<PAGE>
[GRAPHIC]
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, 1999
Smith Barney Mutual Funds
<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,
1999. 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. We hope you find this report to be useful and
informative.
Portfolio Highlights
Smith Barney International Equity Portfolio
For the six months ended April 30, 1999, the Smith Barney International Equity
Portfolio ("Portfolio") provided a total return of 17.22%. The Portfolio's
six-month total return was better than its Lipper Analytical Services Inc. fund
peer group average of 15.16% over the same period. (Lipper is an independent
firm that tracks fund performance.)
Global markets responded positively to a coordinated set of interest-rate
reductions in the fall of 1998. The improved liquidity that resulted from these
rate cuts successfully countered the paralysis of the financial markets
following the unusual confluence of the Russian debt default and resultant
difficulties of leveraged investment partnerships and financial institutions. As
financial market conditions returned to normal, the extreme investor aversion to
risk during the three months ending October 1998 receded.
The early months of 1999 have been an interesting period for international
equity markets, as for the first time in several years performance of the
developed markets lagged the emerging markets by a substantial margin. Emerging
markets were spurred by sharply declining interest rates in many economies, an
upturn of depressed commodity prices and the perception that the "last shoe had
dropped" with the currency devaluation in Brazil. Both Asia and Latin America,
the critical bookends of the asset class, showed signs of stability and
recovery. Emerging
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Travelers Series Fund Inc. 1
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market positions were reduced in line with a reorientation of the Portfolio
specifically on investment opportunities in the developed economies.
Among the developed markets, the Japanese stock market posted the largest gain.
Japanese reform efforts, crafted at an agonizingly slow pace over the last two
years, have finally gathered momentum. The long-term outlook for the Japanese
economy is guarded, but there can be no argument that the government's efforts
to stabilize the economy have taken effect. Japanese government spending has
accelerated, interest rates are at record low levels, banks are being forced to
recapitalize and companies are restructuring to lower costs and boost
productivity. While guardedly cautious about the long-term sustainability of
these efforts, for now the exposure to Japanese equities has been maintained at
14% of the Portfolio's holdings.
After several difficult economic years, non-Japan Asia has started a slow
recovery. Interest rates have plunged from levels needed to stem local currency
declines, and property prices, a key barometer of sentiment in many smaller
Asian economies, have rebounded. The exposure to high-quality Asian
large-capitalization stocks has increased during the past year to 10% of assets.
Additions have focussed on companies with strong earnings prospects such as Hong
Kong and Shanghai Bank and Sun Hung Kai Properties of Hong Kong and Venture
Manufacturing and ST Engineering of Singapore.
The Portfolio remains a committed holder of growth companies in Europe despite
recent geographic and stylistic rotation by other international investors. The
launch of the new European currency, the Euro, while technically well executed,
has been somewhat disappointing as the Euro has weakened sharply versus the U.S.
dollar. Rising short-term yields in the U.S. and declining interest rates in
Europe, combined with anxieties about the military conflict in Kosovo were the
primary causes of the Euro-weakness.
European companies across a swath of industries have embarked on major merger
and acquisition initiatives. Given the favorable cost of capital and
deregulation of many industries, progressive managements have launched strategic
alliances to build geographic breadth and also to achieve economies of scale.
The banking, telecommunications, insurance, automotive, pharmaceutical and
defense industries among others have been affected by the consolidation trend.
These mergers and acquisitions should help European managements dramatically
improve the return on investment of their basic businesses.
Travelers Series Fund Inc. -- Smith Barney Pacific
Basin Portfolio
For the six months ended April 30, 1999, the Smith Barney Pacific Basin
Portfolio ("Portfolio") returned 29.81%. The Portfolio's total return
performance
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2 1999 Semi-Annual Report to Shareholders
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was in line with its Lipper, Inc. fund peer group average of 29.85% over the
same period. (Lipper is an independent firm that tracks fund performance.)
After several years of economic turmoil and plunging stock markets, share prices
in Asia region recovered strongly over the last six months. A combination of
positive developments including lower interest rates, stable currencies,
improving current account balances, corporate restructuring and government
deregulation are stimulating economic growth and encouraging investors to dip
into local shares. During the six months ended April 30, 1999, the price of an
average share in Asia, as measured by the benchmark Morgan Stanley Capital
International (MSCI) All Country Asia Pacific Index, was up by 29%. (The MSCI
All Country Asia Pacific Index, comprising equities in Japan, Australia, New
Zealand, Hong Kong and other countries in the Far East, is a common benchmark
against which the performance of Asian funds is measured.)
The small performance gap occurred mostly in the last two months, when some of
the smaller and riskier stock markets in Asia, including Indonesia and Malaysia,
where the portfolio is under-weighted, increased very sharply. Going forward,
the managers are optimistic about the outlook for share price appreciation in
Asia and believe it is an excellent time to allocate funds to the region.
There is some controversy about the long-term sustainability of government
efforts to stimulate growth in the Japanese economy, but there can be no
argument with the success shown year to date. So far, interest rates are down,
spending is up, banks are recapitalizing and corporations are restructuring. The
government has engaged classic Keynesian measures to boost demand, as it has for
much of the past decade, but this time it added a few new twists, including the
distribution of free vouchers to revive consumer demand, faster money supply
growth and tax relief. The new package of monetary and fiscal stimulus measures
was greeted warmly by investors. In fact, major stock price indices in Japan
broke through their long-term (downward sloping) moving average in February 1999
for the first time since 1995. For the six months ended April 30, 1999, the
Japanese stock market increased by 19% in dollar terms.
It is more than government measures, however, that are driving share prices
higher. Even more important, in the opinion of the managers, have been
announcements from major corporations in Japan about shutting down excess
capacity, shedding unprofitable businesses and laying-off costly excess
employees. This new focus on improving returns and enhancing profitability is a
most welcome development in a country where the average return on equity has
languished at less than 5% for years. Corporate actions to improve returns may
cause some pain in the short-term, but they should restore competitiveness to
the economy in the long-term, and this should encourage consumers to feel more
confident and to spend again.
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Travelers Series Fund Inc. 3
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Stock markets in the rest of the region rebounded sharply during the last six
months, as economies bottomed out in the fourth quarter of 1998 and began to
recover. Share prices rose most sharply in the developing Asian nations, as it
was these countries that were most affected by the crisis and had the most to
gain from recovery. The MSCI Emerging Asia Index, including Indonesia, Thailand,
the Philippines and other less-economically developed countries, increased by
43% in dollar terms during the period. At the same time, share prices in the
developed economies also increased during the last six months but at a more
reasonable pace. The MSCI Pacific ex-Japan Index, including Hong Kong,
Singapore, Australia and New Zealand, rose by 28% in dollar terms during the
period.
There are a number of factors underlying the recovery in Asia, including
interest rate cuts, stable currencies, positive funds flows, low input costs,
the resumption of industrial production and export growth. However, most
important, in the view of the managers, are the measures taken by companies and
government leaders to restructure and restore competitiveness. Having
experienced an awful period of pain and contraction, many countries in the
region have resolved to correct excesses of the past and reduce their
vulnerability to future such shocks. Banking systems are being repaired, new
lending practices put in place, unprofitable businesses are being sold off, and
debts are getting repaid. Korea is a good example of this development. As Korean
companies de-lever, cut back on costs and refocus on core operations, returns on
equity (ROE) are rising dramatically and competitiveness is being restored. In
response, share prices in Korea have increased by over 100% in the last six
months.
According to the managers, there are a number of things that could derail the
recovery in Asia or at least delay it. First, currency stability in the region
still is fragile, and should China devalue the renminbi later this year,
currency weakness could resume. Second, if global interest rates begin to rise
again, funds flows to the region that are critical for continued growth, could
slow. Third, if Japan's recovery should falter or if the yen were to weaken
substantially, growth in the rest of the region could be negatively affected.
While these risks are real, the Portfolio's investment team remains optimistic
about the outlook for Asian markets. The managers believe that the authorities
in China have enough weapons in their arsenal to resist a maxi-devaluation,
including foreign exchange reserves equal to $140 billion dollars. In addition,
the investment team expects that next year China may seek to depreciate the
renminbi by about 10%, but that this process should be well managed and cause
minimal disruption to regional economies. As for global interest rates, a sharp
rise might cause markets everywhere to pull back, but the managers believe a
modest increase in rates, a more likely scenario, would not deter recovery or
limit funds flows to the region. Finally, they remain cautiously optimistic
about Japan and expect steady economic improvement with only modest yen
depreciation.
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4 1999 Semi-Annual Report to Shareholders
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The managers made a few changes to the Portfolio during the last six months.
First, they added a number of new positions in Australia, as they found a
variety of companies reporting strong earnings growth that were virtually
unaffected by the economic crisis in the region. In Japan, they took profits on
some of their export-oriented companies. The most dramatic shift in the
Portfolio occurred between Thailand and Taiwan. The managers sold their holdings
in Thailand, taking their weighting down from 5% to zero.
GT Global Strategic Income Portfolio
The investment objective of the GT Global Strategic Income Portfolio
("Portfolio") is to primarily seek high current income and secondarily, capital
appreciation. For the six months ended April 30, 1999 the Portfolio returned
2.28%, and outperformed its Lipper Inc. peer group average, which returned 1.75%
over the same period.
Over the past six months the financial markets have been roiled by a series of
events that originated from the Russian crisis (which can also be viewed as an
extension of the Asian contagion and events earlier in the year). Although the
Russian crisis began earlier than six months ago, an unforeseeable outcome of
the crisis was the extent to which capital markets were affected. Initially
induced by a loss of financial confidence and subsequent capital flight from
Russia, the emerging markets came under pressure. Investors' risk aversion rose
dramatically in emerging markets, domestic high yield, bond investment-grade and
even equity markets. Capital markets were indeed in a crunch, liquidity dried up
and new issuance slowed to a standstill. This flight to quality resulted in the
30-year U.S. Treasury bond dipping below 5% in October.
In an effort to ward off recession and global deflation, the Federal Reserve
Board in the U.S. initiated a series of targeted rate cuts that ultimately
proved crucial in restoring market confidence. Moreover, rate cuts became more
frequent throughout the world as countries tried to initiate recovery and with
the introduction of the euro, the new European central bank cut rates. The
ultimate impact of these rate cuts flooded the markets with liquidity as capital
returned in strength.
The emerging markets, however, experienced a further crisis as Brazil, viewed as
a bellwether emerging market, devalued the real and its central bank president
resigned. Brazil was eventually able to contain the crisis by appointing a new
central bank president in order to recapture market confidence. After the
subsequent interest rate cuts experienced throughout the world, signs of
recovery eventually began to appear in the depressed Asian economies. Commodity
prices, which have been depressed for at least a year, bounced back led by
OPEC's global supply reduction agreement that helped to boost oil prices.
Oil-producing countries began to stabilize and capital flight slowed and even
reversed in some cases. Confidence has returned to such a level that Korean
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Travelers Series Fund Inc. 5
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assets have rebound to pre-crisis levels and rating agencies have re-assigned
the country investment grade ratings. Both the Hang Seng and the Nikkei indices
are at levels that are in excess of 20% plus or higher from their respective
lows.
Europe's growth has lagged the global recovery primarily because of sluggish
economic activity in the region's three largest economies; Germany, Italy and
France. Their traditional export markets in Latin America have contracted and
business confidence in Germany has fallen with the election of a leftward
leaning coalition government. Events in Kosovo have further sapped confidence
translating into lower capital expenditures.
As the market recovered from its lows, allocations to U.S. corporate, domestic,
and European high yield bonds were increased in lieu of emerging debt. In the
view of the investment management team, this mix of assets increased the
Portfolio's diversification while possibly not negatively impacting its return
potential.
Moreover, the Portfolio's duration was reduced as global deflationary pressures
abated and in the U.S. economy continued to surprise to the upside. Investments
in commodity based countries such as New Zealand, Australia and Canada were made
to provide further diversification.
Since our last report, the managers have significantly upgraded their
expectations for the U.S. economy. A U.S. recession was never in their forecast,
but they had earlier expected a slowdown during the reporting period. Their
expectations has now been pushed back into the second half of the year. While
inflation risks appear to be rising, the managers still think that inflation
will remain subdued. While global sentiment has improved significantly, the
managers view this as a rebound from excessively pessimistic levels and the real
economy outside the U.S. is still very weak. With this backdrop, they think that
it is unlikely that the U.S. central bank (i.e., the Federal Reserve Board) will
tighten monetary policy with a rate rise any time soon.
In closing, thank you for investing in the Travelers Series Fund Inc. We look
forward to continue to help you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 25, 1999
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6 1999 Semi-Annual Report to Shareholders
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Smith Barney International Equity Portfolio
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Historical Performance
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Net Asset Value
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Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/99 $12.60 $14.77 $ 0.00 $ 0.00 17.22%++
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10/31/98 13.23 12.60 0.00 0.00 (4.76)
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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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Smith Barney Pacific Basin Portfolio
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Historical Performance
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Net Asset Value
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Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/99 $ 6.81 $ 8.84 $ 0.00 $ 0.00 29.81%++
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10/31/98 8.04 6.81 0.09 0.00 (14.09)
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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 $ 0.18 $ 0.00
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GT Global Strategic Income 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+
================================================================================
4/30/99 $10.97 $11.22 $ 0.00 $ 0.00 2.28%++
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10/31/98 12.52 10.97 0.66 0.64 (2.50)
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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 $ 1.64 $ 1.22
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It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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Travelers Series Fund Inc. 7
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Average Annual Total Return+
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Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
Six Months Ended 4/30/99++ 17.22% 29.81% 2.28%
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Year Ended 4/30/99 (0.47) 20.19 (5.42)
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6/16/94* through 4/30/99 8.38 (2.03) 7.53
================================================================================
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Cumulative Total Return+
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Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
6/16/94* through 4/30/99 48.02% (9.51)% 42.44%
================================================================================
+ 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 1999 Semi-Annual Report to Shareholders
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Historical Performance (unaudited)
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Growth of $10,000 Invested in Shares of the
Smith Barney International Equity Portfolio vs.
MSCI EAFE Index+
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June 1994 -- April 1999
[LINE CHART]
International Equity MSCI EASFE Index
6/16/94 10,000 10,000
10/94 10,550 10,443
4/95 9,610 10,588
10/95 10,480 10,436
4/96 11,884 11,832
10/96 12,194 11,563
4/97 12,628 11,762
10/97 13,259 12,133
4/98 14,872 14,024
10/98 12,628 13,340
4/30/99 14,802 15,378
+ 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, 1999. The Morgan Stanley Capital
International ("MSCI") MSCI EAFE Index is a composite portfolio consisting
of equity total returns for the countries of Europe, Australia, New
Zealand and the Far East. The MSCI EAFE Index is weighted based on each
company's market capitalization. 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. 9
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Historical Performance (unaudited)
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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 1999
[LINE CHART]
Pacific Basin MSCI Pacific Index
6/16/94 10,000 10,000
10/94 10,100 9,952
4/95 8,760 9,702
10/95 8,950 8,836
4/96 10,260 10,430
10/96 9,779 9,136
4/97 10,264 8,188
10/97 8,114 7,353
4/98 7,529 6,726
10/98 6,971 6,346
4/30/99 9,049 8,091
+ 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, 1999. 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 1999 Semi-Annual Report to Shareholders
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Historical Performance (unaudited)
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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 1999
[LINE CHART]
JP Morgan Global Bond
G.T. Global Strategic Income Index - Unhedged
6/16/94 10,000 10,000
10/94 9,950 10,391
10/95 10,882 11,985
10/96 13,066 12,716
10/97 14,284 13,161
10/98 13,927 14,869
4/30/99 14,244 14,390
+ 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, 1999. 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
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Schedules of Investments (unaudited) April 30, 1999
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SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
STOCKS -- 98.7%
Australia -- 0.9%
475,259 Coca-Cola Amatil Ltd. $ 2,259,193
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Canada -- 2.7%
175,000 Celestica Inc.(a) 6,969,717
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Finland -- 3.5%
123,000 Nokia OYJ 9,125,057
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France -- 7.2%
35,000 Axa(b) 4,525,064
20,000 Danone(b) 5,353,477
35,000 Equant N.V.(a) 3,180,875
50,000 Sidel S.A. 6,030,597
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19,090,013
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Germany -- 4.9%
22,000 Global TeleSystems Group Inc.(a)(b) 1,449,250
37,000 Mannesmann AG 4,850,187
6,500 SAP AG Preferred(b) 2,406,948
100,000 Volkswagen AG Preferred 4,284,898
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12,991,283
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Greece -- 0.5%
50,000 Hellenic Telecommunications Organization SA 1,162,979
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Hong Kong -- 5.9%
163,300 HSBC Holdings PLC(b) 6,068,047
600,000 Hutchison Whampoa Ltd. 5,380,298
483,557 Sun Hung Kai Properties Ltd. 4,242,549
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15,690,894
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Ireland -- 6.5%
294,321 Bank of Ireland 5,900,870
450,000 Independent Newspapers PLC 2,213,864
253,755 Irish Continental Group PLC 3,456,585
613,650 Irish Life PLC 5,518,552
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17,089,871
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Italy -- 5.7%
550,000 Alleanza Assicurazioni(b) 6,588,850
880,000 Istituto Nazionale delle Assicurazioni(b) 2,326,667
1,000,000 Telecom Italia Mobile S.p.A.(b) 6,028,481
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14,943,998
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See Notes to Financial Statements.
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12 1999 Semi-Annual Report to Shareholders
<PAGE>
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Schedules of Investments (unaudited) (continued) April 30, 1999
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SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Japan -- 14.0%
134,000 Canon, Inc. $ 3,278,012
203,000 Hosiden Corp.(b) 4,285,678
38,000 Matsushita Communication Industrial Co., Ltd. 2,728,270
65,000 Murata Manufacturing Co., Ltd. 3,719,264
880 NTT Data Corp.(b) 6,966,866
13,200 Shohkoh Fund & Co., Ltd.(b) 7,740,962
44,000 Sony Corp. 4,110,082
191,000 Terumo Corp. 4,160,348
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36,989,482
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Mexico -- 3.4%
3,306,000 Cifra SA de CV, Class C Shares(a) 6,189,805
70,000 Grupo Televisa SA GDR(a) 2,870,000
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9,059,805
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Netherlands -- 5.6%
162,229 Getronics N.V. 6,668,144
67,011 IHC Caland N.V. 3,041,507
300,000 ING Groep N.V. Warrants, Expire 3/15/01 5,179,965
- --------------------------------------------------------------------------------
14,889,616
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Norway -- 2.7%
180,000 Tomra Systems ASA(b) 7,166,249
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Singapore -- 3.0%
1,500,000 Keppel Corp. Ltd. 4,286,979
1,750,000 Singapore Technologies Engineering Ltd. 1,880,720
293,650 Venture Manufacturing (Singapore) Ltd. 1,612,604
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7,780,303
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South Africa -- 0.7%
432,568 Dimension Data Holdings Ltd. 1,916,776
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Spain -- 3.1%
120,000 Indra Sistemas S.A. 1,155,335
100,000 Superdiplo S.A.(a) 2,163,609
105,884 Telefonica S.A. 4,968,326
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8,287,270
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Sweden -- 1.0%
125,000 Electrolux AB, Class B Shares(b) 2,541,314
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See Notes to Financial Statements.
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Travelers Series Fund Inc. 13
<PAGE>
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Schedules of Investments (unaudited) (continued) April 30, 1999
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SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Switzerland -- 5.0%
150,000 Mettler-Toledo International Inc.(a) $ 3,918,750
3,100 Novartis AG, Registered Shares(b) 4,546,666
400 Roche Holding AG Genuss 4,713,300
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13,178,716
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United Kingdom -- 22.4%
197,000 Boxmore International PLC 490,057
500,000 Capita Group PLC 5,293,198
355,000 Colt Telecom Group PLC 6,590,374
800,000 Compass Group PLC 8,082,694
115,000 Guardian IT PLC 1,134,113
750,000 Hays PLC 8,374,525
782,565 Misys PLC 7,352,139
700,000 Racal Electronics PLC 4,835,125
610,000 Rentokil Initial PLC 3,562,785
359,000 Serco Group PLC 7,947,848
1,200,000 Telewest Communications PLC 5,535,544
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59,198,402
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TOTAL STOCKS
(Cost -- $182,649,253) 260,330,938
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 1.3%
$ 3,400,000 CIBC Wood Gundy Securities Inc., 4.700% due
5/3/99; Proceeds at maturity -- $3,401,331;
(Fully collateralized by U.S. Treasury Notes,
5.625% due 12/31/99; Market value -- $3,468,389
(Cost -- $3,400,000) 3,400,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $186,049,253*) $263,730,938
================================================================================
See Notes to Financial Statements.
