio 1998(1) 1997(2) 1996(2) 1995 1994(3)
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.55 $11.06 $11.16 $10.04 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(4) 0.32 0.63 0.65 0.61 0.21
Net realized and unrealized gain (loss) 0.14 0.35 (0.14) 0.64 (0.17)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.46 0.98 0.51 1.25 0.04
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.49) (0.46) (0.13) --
Net realized gains -- -- (0.15) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.49) (0.61) (0.13) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.01 $11.55 $11.06 $11.16 $10.04
- -------------------------------------------------------------------------------------------------------------------------
Total Return 3.98%++ 9.19% 4.61% 12.68% 0.40%++
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $34,105 $31,779 $23,532 $11,279 $3,840
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.85%+ 0.87% 0.92% 0.92% 0.87%+
Net investment income 5.58+ 6.48 6.19 6.13 5.67+
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 97% 259% 255% 170% 42%
===========================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(4) 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 $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:
<TABLE>
<CAPTION>
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
------------------- -----------------
<S> <C> <C>
1995 $0.04 1.29%
1994 0.07 2.91+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
44 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Smith Barney Money Market Portfolio 1998(1) 1997 1996 1995 1994(2)
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Net investment income(3) 0.025 0.049 0.049 0.052 0.014
Distributions from net
investment income (0.025) (0.049) (0.049) (0.052) (0.014)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 2.53%++ 5.05% 5.05% 5.35% 1.46%++
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $101,779 $111,168 $99,150 $37,487 $5,278
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.65%+ 0.65% 0.65% 0.65% 0.66%+
Net investment income 5.05+ 4.94 4.86 5.26 3.83+
==========================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (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 years ended October 31,
1997, October 31, 1996 and 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:
<TABLE>
<CAPTION>
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- -------------------
<S> <C> <C>
1997 $0.000* 0.67%
1996 0.001 0.74
1995 0.003 0.94
1994 0.005 2.11+
</TABLE>
* Amount represents less than $0.001.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On February 20, 1998 a special meeting of shareholders of the Fund was held for
the purpose of voting on the following matters:
1. To elect Directors of the Fund; and
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage Shares Voted Percentage
Name of Directors For Shares Voted Against Shares Voted
================================================================================
<S> <C> <C> <C> <C>
Victor K. Atkins 231,059,252.884 97.271% 6,481,382.874 2.729%
Abraham E. Cohen 231,294,945.547 97.371 6,245,690.211 2.629
Robert A. Frankel 230,999,179.846 97.246 6,541,455.912 2.754
Rainer Greeven 231,468,718.650 97.444 6,071,917.108 2.556
Susan M. Heilbron 231,485,321.942 97.451 6,055,313.816 2.549
Heath B. McLendon 231,463,894.239 97.442 6,076,741.519 2.558
James M. Shuart 231,410,828.580 97.419 6,129,807.178 2.581
================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental investment policies of the Portfolios in order to modernize them in
view of certain regulatory, business or industry developments that have occurred
since original adoption of these policies by the Portfolios. The following chart
demonstrates that all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates the
elimination of the policy; and "R" indicates the reclassification of the policy
from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Directors).
<TABLE>
<CAPTION>
MFS Total TBC Managed Smith Barney
Return Income Money Market
Portfolio Portfolio Portfolio
=================================================================================================
<S> <C> <C> <C>
E Ability to Pledge Assets N/A N/A Approved
- -------------------------------------------------------------------------------------------------
M Underwriting of Securities Approved Approved Approved
- -------------------------------------------------------------------------------------------------
M Lending by the Fund Approved Approved Approved
- -------------------------------------------------------------------------------------------------
M Real Estate Approved Approved Approved
- -------------------------------------------------------------------------------------------------
R Exercising Control or Management N/A Approved N/A
- -------------------------------------------------------------------------------------------------
R Margin and the Short Sales of Securities N/A Approved N/A
- -------------------------------------------------------------------------------------------------
R Purchases or Sale of Puts, Calls and Combination N/A Approved N/A
- -------------------------------------------------------------------------------------------------
R Investments in Restricted and Illiquid Securities N/A Approved N/A
- -------------------------------------------------------------------------------------------------
R Investments in Oil, Gas and Mineral Exploration Approved Approved N/A
- -------------------------------------------------------------------------------------------------
M Diversification N/A Approved Approved
- -------------------------------------------------------------------------------------------------
M Senior Securities Approved N/A Approved
- -------------------------------------------------------------------------------------------------
M Borrowing Approved Approved Approved
- -------------------------------------------------------------------------------------------------
R Unseasoned Issues N/A Approved N/A
- -------------------------------------------------------------------------------------------------
R Purchases of Securities of Other Investment Co. N/A Approved Approved
=================================================================================================
</TABLE>
N/A - Not Applicable
- --------------------------------------------------------------------------------
46 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)(continued)
================================================================================
The information below reports the lowest percentage of shares voting for the
proposals, the highest percentage of shares voting against and abstaining by
shareholders of the Fund on all proposals.
MFS Total Return Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
============================================================================================
<S> <C> <C> <C> <C> <C>
16,754,158.830 91.578% 232,961.440 1.273% 1,307,918.682 7.149%
============================================================================================
</TABLE>
TBC Managed Income Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
============================================================================================
<S> <C> <C> <C> <C> <C>
2,581,457.388 89.949% 48,383.871 1.686% 240,074.072 8.365%
============================================================================================
</TABLE>
Smith Barney Money Market Portfolio
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
============================================================================================
<S> <C> <C> <C> <C> <C>
98,287,148.111 93.750% 430,119.891 0.411% 6,121,992.848 5.839%
============================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 47
<PAGE>
[This page intentionally left blank]
<PAGE>
SMITH BARNEY
------------
Travelers Series
Fund Inc. A Member of TravelersGroup [LOGO]
Directors Investment Managers
Victor K. Atkins Mutual Management Corp.
A.E. Cohen Travelers Investment Adviser, Inc.
Robert A. Frankel
Rainer Greeven Distributor
Susan M. Heilbron
Heath B. McLendon, Chairman Smith Barney Inc.
James M. Shuart
Officers Custodian
Heath B. McLendon PNC Bank, N.A.
President and
Chief Executive Officer
Annuity Administration
Lewis E. Daidone
Senior Vice President and Treasurer Travelers Annuity Investor Services
5 State House Square
Phyllis Zahorodny 1 Tower Square
Vice President Hartford, CT 06183
Irving P. David
Controller This report is submitted for the general
information of the shareholders of
Thomas M. Reynolds Travelers Series Fund Inc. -- MFS Total
Controller Return, TBC Managed Income and Smith
Barney Money Market Portfolios. It is
Christina T. Sydor not authorized for distribution to
Secretary 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.
Travelers Series
Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0804 6/98
[LOGO]
Travelers Series Fund Inc.
AIM Capital
Appreciation Portfolio
-------------------------------------------------------
SEMI-ANNUAL REPORT
-------------------------------------------------------
April 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
<PAGE>
[PHOTO]
Travelers Series
Fund Inc. HEATH B.
MCLENDON
Dear Shareholder: Chairman
We are pleased to provide the semi-annual report of the Travelers Series Fund
Inc. -- AIM Capital Appreciation Portfolio ("Portfolio") for the period ended
April 30, 1998. In this report, we summarize the period's prevailing economic
and market conditions and outline our portfolio strategy. A detailed summary of
performance and current holdings can be found in the appropriate sections that
follow.
Portfolio Performance Update
The Portfolio seeks capital appreciation. Toward the end of the reporting
period, it seemed that investors were finally beginning to question their
preference for very large company stocks. Nevertheless, throughout the reporting
period, the mid-cap and smaller issues in which the Portfolio invests were out
of favor compared to large-capitalization stocks.
For the six months ended April 30, 1998, the total return for the Portfolio was
10.33%. This compares unfavorably to the 19.17% total return for the Standard &
Poor's Midcap 400 Index ("S&P 400 Index") of mid-capitalization stocks and the
17.24% return for the small-cap dominated Nasdaq Index. (The S&P 400 Index is an
unmanaged index made up of the common stocks of approximately 400
mid-capitalization companies.) By contrast, the large-capitalization company
dominated Standard & Poor's 500 Index rose 22.47% during the six months ended
April 30, 1998. (The S&P 500 Index is a capitalization-weighted measure of 500
widely held common stocks.)
Market Recap
The six-month period covered by this report had two distinct phases. During the
first half of the period, fallout from the currency and market crises in several
Asian nations dampened stock market performance dramatically. When markets are
shaky, investors tend to gravitate toward well-known, widely traded blue-chip
stocks, so the midsize and smaller companies that the Portfolio invests in were
especially hard hit. For example, the Portfolio produced a negative total return
for the first three months of the reporting period.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
But the financial markets seemed to shrug off these difficulties as the new year
unfolded. A much-anticipated slowdown in the U.S. economy predicted to result
from the troubles in Asia never materialized. In fact, government data showed
U.S. gross domestic output rising at a 4.2% annual rate during the first quarter
of 1998. But inflation, widely believed to result from such robust economic
expansion, remained low. In fact, the Commerce Department's overall price index
rose an annualized 0.9% during the quarter -- its slowest rate in 34 years.
With expectations of a good economy, both the markets and the Portfolio
rebounded early in 1998. During the second three months of the reporting period,
the Portfolio rose roughly 12%.
Investment Strategy
The Portfolio continued to find opportunities in the retail and health-care
industries. The portfolio managers pared their holdings of energy stocks while
technology stocks in such industries as electronics, computers and computer
software remained the Portfolio's largest sector weighting.
Retail
As is to be expected, consumer cyclicals in general, and retailers in
particular, are doing very well in the current excellent economic expansion.
Personal earnings are up, and the Conference Board, a business research
organization, reported consumer confidence at a 29-year high in February. Good
times are buoying both discounters and sellers of high-profile brands.
Electronics-oriented stores are experiencing a sales rise with the arrival of
sub-$1,000 personal computers, among other products. The Portfolio's retail
holdings were among its best performers in early 1998.
Health Care
The Portfolio's health-care holdings also did well during the reporting period,
as a number of HMOs and other care providers were able to raise premiums for the
first time in years. Consolidation and cost cutting in the health care sector
have helped profit margins for many service providers while the FDA's gradual
streamlining of filing the approval systems has been a boon to many
pharmaceutical companies, especially those with new products or new drug
delivery systems.
Technology
Technology was not generally in favor for much of the reporting period, mainly
due to disappointing earnings from a few leading companies. Overall, this sector
has still performed well; for example, personal computer sales were up 16% in
the U.S. during the first quarter of 1998, with strong growth expected to
continue. In addition to hardware makers, the Portfolio has significant holdings
in the software industry. The Year 2000 problem continues to provide ample
- --------------------------------------------------------------------------------
2 1998 Semi-Annual Report to Shareholders
<PAGE>
work for companies with expertise in reprogramming computers to recognize this
date. Semiconductor holdings were pared down during the reporting period while
holdings in computer software were increased. Within the semiconductor industry,
the portfolio managers believe the makers of proprietary products remain far
more attractive than commodity manufacturers because of overcapacity.
Energy
Though energy stocks turned in very attractive performance for most of 1997,
these stocks could not maintain their momentum into the new year. The formerly
high-growth economies of Asia were significant energy users, and many investors
anticipated that as Asia's economic growth faltered, so would their demand for
oil and other energy products. Moreover, commodity prices in general fell
sharply in the make of Asia's financial difficulties. The Portfolio's holdings
in the energy sector were trimmed during the reporting period. The managers
continue to hold a number of oilfield-service companies, which are less closely
tied to the price of oil than drillers are. Many service companies have
contracts locked in for 1998 and 1999, so their revenues are relatively
predictable.
The portfolio managers believe the negative reaction to the energy and
technology sectors may be overblown. While economic growth in Asia has declined,
growth remains robust in the U.S., Europe and most developing nations. In
technology, a sizable proportion of electronic components made in Southeast Asia
goes to computer manufacturers in the U.S., therefore Asia's currency woes are
cutting these manufacturer's costs, not their markets.