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14 1999 Semi-Annual Report to Shareholders
<PAGE>
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Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
STOCKS -- 100.0%
Australia -- 9.0%
9,530 Brambles Industries Ltd. $ 280,484
9,414 Commonwealth Bank of Australia 171,683
15,050 Computershare Ltd. 155,612
22,016 E*TRADE Australia Ltd.(a) 138,480
10,945 Lend Lease Corp., Ltd. 147,793
7,700 National Australia Bank Ltd. 150,147
19,400 TABCORP Holdings Ltd. 158,029
26,815 Telstra Corp., Ltd. 145,738
22,800 Westfield Holdings Ltd. 151,118
- --------------------------------------------------------------------------------
1,499,084
- --------------------------------------------------------------------------------
Hong Kong -- 8.4%
740,000 CCT Telecom Holdings Ltd. 168,996
24,000 Cheung Kong Holdings Ltd. 218,308
60,500 Hong Kong Telecommunications Ltd. 162,754
3,293 HSBC Holdings PLC 122,365
20,000 Hutchison Whampoa Ltd. 179,343
20,366 Sun Hung Kai Properties Ltd. 178,684
70,000 VTech Holdings Ltd. 239,339
42,000 Wing Hang Bank Ltd. 128,430
- --------------------------------------------------------------------------------
1,398,219
- --------------------------------------------------------------------------------
India -- 2.2%
16,100 Pentafour Software & Exports Ltd., GDR 362,250
- --------------------------------------------------------------------------------
Japan -- 58.1%
23,000 Canon, Inc. 562,644
42,000 Chugai Pharmaceutical Co., Ltd.(b) 499,644
5,000 Hirose Electric Co., Ltd. 464,960
8,000 Honda Motor Co., Ltd. 352,532
7,000 Ito-Yokado Co., Ltd. 429,858
12,000 Murata Manufacturing Co., Ltd. 686,635
285,000 Nippon Steel Corp.(b) 639,886
81 Nippon Telegraph & Telephone Corp. 882,168
85 NTT Data Corp.(b) 672,936
57,000 Sekisui Chemical Co., Ltd. 381,066
36,000 Sekisui House, Ltd. 403,234
5,000 Seven-Eleven Japan Co., Ltd. 426,842
1,380 Shohkoh Fund & Co., Ltd.(b) 809,282
5,800 Sony Corp. 541,784
42,000 Sumitomo Bank Ltd. 568,608
14,000 Terumo Corp. 304,947
33,000 Tokio Marine & Fire Insurance Co., Ltd. 384,560
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Japan -- 58.1% (continued)
20,000 Tostem Corp. $ 371,131
12,000 Toyota Motor Corp. 340,803
- --------------------------------------------------------------------------------
9,723,520
- --------------------------------------------------------------------------------
New Zealand -- 1.7%
56,000 Telecom Corp. of New Zealand Ltd. 291,440
- --------------------------------------------------------------------------------
Philippines -- 1.6%
1,174,000 SM Prime Holdings 265,520
- --------------------------------------------------------------------------------
Singapore -- 7.8%
370,000 Allgreen Properties Ltd. 225,037
33,800 City Developments Ltd. 225,533
115,392 Datacraft Asia Ltd. 362,331
73,900 Natsteel Electronics Ltd. ADR 248,733
25,850 Oversea-Chinese Banking Corp., Ltd. 242,702
- --------------------------------------------------------------------------------
1,304,336
- --------------------------------------------------------------------------------
South Korea -- 5.9%
11,000 Kookmin Bank 149,937
6,000 Korea Electric Power Corp. 172,655
4,200 Korea Telecom Corp. 183,761
8,600 Pohang Iron & Steel Co., Ltd. ADR 221,450
19,000 Samsung Corp. 266,975
- --------------------------------------------------------------------------------
994,778
- --------------------------------------------------------------------------------
Taiwan -- 5.3%
35,000 Cathay Life Insurance Co. 125,229
66,000 China Motor Co., Ltd. 107,982
53,000 Hon Hai Precision Industry(a) 288,502
340,000 Lealea Enterprise Co. 186,116
53,000 Taiwan Semiconductor Manufacturing Co.(a) 179,097
- --------------------------------------------------------------------------------
886,926
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $13,003,491*) $ 16,726,073
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
BONDS -- 98.0%
Algeria -- 1.1%
550,000 Algeria Tranche IR, 6.688% due 9/4/06 $ 297,000
- --------------------------------------------------------------------------------
Argentina -- 2.4%
Republic of Argentina:
365,000 11.447% due 4/10/05(c) 352,225
95,000 9.750% due 9/19/27 83,410
134,000 12.125% due 2/25/19 139,863
100,000 Supercanal Holdings, 11.500% due 5/15/05 55,000
- --------------------------------------------------------------------------------
630,498
- --------------------------------------------------------------------------------
Brazil -- 3.1%
388,000 Brazil Discount Bond, 5.875% due 4/15/24(c) 257,777
812,791 Republic of Brazil C Bond, 8.000% due 4/15/14(d) 561,841
- --------------------------------------------------------------------------------
819,618
- --------------------------------------------------------------------------------
Bulgaria -- 1.7%
643,000 Bulgaria Discount Series A, 5.875% due 7/28/24(c) 442,062
- --------------------------------------------------------------------------------
Canada -- 1.1%
390,000 CAD Canada Government, 6.000% due 6/1/08 283,870
- --------------------------------------------------------------------------------
Croatia -- 0.4%
122,000 Croatia, 5.813% due 7/31/10 95,465
- --------------------------------------------------------------------------------
Germany -- 3.0%
Bundesrepublik Deutschland:
623,776 EUR 6.500% due 10/14/05 774,127
100 EUR 6.000% due 1/5/06 121
16,323 EUR 6.500% due 7/4/27 21,617
- --------------------------------------------------------------------------------
795,865
- --------------------------------------------------------------------------------
Greece -- 3.3%
Hellenic Republic:
50,000,000 GRD 9.200% due 3/21/02 172,052
190,000,000 GRD 8.700% due 4/8/05 694,944
- --------------------------------------------------------------------------------
866,996
- --------------------------------------------------------------------------------
Ivory Coast -- 0.7%
578,175 Ivory Coast, 2.000% due 3/29/18(c) 189,352
- --------------------------------------------------------------------------------
Jamaica -- 0.0%
37,000 Mechala Group, 12.750% due 12/30/99 10,221
- --------------------------------------------------------------------------------
Jordan -- 0.2%
87,000 Jordan, 5.500% due 12/23/23(c) 53,469
- --------------------------------------------------------------------------------
Mexico -- 2.4%
62,000 Grupo Azucarero Mexico, 11.500% due 1/15/05(e) 22,940
60,000 Petroleos Mexicanos, 9.250% due 3/30/18 56,100
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
Mexico -- 2.4% (continued)
United Mexican States:
119,000 11.375% due 9/15/16 $ 136,031
384,000 10.375% due 2/17/09 412,128
- --------------------------------------------------------------------------------
627,199
- --------------------------------------------------------------------------------
Peru -- 0.3%
133,000 Peru PDI, 4.500% due 3/7/17(c) 89,110
- --------------------------------------------------------------------------------
Philippines -- 0.4%
105,000 Republic of Philippines, 9.875 due 1/15/19 108,938
- --------------------------------------------------------------------------------
Russia -- 0.4%
5,000 Ministry Finance Russia, 3.000% due 5/14/06(c) 575
25,019 Russian Ian, 5.969% due 12/15/15(c) 2,126
1,485,821 Russian Principal Loan, 5.969% due 12/15/20(c)(d) 107,722
- --------------------------------------------------------------------------------
110,423
- --------------------------------------------------------------------------------
Turkey -- 0.5%
119,000 Republic of Turkey, 12.000% due 12/15/08 121,380
- --------------------------------------------------------------------------------
United Kingdom -- 1.3%
150,000 DEM Colt Telecom Group PLC, 7.625% due 7/31/08 81,543
190,000 GBP London International Exhibition Centre,
7.710% due 11/25/16 257,430
338,973
- --------------------------------------------------------------------------------
United States -- 75.4%
U.S. Treasury Notes:
7,660,000 5.625% due 5/15/08(b) 7,770,764
660,000 4.750% due 11/15/08 630,709
1,645,000 6.375% due 8/15/27 1,756,399
1,000,000 Aircraft Finance Trust, 8.000% due 5/15/24 999,375
60,000 Allbritton Communication, 8.875% due 2/1/08 61,650
125,000 American Axle & Manufacturing Inc.,
9.750% due 3/1/09(e) 130,313
250,000 Ames Department Stores, 10.000% due 4/15/06 248,125
200,000 Bayerische Landesbank NY, 5.875% due 12/1/08 192,500
90,000 CUC International Inc., 3.000% due 2/15/02 85,613
100,000 Chancellor Media Corp., 8.125% due 12/15/07 101,000
150,000 Charter Communications Holdings LLC,
8.625% due 4/1/09 154,125
95,000 Chase Manhattan Corp., 6.250% due 1/15/06 93,931
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
United States -- 75.4% (continued)
250,000 Chattem Inc., 8.875% due 4/1/08 $ 254,131
110,000 Circus Circus Enterprise, 9.250% due 12/1/05 116,050
360,000 Comcast Cable Communications, 6.200% due 11/15/08 355,050
150,000 Comcast Cellular Holdings, 9.500% due 5/1/07 171,000
225,000 Continental Mortgage Home Equity Loan Trust,
8.500% due 4/25/29 202,922
100,000 Drypers Corp., 10.250% due 6/15/07 92,000
60,000 Duane Reade Inc., 9.250% due 2/15/08 62,700
250,000 Dura Operating Corp., 9.000% due 5/1/09 255,625
65,000 Eagle Family Foods, 8.750% due 1/15/08 62,644
500,000 NZD Federal National Mortgage Association, 7.250% due
6/20/02 292,642
250,000 Fairchild Corp., 10.750% due 4/15/09 251,250
65,000 Fisher Scientific International, 9.000% due 2/1/08 65,894
250,000 Florida Panthers Holdings, 9.875% due 4/15/09(e) 251,250
330,000 General Motors Acceptance Corp., 6.625% due
10/15/05 333,713
150,000 Graham Packaging, 8.750% due 1/15/08 152,813
150,000 Hollywood Casino Corp., 12.750% due 11/1/03 165,000
100,000 Hollywood Park Inc., 9.250 due 2/15/07 103,750
150,000 Intermedia Communications Inc., 9.500% due
3/1/09(e) 156,000
60,000 International Home Foods, 10.375% due 11/1/06 64,650
250,000 Isle of Capri Casinos, 8.750% due 4/15/09(e) 249,375
150,000 Level 3 Communications, 9.125% due 5/1/08 153,375
150,000 Lin Television Corp., 8.375% due 3/1/08(e) 148,500
60,000 Loews Cineplex Entertainment, 8.875% due 8/1/08 60,600
150,000 Magellan Health Services, 9.000% due 2/15/08 126,750
150,000 Northwest Airlines Corp., 8.700% due 3/15/07 146,438
150,000 Oglebay Norton Co., 10.000% due 2/1/09(e) 147,750
65,000 Park Place Entertainment, 7.875% due 12/15/05 64,188
60,000 Penn National Gaming Inc., 10.625% due 12/15/04 60,750
250,000 Pillowtex Corp., 10.000% due 11/15/06 264,375
75,000 Polaroid Corp., 11.500% due 2/15/06 78,938
150,000 Primus Telecomm Group, 11.250% due 1/15/09(e) 157,125
85,000 Psinet Inc., 10.000% due 2/15/05 89,250
250,000 Rhythms Netconnections, 12.750% due 4/15/09(e) 250,000
150,000 Riddell Sports Inc., 10.500% due 7/15/07 139,500
320,000 Rite Aid Corp., 5.250% due 9/15/02 324,800
65,000 Salton Inc., 10.750% due 12/15/05 68,250
150,000 Smithfield Foods Inc., 7.625 due 2/15/08 151,500
60,000 Syratech Corp., 11.000% due 4/15/07 40,800
400,000 Telecorp PCS Inc., 11.625% due 4/15/09(e) 226,000
150,000 Trump Atlantic City Association, 11.250% due
5/1/06 131,250
100,000 United Stationers Supply, 8.375% due 4/15/08 100,750
90,000 U.S. Filter Corp., 4.500% due 12/15/01 89,438
60,000 ViaSystems Inc., 9.750% due 6/1/07 56,250
250,000 Vintage Petroleum, 9.750% due 6/30/09(e) 260,620
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
United States -- 75.4% (continued)
100,000 Willis Corroon Corp., 9.000% due 2/1/09(e) $ 101,750
140,000 WMX Technologies, 2.000% due 1/24/05 157,500
360,000 Xerox Corp., 5.500% due 11/15/03 354,600
- --------------------------------------------------------------------------------
19,834,010
- --------------------------------------------------------------------------------
Venezuela -- 0.3%
115,000 Republic of Venezuela, 9.250% due 9/15/27 83,557
- --------------------------------------------------------------------------------
TOTAL BONDS
(Cost -- $26,995,575) 25,798,006
================================================================================
SHARES SECURITY VALUE
================================================================================
WARRANTS -- 0.1%
Argentina -- 0.1%
Republic of Argentina, Warrants:
234 Expire 2/25/00(a) 7,137
240 Expire 12/3/99(a) 8,400
- --------------------------------------------------------------------------------
15,537
- --------------------------------------------------------------------------------
Mexico -- 0.0%
3,325,000 United Mexican States Value Recovery Rights,
Expire 6/30/03(a) 0
24 United Mexico States Warrants, Expire 2/18/00(a) 1,248
- --------------------------------------------------------------------------------
1,248
- --------------------------------------------------------------------------------
Venezuela -- 0.0%
4,110 Republic of Venezuela -- Oil Warrants, Expire
4/15/20(a) 0
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $0) 16,785
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
GT GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 1.9%
$ 500,000 CIBC Wood Gundy Securities Inc., 4.700% due
5/3/99; Proceeds at maturity -- $500,196;
(Fully collateralized by U.S. Treasury Notes,
due 12/31/99; Market value -- $510,991)
(Cost -- $500,000) $ 500,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $27,495,575*) $26,314,791
================================================================================
(a) Non-income producing security.
(b) All or a portion of this security is on loan (See Note 9).
(c) Represents current rate on floating rate security.
(d) Effective rate at period end including "payment in kind" bonds.
(e) 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.
++ Face amount denominated in U.S. dollars unless otherwise indicated.
* Aggregate cost for Federal income tax purposes is substantially the same.
Currency Abbreviations
CAD -- Canadian Dollar
EUR -- European Currency Unit
GRD -- Greek Drachma
DEM -- German Mark
GBP -- British Pound
NZD -- New Zealand Dollar
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
==============================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $186,049,253, $13,003,491
and $27,495,575, respectively) $ 263,730,938 $ 16,726,073 $ 26,314,791
Foreign currency, at value
(Cost -- $360,139, $64,629
and $474,309, respectively) 360,531 65,477 487,985
Cash 110,479 -- 385,150
Collateral for securities on loan (Note 9) 53,650,613 1,658,985 4,267,600
Receivable for securities sold -- 292,380 --
Dividends and interest receivable 468,659 33,192 512,476
Receivable for open forward foreign
currency contracts (Note 5) 879 1,888 13,373
- ----------------------------------------------------------------------------------------------
Total Assets 318,322,099 18,777,995 31,981,375
- ----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 9) 53,650,613 1,658,985 4,267,600
Payable for securities purchased 1,165,160 638,340 1,101,107
Management fees payable 195,355 11,988 20,468
Payable to bank -- 303,153 --
Payable for open forward foreign
currency contracts (Note 5) -- -- 13,346
Accrued expenses 75,631 38,529 38,367
- ----------------------------------------------------------------------------------------------
Total Liabilities 55,086,759 2,650,995 5,440,888
- ----------------------------------------------------------------------------------------------
Total Net Assets $ 263,235,340 $ 16,127,000 $ 26,540,487
==============================================================================================
NET ASSETS:
Par value of capital shares $ 178 $ 18 $ 24
Capital paid in excess of par value 204,954,860 17,707,002 26,781,504
Undistributed (overdistributed)
net investment income 1,064,719 (137,823) 2,145,298
Accumulated net realized loss from
security transactions and
foreign currencies (20,440,689) (5,163,450) (1,217,372)
Net unrealized appreciation (depreciation)
of investments and foreign currencies 77,656,272 3,721,253 (1,168,967)
- ----------------------------------------------------------------------------------------------
Total Net Assets $ 263,235,340 $ 16,127,000 $ 26,540,487
==============================================================================================
Shares Outstanding 17,822,549 1,823,442 2,364,413
- ----------------------------------------------------------------------------------------------
Net Asset Value $ 14.77 $ 8.84 $ 11.22
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999
<TABLE>
<CAPTION>
Smith Barney Smith Barney GT Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
==============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,133,053 $ 87,637 --
Interest 582,005 12,554 $ 964,120
Less: Foreign withholding tax (99,486) (9,554) (2,617)
- ---------------------------------------------------------------------------------------------
Total Investment Income 1,615,572 90,637 961,503
- ---------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,115,552 64,186 109,692
Custody 63,090 11,703 14,356
Shareholder communications 13,342 2,674 5,100
Audit and legal 10,771 6,240 8,663
Directors' fees 5,688 1,367 1,935
Shareholder and system servicing fees 4,142 4,193 3,642
Registration fees 1,214 -- --
Other 5,875 2,482 3,496
- ---------------------------------------------------------------------------------------------
Total Expenses 1,219,674 92,845 146,884
- ---------------------------------------------------------------------------------------------
Net Investment Income (Loss) 395,898 (2,208) 814,619
- ---------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 3 AND 5):
Realized Gain (Loss) From:
Security transactions (excluding
short-term securities) (8,836,212) 1,340,455 (249,418)
Foreign currency transactions (213,703) (15,835) (151,955)
- ---------------------------------------------------------------------------------------------
Net Realized Gain (Loss) (9,049,915) 1,324,620 (401,373)
- ---------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments
and Foreign Currencies:
Beginning of period 28,090,858 1,187,437 (1,409,300)
End of period 77,656,272 3,721,253 (1,168,967)
- ---------------------------------------------------------------------------------------------
Change in Net Unrealized
Appreciation (Depreciation) 49,565,414 2,533,816 240,333
- ---------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments and
Foreign Currencies 40,515,499 3,858,436 (161,040)
- ---------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 40,911,397 $ 3,856,228 $ 653,579
=============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
Smith Barney International Equity Portfolio 1999 1998
=====================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 395,898 $ 859,431
Net realized loss (9,049,915) (8,006,219)
Increase (decrease) in net unrealized appreciation 49,565,414 (3,576,698)
- -------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 40,911,397 (10,723,486)
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- --
- -------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- --
- -------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 283,198,631 304,843,574
Net asset value of shares issued for
reinvestment of dividends -- --
Cost of shares reacquired (285,081,684) (288,950,485)
- -------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (1,883,053) 15,893,089
- -------------------------------------------------------------------------------------
Increase in Net Assets 39,028,344 5,169,603
NET ASSETS:
Beginning of period 224,206,996 219,037,393
- -------------------------------------------------------------------------------------
End of period* $ 263,235,340 $ 224,206,996
=====================================================================================
* Includes undistributed net investment income of: $ 1,064,719 $ 882,524
=====================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
Smith Barney Pacific Basin Portfolio 1999 1998
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment loss $ (2,208) $ (4,718)
Net realized gain (loss) 1,324,620 (4,088,979)
Increase in net unrealized appreciation 2,533,816 2,049,336
- -----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 3,856,228 (2,044,361)
- -----------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (181,266)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (181,266)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 12,911,336 35,978,662
Net asset value of shares issued for
reinvestment of dividends -- 181,266
Cost of shares reacquired (13,368,868) (39,430,568)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Fund Share Transactions (457,532) (3,270,640)
- -----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 3,398,696 (5,496,267)
NET ASSETS:
Beginning of period 12,728,304 18,224,571
- -----------------------------------------------------------------------------------
End of period* $ 16,127,000 $ 12,728,304
===================================================================================
* Includes overdistributed net investment income of: $ (137,823) $ (119,780)
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
GT Global Strategic Income Portfolio 1999 1998
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 814,619 $ 2,234,230
Net realized loss (401,373) (1,673,927)
Increase (decrease) in net unrealized appreciation 240,333 (1,344,784)
- -----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 653,579 (784,481)
- -----------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (1,616,552)
Net realized gains -- (1,550,922)
- -----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (3,167,474)
- -----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 961,797 4,608,510
Net asset value of shares issued
for reinvestment of dividends -- 3,167,474
Cost of shares reacquired (3,205,419) (4,925,190)
- -----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (2,243,622) 2,850,794
- -----------------------------------------------------------------------------------
Decrease in Net Assets (1,590,043) (1,101,161)
NET ASSETS:
Beginning of period 28,130,530 29,231,691
- -----------------------------------------------------------------------------------
End of period* $ 26,540,487 $ 28,130,530
===================================================================================
* Includes undistributed net investment income of: $ 2,145,298 $ 1,482,634
===================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 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, Smith Barney Money
Market, Smith Barney Large Capitalization Growth, Travelers Managed Income
(formerly known as 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, 1998, reclassifications
were made to the capital accounts of the Portfolios to reflect permanent
book/tax differences and income and gains available for distribution under
income tax regulations. Accordingly, for the Smith Barney Pacific Basin
Portfolio, a portion of overdistributed net investment income amounting to
$13,473 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
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., 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. SBIE and SBPB pay SSBC a management fee
calculated at the annual rate of 0.90% of the average daily net assets of each
Portfolio. In addition, Travelers Investment Advisors, Inc., ("TIA"), an
affiliate of SSBC, acts as the investment manager of the GT Global Strategic
Income Portfolio ("GTGSI"). 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 INVESCO (NY), Inc.
("INVESCO"). Pursuant to the subadvisory agreement, INVESCO is responsible for
the day-to-day portfolio operations and investment decisions for GTGSI and is
compensated for such services. TIA pays INVESCO a monthly fee calculated at the
annual rate of 0.375% of the average daily net assets of GTGSI.
- --------------------------------------------------------------------------------
28 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
TIA has entered into a sub-administrative services agreement with SSBC. TIA pays
SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
Portfolios' average daily net assets.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. During the six months
ended April 30, 1999, SSB received brokerage commissions in the the amounts of
$2,161 and $3,585 for SBIE and SBPB, respectively.
All officers and one Director of the Fund are employees of SSB.
3. Investments
For the six months ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SBIE SBPB GTGSI
================================================================================
Purchases $66,796,026 $11,190,334 $20,865,203
- --------------------------------------------------------------------------------
Sales 45,294,610 10,530,786 20,599,156
================================================================================
At April 30, 1999, the gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
SBIE SBPB GTGSI
================================================================================
Gross unrealized appreciation $80,913,181 $ 3,816,314 $ 375,638
Gross unrealized depreciation (3,231,496) (93,732) (1,556,422)
- --------------------------------------------------------------------------------
Net unrealized appreciation $77,681,685 $ 3,722,582 $(1,180,784)
================================================================================
4. Capital Loss Carryforward
At October 31, 1998, the Fund had capital loss carryforwards available to offset
future realized capital gains, if any, for Federal income tax purposes of
approximately $11,604,000, $6,496,000 and $852,000 for SBIE, SBPB and GTGSI,
respectively. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
The amounts and expiration of the carryforward losses are indicated below.
Expiration occurs on October 31 of the year indicated.
Portfolio 2003 2004 2005 2006
================================================================================
SBIE $ 947,000 -- $2,625,000 $8,032,000
- --------------------------------------------------------------------------------
SBPB 305,000 $452,000 1,549,000 4,190,000
- --------------------------------------------------------------------------------
GTGSI -- -- -- 852,000
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
5. Forward Foreign Currency Contracts
At April 30, 1999, 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 on the contracts is
reflected as follows:
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
===============================================================================
Smith Barney International Equity
To Buy:
Singapore Dollar 1,363,181 $805,211 5/3/99 $ 879
===============================================================================
Smith Barney Pacific Basin
To Buy:
Australian Dollar 147,295 $ 97,628 5/3/99 1,326
Australian Dollar 10,709 7,098 5/4/99 31
Singapore Dollar 381,100 225,183 5/6/99 531
- -------------------------------------------------------------------------------
Total Unrealized Gain on Forward
Foreign Currency Contracts $ 1,888
===============================================================================
GT Global Strategic Income
To Sell:
Canadian Dollar 410,000 $281,604 6/18/99 $ 13,373
Euro 345,385 366,626 6/18/99 (13,346)
- -------------------------------------------------------------------------------
Total Unrealized Gain on Forward
Foreign Currency Contracts $ 27
===============================================================================
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.
- --------------------------------------------------------------------------------
30 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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, 1999, 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 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, 1999, 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
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Portfolios are exposed to the risk of loss if the market price of the underlying
security declines.
During the six months ended April 30, 1999, 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, 1999, GTGSI had no open reverse repurchase agreements.
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, high quality money market instruments or other
securities 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, 1999, the Portfolios listed below had loaned common stocks which
were collateralized by cash and securities. The market value for the securities
on loan for each portfolio was as follows:
Portfolio Value
================================================================================
SBIE $51,433,697
- --------------------------------------------------------------------------------
SBPB 1,559,169
- --------------------------------------------------------------------------------
GTGSI 4,060,000
================================================================================
- --------------------------------------------------------------------------------
32 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
At April 30, 1999, the cash collateral received for these securities on loan was
invested as follows:
Smith Barney International Equity Portfolio
Security Description Value
================================================================================
Time Deposit:
National Australia Bank, 4.875% due 5/3/99 $ 2,627,005
Caisse de Depots et Consign., Paris, 4.875% due 5/3/99 2,627,005
Argentaria Caja Postal Banco Hipote, 4.875% due 5/3/99 2,627,005
Dresdner Bank Grand Cayman, 4.968% due 5/3/99 2,627,005
Caisse National de Credit Agricole, 4.937% due 5/3/99 2,627,005
CommerzBank AG, Frankfurt, 5.125% due 5/3/99 2,627,005
Southtrust Bank of Alabama, G.C., 5.000% due 5/3/99 2,073,951
Repurchase Agreement:
Merrill Lynch Sec./MLPFS, 4.987% due 5/3/99 9,816,701
NationsBanc Montgomery Sec. Inc., 4.987% due 5/3/99 10,715,413
Commercial Paper:
General Electric Credit, 4.952% due 5/3/99 2,625,921
General Motors Acc. Corp., 4.942% due 5/3/99 2,566,999
Associates First Capital, 4.942% due 5/3/99 2,625,923
Wood Street Funding Corp., 5.052% due 5/3/99 1,382,674
BP Capital PLC, 5.102% due 5/3/99 2,625,887
Barton Capital Corp., 5.102% due 5/3/99 1,727,557
Market Street Funding, 5.102% due 5/3/99 1,727,557
- --------------------------------------------------------------------------------
Total $53,650,613
================================================================================
Smith Barney Pacific Basin Portfolio
Security Description Value
================================================================================
Time Deposit:
National Australia Bank, 4.875% due 5/3/99 $ 81,232
Caisse de Depots et Consign., Paris, 4.875% due 5/3/99 81,232
Argentaria Caja Postal Banco Hipote, 4.875% due 5/3/99 81,232
Dresdner Bank Grand Cayman, 4.968% due 5/3/99 81,232
Caisse National de Credit Agricole, 4.937% due 5/3/99 81,232
CommerzBank AG, Frankfurt, 5.125% due 5/3/99 81,232
Southtrust Bank of Alabama, G.C., 5.000% due 5/3/99 64,131
Repurchase Agreement:
Merrill Lynch Sec./MLPFS, 4.987% due 5/3/99 303,552
NationsBanc Montgomery Sec. Inc., 4.987% due 5/3/99 331,342
Commercial Paper:
General Electric Credit, 4.952% due 5/3/99 81,198
General Motors Acc. Corp., 4.942% due 5/3/99 79,377
Associates First Capital, 4.942% due 5/3/99 81,199
Wood Street Funding Corp., 5.052% due 5/3/99 42,755
BP Capital PLC, 5.102% due 5/3/99 81,198
Barton Capital Corp., 5.102% due 5/3/99 53,420
Market Street Funding, 5.102% due 5/3/99 53,421
- --------------------------------------------------------------------------------
Total $ 1,658,985
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Smith Barney GT Global Strategic Income Portfolio
Security Description Value
================================================================================
Time Deposit:
National Australia Bank, 4.875% due 5/3/99 $ 208,963
Caisse de Depots et Consign., Paris, 4.875% due 5/3/99 208,963
Argentaria Caja Postal Banco Hipote, 4.875% due 5/3/99 208,963
Dresdner Bank Grand Cayman, 4.968% due 5/3/99 208,963
Caisse National de Credit Agricole, 4.937% due 5/3/99 208,963
CommerzBank AG, Frankfurt, 5.125% due 5/3/99 208,963
Southtrust Bank of Alabama, G.C., 5.000% due 5/3/99 164,971
Repurchase Agreement:
Merrill Lynch Sec./MLPFS, 4.987% due 5/3/99 780,863
NationsBanc Montgomery Sec. Inc., 4.987% due 5/3/99 852,350
Commercial Paper:
General Electric Credit, 4.952% due 5/3/99 208,877
General Motors Acc. Corp., 4.942% due 5/3/99 204,190
Associates First Capital, 4.942% due 5/3/99 208,877
Wood Street Funding Corp., 5.052% due 5/3/99 109,984
BP Capital PLC, 5.102% due 5/3/99 208,874
Barton Capital Corp., 5.102% due 5/3/99 137,418
Market Street Funding, 5.102% due 5/3/99 137,418
- --------------------------------------------------------------------------------
Total $4,267,600
================================================================================
In addition to the above noted cash collateral, the Portfolios held securities
collateral with market values of $429,660 for SBIE as of April 30, 1999.
Interest income earned by the Portfolios from securities loaned for the year
ended April 30, 1999 was as follows:
================================================================================
SBIE $80,334
- --------------------------------------------------------------------------------
SBPB 4,283
- --------------------------------------------------------------------------------
GTGSI 292
================================================================================
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. As of April 30, 1999,
58.1% of SBPB's total investments were concentrated in Japan.
- --------------------------------------------------------------------------------
34 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
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, 1999, the Portfolios did not hold any TBA securities.
12. Capital Shares
At April 30, 1999, the Fund had six billion shares of capital stock authorized
with a par value of $0.00001 per share. Each share of a Portfolio represents an
equal proportionate interest in that Portfolio with each share of the same
Portfolio and has an equal entitlement to any dividends and distributions made
by the Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
================================================================================
Smith Barney International Equity
Shares sold 20,548,099 22,047,632
Shares issued on reinvestment -- --
Shares reacquired (20,522,399) (20,807,481)
- --------------------------------------------------------------------------------
Net Increase 25,700 1,240,151
================================================================================
Smith Barney Pacific Basin
Shares sold 1,648,447 5,029,477
Shares issued on reinvestment -- 29,142
Shares reacquired (1,692,806) (5,458,082)
- --------------------------------------------------------------------------------
Net Decrease (44,359) (399,463)
================================================================================
GT Global Strategic Income
Shares sold 86,051 363,584
Shares issued on reinvestment -- 274,478
Shares reacquired (286,943) (407,668)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (200,892) 230,394
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney International
Equity Portfolio 1999(1) 1998 1997 1996 1995 1994(2)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 12.60 $ 13.23 $ 12.18 $ 10.48 $ 10.55 $ 10.00
- -------------------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment
income (loss)(3) 0.02 0.05 0.01 0.02 0.03* (0.03)
Net realized and
unrealized gain (loss) 2.15 (0.68) 1.05 1.69 (0.10) 0.58
- -------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 2.17 (0.63) 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 $ 14.77 $ 12.60 $ 13.23 $ 12.18 $ 10.48 $ 10.55
- -------------------------------------------------------------------------------------------------------------
Total Return 17.22%++ (4.76)% 8.73% 16.36% (0.66)% 5.50%++
- -------------------------------------------------------------------------------------------------------------
Net Assets, End
of Period (000s) $ 263,235 $ 224,207 $ 219,037 $ 143,323 $ 53,538 $ 13,811
- -------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(3) 0.98%+ 1.00% 1.01% 1.10% 1.44% 1.20%+
Net investment
income (loss) 0.32+ 0.37 0.09 0.23 0.25 (0.73)+
- -------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 19% 34% 38% 41% 29% --
=============================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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:
Per Share
Increase to Net Expense Ratio
Investment Loss Without Fee Waiver
--------------- ------------------
1994 $0.03 2.00%+
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.
* 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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney Pacific
Basin Portfolio 1999(1)(2) 1998(2) 1997 1996 1995 1994(3)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 6.81 $ 8.04 $ 9.75 $ 8.95 $ 10.10 $ 10.00
- -------------------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income
(loss)(4) -- -- (0.01) 0.08 (0.04)* (0.04)
Net realized and
unrealized gain (loss) 2.03 (1.14) (1.64) 0.75 (1.11) 0.14
- -------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 2.03 (1.14) (1.65) 0.83 (1.15) 0.10
- -------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment
income -- (0.09) (0.06) (0.03) -- --
- -------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.09) (0.06) (0.03) -- --
- -------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 8.84 $ 6.81 $ 8.04 $ 9.75 $ 8.95 $ 10.10
- -------------------------------------------------------------------------------------------------------------
Total Return 29.81%++ (14.09)% (17.02)% 9.26% (11.39)% 1.00%++
- -------------------------------------------------------------------------------------------------------------
Net Assets, End
of Period (000s) $ 16,127 $ 12,728 $ 18,225 $ 16,657 $ 7,122 $ 4,238
- -------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(4) 1.30%+ 1.56% 1.38% 1.34% 1.83% 1.26%+
Net investment
income (loss) (0.03)+ (0.03) (0.08) 0.47 (0.51) (0.93)+
- -------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 71% 136% 156% 59% 28% --
=============================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (unaudited).
(2) Per share amounts have been calculated using the 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 $9,778 in expenses for the period
ended October 31, 1994. If such fees were not waived and expenses not
reimbursed, the effect on the net investment loss and the expense ratios
would have been as follows:
Per Share Expense Ratio
(Increase) Without Fee Waiver,
Decrease to Net Reimbursement and
Investment Income (Loss) Custody Credits
------------------------ ---------------
1996 $0.02 1.58%
1995 0.03 2.23
1994 0.06 2.82+
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.
* 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 year ended October 31,
except where noted:
<TABLE>
<CAPTION>
GT Global Strategic
Income Portfolio 1999(1)(2) 1998 1997(2) 1996 1995 1994(3)
============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 10.97 $ 12.52 $ 12.45 $ 10.77 $ 9.95 $ 10.00
- ------------------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment
income(4) 0.39 0.84 0.75 0.74 0.64* 0.17
Net realized and
unrealized gain (loss) (0.14) (1.09) 0.36 1.36 0.28 (0.22)
- ------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.25) (0.25) 1.11 2.10 0.92 (0.05)
- ------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.66) (0.46) (0.42) (0.10) --
Net realized gains -- (0.64) (0.58) -- -- --
- ------------------------------------------------------------------------------------------------------------
Total Distributions -- (1.30) (1.04) (0.42) (0.10) --
- ------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 11.22 $ 10.97 $ 12.52 $ 12.45 $ 10.77 $ 9.95
- ------------------------------------------------------------------------------------------------------------
Total Return 2.28%++ (2.50)% 9.32% 20.07% 9.37% (0.50)%++
- ------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000s) $ 26,540 $ 28,131 $ 29,232 $ 19,152 $ 8,397 $ 2,624
- ------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(4) 1.07%+ 1.03% 1.07% 1.23% 1.47% 1.07%+
Net investment
income 5.93+ 7.31 6.05 6.87 6.44 4.58+
- ------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 84% 280% 161% 192% 295% 56%
============================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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:
Expense Ratio
Without Fee Waiver,
Per Share Decreases Reimbursement and
to Net Investment Income Custody Credits
------------------------ ---------------
1996 $0.02 1.38%
1995 0.04 1.93
1994 0.13 4.53+
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 1999 Semi-Annual Report to Shareholders
<PAGE>
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<PAGE>
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<PAGE>
SALOMON SMITH BARNEY
---------------------------
A member of citigroup[LOGO]
Directors
Victor K. Atkins
A. E. Cohen
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Jeffrey J. Russell
Vice President
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Managers
SSBC Fund Management Inc.
Travelers Investment Advisers, Inc.
Custodian
The Chase Manhattan Bank
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Travelers Series Fund Inc. -- Smith Barney International Equity, Smith Barney
Pacific Basin and GT Global Strategic Income Portfolios. It is not authorized
for distribution to prospective investors unless accompanied or preceded by a
current Prospectus for the Portfolios, which contains information concerning the
Portfolios' investment policies and expenses as well as other pertinent
information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
www.smithbarney.com
IN0802 6/99
<PAGE>
[GRAPHIC]
Travelers Series Fund Inc.
MFS Total Return Portfolio
Travelers Managed Income Portfolio
Smith Barney Money Market Portfolio
- ------------------
SEMI-ANNUAL REPORT
- ------------------
April 30, 1999
Smith Barney Mutual Funds
<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 Portfolio, Travelers Managed Income Portfolio (formerly
known as TBC Managed Income Portfolio) and Smith Barney Money Market Portfolio
("Portfolios") for the period ended April 30, 1999. 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. We
hope you find this report to be useful and informative.
Portfolio Highlights
MFS Total Return Portfolio
The primary investment objective of the MFS Total Return 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 because many of the
securities under consideration offering a better-than-average yield may also
possess growth potential.
For the period ended April 30, 1999 the Portfolio provided a total return of
9.24%. This compares to a 22.31% return for the Standard and Poor's 500
Composite Stock Index ("S&P 500"), a popular, unmanaged index of common stock
total return performance, and to a negative 0.12% 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.
During the reporting period, the managers increased the Portfolio's stock
allocation to around 60% of assets as the market rose this winter. The price
difference between value and growth stocks widened, so the managers believed
they were able to find some good companies selling at attractive prices. They
added names such as PNC Bank and Bank of New York. To the managers, the
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
banks looked particularly inexpensive in January. In addition, the investment
team recently added Allstate, which they believe is a great franchise. Although
Allstate had some earnings difficulties over the past few quarters, the managers
believe that the company's basic businesses are sound.
Why are banks currently attractive to the managers? In their view, financial
stocks have been getting more interest from investors, partly because of the
possibility of higher rates, which would help their earnings, but also because
of industry consolidation. Transamerica, for example, is being acquired by
Aegon; and Equitable continues to be a big position in the Portfolio. According
to the investment team, Equitable is a model for what many other financial
services companies are trying to become. It has a solid money management
business and it owns Donaldson Lufkin & Jenrette, a well-run brokerage outfit.
Moreover, Equitable's basic insurance operation has done quite well in the
annuity area. In their view, American Express has also been a great stock. The
company has been reaching its sales targets and making double-digit earnings
growth.
Energy is another sector that the managers currently favor. In the view of the
managers, inflation has gotten so low that it cannot go any lower and they are
starting to see oil prices go up slightly, in part because oil-producing
countries are taking steps to curtail production.
With respect to the Portfolio's bond portion, the managers lowered its duration,
or interest-rate sensitivity, during the reporting period. That is because the
economy is still growing strongly, unemployment is low and commodity prices may
have bottomed out. The investment team has seen lower capital expenditures for
basic materials companies. When that happens, supply usually shrinks and prices
go up. As a result, the Portfolio's managers have become more concerned about
inflation rising a little, which could lead to higher interest rates and lower
prices for bonds.
Travelers Managed Income Portfolio
On December 1, 1998, Travelers Asset Management International Corporation
("TAMIC") assumed management of the Portfolio. The Portfolio also changed its
name to Travelers Managed Income Portfolio to reflect this new management team.
For the six months ended April 30, 1999, the Portfolio returned 1.72%. In
comparison, the Lehman Intermediate Government/Corporate Bond Index returned a
negative 0.12%.
Major bond markets began to stabilize in the past six months following the
upheavals triggered by Russia's debt default in August 1998. Escalating concerns
of how the fallout might eventually effect U.S. and European economies led
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
many investors to avoid risk and shift assets into government securities such as
U.S. Treasury bonds. This renewed interest in U.S. Treasury bonds sent their
yields, which move inversely to their prices, tumbling to a 30-year low of 4.69%
on October 5, 1998. In contrast, many other fixed-income securities lost ground
during this time causing their yields to widen relative to U.S.
Treasury securities.
As fears of a worsening global recession subsided, market interest rates began
to rise. Long-term U.S. Treasury bond yields rose from 5.23% on October 31, 1998
to 5.66% on April 30, 1999. Moreover, the U.S. economy continued to expand
vigorously, defying the expectations of many economists. The domestic economy
grew at an annual rate of roughly 3.5% in the first quarter of 1999, coming off
the heels of a brisk 6% annual growth rate for the fourth quarter of 1998. This
unexpected strength in the U.S. economy revived inflation fears among many
investors and drove interest rates higher.
The sharp rise in interest rates in the first quarter of 1999 created difficult
conditions for many bond investors. The Lehman Brothers Government/Corporate
Index posted a negative 1.2% return for the first quarter of 1999. Losses for
longer-maturity bonds, which tend to be more interest rate sensitive, were even
greater. The Lehman Brothers Long Government Index lost 4.22% during the same
period. However, mortgage-backed securities recovered strongly, posting a gain
of 2.52% for the six months ended April 30, 1999 and outperformed most other
government issues.
Since assuming management responsibility, TAMIC has made a number of changes to
the Portfolio. The Portfolio's restructuring was designed to help reduce risk
and provide more consistent returns. The Portfolio's holdings were reduced from
approximately 170 issues to roughly 40, more liquid securities. Moreover, the
Portfolio's duration was shortened significantly since December 1, 1999.
(Duration is a measure of a security's sensitivity to change in interest rates.
The higher the number, the greater sensitivity to interest rate volatility.) In
addition, the average credit quality was increased from mid-triple "BBB" rating
at the beginning of the reporting period to "A+" as of April 30, 1999. The
Portfolio's managers also placed a greater emphasis on high-quality corporate
bonds because of their greater yield potential.
Smith Barney Money Market Portfolio
During the six months ended April 30, 1999, the U.S. economy continued to grow
and the outlook remained positive as the managers headed into the second quarter
of 1999. The Gross Domestic Product, the output of all goods and services, grew
at roughly a 4.5% annual rate in the first quarter of 1999. This came on the
heels of a 6.0% rate in the fourth quarter of 1998. We are now in the ninth year
of economic expansion, the result of solid output, low interest rates
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
and negligible inflation. These factors, in conjunction with improvements in the
economies of foreign nations, have prompted a rebound in the stock market from
last summer. Consumer spending, fueled by the wealth effect of the market and
rising incomes, helped support already strong housing and retail markets. Growth
too became broader based, as we saw signs of a rebound in the manufacturing
sector.