Market Outlook
Almost unnoticed by the popular or business press, the dominance of very
large-capitalization stocks had slipped somewhat by the end of this reporting
period. For the three months ending April 30, 1998, S&P 400 Index outperformed
the large-cap S&P 500 Index. In our view, values in the mid-cap sector may
simply be more attractive. Earnings of mid-cap and smaller companies are growing
in the double digits and are projected to continue growing at high rates,
whereas actual first-quarter year-over-year earnings growth for the large
companies represented by the S&P 500 Index was in the single digits. The
managers believe you simply get more earnings by investing in smaller and
mid-cap stocks given the ultra high price/earnings ratios of many blue-chip
stocks. The portfolio managers expect this should ultimately translate into
continued strong performance for select mid-size company stocks.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
With respect to the investing environment in general, most observers do not
expect dramatic change; they still foresee stable to lower interest rates,
healthy economic growth and subdued inflation as global competition and lower
energy costs offset any inflationary pressures of a tight labor market. In the
view of the portfolio's managers, no one has identified a good reason why the
seven-plus years of domestic economic expansion should end abruptly.
However, most investors would probably welcome some cooling off. One of the
events most likely to trigger a halt in the market's prolonged rise would be an
interest rate hike by the Federal Reserve Board, which has been hinting about
its concern over rapid economic growth and the dramatic rise in stock values. An
interest rate move would be forestalled by evidence that the economy is growing
a little less rapidly.
In closing, thank you for investing in the Travelers Series Fund Inc. -- AIM
Capital Appreciation Portfolio. We look forward to continuing to help you to
pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 22, 1998
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Historical Performance
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
<S> <C> <C> <C> <C> <C>
4/30/98 $12.68 $13.99 $0.00 $0.00 10.33%++
- --------------------------------------------------------------------------------
10/31/97 10.76 12.68 0.01 0.00 17.96
- --------------------------------------------------------------------------------
10/31/96 10.00 10.76 0.01 0.00 7.71
- --------------------------------------------------------------------------------
10/10/95* - 10/31/95 10.00 10.00 0.00 0.00 0.00++
================================================================================
Total $0.02 $0.00
================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
================================================================================
Average Annual Total Return+
================================================================================
<TABLE>
================================================================================
<S> <C>
Six Months Ended 4/30/98++ 10.33%
- --------------------------------------------------------------------------------
Year Ended 4/30/98 32.48
- --------------------------------------------------------------------------------
10/10/95* through 4/30/98 14.13
================================================================================
</TABLE>
================================================================================
Cumulative Total Return+
================================================================================
<TABLE>
================================================================================
<S> <C>
10/10/95* through 4/30/98 40.19%
================================================================================
</TABLE>
+ 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Shares of the
AIM Capital Appreciation Portfolio vs. Lipper Midcap Index+
- --------------------------------------------------------------------------------
October 1995 -- April 1998
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
AIM Capital Lipper
Appreciation Portfolio Midcap Index
---------------------- ------------
<S> <C> <C>
10/10/95 $10,000 $10,000
4/96 $10,711 $11,727
10/96 $10,771 $11,739
4/97 $10,582 $11,530
10/97 $12,696 $14,180
4/30/98 $14,019 $16,201
</TABLE>
+ 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, 1998. 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.
- --------------------------------------------------------------------------------
6 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
COMMON STOCK -- 89.6%
Advertising -- 0.9%
25,600 Omnicom Group $ 1,212,800
15,200 Outdoor Systems, Inc.+ 482,600
11,500 Snyder Communications, Inc.+ 488,750
- --------------------------------------------------------------------------------
2,184,150
- --------------------------------------------------------------------------------
Aerospace & Defense -- 0.5%
15,500 AAR Corp. 405,906
9,700 BE Aerospace Inc.+ 302,519
14,900 Gulfstream Aerospace Corp.+ 624,869
- --------------------------------------------------------------------------------
1,333,294
- --------------------------------------------------------------------------------
Airlines -- 0.5%
15,400 Continental Airlines, Inc., Class B Share+ 906,675
9,000 Southwest Airlines Co. 246,938
- --------------------------------------------------------------------------------
1,153,613
- --------------------------------------------------------------------------------
Banking -- 3.2%
10,600 Amsouth Bancorp. 661,175
5,100 Charter One Financial, Inc. 345,206
8,000 Crestar Financial Corp. 478,500
18,900 Dime Bancorp Inc. 579,994
11,700 Golden State Bancorp., Inc.+ 456,300
12,600 Greenpoint Financial Corp. 500,063
40,800 MBNA Corp. 1,382,100
10,700 Mercantile Bankshares Corp. 410,613
16,300 North Fork Bancorp. 605,138
11,600 Northern Trust Corp. 846,800
9,400 Star Banc Corp. 593,963
8,200 Summit Bancorp. 411,025
16,600 TCF Financial Corp. 540,538
- --------------------------------------------------------------------------------
7,811,415
- --------------------------------------------------------------------------------
Biotechnology -- 0.1%
7,000 Arterial Vascular Engineering, Inc.+ 247,625
- --------------------------------------------------------------------------------
Broadcasting -- 1.2%
9,200 A.H. Belo Corp. 487,025
23,000 CanWest Global Communication Corp. 431,250
13,490 Chancellor Media Corp.+ 639,932
11,500 Cox Communications, Inc.+ 513,188
9,400 Heftel Broadcasting Corp.+ 412,425
16,000 Liberty Media Group, Class A Shares+ 531,000
- --------------------------------------------------------------------------------
3,014,820
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Commercial Services -- 2.5%
15,500 Ceridian Corp.+ $ 876,719
29,300 Comdisco Inc. 1,296,525
13,000 Equity Corp. International+ 322,563
8,300 Inacom Corp.+ 297,244
21,150 Paychex Inc. 1,148,709
17,050 PMT Services Inc.+ 332,475
47,500 Service Corp. International 1,959,375
- --------------------------------------------------------------------------------
6,233,610
- --------------------------------------------------------------------------------
Communications - Equipment and Software -- 2.7%
46,200 Ascend Communications, Inc.+ 2,012,588
6,500 Avid Technology, Inc.+ 281,938
25,000 Fore Systems, Inc.+ 571,875
23,400 Gartner Group Inc., Class A Shares+ 775,125
22,100 McKensson Corp. 1,562,194
11,200 Storage Technology Corp.+ 945,700
12,300 Valassis Communications, Inc.+ 482,775
- --------------------------------------------------------------------------------
6,632,195
- --------------------------------------------------------------------------------
Computer Software -- 10.6%
14,200 Affiliated Computer Services, Class A Shares+ 498,775
23,200 America Online Inc.+ 1,856,000
4,600 Applied Voice Technology Inc.+ 202,975
4,500 Aspect Development Inc.+ 284,906
9,800 Autodesk Inc. 460,600
26,600 BMC Software Inc. 2,488,763
11,800 Broderbund Software, Inc.+ 210,925
51,550 Cadence Design Systems Inc.+ 1,871,909
6,300 Cambridge Technology Partners, Inc.+ 329,175
10,850 Cisco Systems, Inc.+ 794,763
7,950 Citrix Systems, Inc.+ 493,894
14,925 Computer Associates International Inc. 874,045
35,800 Compuware Corp.+ 1,749,725
44,800 Concord EFS, Inc.+ 1,411,200
14,000 DST Systems Inc.+ 771,750
18,900 Electronics Arts Inc.+ 874,125
10,600 IDX Systems Corp.+ 461,763
21,700 Input/Output Inc.+ 539,788
10,000 Intuit Inc.+ 531,875
15,000 J.D. Edwards & Co.+ 534,375
12,800 Microsoft Corp.+ 1,153,600
11,400 National Data Corp. 465,263
7,625 Network Associates, Inc.+ 522,313
20,800 Oracle Systems Corp.+ 538,200
42,400 Parametric Technologies Inc.+ 1,355,475
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Computer Software -- 10.6% (continued)
18,500 Platinum Technology, Inc.+ $ 471,750
27,185 Sterling Commerce Inc.+ 1,157,062
14,600 Sterling Software Inc.+ 385,988
30,600 Sungard Data Systems Inc.+ 1,090,125
13,300 Symantec Corp.+ 385,700
14,800 Synopsys Inc.+ 636,400
5,700 Technomatrix Technology Ltd.+ 144,638
17,650 Wind River Systems, Inc. 611,131
- --------------------------------------------------------------------------------
26,158,976
- --------------------------------------------------------------------------------
Computers -- 2.5%
18,000 Computer Sciences Corp.+ 949,500
13,200 Comverse Technology, Inc.+ 625,350
9,500 CSG Systems International Inc.+ 432,250
27,200 Dell Computer Corp.+ 2,196,400
14,000 Gateway 2000, Inc.+ 821,625
20,300 Tech Data Corp.+ 1,012,463
- --------------------------------------------------------------------------------
6,037,588
- --------------------------------------------------------------------------------
Consumer/Commercial Services -- 1.2%
14,137 Accustaff Inc.+ 507,165
6,300 Central Garden & Pet Co.+ 215,775
39,300 Stewart Enterprises Inc., Class A Shares 1,011,975
16,800 Symbol Technologies Inc. 646,800
10,800 Tyco International Ltd. 588,600
- --------------------------------------------------------------------------------
2,970,315
- --------------------------------------------------------------------------------
Distribution -- 0.6%
17,400 Coca-Cola Enterprises, Inc. 656,850
15,500 Ingram Micro Inc., Class A Shares+ 707,188
- --------------------------------------------------------------------------------
1,364,038
- --------------------------------------------------------------------------------
Diversified -- 0.2%
11,400 American Disposal Services+ 457,069
- --------------------------------------------------------------------------------
Drugs -- 0.1%
3,700 Biovail Corp. International+ 151,238
- --------------------------------------------------------------------------------
Electronics -- 1.4%
7,700 Action Performance Cos., Inc. 266,613
17,000 Altera Corp.+ 688,500
18,600 Arrow Electronics Inc.+ 508,013
18,700 KLA-- Tencor Corp.+ 753,844
16,500 Solectron Corp.+ 731,156
13,500 Teradyne Inc.+ 492,750
- --------------------------------------------------------------------------------
3,440,876
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Electronics - Semiconductors and Components -- 4.8%
15,000 Advanced Micro Devices, Inc. $ 416,250
26,700 Analog Devices Inc.+ 1,039,631
15,000 Applied Materials, Inc.+ 541,875
22,300 Atmel Corp.+ 450,181
14,700 Berg Electronics Corp.+ 350,044
16,200 Burr-Brown Corp.+ 493,088
4,000 Etec Systems, Inc.+ 227,000
11,600 Lattice Semiconductor Corp.+ 529,250
15,000 Linear Technology Corp. 1,207,500
18,000 LSI Logic Corp.+ 488,250
38,400 Maxim Integrated Products Inc.+ 1,550,400
7,100 Perkin-Elmer Corp. 485,463
18,100 PMC-Sierra Inc.+ 823,550
10,100 Sanmina Corp.+ 909,000
23,000 SCI Systems Inc.+ 947,313
12,800 Vitesse Semiconductors Corp.+ 738,400
14,200 Xilinx Inc.+ 649,650
- --------------------------------------------------------------------------------
11,846,845
- --------------------------------------------------------------------------------
Entertainment and Leisure Time -- 1.0%
14,000 Choice Hotels International Inc.+ 239,750
20,500 Hollywood Entertainment Corp.+ 257,531
13,700 Host Marriott Corp.+ 266,294
23,000 International Game Technology 639,688
18,410 Promus Hotel Corp.+ 831,902
7,300 Speedway Motorsports Inc.+ 199,381
- --------------------------------------------------------------------------------
2,434,546
- --------------------------------------------------------------------------------
Financial Services -- 5.4%
17,700 Capital One Financial Corp. 1,700,306
6,200 ContiFinancial Corp.+ 199,950
10,000 Countrywide Credit Industries, Inc. 483,750
8,000 Equifax Inc. 309,500
16,300 Finova Group, Inc. 954,569
23,000 Firstplus Financial Group, Inc.+ 1,115,500
15,400 Franklin Resources, Inc. 823,900
14,100 Household International Inc. 1,853,269
21,000 IMC Mortgage Co.+ 334,688
22,100 MGIC Investment Corp. 1,392,300
16,300 Newcourt Credit Group Inc. 800,738
14,700 Paine Webber Group Inc. 658,744
18,850 SLM Holding Corp. 804,659
15,000 SunAmerica, Inc. 749,063
15,400 T. Rowe Price Associates, Inc. 1,162,700
- --------------------------------------------------------------------------------
13,343,636