Please note that an investment in the Portfolio is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Portfolio seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the Portfolio.
In recent remarks, Federal Reserve ("Fed") Chairman Alan Greenspan has discussed
the general strength of the U.S. economy at the historically low levels of
unemployment, currently 4.3%, and the inflation risks that may be associated
with a strong economy. There has been concern that the current growth rate of
the economy, with labor markets as tight as they are, will eventually create
wage pressures. One factor that has prevented this from happening has been the
growth in labor productivity. For all of last year, productivity increased 2.2%,
up from 1.2% in 1997. What this suggests is that businesses are able to offset
higher labor costs, without increasing prices.
Short-term interest rates have remained relatively stable and have not reflected
any perceived future rate increases by the Fed. Given the vigor of our domestic
economy, and the promising global picture, the managers think that it is likely
that the Fed will remain very sensitive to any signs of inflation, increasing
the likelihood that the next Fed move will be to slightly raise interest rates.
Over the last few months the managers have shortened the average maturity of the
Portfolio from 45 days to 35 days to take advantage of any increase in yields.
In closing, thank you for investing in the Travelers Series Fund Inc. We look
forward to helping you pursue your investment goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 25, 1999
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
MFS Total Return Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
4/30/99 $16.23 $17.73 $0.00 $0.00 9.24%++
- --------------------------------------------------------------------------------
10/31/98 15.31 16.23 0.28 0.48 10.94
- --------------------------------------------------------------------------------
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 $0.89 $0.74
================================================================================
- --------------------------------------------------------------------------------
Travelers Managed Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Period Ended of Period Period Dividends Distribution Returns+
================================================================================
4/30/99 $11.65 $11.85 $0.00 $0.00 1.72%++
- --------------------------------------------------------------------------------
10/31/98 11.55 11.65 0.54 0.02 5.71
- --------------------------------------------------------------------------------
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 $1.62 $0.17
================================================================================
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
Six Months Ended 4/30/99++ 9.24% 1.72%
- --------------------------------------------------------------------------------
Year Ended 4/30/99 8.38 3.41
- --------------------------------------------------------------------------------
6/16/94* through 4/30/99 15.11 6.98
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Returns+
- --------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
6/16/94* through 4/30/99 98.51% 38.96%
================================================================================
+ 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 1999 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 1999
[LINE GRAPH]
Lehman Brothers
MFS Total Return Government/Corporate
Portfolio S&P 500 Index Bond Index
6/16/94 10,000 10,000 10,000
10/94 9,980 10,324 10,075
10/95 11,589 13,053 11,704
10/96 13,577 16,018 12,335
10/97 16,380 21,159 13,423
10/98 18,172 25,817 14,802
4/30/99 19,851 31,576 14,784
+ 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, 1999. 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
Travelers Managed Income Portfolio vs.
Lehman Brothers Aggregate Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE GRAPH]
TBC Managed Income Lehman Brothers
Portfolio Aggregate Bond Index
6/16/94 10,000 10,000
10/94 10,040 10,052
10/95 11,313 11,626
10/96 11,835 12,305
10/97 12,923 13,399
10/98 13,661 14,651
4/30/99 13,896 14,752
+ Hypothetical illustration of $10,000 invested in shares of the Travelers
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, 1999. The Lehman Brothers Aggregate Bond Index is
comprised of over 6,500 issues of U.S. Treasury and Agency securities,
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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
DOMESTIC COMMON STOCKS -- 52.2%
Aerospace -- 1.6%
11,300 General Dynamics Corp. $ 793,825
45,006 Raytheon Co., Class A Shares 3,113,853
26,900 Raytheon Co., Class B Shares 1,889,725
66,700 TRW Inc. 2,797,231
6,200 United Technologies Corp. 898,225
- --------------------------------------------------------------------------------
9,492,859
- --------------------------------------------------------------------------------
Automotive -- 0.7%
56,100 Delphi Automotive Systems+ 1,090,444
45,800 Ford Motor Co. 2,928,337
- --------------------------------------------------------------------------------
4,018,781
- --------------------------------------------------------------------------------
Banks & Credit Companies -- 2.3%
108,400 Bank of New York Co., Inc. 4,336,000
13,100 National City Corp. 939,925
68,900 PNC Bank Corp. 3,987,587
14,000 Washington Mutual Bank 575,750
87,000 Wells Fargo Co. 3,757,313
- --------------------------------------------------------------------------------
13,596,575
- --------------------------------------------------------------------------------
Building -- 0.2%
30,000 Stanley Works 913,125
- --------------------------------------------------------------------------------
Business Machines -- 2.0%
41,300 Hewlett-Packard Co. 3,257,538
20,100 International Business Machines Corp. 4,204,669
51,700 Motorola Inc. 4,142,462
- --------------------------------------------------------------------------------
11,604,669
- --------------------------------------------------------------------------------
Business Services -- 0.1%
7,800 CVS Trust Automatic Common Exchange Securities 663,487
- --------------------------------------------------------------------------------
Cellular Phones -- 0.4%
37,900 Telephone & Data Systems Inc. 2,269,263
- --------------------------------------------------------------------------------
Chemicals -- 0.9%
16,600 Dow Chemical Co. 2,177,712
11,400 E.I. Du Pont de Nemours 805,125
45,800 Rohm & Haas Co. 2,052,413
- --------------------------------------------------------------------------------
5,035,250
- --------------------------------------------------------------------------------
Communication Services -- 4.2%
15,000 Alltel Corp. 1,011,563
55,200 American Telephone & Telegraph Corp. 2,787,600
30,900 Bell Atlantic Corp. 1,780,613
133,200 GTE Corp. 8,916,075
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Communication Services -- 4.2% (continued)
106,924 SBC Communications Inc. $ 5,987,744
43,300 Sprint Corp., (FON Group) 4,440,956
- --------------------------------------------------------------------------------
24,924,551
- --------------------------------------------------------------------------------
Computer Software - Systems -- 0.3%
38,100 BMC Software Inc.+ 1,640,681
- --------------------------------------------------------------------------------
Conglomerates -- 1.6%
138,900 AlliedSignal Inc. 8,160,375
14,728 Tyco International Ltd. 1,196,650
- --------------------------------------------------------------------------------
9,357,025
- --------------------------------------------------------------------------------
Consumer Goods & Services -- 1.2%
66,000 Fortune Brands Inc. 2,607,000
53,900 Kimberly-Clark Corp. 3,304,744
42,600 Philip Morris Cos. Inc. 1,493,662
- --------------------------------------------------------------------------------
7,405,406
- --------------------------------------------------------------------------------
Electrical Equipment - Utilities -- 1.0%
70,300 Emerson Electric Co. 4,534,350
8,700 General Electric Co. 917,850
11,000 Hubbell Inc., Class B Shares 525,937
- --------------------------------------------------------------------------------
5,978,137
- --------------------------------------------------------------------------------
Entertainment -- 2.6%
20,300 Eastman Kodak Co. 1,514,887
49,100 MediaOne Group Inc.+ 4,004,719
25,000 MGM Grand Inc.+ 1,100,000
90,800 Time Warner Inc. 6,356,000
77,500 Walt Disney Co. 2,460,625
- --------------------------------------------------------------------------------
15,436,231
- --------------------------------------------------------------------------------
Financial Institutions -- 2.8%
78,400 A.G. Edwards Inc. 2,744,000
34,900 American Express Co. 4,560,994
51,500 Federal Home Loan Mortgage Corp. 3,231,625
57,500 Mellon Bank Corp. 4,272,969
15,000 Morgan Stanley Dean Witter & Co. 1,487,812
- --------------------------------------------------------------------------------
16,297,400
- --------------------------------------------------------------------------------
Food & Beverages -- 1.6%
224,825 Archer-Daniels-Midland Co. 3,372,375
36,900 General Mills Inc. 2,698,312
20,200 Hershey Foods Corp. 1,063,025
24,000 Hormel Foods Corp. 882,000
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Food & Beverages -- 1.6% (continued)
29,600 McCormick & Co., Inc. $ 897,250
4,500 Quaker Oats Co. 290,531
- --------------------------------------------------------------------------------
9,203,493
- --------------------------------------------------------------------------------
Forest & Paper Products -- 1.8%
38,300 Bowater Inc. 2,053,837
69,500 Champion International Corp. 3,800,781
30,300 International Paper Co. 1,615,369
42,500 Weyerhaeuser Co. 2,852,813
- --------------------------------------------------------------------------------
10,322,800
- --------------------------------------------------------------------------------
Health Care -- 2.8%
40,300 American Home Products Corp. 2,458,300
11,900 Baxter International Inc. 749,700
24,800 Bristol-Myers Squibb Co. 1,576,350
147,000 Columbia HCA Healthcare 3,629,062
23,800 Glaxo Holdings PLC, ADR 1,386,350
31,400 Pharmacia & Upjohn Inc. 1,758,400
50,300 Smithkline Beecham, ADR 3,304,081
23,800 United Healthcare Corp. 1,335,775
- --------------------------------------------------------------------------------
16,198,018
- --------------------------------------------------------------------------------
Insurance -- 6.1%
75,100 Allstate Corp. 2,731,762
67,800 Chubb Corp. 4,017,150
47,600 Cigna Corp. 4,150,125
122,700 The Equitable Cos., Inc. 8,259,244
78,600 Hartford Financial Services Group, Inc. 4,632,487
36,250 Jefferson-Pilot Corp. 2,442,344
64,500 Lincoln National Corp. 6,196,031
53,500 ReliaStar Financial Corp. 1,966,125
13,100 Torchmark Corp. 447,856
15,600 Transamerica Corp. 1,111,500
- --------------------------------------------------------------------------------
35,954,624
- --------------------------------------------------------------------------------
Metals & Minerals -- 0.4%
43,300 Alcoa Inc. 2,695,425
- --------------------------------------------------------------------------------
Oil Production -- 6.7%
99,103 BP Amoco PLC, ADR 11,217,221
28,900 Chevron Corp. 2,882,775
149,500 Coastal Corp. 5,718,375
85,900 Conoco Inc., Class A Shares 2,330,038
18,800 Exxon Corp. 1,561,575
45,700 Mobil Corp. 4,787,075
140,500 Noble Drilling Corp.+ 2,757,312
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Oil Production -- 6.7% (continued)
45,000 Royal Dutch Petroleum Co., ADR $ 2,640,937
8,900 Schlumberger Ltd. 568,488
44,900 Texaco Inc. 2,817,475
55,400 Unocal Corp. 2,302,563
- --------------------------------------------------------------------------------
39,583,834
- --------------------------------------------------------------------------------
Pollution Control -- 0.4%
54,100 Browning-Ferris Industries Inc. 2,157,238
- --------------------------------------------------------------------------------
Printing & Publishing -- 0.9%
44,700 Gannett Co., Inc 3,165,319
60,200 New York Times Co., Class A Shares 2,076,900
- --------------------------------------------------------------------------------
5,242,219
- --------------------------------------------------------------------------------
Railroads -- 1.0%
69,600 Burlington Northern Santa Fe Corp. 2,549,100
16,900 Canadian National Railway Co. 1,066,813
59,500 Norfolk Southern Corp. 1,944,906
- --------------------------------------------------------------------------------
5,560,819
- --------------------------------------------------------------------------------
Real Estate -- 0.3%
15,000 Boston Properties Inc. 544,687
55,000 Trinet Corporate Realty Trust, Inc. 1,509,063
- --------------------------------------------------------------------------------
2,053,750
- --------------------------------------------------------------------------------
Retail Stores -- 1.5%
87,000 American Stores Co. 2,745,937
78,800 Dayton-Hudson Corp. 5,304,225
29,900 Rite Aid Corp. 697,044
- --------------------------------------------------------------------------------
8,747,206
- --------------------------------------------------------------------------------
Special Products & Services -- 1.9%
6,600 Illinois Tool Works 508,200
150,500 McDonald's Corp. 6,377,438
72,000 Xerox Corp. 4,230,000
- --------------------------------------------------------------------------------
11,115,638
- --------------------------------------------------------------------------------
Supermarkets -- 0.5%
51,200 Fred Meyer Inc.+ 2,771,200
- --------------------------------------------------------------------------------
Utilities - Electric -- 3.0%
83,000 Carolina Power & Light Co. 3,345,937
42,000 CMS Energy Corp. 1,848,000
60,600 GPU Inc. 2,310,375
27,000 PacifiCorp 450,563
73,300 Pinnacle West Capital Corp. 2,844,956
60,600 Sempra Energy 1,257,450
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Utilities - Electric -- 3.0% (continued)
40,000 Sierra Pacific Resources $ 1,425,000
92,800 Southern Co. 2,511,400
34,000 Texas Utilities Co. 1,351,500
- --------------------------------------------------------------------------------
17,345,181
- --------------------------------------------------------------------------------
Utilities - Gas -- 1.4%
58,400 Columbia Energy Group 2,806,850
48,900 Eastern Enterprises 1,757,344
51,100 Sonat Inc. 1,826,825
41,000 UGI Corp. 704,688
49,200 Washington Gas Light Co. 1,159,275
- --------------------------------------------------------------------------------
8,254,982
- --------------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(Cost -- $263,950,837) 305,839,867
================================================================================
CONVERTIBLE PREFERRED STOCK -- 2.2%
Consumer Goods & Services -- 0.6%
31,000 Newell Financial Trust, 5.250%++ 1,770,875
30,500 Newell Financial Trust, 5.250% 1,742,313
- --------------------------------------------------------------------------------
3,513,188
- --------------------------------------------------------------------------------
Insurance -- 0.4%
90,200 Lincoln National Corp., 7.750% 2,390,300
- --------------------------------------------------------------------------------
Railroad -- 0.5%
51,300 Union Pacific Cap. Trust, 6.250% 2,802,262
- --------------------------------------------------------------------------------
Utilities - Electric -- 0.3%
30,500 Texas Utilities Co., 9.250% 1,568,844
- --------------------------------------------------------------------------------
Utilities - Gas -- 0.4
46,500 El Paso Energy Cap., 4.750% 2,394,750
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost -- $11,829,054) 12,669,344
================================================================================
PREFERRED STOCK -- 0.1%
Printing & Publishing -- 0.1%
16,000 NB Capital Corp., 8.350% (Cost -- $400,000) 416,000
================================================================================
FOREIGN COMMON STOCK -- 2.1%
Netherlands -- 1.4%
70,900 Akzo Nobel NV 3,206,770
84,921 Ing Groep NV 5,238,044
- --------------------------------------------------------------------------------
8,444,814
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Switzerland -- 0.7%
2,200 Nestle SA $ 4,079,211
- --------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(Cost -- $12,581,108) 12,524,025
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
CORPORATE BONDS -- 21.1%
Airlines -- 1.2%
$1,895,000 AA- Atlas Air Inc., 7.200% due 1/2/19 1,901,632
Continental Airlines Inc.:
290,000 Ba2 9.500% due 12/15/01 297,975
372,211 BBB+ 9.500% due 10/15/13 406,380
92,995 Baa1 10.220% due 7/2/14 103,057
148,461 AA+ 6.648% due 3/15/19 148,313
1,000,000 AA+ 6.545% due 8/2/20 992,900
Jet Equipment Trust:
250,000 A+ 9.410% due 6/15/10++ 286,132
184,780 A+ 8.640% due 11/1/12++ 201,797
100,000 Baa1 10.690% due 11/1/13++ 122,610
300,000 BBB 11.440% due 11/1/14++ 377,610
Northwest Airlines Inc.:
535,000 BB 7.625% due 3/15/05 499,556
205,000 BB 8.700% due 3/15/07 200,131
1,500,000 AA 6.810% due 3/15/07 1,482,750
- --------------------------------------------------------------------------------
7,020,843
- --------------------------------------------------------------------------------
Automotive -- 0.6%
785,000 BBB Amerco, 7.850% due 5/15/03 794,813
Federal-Mogul:
500,000 BB+ 7.500% due 7/1/04 499,375
175,000 BB+ 7.750% due 7/1/06 175,438
1,929,000 BB+ 7.500% due 1/15/09++ 1,890,420
425,000 A1 Ford Motor Co., 8.900% due 1/15/32 524,875
- --------------------------------------------------------------------------------
3,884,921
- --------------------------------------------------------------------------------
Bank/Finance -- 5.5%
1,215,000 A Ahold Finance USA Inc., 6.250% due 5/1/09 1,206,981
801,000 A- Aristar Inc., 5.850% due 1/27/04 784,980
Associates Corp., NA:
510,000 AA- 5.750% due 11/1/03 504,900
1,511,000 AA- 5.500% due 2/15/04 1,482,669
2,000,000 A Bear Stearns Cos. Inc., 6.150% due 3/2/04 1,995,000
1,425,000 BB- Beaver Valley Funding Corp., 9.000% due 6/1/17 1,603,125
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Bank/Finance -- 5.5% (continued)
$ 400,000 BB+ Capital One Financial Corp., 7.250%
due 12/1/03 $ 406,500
400,000 BB Colonial Capital II, 8.920% due 1/15/27 391,500
540,000 A Countrywide Home Loan, 6.250% due 4/15/09 524,729
815,000 A- Donaldson Lufkin & Jenrette, 5.875% due 4/1/02 810,925
280,000 BBB- First Empire Capital Trust, 8.234% due 2/1/27 287,700
Ford Motor Credit:
2,000,000 A1 5.750% due 2/23/04 1,980,000
3,900,000 A1 5.800% due 1/12/09 3,739,125
917,000 A General Motors Accept Corp., 6.150% due 4/5/07 915,854
4,000,000 A+ Goldman Sachs Group, 5.900% due 1/15/03++ 3,980,000
GS Escrow Corp.:
2,085,000 BB+ 6.750% due 8/1/01 2,092,819
1,470,000 BB+ 7.125% due 8/1/05 1,479,188
3,800,000 BBB Marlin Water Trust, 7.090% due 12/15/01++ 3,809,500
500,000 BBB Newcourt Credit Group, 6.875% due 2/16/05++ 511,875
Providian National Bank:
500,000 BBB- 6.700% due 3/15/03 501,875
2,000,000 BBB- 6.650% due 2/1/04 2,007,500
400,000 BB+ Riggs National Bank Corp., 8.500% due 2/1/06 417,000
600,000 BBB- Washington Mutual Capital Trust, 8.375%
due 6/1/27 641,250
- --------------------------------------------------------------------------------
32,074,995
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations -- 1.9%
859,000 AAA American Express Credit Account Master Trust, 852,558
5.600% due 11/15/06
1,041,430 AAA Beneficial Mortgage Corp., 5.020%
due 9/28/37# 1,039,867
383,506 Baa2* Blackrock Capital Finance LLC, 7.750%
due 9/25/26++ 295,838
2,150,000 A CRIIMI MAE Commercial Mortgage Trust,
7.000% due 3/2/11++ 1,946,085
1,001,000 AAA Discover Card Master Trust I, 5.650%
due 11/16/04 998,576
925,000 AAA Ford Credit Auto Owner Trust, 5.310%
due 4/16/01 914,363
424,649 NR Government National Mortgage Association,
8.000% due 6/20/25 434,407
377,000 AAA Illinois Power Special Purpose Trust, 5.260%
due 6/25/03 374,997
Residential Accredit Loan, Inc.:
1,300,000 AAA 7.000% due 3/25/28 1,310,969
1,740,000 AAA 6.750% due 10/25/28 1,733,475
1,359,000 AAA Sears Credit Account Master Trust, 5.650%
due 3/17/09 1,338,615
- --------------------------------------------------------------------------------
11,239,750
- --------------------------------------------------------------------------------
Consumer Goods & Services -- 0.5%
400,000 BBB Fingerhut Cos., 7.375% due 9/15/99 402,000
224,000 NR Jones Apparel, 6.250% due 10/1/01++ 221,200
55,000 A Lowe's Cos., 6.875% due 2/15/28 54,794
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Consumer Goods & Services -- 0.5% (continued)
$ 280,000 BBB Nabisco Inc., 6.375% due 2/1/05 $ 273,000
1,390,000 BBB- Protection One Alarm, 7.375% due 8/15/05 1,360,463
Tommy Hilfiger USA Inc.:
430,000 BBB- 6.500% due 6/1/03 419,250
330,000 BBB- 6.850% due 6/1/08 323,400
- --------------------------------------------------------------------------------
3,054,107
- --------------------------------------------------------------------------------
Entertainment/Media -- 1.7%
1,803,000 BBB- Hearst Argyle TV Inc., 7.500% due 11/15/27 1,800,746
1,565,000 BBB- J Seagram & Sons, 6.400% due 12/15/03 1,561,087
1,073,000 BBB- News America Holdings, 6.703% due 5/21/04 1,094,460
Time Warner Inc.:
4,780,000 BBB 6.100% due 12/30/01++ 4,809,875
705,000 BBB 10.150% due 5/1/12 912,975
- --------------------------------------------------------------------------------
10,179,143
- --------------------------------------------------------------------------------
Food & Beverage Product -- 0.1%
30,000 A1 Pepsi Bottling Holdings Inc., 5.625%
due 2/17/09++ 28,650
697,000 A- Whitman Corp., 6.375 due 5/1/09 690,030
- --------------------------------------------------------------------------------
718,680
- --------------------------------------------------------------------------------
Forest & Paper Products -- 0.1%
200,000 BBB2 Georgia-Pacific Corp., 9.875% due 11/1/21 217,500
200,000 B+ The Timberlands Co., 9.625% due 11/15/07 204,500
- --------------------------------------------------------------------------------
422,000
- --------------------------------------------------------------------------------
Gaming -- 0.1%
400,000 BBB- Circus Circus Enterprise, 6.700% due 11/15/96 381,000
- --------------------------------------------------------------------------------
Insurance -- 0.4%
974,000 A AFLAC Inc., 6.500% due 4/15/09++ 961,825
176,000 BBB Atlantic Mutual Ins. Co., 8.150% due 2/15/28++ 163,460
600,000 BBB Conseco Inc., 6.400% due 6/15/01 592,500
741,000 B+ Providian Capital I, 9.525% due 2/1/27++ 722,475
- --------------------------------------------------------------------------------
2,440,260
- --------------------------------------------------------------------------------
Medical & Health Products -- 0.1%
355,000 BBB Bausch & Lomb Inc., 6.500% due 8/1/05 346,125
- --------------------------------------------------------------------------------
Medical Services -- 0.1%
160,000 BBB Columbia Healthcare Corp., 6.875% due 7/15/01 156,200
- --------------------------------------------------------------------------------
Oil/Oil Services -- 1.3%
658,000 BBB+ Anadarko Petroleum Corp., 7.200% due 3/15/29 641,550
320,000 A- Conoco Inc., 5.900% due 4/15/04 318,400
885,000 BB+ Husky Oil Ltd., 8.900% due 8/15/28 862,875
985,000 BBB- McDermott Inc., 9.375% due 3/15/02 1,045,331
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Oil/Oil Services -- 1.3% (continued)
$ 693,000 BBB Occidental Petroleum Corp., 10.125%
due 11/15/01 $ 752,771
500,000 Baa1 ORYX Energy Co., 8.375% due 7/15/04 538,750
3,377,000 A- Phillips Petroleum Co., 7.000% due 3/30/29 3,343,230
216,000 BB+ Seagull Energy, 7.500% due 9/15/27 177,660
115,000 BBB Ultramar Diamond Shamrock, 7.200% due 10/15/17 114,569
- --------------------------------------------------------------------------------
7,795,136
- --------------------------------------------------------------------------------
Railroad -- 0.2%
1,435,000 BBB- Union Pacific Corp., 6.340% due 11/25/03 1,429,618
- --------------------------------------------------------------------------------
Stores -- 1.5%
355,000 Baa1 Dillards Inc., 7.130% due 8/1/18 352,338
Federated Department Stores:
1,725,000 BBB+ 8.500% due 6/15/03 1,869,469
1,070,000 BBB+ 6.300% due 4/1/09 1,049,937
5,000,000 Baa3 Saks Inc., 8.250% due 11/15/08 5,412,500
- --------------------------------------------------------------------------------
8,684,244
- --------------------------------------------------------------------------------
Telecommunications -- 2.4%
AT&T Capital Corp.:
809,000 BBB 6.250% due 5/15/01 815,068
2,000,000 BBB 7.250% due 11/15/00 2,048,380
857,000 AA- AT&T Corp., 6.000% due 3/15/09 837,718
1,600,000 BB- Century Communications Corp.,
zero coupon bond to yield 8.788% due 1/15/08 768,000
1,571,000 BBB- Continental Cablevision, 11.000% due 6/1/07 1,661,332
3,290,000 BB+ CSC Holdings, 7.625% due 7/15/18 3,310,562
1,000,000 B FrontierVision LP, 11.000% due 10/15/06 1,125,000
MCI WorldCom Inc.:
100,000 BBB+ 8.875% due 1/15/06 107,625
412,000 BBB+ 6.950% due 8/15/28 407,880
817,000 BBB+ Sprint Capital Corp., 5.875% due 5/1/04 808,830
1,825,000 A TCI Communication, 9.650% due 3/31/27 2,151,219
- --------------------------------------------------------------------------------
14,041,614
- --------------------------------------------------------------------------------
Utilities -- 3.4%
Calenergy Co. Inc.:
10,000 BBB- 7.230% due 9/15/05 10,338
667,000 BBB- 9.500% due 9/15/06 746,206
5,000 BBB- 7.520% due 9/15/08 5,275
2,600,000 BBB- CE Generation LLC, 7.416% due 12/15/08++ 2,619,500
Cleveland Electric Illumination:
500,000 BB+ 7.880% due 11/1/17 530,000
203,000 BB+ 9.000% due 7/1/23 214,926
1,900,000 BB CMS Energy Corp., 6.750% due 1/15/04++ 1,869,125
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Utilities -- 3.4% (continued)
Connecticut Lighting & Power Co.