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Hospital Management -- 2.5%
10,650 American HomePatient Inc.+ $ 196,359
14,700 Cardinal Health Inc. 1,414,875
8,100 First Health Group Corp. 477,900
15,300 FPA Medical Management Inc.+ 191,250
7,500 Orthodontic Centers of America, Inc.+ 160,313
4,666 Sunburst Hospitality Corp.+ 37,620
59,160 Tenet Healthcare Corp. 2,214,802
26,200 Universal Health Services Inc., Class B Shares+ 1,508,138
- --------------------------------------------------------------------------------
6,201,257
- --------------------------------------------------------------------------------
Hospital Related -- 0.4%
44,400 Beverly Enterprises, Inc.+ 699,300
12,200 Curative Health Services, Inc.+ 378,200
- --------------------------------------------------------------------------------
1,077,500
- --------------------------------------------------------------------------------
Insurance -- 1.4%
7,000 ChoicePoint Inc.+ 383,250
10,000 Everest Reinsurance Holdings 412,500
7,400 Executive Risk, Inc. 493,488
4,500 HCC Insurance Holdings, Inc. 97,874
10,400 Mercury General Corp. 673,400
18,800 Provident Co., Inc. 734,374
9,600 Providian Corp. 577,800
- --------------------------------------------------------------------------------
3,372,686
- --------------------------------------------------------------------------------
Manufacturing -- 6.4%
16,900 American Power Conversion Corp.+ 543,969
3,800 Ametek Inc. 115,662
9,000 Blyth Industries, Inc.+ 330,188
29,800 Clayton Homes, Inc. 597,862
14,000 Cognex Cor.+ 338,624
43,700 EMC Corp.-- Mass.+ 2,015,662
12,500 Fort James Corp. 620,312
29,000 Harley Davidson Inc. 1,044,000
10,700 Hillenbrand Industries, Inc. 667,412
14,600 Hon Industries Inc. 467,200
15,000 IMC Global, Inc. 540,000
15,000 Leggett & Platt Inc. 779,062
13,600 Lexmark International Group Inc., Class A Shares 787,100
29,550 Microchip Technology Inc.+ 838,481
3,300 Oakwood Homes Corp. 93,019
30,200 Pairgain Technologies, Inc. 556,812
5,300 Pentair Inc. 229,225
5,200 Potash Corp. of Saskatchewan Inc. 464,424
7,100 Precision Castparts Corp. 441,088
13,800 Smith International Inc.+ 810,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Manufacturing -- 6.4% (continued)
9,200 Suiza Foods Corp.+ $ 545,100
7,500 Sundstrand Corp. 517,968
16,800 Thermo Electron Corp.+ 668,850
15,500 Thermo Instruments Systems Inc.+ 457,250
14,600 Unifi, Inc. 559,362
18,000 Warnaco Group, Inc. 760,500
- --------------------------------------------------------------------------------
15,789,882
- --------------------------------------------------------------------------------
Medical Equipment and Information Systems -- 1.8%
12,400 Biomet Inc. 372,000
19,500 Guidant Corp. 1,304,062
34,092 HBO & Co. 2,039,128
10,600 Shared Medical Systems Corp. 773,138
- --------------------------------------------------------------------------------
4,488,328
- --------------------------------------------------------------------------------
Medical Products and Supplies -- 3.1%
17,500 Allegiance Corp. 798,438
15,000 Bergen Brunswig Corp. 680,624
13,100 Dentsply International Inc. 430,662
18,924 Henry Schein, Inc.+ 738,036
55,400 Omnicare Inc. 1,897,450
17,600 PSS World Medical, Inc.+ 394,900
4,300 Sofamor Danek Group, Inc.+ 377,324
14,000 St. Jude Medical, Inc.+ 496,124
5,500 Stryker Corp. 247,500
54,400 Sybron International Corp.+ 1,441,600
- --------------------------------------------------------------------------------
7,502,658
- --------------------------------------------------------------------------------
Medical Services -- 4.6%
7,000 American Oncology Resources+ 105,000
16,600 Concentra Managed Care, Inc.+ 516,674
8,800 Express Scripts Inc., Class A Shares+ 704,000
24,050 Health Care & Retirement Inc.+ 980,038
73,925 Health Management Associates Inc., Class A Shares+ 2,328,638
76,000 Healthsouth Corp.+ 2,294,250
17,150 Jones Medical Industries Inc. 505,924
18,300 Lincare Holdings Inc.+ 1,484,588
12,500 Medtronic Inc. 657,812
24,000 Quorum Health Group Inc.+ 771,000
25,966 Total Renal Care Holdings, Inc.+ 860,124
2,000 Transition Systems Inc.+ 45,000
- --------------------------------------------------------------------------------
11,253,048
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Miscellaneous -- 0.5%
17,200 Fiserv Inc.+ $ 1,124,450
6,000 Helen Of Troy Ltd.+ 123,000
- --------------------------------------------------------------------------------
1,247,450
- --------------------------------------------------------------------------------
Office Equipment, Products and Supplies -- 1.8%
9,400 Avery Dennison Corp. 492,324
20,800 Herman Miller, Inc. 627,900
33,500 Office Depot Inc.+ 1,109,688
71,025 Staples Inc.+ 1,753,430
20,400 Viking Office Products Inc.+ 493,424
- --------------------------------------------------------------------------------
4,476,766
- --------------------------------------------------------------------------------
Oil & Gas -- 3.9%
9,500 Apache Corp. 336,062
7,900 Baker Hughes Inc. 319,950
26,600 BJ Services Co.+ 997,500
9,800 Burlington Resources Inc. 460,600
15,200 Camco International Corp. 1,031,700
14,800 Cooper Cameron Corp.+ 983,274
22,000 El Paso Natural Gas Co.+ 812,624
13,100 Elan Corp. PLC ADR 813,838
11,800 EVI, Inc.+ 628,350
42,500 Global Industries Ltd.+ 964,219
12,800 National-Oilwell, Inc.+ 485,600
30,200 Pride International, Inc.+ 734,238
13,500 Rowan Cos., Inc.+ 397,406
22,800 Santa Fe Energy Resources Inc.+ 235,124
7,700 Veritas DGC Inc.+ 417,244
- --------------------------------------------------------------------------------
9,617,729
- --------------------------------------------------------------------------------
Oil & Gas Drilling -- 2.4%
12,000 Core Laboratories N.V.+ 340,500
12,900 Equitable Resources Inc. 419,250
18,000 K N Energy, Inc. 1,056,375
23,500 Marine Drilling Co. Inc.+ 571,344
19,300 Noble Drilling Corp.+ 623,631
23,166 Ocean Energy, Inc.+ 567,567
20,400 Precision Drilling Corp.+ 487,050
17,900 R&B Falcon Corp.+ 573,919
5,000 Santa Fe International Corp. 195,938
1,500 St. Mary Land & Exploration 48,000
18,000 Stolt Comex Seaway, S.A.+ 585,000
7,800 Transocean Offshore Inc. 435,825
- --------------------------------------------------------------------------------
5,904,399
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Pharmaceuticals -- 2.2%
4,700 Alpharma, Inc., Class A Shares $ 106,925
21,500 Alza Corp.+ 1,030,656
12,500 Biogen, Inc.+ 554,688
7,600 Columbia Laboratories, Inc.+ 68,400
15,000 Forest Labs Inc.+ 542,812
38,500 Mylan Laboratories Inc. 1,044,312
5,800 Parexel International Corp.+ 194,300
17,200 Quintiles Transnational Corp.+ 851,400