$1,500,000 N/R 8.590% due 6/5/03++ $ 1,534,800
500,000 BB+ 7.875% due 10/1/24 518,750
135,000 BB+ El Paso Electric Co., 8.900% due 2/1/06 152,550
544,000 BBB+ Entergy Mississippi Inc., 5.645% due 5/3/04 543,037
628,288 BBB- GG1B Funding Corp., 7.430% due 1/15/11 640,853
MidAmerican Funding LLC:
780,000 BBB+ 5.850% due 3/1/01++ 780,000
440,000 BBB+ 6.927% due 3/1/29++ 433,950
109,000 BB Midland Funding II, 11.750% due 7/23/05 123,170
2,400,000 BB+ Niagara Mohawk Power Corp.,
zero coupon bond to yield 6.963% due 7/1/10 1,911,000
Niagara Mohawk Power Corp.:
650,000 BB+ 7.250% due 10/1/02 665,437
411,000 BBB 7.750% due 5/15/06 436,174
1,018,000 BBB- 8.770% due 1/1/18 1,081,625
450,000 BBB 8.750% due 4/1/22 478,688
140,000 BBB 8.500% due 7/1/23 147,000
163,000 B+ North Atlantic Energy, 9.050% due 6/1/02 164,426
230,942 B+ Northeast Utilities, 8.580% due 12/1/06 232,386
Salton Sea Funding:
80,436 BBB 7.370% due 5/30/05 83,050
1,100,000 BBB 7.840% due 5/30/10 1,164,625
1,724,331 BBB- Seabrook, 7.830% due 1/2/19 1,720,365
215,000 BBB Tennessee Gas Pipeline Co., 7.000% due 10/15/28 212,850
400,000 Baa1 Texas Gas Transmission Corp., 7.250%
due 7/15/27 403,500
400,000 BB+ Toledo Edison, 7.875% due 8/1/04 417,500
100,000 BBB Utilicorp United Inc., 8.450% due 11/15/99 101,500
316,692 BBB- Waterford 3 Funding - Entergy, 8.090%
due 1/2/17 327,777
- --------------------------------------------------------------------------------
20,270,383
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $125,063,225) 124,139,019
================================================================================
CONVERTIBLE CORPORATE BONDS -- 1.1%
3,350,000 A+ Bell Atlantic Financial Service, 4.250%
due 9/15/05++ 3,697,730
740,000 BBB- HealthSouth Corp., 3.250% due 4/1/03 634,550
1,670,000 A- Xerox Corp., 0.570% due 4/21/18++ 997,825
2,290,000 A- Xerox Corp., 0.570% due 4/21/18 1,436,975
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost -- $6,742,013) 6,767,080
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
FOREIGN BONDS -- 0.2%
Colombia -- 0.1%
$ 245,000 BBB- Republic of Colombia, 10.986% due 8/13/05 $ 234,588
- --------------------------------------------------------------------------------
Finland -- 0.1%
140,000 BBB+ UPM Kymmene Corp., 7.450% due 11/26/27++ 135,450
- --------------------------------------------------------------------------------
TOTAL FOREIGN BONDS
(Cost -- $384,294) 370,038
================================================================================
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 11.8%
535,000 U.S. Treasury Note, 5.875% due 11/15/05 550,001
5,385,000 U.S. Treasury Note, 6.500% due 10/15/06 5,737,394
275,000 U.S. Treasury Note, 4.750% due 11/15/08 262,796
100,000 U.S. Treasury Bond, 9.875% due 11/15/15 141,740
13,430,000 U.S. Treasury Bond, 6.375% due 8/15/27@ 14,339,480
2,616,000 U.S. Treasury Bond, 6.125% due 11/15/27 2,707,743
1,795,000 U.S. Treasury Bond, 5.500% due 8/15/28 1,709,684
440,000 U.S. Treasury Bond, 5.250% due 11/15/28 407,141
6,125,000 U.S. Treasury Bond, 5.250% due 2/15/29 5,756,520
2,100,000 Federal Home Mortgage Corp.
6.500% due 8/13/27(b) 2,088,828
6,299,370 Federal Home Mortgage Corp.
6.500% due 4/1/29 6,269,826
1,400,000 Federal National Mortgage Association,
5.722% due 3/25/09 1,358,438
4,045,212 Federal National Mortgage Association,
6.000% due 12/1/13 4,011,071
3,321,500 Federal National Mortgage Association,
6.500% due 11/1/28 3,302,798
1,258,714 Government National Mortgage Association,
8.000% due 10/15/25 through 7/15/26 1,312,990
8,666,890 Government National Mortgage Association,
7.500% due 8/15/25 through 12/12/27 8,937,731
3,519,798 Government National Mortgage Association,
6.500% due 12/15/28 3,499,982
6,584,632 Government National Mortgage Association,
7.000% due 3/15/29 6,689,525
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
AGENCIES & OBLIGATIONS
(Cost -- $70,912,866) 69,083,688
================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $491,863,397) 531,809,061
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM SECURITIES -- 9.2%
$12,300,000 Federal Farm Credit Bank, 4.640% due 5/3/99 $ 12,296,829
7,000,000 Federal Home Loan Bank, 4.900% due 5/3/99 6,998,094
5,500,000 Federal Home Loan Bank, 4.670% due 5/12/99 5,492,152
7,000,000 Federal Home Loan Mortgage Corp., 4.710%
due 5/7/99 6,994,505
7,000,000 Federal Home Loan Mortgage Corp., 4.710%
due 5/14/99 6,988,094
8,000,000 Federal National Mortgage Association,
4.660% due 5/5/99 7,995,858
7,400,000 Federal National Mortgage Association,
4.730% due 5/18/99 7,383,472
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES
(Cost -- $54,149,004) 54,149,004
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $546,012,401**) $585,958,065
================================================================================
(a) All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those which are identified by an asterick (*), which are rated by
Moody's Investors Service, Inc. ("Moody's").
(b) Security is traded on a to-be-announced ("TBA") basis.
+ Non-income producing security.
++ Security exempt from registration under rule 144A of the Securities Act of
1933. The securities may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
# Variable rate - resets monthly.
@ Security is segregated for TBA purchases.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 26 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 11.5%
$ 77,000 Federal National Mortgage Association,
6.838% due 6/17/11 $ 76,570
10,800,000 U.S. Treasury Bond, 4.750% due 11/15/08 10,320,696
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
AGENCIES & OBLIGATIONS
(Cost -- $10,496,281) 10,397,266
================================================================================
CORPORATE BONDS -- 57.8%
Building Products -- 0.3%
275,000 BBB Noranda Forest, 8.875% due 10/15/99 278,438
- --------------------------------------------------------------------------------
Communications -- 11.1%
3,800,000 BBB+ MCI Worldcom, 6.400% due 8/15/05 3,828,498
4,000,000 BBB+ Sprint Capital Corp., 5.875% due 5/1/04 3,960,000
2,225,000 AA- TCI Communications Inc., 6.375% due 5/1/03 2,261,156
- --------------------------------------------------------------------------------
10,049,654
- --------------------------------------------------------------------------------
Financial Services -- 21.8%
3,400,000 BBB AT&T Captial Corp., 6.875% due 1/16/01 3,459,500
1,700,000 A3* Banponce Financial, 7.300% due 6/5/02 1,753,125
3,400,000 BBB- Capital One Bank, 6.750% due 1/27/03 3,408,421
2,025,000 A+ CIT Group Holdings, Inc. 5.500% due 10/15/01 2,014,875
1,800,000 BBB+ Comdisco Inc., 6.130% due 8/1/01 1,815,750
3,000,000 A- Finova Capital Corp., 6.310% due 11/6/00 3,023,850
275,000 BB+ Golden State Holdings, 7.000% due 8/1/03 275,344
Orix Credit Alliance:
1,100,000 NR 6.400% due 11/22/99 1,100,000
2,900,000 BBB+ 6.780% due 5/15/01+ 2,896,375
- --------------------------------------------------------------------------------
19,747,240
- --------------------------------------------------------------------------------
Health Care -- 2.6%
2,400,000 BB+ Columbia /HCA Healthcare, 6.630% due 7/15/45 2,295,000
- --------------------------------------------------------------------------------
Industrial -- 0.6%
50,000 A3* Carpenter Technology Corp., 7.440% due 8/16/99 50,250
Navistar International:
140,000 BB+ Sr. Notes, 7.000% due 2/1/03 141,575
75,000 BB- Sr. Sub. Notes, 8.000% due 2/1/08 78,188
250,000 CCC+ Steel Heddle Manufacturing Co.,
Sr. Sub. Notes, 10.625% due 6/1/08 150,000
70,000 B US Can Corp., Sr. Sub. Notes, 10.125% due
10/15/06 74,375
- --------------------------------------------------------------------------------
494,388
- --------------------------------------------------------------------------------
Oil -- 5.7%
3,000,000 A Atlantic Richfield Co., 5.900% due 4/15/09 2,943,750
35,000 BBB- Norcen Energy Resources, Ltd., 7.375% due
5/15/06 34,869
2,100,000 BBB Occidental Petroleum Corp., 7.650% due 2/15/06 2,163,000
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Oil -- 5.7% (continued)
$ 40,000 Baa1* ORYX Energy Co., 10.000% due 4/1/01 $ 42,700
- --------------------------------------------------------------------------------
5,184,319
- --------------------------------------------------------------------------------
Retail -- 6.5%
800,000 A- Dayton Hudson Corp., 6.800% due 10/1/01 818,000
1,999,000 BBB+ Federated Dept. Stores, Sr. Notes, 8.125%
due 10/15/02 2,123,938
Saks Inc:
1,275,000 BB+ 7.250% due 12/1/04 1,305,281
1,600,000 BB+ 7.500% due 12/1/10 1,650,000
- --------------------------------------------------------------------------------
5,897,219
- --------------------------------------------------------------------------------
Tobacco -- 2.0%
280,000 BBB Nabisco Inc., 6.000% due 2/15/11 279,650
1,490,000 A Philip Morris Cos., Inc., 7.500% due 1/15/02 1,538,425
- --------------------------------------------------------------------------------
1,818,075
- --------------------------------------------------------------------------------
Utilities -- 7.2%
2,525,000 BBB- Calenergy Co., Inc., 7.230% due 9/15/05 2,610,219
900,000 BB CMS Energy Corp., 6.750% due 1/15/04+ 885,375
3,000,000 BBB Marlin Water Trust, 7.090% due 12/15/01+ 3,007,500
- --------------------------------------------------------------------------------
6,503,094
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $52,360,993) 52,267,427
================================================================================
SHARES SECURITY VALUE
================================================================================
WARRANT++ -- 0%
150 Loral Orion Network Systems, Inc., Expire
1/31/07
(Cost -- $105) 1,425
================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $62,857,379) 62,666,118
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENTS -- 30.7%
$18,753,000 CS First Boston Corp., 4.850% due 5/3/99
Proceeds at maturity - $18,760,579;
(Fully collateralized by U.S. Treasury
Bills due 7/29/99; Market value -
$19,128,358) $18,753,000
9,000,000 Chase Manhattan Bank, 4.770% due 5/3/99
Proceeds at maturity - $9,003,578; (Fully
collateralized by U.S. Treasury Bonds
8.125% due 8/15/21; Market value -
$9,181,550) 9,000,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $27,753,000) 27,753,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $90,610,379**) $90,419,118
================================================================================
(a) All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those which are identified by an asterisk (*) which are rated by
Moody's Investors Service Inc. ("Moody's").
+ Security is exempt from registration under Rule 144A of the Securities Act
1933. This security may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
++ Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 26 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
================================================================================
U.S. GOVERNMENT AGENCY -- 1.2%
$3,000,000 Federal Home Loan Mortgage Corp. matures 10/8/99
(Cost -- $2,936,800) 4.86% $ 2,936,800
================================================================================
COMMERCIAL PAPER -- 67.2%
7,000,000 AT&T Corp. matures 5/24/99 4.77 6,978,757
5,000,000 Bank America Corp. matures 6/16/99 4.89 4,969,142
5,000,000 Bank of New York matures 5/6/99 4.86 4,996,667
8,000,000 BCI Funding Corp. matures 6/10/99 to
6/15/99 4.86 to 4.98 7,954,997
8,000,000 Bell Atlantic Financial Services matures
5/3/99 4.90 7,997,822
7,000,000 Chase Manhattan Bank Corp.
matures 5/14/99 to 7/12/99 4.83 to 4.90 6,972,126
5,000,000 Cregem North America matures 5/25/99 4.80 4,984,067
7,000,000 Daimler-Chrysler matures 5/6/99 4.82 6,995,324
6,000,000 Ford Motor Credit matures 05/06/99 4.85 5,996,008
5,000,000 General Electric Capital Corp. matures
6/18/99 4.84 4,967,933
2,000,000 General Electric Capital Corp. matures
7/15/99 4.90 1,980,083
3,000,000 Generale Bank matures 5/11/99 4.89 2,995,975
8,000,000 Goldman Sachs & Co. matures 5/3/99 to
5/27/99 4.92 to 4.99 7,991,311
5,000,000 GTE Funding Corp. matures 5/27/99 4.79 4,982,775
7,000,000 J.P. Morgan & Co. matures 6/28/99 to
7/12/99 4.90 to 4.97 6,941,611
7,000,000 Lloyd's Bank matures 6/14/99 4.84 6,958,933
7,000,000 Lucent Technologies matures 5/12/99 4.85 6,989,669
7,000,000 National Australia Fund matures 5/14/99 4.82 6,987,867
8,000,000 Nestle Capital Corp. matures 5/3/99 4.91 7,997,818
7,000,000 Procter & Gamble Co. Inc., matures 6/28/99 4.82 6,946,092
6,000,000 San Paolo US Finance Inc. matures 6/22/99
to 7/7/99 4.88 to 5.05 5,951,725
5,000,000 Shell Oil Co. matures 6/22/99 4.81 4,965,478
5,000,000 Transamerica Finance Corp. matures 6/23/99 4.83 4,964,740
6,398,000 Union Bank of Switzerland matures 5/3/99 4.84 6,396,280
8,843,000 USAA Capital Corp. matures 5/3/99 to
6/21/99 4.82 to 4.88 8,815,621
- --------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $154,678,821) 154,678,821
================================================================================
DOMESTIC CERTIFICATES OF DEPOSIT -- 0.9%
2,000,000 Wachovia Bank matures 7/30/99
(Cost -- $2,000,049) 4.85 2,000,049
================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 18.3%
5,000,000 Bank of Nova Scotia matures 7/6/99 4.88 5,000,091
3,000,000 Barclays Bank matures 9/8/99 4.95 3,000,000
5,000,000 Bayerische Vereinsbank matures 6/23/99 4.85 5,000,145
7,000,000 Cariplo mature 7/1/99 to 7/12/99 4.91 to 4.94 7,000,142
2,000,000 International Nederlanden Group matures
8/19/99 4.95 2,000,119
3,000,000 International Nederlanden Group matures
9/20/99 4.98 2,999,845
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 18.3% (continued)
$5,000,000 KBC Bank matures 6/17/99 4.90% $ 4,999,991
7,000,000 Toronto Dominion Bank matures 6/16/99 4.84 7,000,089
5,000,000 Westdeutsche Landesbank matures 7/7/99 4.89 5,000,132
- --------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $41,000,564) 42,000,554
================================================================================
TIME DEPOSITS -- 9.1%
7,000,000 Bank Austriaengellschaft matures 5/3/99 4.94 7,000,000
7,000,000 Dresdner Bank matures 5/3/99 4.97 7,000,000
7,000,000 Paribas matures 5/3/99 4.94 7,000,000
- --------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $21,999,990) 21,000,000
================================================================================
REPURCHASE AGREEMENT -- 3.3%
7,486,000 Morgan Stanley Dean Witter & Co.,
4.870% due 5/3/99; Proceeds at maturity
-- $7,489,038; (Fully collateralized by
U.S. Treasury Bills, 9.125% due
7/29/99; Market value -- $7,674,935)
(Cost -- $7,486,000) 4.87 7,486,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $230,102,224) $230,102,224
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard and 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 and -- Bonds rated "BB" and "B" are regarded, on balance, as
CCC predominantly speculative with respect to capacity to pay interest
and repay 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 Investors Service Inc. ("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 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 that suggest a
susceptibility to impairment some time in the future.
Baa -- Bonds rated "Baa" are considered to be medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payment and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate thereby
not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B -- Bonds rated "B" generally lack characteristics of the desirable
investments. Assurance of interest and principal payments or
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. Such issues
may be in default or present elements of danger with respect to
principal or interest.
NR -- Indicates that the bond is not rated by Standard & Poor's or
Moody's.
- --------------------------------------------------------------------------------
26 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
====================================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost - $491,863,397
and $62,857,379 respectively) $531,809,061 $ 62,666,118 --
Short-term investments, at value
(Cost - $54,149,004, $27,753,000
and $230,102,224, respectively) 54,149,004 27,753,000 $230,102,224
Cash 478,070 587 820
Receivable for securities sold 2,072,088 -- --
Receivable from Manager -- 2,666 --
Dividends and interest receivable 3,409,890 1,010,301 224,359
- ----------------------------------------------------------------------------------------------------
Total Assets 591,918,113 91,432,672 230,327,403
- ----------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 8,699,345 6,958,198 --
Management fees payable 385,214 99,302 71,195
Dividends payable -- -- 374,734
Payable for open forward foreign
currency contract (Note 5) 1,065 -- --
Accrued expenses 26,657 17,699 100,469
- ----------------------------------------------------------------------------------------------------
Total Liabilities 9,112,281 7,075,199 546,398
- ----------------------------------------------------------------------------------------------------
Total Net Assets $582,805,832 $ 84,357,473 $229,781,005
====================================================================================================
NET ASSETS:
Par value of capital shares $ 329 $ 71 $ 2,298
Capital paid in excess of par value 476,663,228 80,659,158 229,778,707
Undistributed net investment income 20,493,074 4,389,522 --
Accumulated net realized gain (loss) from
security transactions and foreign currencies 45,673,784 (500,017) --
Net unrealized appreciation (depreciation)
of investments and foreign currencies 39,975,417 (191,261) --
- ----------------------------------------------------------------------------------------------------
Total Net Assets $582,805,832 $ 84,357,473 $229,781,005
====================================================================================================
Shares Outstanding 32,866,629 7,115,805 229,781,005
- ----------------------------------------------------------------------------------------------------
Net Asset Value $ 17.73 $ 11.85 $ 1.00
- ----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
====================================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 7,253,283 $ 2,220,728 $ 4,629,074
Dividends 2,822,855 -- --
Less: Foreign withholding tax (28,647) -- --
- ----------------------------------------------------------------------------------------------------
Total Investment Income 10,047,491 2,220,728 4,629,074
- ----------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 2,078,864 234,603 439,422
Custody 22,386 4,535 8,635
Audit and legal 15,559 8,922 10,927
Directors' fees 11,495 2,033 2,795
Shareholder communications 10,920 4,649 7,536
Pricing service fees 6,552 11,513 --
System servicing fees 4,004 3,700 3,061
Registration fees -- 618 1,727
Other 11,820 1,301 39,401
- ----------------------------------------------------------------------------------------------------
Total Expenses 2,161,600 271,874 513,504
- ----------------------------------------------------------------------------------------------------
Net Investment Income 7,885,891 1,948,854 4,115,570
- ----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized Gain (Loss) From:
Securities transactions
(excluding short-term securities*) 16,051,916 (1,106,404) 994
Foreign currency transactions (63,014) -- --
- ----------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) 15,988,902 (1,106,404) 994
- ----------------------------------------------------------------------------------------------------
Changes in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of period 17,220,430 (555,535) --
End of period 39,975,417 (191,261) --
- ----------------------------------------------------------------------------------------------------
Change in Net Unrealized
Appreciation (Depreciation) 22,754,987 364,274 --
- ----------------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments
and Foreign Currencies 38,743,889 (742,130) 994
- ----------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 46,629,780 $ 1,206,724 $ 4,116,564
====================================================================================================
</TABLE>
* Represents only gains from the sale of short-term securities for the Smith
Barney Money Market Portfolio.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
MFS Total Return Portfolio 1999 1998
===========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 7,885,891 $ 12,458,479
Net realized gain 15,988,902 29,863,794
Increase (decrease) in net unrealized appreciation 22,754,987 (9,196,861)
- -------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 46,629,780 33,125,412
- -------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (6,865,134)
Net realized gains -- (11,682,166)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (18,547,300)
- -------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 76,189,499 167,526,814
Net asset value of shares issued
for reinvestment of dividends -- 18,547,300
Cost of shares reacquired (2,287,225) (1,963,578)
- -------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 73,902,274 184,110,536
- -------------------------------------------------------------------------------------------
Increase in Net Assets 120,532,054 198,688,648
NET ASSETS:
Beginning of period 462,273,778 263,585,130
- -------------------------------------------------------------------------------------------
End of period* $ 582,805,832 $ 462,273,778
===========================================================================================
*Includes undistributed net investment income of: $ 20,493,074 $ 12,670,197
===========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the year Ended October 31, 1998
<TABLE>
<CAPTION>
Travelers Managed Income Portfolio 1999 1998
===========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,948,854 $ 2,444,409
Net realized gain (loss) (1,106,404) 606,030
Increase (decrease) in net unrealized
appreciation of investments 364,274 (1,137,406)
- -------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,206,724 1,913,033
- -------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (1,768,427)
Net realized gains -- (75,046)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (1,843,473)
- -------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 27,746,914 27,200,431
Net asset value of shares issued
for reinvestment of dividends -- 1,843,473
Cost of shares reacquired (2,151,861) (3,336,756)
- -------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 25,595,053 25,707,148
- -------------------------------------------------------------------------------------------
Increase in Net Assets 26,801,777 25,776,708
NET ASSETS:
Beginning of period 57,555,696 31,778,988
- -------------------------------------------------------------------------------------------
End of period* $ 84,357,473 $ 57,555,696
===========================================================================================
*Includes undistributed net investment income of: $ 4,389,522 $ 2,440,668
===========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
Smith Barney Money Market Portfolio 1999 1998
===========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,115,570 $ 5,939,071
Net realized gain 994 50
- -------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 4,116,564 5,939,121
- -------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income (4,115,570) (5,939,071)
Net realized gains (994) (50)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (4,116,564) (5,939,121)
- -------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 897,297,856 456,432,130
Net asset value of shares issued
for reinvestment of dividends 4,080,050 5,823,491
Cost of shares reacquired (836,274,345) (408,746,205)
- -------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 65,103,561 53,509,416
- -------------------------------------------------------------------------------------------
Increase in Net Assets 65,103,561 53,509,416
NET ASSETS:
Beginning of period 164,677,444 111,168,028
- -------------------------------------------------------------------------------------------
End of period $ 229,781,005 $ 164,677,444
===========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The MFS Total Return, Travelers Managed Income (formerly known as TBC Managed
Income Portfolio) 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, GTGlobal Strategic Income, Putnam
Diversified Income, Smith Barney High Income, Smith Barney Large Cap Value,
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 Travelers 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
- --------------------------------------------------------------------------------
32 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
principles. At October 31, 1998, reclassifications were made to the capital
accounts of the MFS Total Return Portfolio and the Travelers Managed Income
Portfolio to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, a portion
of accumulated net realized gain amounting to $13,675 was reclassified to
paid-in capital for the MFS Total Return 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
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., 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 SSBC, acts as the investment
manager of the MFS Total Return ("MFSTR") and the Travelers Managed Income
("TMI") Portfolios. Effective March 27, 1998, the management fee SBMM pays SSBC
was decreased from an annual rate of 0.60% to 0.50% of the average daily net
assets of the Portfolio. MFSTR and TMI 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 Travelers Asset Management International Corporation ("TAMIC").
Pursuant to each sub-advisory agreement, MFS and TAMIC are responsible for the
day-to-day portfolio operations and investment decisions for MFSTR and TMI,
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 TMI. These
fees are calculated daily and paid monthly.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
TIA has entered into a Sub-Administrative Services Agreement with SSBC. TIA pays
SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of MFSTR and TMI.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions.
All officers and one Director of the Fund are employees of SSB.
4. Investments
During the six months ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
MFSTR TMI
- --------------------------------------------------------------------------------
Purchases $365,118,014 $208,469,218
- --------------------------------------------------------------------------------
Sales 270,809,569 200,293,273
- --------------------------------------------------------------------------------
At April 30, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
MFSTR TMI
- --------------------------------------------------------------------------------
Gross unrealized appreciation $ 49,994,920 $ 241,390
Gross unrealized depreciation (10,049,256) (432,651)
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 39,945,664 $ (191,261)
- --------------------------------------------------------------------------------
5. Forward Foreign Currency Contracts
At April 30, 1999, 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 loss on the contracts reflected
in the accompanying financial statements were as follows:
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Loss
========================================================================================
<S> <C> <C> <C> <C>
MFS Total Return Portfolio
To Buy:
European Currency Unit 193,629 $204,860 5/4/99 $ (1,065)
- ----------------------------------------------------------------------------------------
Total Unrealized Loss on Open
Forward Foreign Currency Contracts $(1,065)
========================================================================================
</TABLE>
- --------------------------------------------------------------------------------
34 1999 Semi-Annual Report to Shareholders
<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, 1999, 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, high quality money market instruments or other
securities 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, 1999, the Portfolios had no securities on loan.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<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
Porfolios purchase upon exercise will be increased by the premium originally
paid.
At April 30, 1999, the Portfolios had no open purchased put or call option
contracts.
When the Porfolios 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, 1999, the Portfolios did not write any
options.
- --------------------------------------------------------------------------------
36 1999 Semi-Annual Report to Shareholders
<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 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, 1999, MFSTR held one TBA security with a cost of $2,097,541.
11. Capital Shares
At April 30, 1999, 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:
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
================================================================================
MFS Total Return Portfolio
Shares sold 4,526,551 10,257,417
Shares issued on reinvestment -- 1,123,398
Shares reacquired (135,828) (125,704)
- --------------------------------------------------------------------------------
Net Increase 4,390,723 11,255,111
================================================================================
Travelers Managed Income Portfolio
Shares sold 2,356,951 2,314,924
Shares issued on reinvestment -- 157,967
Shares reacquired (182,418) (283,065)
- --------------------------------------------------------------------------------
Net Increase 2,174,533 2,189,826
================================================================================
SB Money Market Portfolio
Shares sold 897,297,856 456,432,130
Shares issued on reinvestment 4,080,050 5,823,491
Shares reacquired (836,274,345) (408,746,205)
- --------------------------------------------------------------------------------
Net Increase 65,103,561 53,509,416
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
MFS Total Return Portfolio 1999(1) 1998 1997 1996 1995 1994(2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $16.23 $15.31 $13.13 $11.53 $9.98 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.26 0.32 0.38 0.33 0.45 0.13
Net realized and
unrealized gain (loss) 1.24 1.36 2.27 1.62 1.15 (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 1.50 1.68 2.65 1.95 1.60 (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.28) (0.29) (0.27) (0.05) --
Net realized gains -- (0.48) (0.18) (0.08) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.76) (0.47) (0.35) (0.05) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $17.73 $16.23 $15.31 $13.13 $11.53 $9.98
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 9.24%++ 10.94% 20.64% 17.16% 16.12% (0.20)%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000s) $582,806 $462,274 $263,585 $134,529 $49,363 $8,504
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.83%+ 0.84% 0.86% 0.91% 0.95% 0.93%+
Net investment income 3.05+ 3.32 3.54 3.82 4.40 3.51+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 57% 118% 99% 139% 104% 18%
====================================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the Manager has
reimbursed the Portfolio for $13,857 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share effect on net investment income and expense ratios would have
been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
------------------- -----------------
1995 $0.01 1.06%
1994 0.06 2.51+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
38 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Travelers Managed
Income Portfolio 1999(1)(2) 1998(2) 1997(2) 1996(2) 1995 1994(3)
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.65 $11.55 $11.06 $11.16 $10.04 $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(4) 0.32 0.72 0.63 0.65 0.61 0.21
Net realized and
unrealized gain (loss) (0.12) (0.06) 0.35 (0.14) 0.64 (0.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.20 0.66 0.98 0.51 1.25 0.04
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.54) (0.49) (0.46) (0.13) --
Net realized gains -- (0.02) -- (0.15) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.56) (0.49) (0.61) (0.13) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.85 $11.65 $11.55 $11.06 $11.16 $10.04
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return 1.72%++ 5.71% 9.19% 4.61% 12.68% 0.40%++
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000s) $84,357 $57,556 $31,779 $23,532 $11,279 $3,840
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.76%+ 0.84% 0.87% 0.92% 0.92% 0.87%+
Net investment income 5.41+ 6.11 6.48 6.19 6.13 5.67+
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 306% 327% 259% 255% 170% 42%
=================================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
------------------- -----------------
1995 $0.04 1.29%
1994 0.07 2.91+
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted;
<TABLE>
<CAPTION>
Smith Barney
Money Market Portfolio 1999(1) 1998 1997 1996 1995 1994(2)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------
Net investment income(3) 0.022 0.050 0.049 0.049 0.052 0.014
Distributions from net
investment income (0.022) (0.050) (0.049) (0.049) (0.052) (0.014)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------------
Total Return 2.26%++ 5.11% 5.05% 5.05% 5.35% 1.46%++
- ------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000s) $229,781 $164,677 $111,168 $99,150 $37,487 $5,278
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.56%+ 0.64% 0.65% 0.65% 0.65% 0.66%+
Net investment income 4.45+ 4.99 4.94 4.86 5.26 3.83+
========================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999, (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:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
------------------- -----------------
1997 $0.000* 0.67%
1996 0.001 0.74
1995 0.003 0.94
1994 0.005 2.11+
* 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.
- --------------------------------------------------------------------------------
40 1999 Semi-Annual Report to Shareholders
<PAGE>
SALOMON SMITH BARNEY
----------------------------
A member of citigroup [LOGO]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Phyllis Zahorodny
Vice President
Irving P. David
Controller
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSBC Fund Management Inc.
Travelers Investment Adviser, Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Travelers Series Fund Inc. -- MFS Total Return, Travelers Managed Income and
Smith Barney Money Market Portfolios. It is not authorized for distribution to
prospective investors unless accompanied or preceded by a current Prospectus for
the Portfolios, which contains information concerning the Portfolios' investment
policies and expenses as well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0804 6/99
<PAGE>
[GRAPHIC]
Travelers Series Fund Inc.
Smith Barney Large Cap
Value Portfolio
Alliance Growth Portfolio
Van Kampen American
Capital Enterprise Portfolio
- ----------------------------------
S E M I - A N N U A L R E P O R T
- ----------------------------------
April 30, 1999
Smith Barney Mutual Funds
<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, Alliance Growth Portfolio and
Van Kampen American Capital Enterprise Portfolio ("Portfolios") for the period
ended April 30, 1999. 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. We hope you find this report to
be useful and informative.
Portfolio Highlights
Smith Barney Large Cap Value Portfolio
For the six months ended April 30, 1999, the Smith Barney Large Cap Value
Portfolio ("Portfolio") had a total return of 16.21%. In comparison, equity
income funds averaged a 17.23% total return over the same period according to
Lipper, Inc. (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 are impressed by the coming together of several positive events
sustaining this bull market, notwithstanding the fact that by many of the
traditional yardsticks, valuations are obviously trending higher. Specifically,
the economy continues to sustain its momentum, which bodes well for ongoing
growth in corporate profits. What had previously been perceived as the Asian
crisis (which had been predicted to lead to the unraveling of all of the world's
global economies) is now being welcomed. From the perspective of the U.S., it is
almost perceived as the salvation of what otherwise might have become an
overheated economy for Federal Reserve Board ("Fed") regulators.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
Currently the Fed is unsettling bond and stock investors alike with threatening
overtures of raising rates. In fact, the inflation news remains surprisingly
sanguine. Indeed, the markets recently rallied strongly as the Employment Cost
Index, purportedly 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 dearth,
relatively speaking, of initial public offerings. Although the managers are
sensitive to the potential for short-term concerns about rates to unsettle the
stock market, they nevertheless believe that the fundamentals are powerful
enough to enable the market to continue to go up.
The Portfolio continues to be fully invested. In addition, the Portfolio enjoys
an approximately 43% yield pick-up to the S&P 500, which the managers believe
should cushion volatility in a more difficult environment and act as an ongoing
way to enhance return potential.
Alliance Growth Portfolio
For the six months ended April 30, 1999, the Alliance Growth Portfolio
("Portfolio") generated a total return of 27.55%, outperforming the average
total return of 24.61% for growth fund according to Lipper, Inc.
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 market conditions have been more favorable to
the managers' investment style. The managers stress large and mid-cap stocks but
underweight the very largest companies that are most heavily represented in the
popular averages.
The chaos in Asian markets and economies appears to have had no lasting negative
effect on the U.S. market. Paradoxically, it may even have 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
1999 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 1999 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 than on American institutions.
One risk is that this market is as good as it can get. According to the
managers, we may have seen the maximum benefit of lower commodity prices and Fed
forbearance. And perhaps the U.S. economy will finally slow and corporate
profits will weaken. If not, the Fed may decide that it is time to cool the
economy down. At the risk of appearing to repeat the same cautions with a 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. Yet, the managers do not believe that there is great short-term risk in
the market. Any future weakness would probably provide them with opportunities.
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, the managers
think the longer-term outlook for both the U.S. economy and stock market is
quite favorable.
The managers are not inclined to change the areas of emphasis that have
predominated for several years now. Financial services and technology still look
very 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 have gravitated towards companies 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 new consumer uses possible.
Digital communications traffic is growing at an accelerating rate. Changing
technology and regulation are creating new winners and losers in the
marketplace. 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
Van Kampen American Capital Enterprise Portfolio
For the six-month period ended April 30, 1999, the Van Kampen Enterprise
Portfolio ("Portfolio") generated a total return of 23.10%. In comparison,
capital appreciation funds produced an average total return of 28.91% during the
same period according to Lipper, Inc.
The Portfolio is managed with a consistent philosophy: to own companies with
positive future fundamentals at attractive current valuations. In selecting
stocks, the portfolio managers generally look for at least one of the following
fundamental characteristics:
. Consistent earnings growth
. Accelerating earnings growth
. Better-than-expected fundamentals
. An underlying change in a company, industry or regulatory
environment
As long as the original criteria for purchasing a particular stock holds true
and its value remains relatively attractive, the stock usually stays in the
Portfolio.
Despite considerable market volatility during the reporting period, the managers
encountered a favorable environment for stock selection. On the heels of a
significant market drop throughout 1998's third quarter, the Dow Jones
Industrial Average staged an impressive recovery throughout the period,
surpassing the 10,000 milestone in March and going past 11,000 in May. The stock
market's rise can be attributed primarily to sustained U.S. economic growth, low
inflation and strengthening corporate earnings.
In terms of the Portfolio's allocation to various industry sectors, the managers
did not make any major changes during the reporting period, although they did
slightly increase the Portfolio's weighting in technology companies while
trimming its health care holdings. Some of the Portfolio's most successful
technology stocks were those that benefited from the Internet and computing
boom. Internet service provider America Online was an extremely productive
investment, as was EMC, a company that provides data storage solutions to major
corporations. Other technology holdings that performed well for the Portfolio
were Cisco Systems, a maker of computer network devices, and Lexmark
International, a manufacturer of computer printers.
Despite the predominantly positive performance of technology firms, some
software companies did not share in the good times. Companies like BMC Software
and Compuware faced the prospect of declining demand for their products as
businesses began to ease software spending to focus their resources on
addressing year 2000 concerns. Although BMC and Compuware lost value during the
reporting period, good earnings reports announced in late April helped make up
some of the Portfolio's losses on these stocks.
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
Non-technology companies benefiting the Portfolio during the reporting period
included home products superstore Lowe's, department store Dayton Hudson,
discount apparel store TJX, entertainment giant CBS Broadcasting, cable company
Comcast, restaurant management firm Tricon Global, and beverage producer
Anheuser-Busch. At the end of the reporting period, the Portfolio had a higher
than normal weighting in consumer-oriented industries such as retail, radio
broadcasting, cable, and grocery stores.
Stocks in the area of health care services had the most significant negative
impact on the Portfolio's performance. Two primary factors fueled these
companies' stock price declines. First, many companies in this area have seen
their profits squeezed because of their inability to keep pace with rising
health care costs. Second, changes in Medicare regulations and some instances of
Medicare fraud have hurt the industry. Investors have generally been wary of
this sector, even though most of the companies--including the ones owned in the
Portfolio--have not been shown to have committed any wrongdoing. Some of the
Portfolio's health care holdings that dragged down its performance were Health
Management Associates, Tenet Health Care, Universal Health Services, Health Care
Retirement and Total Renal Care. The managers sold each of these stocks during
the reporting period.
Looking ahead, the managers do not anticipate any major changes in current
market conditions. They are cautiously optimistic that corporate earnings will
continue to improve and that many international economies are beginning to
perform better. Inflation also remains low--a promising sign for the U.S. stock
market.
The managers' primary concern is that stock-market valuations remain very high
by relative and historical measures. Maintaining those levels depends on
continued good news with respect to inflation and earnings. As long as both
remain favorable, the managers do not expect the current bull market to end.