24,200 Watson Pharmaceuticals Inc.+ 1,040,600
- --------------------------------------------------------------------------------
5,434,093
- --------------------------------------------------------------------------------
Restaurants -- 1.9%
23,000 Brinker International, Inc.+ 552,000
12,980 CKE Restaurants, Inc. 449,432
12,100 Cracker Barrel Old Country Store Inc. 444,675
3,200 Foodmaker Inc.+ 60,800
7,600 Outback Steakhouse Inc.+ 289,750
59,800 Safeway Inc.+ 2,287,350
9,400 Starbucks Corp.+ 452,375
- --------------------------------------------------------------------------------
4,536,382
- --------------------------------------------------------------------------------
Retail -- 10.7%
22,500 Autozone Inc.+ 679,219
16,300 Bed Bath & Beyond Inc.+ 802,775
10,800 Best Buy Co., Inc.+ 758,700
21,850 CDW Computers Centers Inc.+ 1,059,725
14,000 Cintas Corp. 666,750
23,000 Circuit City Stores 934,375
12,200 Comp USA Inc.+ 226,462
9,100 Costco Cos, Inc.+ 508,462
28,750 Covance Inc.+ 616,328
6,858 CVS Corp. 505,778
12,600 Dayton-Hudson Corp. 1,100,138
11,445 Dollar General Corp. 433,479
14,650 Dollar Tree Stores Inc.+ 794,762
13,000 Family Dollar Stores, Inc. 442,000
7,000 The Finish Line, Class A Shares+ 173,250
33,200 Fred Meyer, Inc.+ 1,489,850
15,150 Gap Inc. 779,278
9,800 General Nutrition Cos.+ 351,575
3,600 Home Depot, Inc. 250,650
16,100 Jones Apparel Group Inc.+ 962,981
15,200 Kohl's Corp.+ 627,950
38,100 Kroger Co.+ 1,595,438
17,000 Liz Clairborne Inc. 836,188
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Retail -- 10.7% (continued)
9,500 Lowe's Co., Inc. $ 664,406
19,650 The Mens Warehouse Inc.+ 827,756
21,300 Michaels Stores, Inc.+ 644,324
17,600 Nautica Enterprises Inc.+ 437,800
4,300 North Face Inc.+ 96,481
13,400 Proffitt's, Inc.+ 532,650
32,100 Rexall Sundown Inc.+ 1,025,194
38,550 Rite Aid Corp. 1,238,419
9,200 Ross Stores Inc. 426,075
10,000 St. John Knits Inc. 446,250
11,000 Tiffany & Co. 500,500
20,600 TJX Cos., Inc. 911,550
19,500 Tommy Hilfiger Corp.+ 1,189,500
8,200 Williams-Sonoma Inc.+ 450,488
13,075 Wolverine Worldwide Inc. 377,541
- --------------------------------------------------------------------------------
26,365,047
- --------------------------------------------------------------------------------
Telecommunications -- 3.6%
11,900 ADC Telecommunications Inc.+ 356,256
17,300 Airtouch Communications, Inc.+ 919,063
19,400 Billing Information Concepts Corp.+ 543,200
21,200 Brightpoint Inc.+ 413,400
7,700 Century Telephone Enterprises, Inc. 327,731
16,200 Cincinnati Bell Inc. 619,650
7,400 Clear Channel Communications, Inc.+ 697,450
23,200 Comcast Corp., Class A Shares 830,850
10,200 Jacor Communications Inc.+ 580,125
14,800 Nextel Communications, Inc.+ 424,575
3,500 Remec Inc.+ 87,062
25,000 Tellabs Inc.+ 1,771,875
40,800 Varco International Inc.+ 1,254,600
- --------------------------------------------------------------------------------
8,825,837
- --------------------------------------------------------------------------------
Telecommunications Equipment -- 1.0%
12,000 Andrews Corp.+ 274,500
18,700 Aspect Telecommunications Corp.+ 537,624
8,500 ECI Telecommunications Ltd. 259,250
8,700 General Instrument Corp.+ 195,206
16,400 Nokia Corp. ADR 1,096,750
- --------------------------------------------------------------------------------
2,363,330
- --------------------------------------------------------------------------------
Transportation - Miscellaneous -- 0.4%
7,500 Airnet Systems Inc.+ 202,500
16,500 Kansas City Southern Industries, Inc. 745,594
- --------------------------------------------------------------------------------
948,094
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) April 30, 1998
================================================================================
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================
<S> <C> <C>
Utilities -- 0.5%
24,000 AES Corp. $ 1,324,500
- --------------------------------------------------------------------------------
Waste Management -- 1.1%
15,300 US Filter Corp.+ 499,163
44,477 U.S.A. Waste Service Inc.+ 2,182,153
- --------------------------------------------------------------------------------
2,681,316
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $164,050,428) 220,226,151
================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
================================================================================
<S> <C> <C>
CONVERTIBLE BOND -- 0.1%
$ 150,000 EMC Corp., 3.250% due 3/15/02
(Cost -- $203,143) 317,625
================================================================================
SHORT-TERM INVESTMENT -- 10.3%
25,415,000 Farmer Mac Discount Note, 5.450% due 4/30/98
(Cost -- $25,415,000) 25,415,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $189,668,571*) $245,958,776
================================================================================
</TABLE>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statement of Assets and Liabilities (unaudited) April 30, 1998
================================================================================
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost-- $189,668,571) $ 245,958,776
Cash 17,599
Dividends and interest receivable 30,006
- -------------------------------------------------------------------------------
Total Assets 246,006,381
- -------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 170,516
Accrued expenses 40,674
- -------------------------------------------------------------------------------
Total Liabilities 211,190
- -------------------------------------------------------------------------------
Total Net Assets $ 245,795,191
===============================================================================
NET ASSETS:
Par value of capital shares $ 176
Capital paid in excess of par value 191,148,628
Undistributed net investment income 263,220
Accumulated net realized loss on security transactions
and futures contracts (1,907,038)
Net unrealized appreciation of investments 56,290,205
- -------------------------------------------------------------------------------
Total Net Assets $ 245,795,191
===============================================================================
Shares Outstanding 17,563,382
- -------------------------------------------------------------------------------
Net Asset Value $13.99
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
================================================================================
Statement of Operations (unaudited) April 30, 1998
================================================================================