However, high valuations leave stocks vulnerable if economic conditions do
change.
Thank you for investing in the Travelers Series Fund Inc. We look forward to
continuing to help you pursue your financial goals in the years to come.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 25, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
May 25, 1999
- --------------------------------------------------------------------------------
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+
================================================================================
4/30/99 $18.94 $22.01 $0.00 $0.00 16.21%++
- --------------------------------------------------------------------------------
10/31/98 17.90 18.94 0.21 0.53 9.65
- --------------------------------------------------------------------------------
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 $0.62 $0.75
================================================================================
- --------------------------------------------------------------------------------
Alliance Growth Portfolio
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gain Total
Period Ended of Period Period Dividends Distributions Returns+
================================================================================
4/30/99 $22.14 $28.24 $0.00 $0.00 27.55%++
- --------------------------------------------------------------------------------
10/31/98 20.82 22.14 0.04 1.44 12.92
- --------------------------------------------------------------------------------
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 $0.17 $2.48
================================================================================
- --------------------------------------------------------------------------------
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+
================================================================================
4/30/99 $20.56 $25.31 $0.00 $0.00 23.10%++
- --------------------------------------------------------------------------------
10/31/98 19.89 20.56 0.05 1.17 8.97
- --------------------------------------------------------------------------------
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 $0.16 $1.60
================================================================================
- --------------------------------------------------------------------------------
6 1999 Semi-Annual Report to Shareholders
<PAGE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
Smith Barney Alliance Van Kampen
Large Cap Growth American Capital
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
Six Months Ended 4/30/99++ 16.21% 27.55% 23.10%
- --------------------------------------------------------------------------------
Year Ended 4/30/99 8.25 21.16 12.44
- --------------------------------------------------------------------------------
6/16/94* through 4/30/99 19.54 27.34 23.35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cumulative Total Returns+
- --------------------------------------------------------------------------------
Smith Barney Alliance Van Kampen
Large Cap Growth American Capital
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
6/16/94* through 4/30/99 138.68% 224.78% 178.12%
================================================================================
+ Assumes the reinvestment of all dividend and capital gain distributions,
if any, at net asset value.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
* Commencement of operations.
- --------------------------------------------------------------------------------
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+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE CHART]
Smith Barney Large Cap Value Portfolio S&P 500 Index
6/16/94 10,000 10,000
10/94 10,140 10,324
10/95 12,189 13,053
10/96 15,181 16,018
10/97 18,731 21,159
10/98 20,539 25,817
4/99 23,868 31,576
+ Hypothetical illustration of $10,000 invested in shares of the Smith
Barney Large Cap Value Portfolio on June 16, 1994 (commencement of
operations), assuming reinvestment of dividends and capital gains, if any,
at net asset value through April 30, 1999. 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 1999 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+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE CHART]
Alliance Growth Portfolio S&P 500 Index Russell 1000 Index
6/16/94 10,000 10,000 10,000
10/94 10,650 10,324 10,191
10/95 13,428 13,053 12,612
10/96 17,007 16,018 15,501
10/97 22,549 21,159 20,236
10/98 25,463 25,817 24,039
4/99 32,478 31,576 29,455
+ 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, 1999. 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+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE CHART]
Van Kampen American Capital Enterprise Portfolio S&P 500 Index
6/16/94 10,000 10,000
10/94 10,380 10,324
10/95 12,948 13,053
10/96 15,972 16,018
10/97 20,733 21,159
10/98 22,593 25,817
4/99 27,812 31,576
+ 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, 1999. 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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
COMMON STOCK -- 98.5%
Capital Goods -- 11.8%
225,000 Avon Products Inc. $12,220,313
210,000 Emerson Electric Co. 13,545,000
130,000 General Electric Co. 13,715,000
125,000 H.J. Heinz Co. 5,835,937
22,300 Unilever NV, NY Shares 1,448,106
275,000 Xerox Corp. 16,156,250
- -------------------------------------------------------------------------------
62,920,606
- -------------------------------------------------------------------------------
Communication Equipment & Services -- 11.3%
155,000 Ameritech Corp. 10,607,813
285,000 AT&T Corp. 14,392,500
200,000 BellSouth Corp. 8,950,000
170,000 GTE Corp. 11,379,375
145,000 Sprint Corp. 14,871,563
- -------------------------------------------------------------------------------
60,201,251
- -------------------------------------------------------------------------------
Consumer Cyclicals -- 9.4%
120,000 Ford Motor Co. 7,672,500
135,000 General Motors Corp. 12,006,562
525,000 Masco Corp. 15,421,875
215,000 Pitney Bowes, Inc. 15,036,562
- -------------------------------------------------------------------------------
50,137,499
- -------------------------------------------------------------------------------
Consumer Staples -- 4.1%
150,000 El Paso Energy Corp. 5,512,500
100,000 The McGraw-Hill Cos., Inc. 5,525,000
295,000 PepsiCo, Inc. 10,896,563
- -------------------------------------------------------------------------------
21,934,063
- -------------------------------------------------------------------------------
Energy -- 18.5%
45,000 BP Amoco PLC 5,093,438
100,000 Chevron Corp. 9,975,000
234,000 Conoco Inc., Class A Shares 6,347,250
260,134 Enron Corp. 19,575,083
130,000 Exxon Corp. 10,798,125
130,000 Honeywell, Inc. 12,317,500
135,000 Mobil Corp. 14,141,250
425,000 The Williams Cos., Inc. 20,081,250
- -------------------------------------------------------------------------------
98,328,896
- -------------------------------------------------------------------------------
Financial Services -- 14.6%
130,000 American General Corp. 9,620,000
156,580 Bank of America Corp. 11,273,760
200,000 Chase Manhattan Corp. 16,550,000
200,000 Hartford Financial Services Group, Inc. 11,787,500
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Financial Services -- 14.6% (continued)
180,000 Marsh & McLennan Cos., Inc. $13,781,250
200,000 Mellon Bank Corp. 14,862,500
- -------------------------------------------------------------------------------
77,875,010
- -------------------------------------------------------------------------------
Healthcare -- 10.2%
220,000 Abbott Laboratories, Inc. 10,656,250
200,000 American Home Products Corp. 12,200,000
120,000 Baxter International, Inc. 7,560,000
200,000 Bristol-Myers Squibb Co. 12,712,500
200,000 Pharmacia & Upjohn, Inc. 11,200,000
- -------------------------------------------------------------------------------
54,328,750
- -------------------------------------------------------------------------------
Insurance -- 3.4%
130,000 Cigna Corp. 11,334,375
120,000 UNUM Corp. 6,555,000
- -------------------------------------------------------------------------------
17,889,375
- -------------------------------------------------------------------------------
Raw & Intermediate Materials -- 3.2%
175,000 International Paper Co. 9,329,687
122,500 Reynolds Metals Co. 7,640,937
- -------------------------------------------------------------------------------
16,970,624
- -------------------------------------------------------------------------------
Technology -- 8.2%
210,000 E.I. du Pont de Nemours & Co. 14,831,250
175,000 Raytheon Co., Class A Shares 12,107,813
115,000 United Technologies Corp. 16,660,625
- -------------------------------------------------------------------------------
43,599,688
- -------------------------------------------------------------------------------
Utilities -- 3.8%
200,000 Duke Energy Corp. 11,200,000
230,000 Unicom Corp. 8,926,875
- -------------------------------------------------------------------------------
20,126,875
- -------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $412,931,776) 524,312,637
===============================================================================
FACE
AMOUNT SECURITY VALUE
===============================================================================
REPURCHASE AGREEMENT -- 1.5%
$7,766,000 Morgan Stanley Dean Witter & Co., 4.870% due 5/3/99;
Proceeds at maturity -- $7,769,152;
(Fully collateralized by U.S. Treasury Bills, 4.310%
due 7/29/99;
Market value -- $7,961,285) (Cost -- $7,766,000) 7,766,000
===============================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $420,697,776*) $532,078,637
===============================================================================
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
COMMON STOCK -- 97.2%
Aerospace -- 1.5%
796,200 Loral Space & Communications Ltd.* $15,525,900
- -------------------------------------------------------------------------------
Airlines -- 2.9%
43,000 AMR Corp. 3,001,938
242,000 Continental Airlines, Inc., Class B Shares* 10,451,375
166,900 Delta Airlines, Inc. 10,587,719
84,000 UAL Corp.* 6,783,000
- -------------------------------------------------------------------------------
30,824,032
- -------------------------------------------------------------------------------
Auto Related -- 0.4%
77,800 AutoNation, Inc.* 1,113,512
72,400 Dana Corp. 3,411,850
- -------------------------------------------------------------------------------
4,525,362
- -------------------------------------------------------------------------------
Banks -- 6.4%
429,400 Bank of America Corp. 30,916,800
570,900 Bank of Tokyo-Mitsubishi 8,349,413
60,000 Bank One Corp. 3,540,000
302,208 Chase Manhattan Corp. 25,007,712
- -------------------------------------------------------------------------------
67,813,925
- -------------------------------------------------------------------------------
Building Materials & Forest Products -- 0.3%
99,000 Masco Corp. 2,908,125
- -------------------------------------------------------------------------------
Communication Services -- 4.8%
798,214 AT&T Corp.-- Liberty Media Group* 50,985,940
- -------------------------------------------------------------------------------
Computer Services -- 0.4%
96,000 First Data Corp. 4,074,000
- -------------------------------------------------------------------------------
Drugs -- 3.5%
284,000 Bristol Myers Squibb Co. 18,051,750
208,800 Merck & Co., Inc. 14,668,200
96,000 Schering-Plough Corp. 4,638,000
- -------------------------------------------------------------------------------
37,357,950
- -------------------------------------------------------------------------------
Electrical Equipment -- 0.4%
51,000 Koninklijke Philips Electronics N.V. 4,354,125
- -------------------------------------------------------------------------------
Electronics -- 13.4%
86,000 Altera Corp.* 6,213,500
275,425 Cisco Systems Inc.* 31,415,664
183,700 Ingram Micro Inc., Class A Shares* 4,684,350
42,000 Intel Corp. 2,569,875
132,000 Micron Technology, Inc. 4,900,500
168,300 Network Associates Inc.* 2,229,975
506,900 Sanmina Corp. 33,645,488
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Electronics -- 13.4% (continued)
358,600 SCI Systems, Inc.* $ 13,649,212
186,000 Seagate Technology, Inc.* 5,184,750
327,800 Solectron Corp.* 15,898,300
649,175 Sterling Commerce Inc.* 20,327,292
- -------------------------------------------------------------------------------
140,718,906
- -------------------------------------------------------------------------------
Financial Services -- 8.2%
310,000 Associates First Capital Corp. 13,736,875
84,548 CIT Group, Inc. 2,747,810
167,000 CompuCredit Corp.* 2,672,000
179,100 Household International Inc. 9,010,969
1,049,762 MBNA Corp. 29,590,166
1,023,200 Newcourt Credit Group Inc. 28,905,400
- -------------------------------------------------------------------------------
86,663,220
- -------------------------------------------------------------------------------
Food Services, Lodging -- 0.2%
270,300 Humphrey Hospitality Trust, Inc. 2,263,763
- -------------------------------------------------------------------------------
Healthcare -- 2.1%
129,000 Columbia/HCA Healthcare Corp. 3,184,688
338,000 Health Management Associates, Inc.* 5,281,250
281,230 McKesson HBOC, Inc. 9,843,050
51,600 Medtronic Inc. 3,711,975
- -------------------------------------------------------------------------------
22,020,963
- -------------------------------------------------------------------------------
Insurance -- 4.5%
92,000 Ace Ltd. 2,783,000
160,000 American Bankers Insurance Group, Inc. 8,390,000
268,012 American International Group, Inc. 31,474,659
36,000 Providian Financial Corp. 4,646,250
- -------------------------------------------------------------------------------
47,293,909
- -------------------------------------------------------------------------------
Leisure Related -- 1.0%
283,700 Royal Caribbean Cruises Ltd. 10,479,169
- -------------------------------------------------------------------------------
Manufacturing -- 3.1%
250,300 Mannesmann AG 32,810,862
- -------------------------------------------------------------------------------
Miscellaneous -- 3.7%
899,250 Cendant Corp. 16,186,500
302,000 Convergys Corp.* 5,624,750
92,000 Engelhard Corp. 1,765,250
192,398 Tyco International Ltd. 15,632,338
- -------------------------------------------------------------------------------
39,208,838
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Multimedia -- 3.7%
411,800 CBS Corp.* $18,762,638
229,400 The News Corp. Ltd., ADR 7,484,175
150,900 Nielsen Media Research, Inc. 4,130,887
1 Reuters Group PLC 82
204,800 Viacom Inc., Class B Shares* 8,371,200
- -------------------------------------------------------------------------------
38,748,982
- -------------------------------------------------------------------------------
Office Equipment -- 9.2%
735,200 Ceridian Corp. 26,926,700
21,000 Compaq Computer Corp. 468,562
227,000 International Business Machines Corp. 47,485,563
1,059,400 Sterling Software Inc. 21,916,338
- -------------------------------------------------------------------------------
96,797,163
- -------------------------------------------------------------------------------
Oil Related -- 3.8%
304,700 Atlantic Richfield Co. 25,575,756
718,500 Gulf Canada Resources Ltd.* 2,874,000
110,500 Kerr-McGee Corp. 4,682,438
101,000 Total SA, ADR 6,868,000
- -------------------------------------------------------------------------------
40,000,194
- -------------------------------------------------------------------------------
Real Estate -- 2.2%
140,000 Entertainment Properties Trust 2,572,500
376,400 JP Realty Inc. 7,551,525
250,000 Koger Equity Inc. 3,671,875
131,900 Macerich Co. 3,371,694
138,000 Spieker Properties Inc. 5,416,500
- -------------------------------------------------------------------------------
22,584,094
- -------------------------------------------------------------------------------
Retail -- 4.6%
309,700 The Home Depot, Inc. 18,562,644
390,850 The Limited Inc. 17,099,688
132,800 The Pepsi Bottling Group, Inc. 2,797,100
132,000 Tandy Corp. 9,561,750
- -------------------------------------------------------------------------------
48,021,182
- -------------------------------------------------------------------------------
Telecommunications -- 14.4%
35,000 Ascend Communications, Inc.* 3,381,875
119,800 Colt Telecommunications Group PLC, ADR* 9,149,725
224,252 Global TeleSystems Group, Inc.* 14,828,663
432,600 Globalstar Telecommunications Inc. 8,706,075
123,000 IXC Communications Inc.* 4,873,875
535,950 MCI WorldCom Inc.* 44,048,391
212,500 MediaOne Group, Inc.* 17,332,031
155,000 Millicom International Cellular S.A.* 5,347,500
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Telecommunications -- 14.4% (continued)
702,700 Nextel Communications Inc.* $28,766,781
287,000 Pacific Gateway Exchange, Inc.* 11,480,000
41,900 Sprint Corp. 4,297,369
- -------------------------------------------------------------------------------
152,212,285
- -------------------------------------------------------------------------------
Tobacco -- 2.5%
103,800 Loews Corp. 7,596,862
527,400 Philip Morris Cos., Inc. 18,491,963
- -------------------------------------------------------------------------------
26,088,825
- -------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $742,542,238) $1,024,281,714
===============================================================================
PREFERRED STOCK -- 0.7%
Miscellaneous -- 0.1%
56,800 Automatic Common Exchange Security Trust 6.50% 837,800
- -------------------------------------------------------------------------------
Publishing -- 0.6%
185,000 Reader's Digest Association, Inc. 6,105,000
- -------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $6,085,945) 6,942,800
===============================================================================
FACE
AMOUNT SECURITY VALUE
===============================================================================
CONVERTIBLE BOND -- 1.4%
Telecommunications -- 1.4%
$11,165,000 Global TeleSystems Group, Inc., 5.75% due 7/1/10
(Cost -- $9,498,018) 14,821,538
===============================================================================
SHORT-TERM INVESTMENT -- 0.7%
7,700,000 Federal Home Loan Mortgage Corp.