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 569,328
Dividends 273,890
- -------------------------------------------------------------------------------
Total Investment Income 843,218
- -------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 857,665
Audit and legal fees 10,087
Custody 9,421
Shareholder communications 9,160
Directors' fees 6,125
Shareholder and system servicing fees 4,145
Other 6,354
- -------------------------------------------------------------------------------
Total Expenses 902,957
- -------------------------------------------------------------------------------
Net Investment Loss (59,739)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 6):
Realized Loss From:
Security transactions (excluding short-term securities) (387,933)
Futures contracts (129,027)
- -------------------------------------------------------------------------------
Net Realized Loss (516,960)
- -------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 32,885,817
End of period 56,290,205
- -------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 23,404,388
- -------------------------------------------------------------------------------
Net Gain on Investments and Future Contracts 22,887,428
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 22,827,689
===============================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended April 30, 1998 (unaudited)
and the Year Ended October 31, 1997
<TABLE>
<CAPTION>
1998 1997
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (59,739) $ 323,723
Net realized gain (loss) (516,960) 2,801,386
Increase in net unrealized appreciation 23,404,388 22,640,331
- -----------------------------------------------------------------------------------
Increase in Net Assets From Operations 22,827,689 25,765,440
- -----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (128,125)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (128,125)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 23,157,097 66,474,952
Net asset value of shares issued
for reinvestment of shares -- 128,125
Cost of shares reacquired (3,035,189) (2,299,468)
- -----------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 20,121,908 64,303,609
- -----------------------------------------------------------------------------------
Increase in Net Assets 42,949,597 89,940,924
NET ASSETS:
Beginning of period 202,845,594 112,904,670
- -----------------------------------------------------------------------------------
End of period* $ 245,795,191 $ 202,845,594
===================================================================================
* Includes undistributed net investment income of: $263,220 $322,959
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
The AIM Capital Appreciation Portfolio ("Portfolio") is a separate investment
portfolio of the 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
twelve other separate investment portfolios: Smith Barney Large Cap Value
(formerly known as 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, Smith Barney Large
Capitalization Growth 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 Portfolio 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 agencies and
obligations are valued at the mean between the bid and asked prices; (c)
securities maturing within 60 days are valued at cost plus accreted discount or
minus amortized premium, which approximates value; (d) interest income is
recorded on an accrual basis; (e) dividend income is recorded on the ex-dividend
date; foreign dividends are recorded on the ex-dividend date or as soon as
practical after the Portfolio determines the existence of a dividend declaration
after exercising reasonable due diligence; (f) gains or losses on the sale of
securities are calculated by using the specific identification method; (g) 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 income or expense
amounts recorded and collected or paid are adjusted when reported by the
custodian; (h) the character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles; (i) 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
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
distributions of taxable income sufficient to relieve it from substantially all
Federal income and excise taxes; and (j) estimates and assumptions are required
to be made regarding assets, liabilities and changes in net assets resulting
from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Management Agreement and Transactions with Affiliated Persons
Travelers Investment Adviser, Inc. ("TIA"), acts as investment manager of the
Fund. The Portfolio pays TIA 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.
TIA has entered into a sub-advisory agreement with AIM Capital Management, Inc.
("AIM"). Pursuant to the sub-advisory agreement, AIM is responsible for the
day-to-day portfolio operations and investment decisions and is compensated for
such service at the annual rate of 0.375% of the Portfolio's average daily net
assets. TIA pays this fee to AIM on a monthly basis.
TIA has entered into a sub-administrative services agreement with Mutual
Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"). TIA pays MMC,
as sub-administrator, a fee calculated at an annual rate of 0.10% of the
Portfolio's average daily net assets.
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares and primary broker for its portfolio agency transactions.
All officers and one Director of the Fund are employees of SB.
3. Investments
During the six months ended April 30, 1998, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
================================================================================
<S> <C>
Purchases $76,193,863
- --------------------------------------------------------------------------------
Sales 66,846,231
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
At April 30, 1998, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
================================================================================
<S> <C>
Gross unrealized appreciation $59,865,742
Gross unrealized depreciation (3,575,537)
- --------------------------------------------------------------------------------
Net unrealized appreciation $56,290,205
================================================================================
</TABLE>
4. Capital Loss Carryforward
At October 31, 1997, the Portfolio had, for Federal income tax purposes,
approximately $939,000 of capital loss carryforwards available to offset any
future capital gains, expiring October 31, 2004. 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.
5. Lending of Portfolio Securities
The Portfolio has an agreement with its custodian whereby the custodian may lend
securities owned by the Portfolio to brokers, dealers and other financial
organizations. Fees earned by the Portfolio on securities lending are recorded
as interest income. Loans of securities by the Portfolio are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin which may vary depending on the
type of securities loaned. The custodian establishes and maintains the
collateral in a segregated account.
At April 30, 1998, the Porfolio had no securities on loan.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the 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.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
The Portfolio enters into such contracts to hedge a portion of its portfolio.
The Portfolio bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At April 30, 1998, the Portfolio had no open futures contracts.
7. Options Contracts
When a Portfolio writes a covered call option, an amount equal to the premium
received by the Portfolio is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Portfolio realizes a
gain equal to the amount of the premium received. When the Portfolio enters into
a closing purchase transaction, the Portfolio realizes a gain or loss depending
upon whether the cost of the closing transaction is greater or less than the
premium originally received, without regard to any unrealized gain or loss on
the underlying security, and the liability related to such option is eliminated.
When a written call option is exercised, the cost of the security sold will be
decreased by the premium originally received. When written index options are
exercised, settlement is made in cash.
The risk in writing a covered call option is that the Portfolio gives up the
opportunity to participate in any increase in the price of the underlying
security beyond the exercise price.
During the six months ended April 30, 1998, the Portfolio did not write any
covered call options.
8. Capital Shares
At April 30, 1998, the Fund had six billion shares of capital stock authorized
with a par value of $0.00001 per share. 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 Year Ended
April 30, 1998 October 31, 1997
================================================================================
<S> <C> <C>
Shares sold 1,820,032 5,684,968
Shares issued on reinvestment -- 11,595
Shares redeemed (247,909) (196,083)
- --------------------------------------------------------------------------------
Net Increase 1,572,123 5,500,480
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
1998(1) 1997 1996(2) 1995(2)(3)
=====================================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.68 $10.76 $10.00 $10.00
- ---------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income (loss)(4) (0.01) 0.02 0.02 0.02
Net realized and unrealized gain (loss) 1.32 1.91 0.75 (0.02)
- ---------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.31 1.93 0.77 --
- ---------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.01) (0.01) --
- ---------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.01) (0.01) --
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.99 $12.68 $10.76 $10.00
- ---------------------------------------------------------------------------------------------------------------------
Total Return 10.33%++ 17.96% 7.71% 0.00%++
- ---------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $245,795 $202,846 $112,905 $8,083
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.84%+ 0.85% 0.96% 1.00%+
Net investment income (loss) (0.06)+ 0.20 0.22 4.07+
- ---------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 34% 56% 44% 6%
- ---------------------------------------------------------------------------------------------------------------------
Average commissions per share
paid on equity transactions $0.01 $0.06 $0.06 $0.06
=====================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1998 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) For the period from October 10, 1995 (commencement of operations) to
October 31, 1995.
(4) The Manager waived all 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 effect on net investment income would have been a decrease of $0.03
and the expense ratio would have been 5.95% (annualized).
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On February 20, 1998, a special meeting of shareholders of the Fund was held for
the purpose of voting on the following matters:
1. To elect Directors of the Fund; and
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage Shares Voted Percentage
Name of Directors For Shares Voted Against Shares Voted
=====================================================================================
<S> <C> <C> <C> <C>
Victor K. Atkins 231,059,252.884 97.271% 6,481,382.874 2.729%
Abraham E. Cohen 231,294,945.547 97.371 6,245,690.211 2.629
Robert A. Frankel 230,999,179.846 97.246 6,541,455.912 2.754
Rainer Greeven 231,468,718.650 97.444 6,071,917.108 2.556
Susan M. Heilbron 231,485,321.942 97.451 6,055,313.816 2.549
Heath B. McLendon 231,463,894.239 97.442 6,076,741.519 2.558
James M. Shuart 231,410,828.580 97.419 6,129,807.178 2.581
=====================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental investment policies of the Porfolios in order to modernize them in
view of certain regulatory, business or industry developments that have occurred
since original adoption of these policies by the Portfolios. The following chart
demonstrates that all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates the
elimination of the policy; and "R" indicates the reclassification of the policy
from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Directors).
<TABLE>
================================================================================
<S> <C>
M Underwriting of Securities Approved
- --------------------------------------------------------------------------------
M Lending by the Fund Approved
- --------------------------------------------------------------------------------
M Real Estate Approved
- --------------------------------------------------------------------------------
R Exercising Control or Management Approved
- --------------------------------------------------------------------------------
R Investments in Oil, Gas and Mineral Exploration Approved
- --------------------------------------------------------------------------------
M Industry Concentration Approved
================================================================================
</TABLE>
The information below reports the lowest percentage of shares voting for the
proposals, the highest percentage of shares voting against and abstaining by
shareholders of the Porfolio on all proposals.
<TABLE>
<CAPTION>
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
================================================================================
<S> <C> <C> <C> <C> <C>
15,017,101.264 91.264% 261,443.305 1.589% 1,175,949.412 7.147%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
Travelers Series SMITH BARNEY
Fund Inc. ------------
A Member of TravelersGroup[LOGO]
Directors Investment Manager
Victor K. Atkins Travelers Investment Adviser, Inc.
A.E. Cohen
Robert A. Frankel Distributor
Rainer Greeven Smith Barney Inc.
Susan M. Heilbron
Heath B. McLendon, Chairman Custodian
James M. Shuart PNC Bank, N.A.
Officers Annuity Administration
Heath B. McLendon Travelers Annuity Investor Services
President and 5 State House Square
Chief Executive Officer 1 Tower Square
Hartford, CT 06183
Lewis E. Daidone
Senior Vice President
and Treasurer This report is submitted for the general
information of the shareholders of the
Thomas M. Reynolds Travelers Series Fund Inc. -- AIM
Controller Capital Appreciation Portfolio. It is
not authorized for distribution to
Christina T. Sydor prospective investors unless accompanied
Secretary 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.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0806 6/98