Discount Note, 4.82% due 5/3/99
(Cost -- $7,697,938) 7,697,938
===============================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $765,824,139**) $1,053,743,990
===============================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
COMMON STOCK -- 97.9%
Advertising -- 1.5%
65,000 Omnicom Group Inc. $ 4,712,500
- -------------------------------------------------------------------------------
Aircraft & Aerospace -- 1.1%
23,500 United Technologies Corp. 3,404,562
- -------------------------------------------------------------------------------
Airlines -- 0.7%
36,000 Delta Air Lines Inc. 2,283,750
- -------------------------------------------------------------------------------
Apparel Manufacturers -- 1.3%
34,000 Tommy Hilfiger Corp.* 2,375,750
32,000 V.F. Corp. 1,648,000
- -------------------------------------------------------------------------------
4,023,750
- -------------------------------------------------------------------------------
Athletic Footwear -- 0.5%
27,000 Nike, Inc., Class B shares 1,679,063
- -------------------------------------------------------------------------------
Automotive -- 0.8%
38,800 Ford Motor Co. 2,480,775
- -------------------------------------------------------------------------------
Automotive - Truck Manufacturer -- 0.9%
52,600 Navistar International Corp. 2,751,637
- -------------------------------------------------------------------------------
Banking -- 6.1%
35,000 BB&T Corp. 1,397,812
38,000 Chase Manhattan Corp. 3,144,500
105,000 Firstar Corp. 3,156,562
24,000 JP Morgan & Co., Inc. 3,234,000
21,000 Mellon Bank Corp. 1,560,562
52,000 PNC Bank Corp. 3,009,500
37,000 State Street Corp. 3,237,500
- -------------------------------------------------------------------------------
18,740,436
- -------------------------------------------------------------------------------
Brewery -- 0.9%
40,000 Anheuser-Busch Cos., Inc. 2,925,000
- -------------------------------------------------------------------------------
Broadcast Media & Cable Television -- 5.8%
97,600 CBS Corp. 4,446,900
33,300 Chancellor Media Corp.* 1,827,337
45,000 Comcast Corp.* 2,955,937
34,800 Jacor Communications Inc.* 2,792,700
49,200 Time Warner Inc. 3,444,000
42,000 Univision Communications Inc.* 2,430,750
- -------------------------------------------------------------------------------
17,897,624
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Casino Operators -- 1.5%
80,000 Harrah's Entertainment, Inc.* $1,760,000
43,000 MGM Grand, Inc.* 1,892,000
46,000 Mirage Resorts, Inc.* 1,032,125
- -------------------------------------------------------------------------------
4,684,125
- -------------------------------------------------------------------------------
Circuits -- 0.9%
14,000 Linear Technology Corp. 796,250
30,000 Sanmina Corp.* 1,991,250
- -------------------------------------------------------------------------------
2,787,500
- -------------------------------------------------------------------------------
Cosmetics & Toiletries -- 0.5%
27,000 Kimberly-Clark Corp. 1,655,437
- -------------------------------------------------------------------------------
Electrical - Integrated -- 0.6%
46,000 Unicom Corp. 1,785,375
- -------------------------------------------------------------------------------
Electronic Components - Semiconductors -- 3.2%
72,000 Intel Corp. 4,405,500
28,000 LSI Logic Corp.* 952,000
10,000 STMicroelectonics N.V.* 1,020,000
20,000 Texas Instruments Inc. 2,042,500
30,000 Xilinx, Inc.* 1,368,750
- -------------------------------------------------------------------------------
9,788,750
- -------------------------------------------------------------------------------
Finance - Credit Cards -- 1.7%
10,000 Capital One Financial Corp. 1,736,875
28,000 Providian Financial Corp. 3,613,750
- -------------------------------------------------------------------------------
5,350,625
- -------------------------------------------------------------------------------
Financial Services -- 1.4%
13,000 The Charles Schwab Corp. 1,426,750
33,000 Merrill Lynch & Co., Inc. 2,769,937
- -------------------------------------------------------------------------------
4,196,687
- -------------------------------------------------------------------------------
Food - Diversified -- 0.4%
37,500 Keebler Foods Co.* 1,204,687
- -------------------------------------------------------------------------------
Healthcare - Hospital/Medical Services -- 1.7%
20,000 Cardinal Health, Inc. 1,196,250
69,600 Lincare Holdings, Inc.* 2,061,900
26,200 Wellpoint Health Networks Inc.* 1,840,550
- -------------------------------------------------------------------------------
5,098,700
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Healthcare - Products -- 6.8%
35,400 Abbott Laboratories $ 1,714,687
31,000 American Home Products Corp. 1,891,000
58,000 Amgen Inc.* 3,563,375
24,500 Baxter International Inc. 1,543,500
27,200 Guidant Corp. 1,460,300
17,000 Johnson & Johnson 1,657,500
12,500 Pfizer, Inc. 1,438,281
83,000 Schering-Plough Corp. 4,009,937
35,000 Warner-Lambert Co. 2,377,813
34,000 Watson Pharmaceuticals, Inc.* 1,377,000
- -------------------------------------------------------------------------------
21,033,393
- -------------------------------------------------------------------------------
Instruments - Scientific -- 0.3%
10,000 Waters Corp.* 1,051,250
- -------------------------------------------------------------------------------
Insurance -- 3.9%
16,000 Aetna Inc 1,403,000
47,000 AFLAC Inc. 2,549,750
49,000 Equitable Cos. Inc. 3,298,313
16,000 Lincoln National Corp. 1,537,000
44,000 Marsh & McLennan Cos., Inc. 3,368,750
- -------------------------------------------------------------------------------
12,156,813
- -------------------------------------------------------------------------------
Manufacturing -- 2.4%
29,000 Corning Inc. 1,660,250
70,600 Tyco International Ltd. 5,736,250
- -------------------------------------------------------------------------------
7,396,500
- -------------------------------------------------------------------------------
Machinery -- 1.4%
39,000 Applied Materials, Inc.* 2,091,375
30,000 Ingersoll-Rand Co. 2,075,625
- -------------------------------------------------------------------------------
4,167,000
- -------------------------------------------------------------------------------
Medical - Biomedical -- 1.1%
21,000 Biogen, Inc* 1,996,313
15,000 Genentech, Inc.* 1,269,375
- -------------------------------------------------------------------------------
3,265,688
- -------------------------------------------------------------------------------
Medical - Drugs -- 1.8%
31,400 Bristol-Myers Squibb Co. 1,995,863
21,000 Eli Lilly and Co. 1,546,125
50,500 Mylan Laboratories Inc. 1,145,719
15,000 Pharmacia & Upjohn, Inc. 840,000
- -------------------------------------------------------------------------------
5,527,707
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Motorcycle -- 0.6%
30,000 Harley-Davidson, Inc. $ 1,788,750
- -------------------------------------------------------------------------------
Oil - Field Services -- 1.1%
58,000 Baker Hughes Inc. 1,732,750
18,000 Halliburton Co. 767,250
12,000 Schlumberger Ltd. 766,500
- -------------------------------------------------------------------------------
3,266,500
- -------------------------------------------------------------------------------
Paper & Related Products -- 2.2%
47,000 Boise Cascade Corp. 1,891,750
19,000 Georgia-Pacific Group 1,757,500
28,000 International Paper Co. 1,492,750
25,000 Temple-Inland Inc. 1,725,000
- -------------------------------------------------------------------------------
6,867,000
- -------------------------------------------------------------------------------
Pipelines -- 1.7%
32,100 Enron Corp. 2,415,525
58,000 The Williams Cos., Inc. 2,740,500
- -------------------------------------------------------------------------------
5,156,025
- -------------------------------------------------------------------------------
Retail - Department/Discount -- 9.8%
24,000 Abercrombie & Fitch Co.* 2,283,000
47,000 AnnTaylor Stores Corp.* 2,232,500
44,000 Best Buy Co., Inc.* 2,101,000
35,200 Costco Cos. Inc* 2,849,000
65,300 Dayton Hudson Corp. 4,395,506
88,300 Family Dollar Stores, Inc. 2,130,238
27,000 The Home Depot, Inc. 1,618,313
58,500 Lowe's Cos., Inc. 3,085,875
66,000 Office Depot, Inc.* 1,452,000
136,900 TJX Co. 4,560,481
80,000 Wal-Mart Stores, Inc. 3,680,000
- -------------------------------------------------------------------------------
30,387,913
- -------------------------------------------------------------------------------
Retail - Food/Drugs -- 3.2%
31,600 CVS Corp. 1,504,950
51,900 Kroger, Inc.* 2,818,819
103,995 Safeway, Inc.* 5,609,230
- -------------------------------------------------------------------------------
9,932,999
- -------------------------------------------------------------------------------
Retail - Restaurants -- 0.5%
58,200 Brinker International Inc. * 1,607,775
- -------------------------------------------------------------------------------
Savings & Loans Thrifts -- 0.7%
88,000 Golden State Bancorp Inc.* 2,161,500
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Soap & Cleaning Products -- 0.4%
11,000 The Clorox Co. $ 1,269,125
- -------------------------------------------------------------------------------
Technology - Computers & Office Equipment -- 6.5%
85,100 EMC Corp. * 9,270,581
19,600 International Business Machine Corp. 4,100,075
41,000 Lexmark International Group, Inc.* 5,063,500
21,000 Tandy Corp. 1,521,188
- -------------------------------------------------------------------------------
19,955,344
- -------------------------------------------------------------------------------
Technology - Computer Services -- 3.9%
84,000 America Online, Inc.* 11,991,000
- -------------------------------------------------------------------------------
Technology - Computer Software -- 3.9%
45,500 BMC Software, Inc.* 1,959,344
50,900 Citrix Systems Inc. * 2,163,250
47,800 Compuware Corp. * 1,165,125
59,800 Microsoft Corp. * 4,862,488
66,000 Oracle Corp.* 1,786,125
- -------------------------------------------------------------------------------
11,936,332
- -------------------------------------------------------------------------------
Technology - Telecommunications Equipment -- 5.2%
38,700 Ascend Communications, Inc.* 3,739,388
44,500 Cisco Systems Inc.* 5,075,781
34,050 Comverse Technology, Inc.* 2,183,456
20,000 Lucent Technologies, Inc. 1,202,500
50,600 Nokia Corp., ADR 3,753,888
- -------------------------------------------------------------------------------
15,955,013
- -------------------------------------------------------------------------------
Telecommunications Services -- 2.9%
28,000 Frontier Corp. 1,545,250
41,000 Level 3 Communications, Inc.* 3,692,563
25,000 Qwest Communications International Inc.* 2,135,938
15,000 Sprint Corp. 1,538,438
- -------------------------------------------------------------------------------
8,912,189
- -------------------------------------------------------------------------------
Textiles -- 0.4%
74,000 Shaw Industries, Inc. 1,341,250
- -------------------------------------------------------------------------------
Toys -- 0.6%
54,000 Hasbro, Inc. 1,842,750
- -------------------------------------------------------------------------------
Transport - Rail -- 0.6%
32,000 Kansas City Southern Industries, Inc. 1,906,000
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
===============================================================================
Utilities - Telephone -- 2.6%
62,000 ALLTEL Corp. $ 4,181,125
34,500 CenturyTel, Inc. 1,388,625
28,000 MCI Worldcom, Inc.* 2,301,250
- -------------------------------------------------------------------------------
7,871,000
- -------------------------------------------------------------------------------
Waste Disposal -- 1.9%
136,800 Republic Services, Inc.* 2,812,950
53,900 Waste Management, Inc. 3,045,350
- -------------------------------------------------------------------------------
5,858,300
- -------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $216,296,685) 302,056,099
===============================================================================
FACE
AMOUNT SECURITY VALUE
===============================================================================
SHORT-TERM INVESTMENTS -- 2.1%
$ 450,000 U.S. Treasury Bill, 4.310% due 5/20/99 448,976
400,000 U.S. Treasury Bill, 4.440% due 5/20/99 399,063
100,000 U.S. Treasury Bill, 4.470% due 5/20/99 99,764
100,000 U.S. Treasury Bill, 4.170% due 6/17/99 99,456
2,400,000 U.S. Treasury Bill, 4.310% due 6/17/99 2,386,495
400,000 U.S. Treasury Bill, 4.320% due 6/17/99 397,744
2,700,000 U.S. Treasury Bill, 4.330% due 6/17/99 2,684,737
- -------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $6,516,235) 6,516,235
===============================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $222,812,920**) $308,572,334
===============================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
<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 -- $420,697,776, $765,824,139
and $222,812,920, respectively) $ 532,078,637 $1,053,743,990 $ 308,572,334
Cash 926 -- 83,814
Receivable for securities sold 9,284,194 1,945,329 5,718,571
Dividends and interest receivable 655,613 1,026,199 122,033
- -----------------------------------------------------------------------------------------------
Total Assets 542,019,370 1,056,715,518 314,496,752
- -----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 9,080,903 3,133,782 3,814,589
Management fees payable 289,785 664,630 361,354
Payable to bank -- 188,456 --
Accrued expenses 63,092 41,736 29,604
- -----------------------------------------------------------------------------------------------
Total Liabilities 9,433,780 4,028,604 4,205,547
- -----------------------------------------------------------------------------------------------
Total Net Assets $ 532,585,590 $1,052,686,914 $ 310,291,205
===============================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 242 $ 373 $ 123
Capital paid in excess of par value 394,379,966 650,184,728 197,194,242
Undistributed net investment income 9,232,120 6,904,473 910,597
Accumulated net realized gain
on security transactions 17,592,401 107,677,489 26,426,829
Net unrealized appreciation
of investments 111,380,861 287,919,851 85,759,414
- -----------------------------------------------------------------------------------------------
Total Net Assets $ 532,585,590 $1,052,686,914 $ 310,291,205
===============================================================================================
Shares Outstanding 24,198,800 37,275,934 12,262,013
- -----------------------------------------------------------------------------------------------
Net Asset Value $ 22.01 $ 28.24 $ 25.31
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999
<TABLE>
<CAPTION>
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
Portfolio Portfolio Portfolio
===============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 125,440 $ 1,455,754 $ 187,260
Dividends 4,696,012 3,457,844 936,355
Less: Foreign withholding tax (6,683) (28,466) (3,925)
- -----------------------------------------------------------------------------------------------
Total Investment Income 4,814,769 4,885,132 1,119,690
- -----------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,523,644 3,753,192 1,013,379
Shareholder communications 19,638 16,116 5,485
Audit and legal 15,386 12,645 7,480
Custody 8,898 25,908 15,652
Registration fees 7,447 -- --
Directors' fees 6,622 8,431 7,098
Shareholder and system servicing fees 3,989 3,720 3,640
Other 3,187 4,704 1,995
- -----------------------------------------------------------------------------------------------
Total Expenses 1,588,811 3,824,716 1,054,729
- -----------------------------------------------------------------------------------------------
Net Investment Income 3,225,958 1,060,416 64,961
- -----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 144,765,672 294,950,028 174,601,536
Cost of securities sold 140,011,439 241,364,216 152,314,846
- -----------------------------------------------------------------------------------------------
Net Realized Gain 4,754,233 53,585,812 22,286,690
- -----------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of period 47,492,899 123,575,840 50,007,621
End of period 111,380,861 287,919,851 85,759,414
- -----------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 63,887,962 164,344,011 35,751,793
- -----------------------------------------------------------------------------------------------
Net Gain on Investments 68,642,195 217,929,823 58,038,483
- -----------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 71,868,153 $ 218,990,239 $ 58,103,444
===============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
Smith Barney Large Cap Value Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 3,225,958 $ 6,028,674
Net realized gain 4,754,233 12,824,294
Increase in net unrealized appreciation 63,887,962 6,701,077
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 71,868,153 25,554,045
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (4,308,078)
Net realized gains -- (10,768,673)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (15,076,751)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 46,428,239 120,636,096
Net asset value of shares issued
for reinvestment of dividends -- 15,076,751
Cost of shares reacquired (9,281,051) (9,952,696)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 37,147,188 125,760,151
- --------------------------------------------------------------------------------
Increase in Net Assets 109,015,341 136,237,445
NET ASSETS:
Beginning of period 423,570,249 287,332,804
- --------------------------------------------------------------------------------
End of period* $ 532,585,590 $ 423,570,249
================================================================================
* Includes undistributed net investment
income of: $ 9,232,120 $ 6,006,162
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
Alliance Growth Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 1,060,416 $ 4,103,580
Net realized gain 53,585,812 55,878,888
Increase in net unrealized appreciation 164,344,011 11,060,073
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 218,990,239 71,042,541
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (1,174,337)
Net realized gains -- (45,386,333)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (46,560,670)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 70,758,153 176,224,362
Net asset value of shares issued
for reinvestment of dividends -- 46,560,670
Cost of shares reacquired (12,004,115) (16,850,281)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 58,754,038 205,934,751
- --------------------------------------------------------------------------------
Increase in Net Assets 277,744,277 230,416,622
NET ASSETS:
Beginning of period 774,942,637 544,526,015
- --------------------------------------------------------------------------------
End of period* $1,052,686,914 $ 774,942,637
================================================================================
* Includes undistributed net investment
income of: $ 6,904,473 $ 5,844,057
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
Van Kampen American Capital Enterprise Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 64,961 $ 849,639
Net realized gain 22,286,690 4,871,186
Increase in net unrealized appreciation 35,751,793 11,470,817
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 58,103,444 17,191,642
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (569,909)
Net realized gains -- (13,326,876)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (13,896,785)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 12,966,934 46,202,993
Net asset value of shares issued
for reinvestment of dividends -- 13,896,785
Cost of shares reacquired (9,829,752) (10,927,001)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 3,137,182 49,172,777
- --------------------------------------------------------------------------------
Increase in Net Assets 61,240,626 52,467,634
NET ASSETS:
Beginning of period 249,050,579 196,582,945
- --------------------------------------------------------------------------------
End of period* $ 310,291,205 $ 249,050,579
================================================================================
* Includes undistributed net investment
income of: $ 910,597 $ 845,636
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Large Cap Value 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,
Travelers Managed Income (formerly known as TBC Managed Income), Putnam
Diversified Income, GT Global Strategic Income, Smith Barney High 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 bid and ask prices; (c)
securities for which market quotations are not available will be valued in good
faith at fair value by or under the direction of the Board of Directors; (d)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (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 Portfolios determine the
existence of a dividend declaration after exercising reasonable due diligence;
(f) interest income is recorded on an accrual basis; (g) dividends and
distributions to shareholders are recorded on the ex-dividend date; (h) gains or
losses on the sale of securities are calculated by using the specific
identification method; (i) the accounting records of the Portfolios are
maintained in U.S. dollars. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities, and income and expenses are translated at the rate of
exchange quoted on the respective date that such transactions are recorded.
Differences between income or expense amounts recorded and collected or paid are
adjusted when reported by the custodian bank; (j) the character of income and
gains to be distributed are determined in accordance with income tax regulations
which may
- --------------------------------------------------------------------------------
28 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
differ from generally accepted accounting principles, (k) the Portfolios intend
to comply with the requirements of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (l) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Management Agreement and Transactions with Affiliated Persons
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as the
investment manager of the Smith Barney Large Cap Value Portfolio ("SBLCV"). In
addition, SBLCV pays SSBC a management fee calculated at an annual rate of 0.65%
of the average daily net assets of the Portfolio. Travelers Investment Adviser,
Inc. ("TIA"), an affiliate of SSBC, acts as the investment manager of the
Alliance Growth ("AGP") and the Van Kampen American Capital Enterprise
("VKACEP") Portfolios. 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 by TIA 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 SSBC. TIA pays
SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of AGP and VKACEP.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. For the six months ended
April 30, 1999, SSB received brokerage commissions of $101,101.
All officers and one director of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. Investments
During the six months ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were:
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
================================================================================
Purchases $170,870,503 $349,805,193 $177,317,329
- --------------------------------------------------------------------------------
Sales 144,765,672 294,950,028 174,601,536
================================================================================
At April 30, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
Van Kampen
Smith Barney American
Large Cap Alliance Capital
Value Growth Enterprise
================================================================================
Gross unrealized appreciation $114,357,046 $327,032,329 $88,360,191
Gross unrealized depreciation (2,976,185) (39,112,478) (2,600,777)
- --------------------------------------------------------------------------------
Net unrealized appreciation $111,380,861 $287,919,851 $85,759,414
================================================================================
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.
- --------------------------------------------------------------------------------
30 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
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, 1999, 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 decreased 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, 1999, 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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 six months ended April 30, 1999, 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, 1999, there were no securities on loan.
8. Capital Shares
At April 30, 1999, 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.
- --------------------------------------------------------------------------------
32 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
================================================================================
Smith Barney Large Cap Value
Shares sold 2,290,815 6,115,029
Shares issued on reinvestment -- 741,966
Shares reacquired (459,343) (539,460)
- --------------------------------------------------------------------------------
Net Increase 1,831,472 6,317,535
================================================================================
Alliance Growth
Shares sold 2,731,691 7,720,017
Shares issued on reinvestment -- 1,945,703
Shares reacquired (452,762) (822,127)
- --------------------------------------------------------------------------------
Net Increase 2,278,929 8,843,593
================================================================================
Van Kampen American Capital Enterprise
Shares sold 556,526 2,160,649
Shares issued on reinvestment -- 616,265
Shares reacquired (409,589) (545,496)
- --------------------------------------------------------------------------------
Net Increase 146,937 2,231,418
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney Large Cap
Value Portfolio 1999(1) 1998(2) 1997 1996 1995 1994(3)
======================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $18.94 $17.90 $14.84 $12.12 $10.14 $10.00
- --------------------------------------------------------------------------------------
Income From
Operations:
Net investment
income(4) 0.11 0.31 0.25 0.32 0.28 0.11
Net realized and
unrealized gain 2.96 1.47 3.16 2.62 1.76 0.03
- --------------------------------------------------------------------------------------
Total Income From
Operations 3.07 1.78 3.41 2.94 2.04 0.14
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.21) (0.18) (0.17) (0.06) --
Net realized gains -- (0.53) (0.17) (0.05) -- --
- --------------------------------------------------------------------------------------
Total Distributions -- (0.74) (0.35) (0.22) (0.06) --
- --------------------------------------------------------------------------------------
Net Asset Value,
End of Period $22.01 $18.94 $17.90 $14.84 $12.12 $10.14
- --------------------------------------------------------------------------------------
Total Return 16.21%++ 9.65% 23.38% 24.55% 20.21% 1.40%++
- --------------------------------------------------------------------------------------
Net Assets,
End of Period
(millions) $533 $424 $287 $139 $39 $6
- --------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(4) 0.68%+ 0.68% 0.69% 0.73% 0.73% 0.73%+
Net investment
income 1.37+ 1.59 2.01 2.35 2.70 2.82+
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 31% 36% 46% 32% 38% 2%
======================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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 $13,120 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not
reimbursed, the per share decreases in net investment income and the
ratios of expenses to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -----------------
1995 $0.02 0.94%
1994 0.05 2.08+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
34 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Alliance Growth Portfolio 1999(1) 1998 1997 1996 1995 1994(2)
======================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $22.14 $20.82 $16.30 $13.28 $10.65 $10.00
- --------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.02 0.11 0.05 0.04 0.14 0.06
Net realized and
unrealized gain 6.08 2.69 5.11 3.39 2.61 0.59
- --------------------------------------------------------------------------------------
Total Income From
Operations 6.10 2.80 5.16 3.43 2.75 0.65
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.04) (0.02) (0.09) (0.02) --
Net realized gains -- (1.44) (0.62) (0.32) (0.10) --
- --------------------------------------------------------------------------------------
Total Distributions -- (1.48) (0.64) (0.41) (0.12) --
- --------------------------------------------------------------------------------------
Net Asset Value,
End of Period $28.24 $22.14 $20.82 $16.30 $13.28 $10.65
- --------------------------------------------------------------------------------------
Total Return 27.55%++ 12.92% 32.59% 26.55% 26.18% 6.50%++
- --------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $1,053 $775 $545 $295 $112 $17
- --------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(3) 0.81%+ 0.82% 0.82% 0.87% 0.90% 0.88%+
Net investment income 0.23+ 0.59 0.32 0.39 1.24 1.47+
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 33% 40% 66% 88% 78% 37%
======================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the manager
has reimbursed the Portfolio for $3,500 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not
reimbursed, the per share decreases in net investment income and the
ratios of expenses to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -----------------
1995 $0.01 0.97%
1994 0.03 1.76+
++ 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)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Van Kampen American
Capital Enterprise Portfolio 1999(1) 1998 1997 1996 1995 1994(2)
=======================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 20.56 $ 19.89 $ 15.37 $ 12.89 $ 10.38 $10.00
- -------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.00* 0.06 0.06 0.05 0.03 0.03
Net realized and
unrealized gain 4.75 1.83 4.51 2.87 2.53 0.35
- -------------------------------------------------------------------------------------------------------
Total Income From Operations 4.75 1.89 4.57 2.92 2.56 0.38
- -------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.05) (0.05) (0.04) (0.02) --
Net realized gains -- (1.17) -- (0.40) (0.03) --
- -------------------------------------------------------------------------------------------------------
Total Distributions -- (1.22) (0.05) (0.44) (0.05) --
- -------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 25.31 $ 20.56 $ 19.89 $ 15.37 $ 12.89 $10.38
- -------------------------------------------------------------------------------------------------------
Total Return 23.10%++ 8.97% 29.81% 23.35% 24.74% 3.80%++
- -------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $310,291 $249,051 $196,583 $103,691 $32,447 $5,734
- -------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(3) 0.73%+ 0.73% 0.74% 0.83% 0.88% 0.84%+
Net investment income 0.05+ 0.35 0.41 0.53 0.65 0.79+
- -------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 62% 68% 75% 112% 180% 55%
=======================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (unaudited).
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The Manager has waived all or part of its fees for the year ended October
31, 1995 and the period ended October 31, 1994. In addition, the manager has
reimbursed the Portfolio for $19,007 in expenses for the period ended
October 31, 1994. If such fees were not waived and expenses not reimbursed,
the per share decreases in net investment income and the ratios of expenses
to average net assets would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ -----------------
1995 $0.06 1.26%
1994 0.07 2.66+
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
36 1999 Semi-Annual Report to Shareholders
<PAGE>
SALMON SMITH BARNEY
---------------------------
A member of citigroup[LOGO]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and
Treasurer
James B. Conheady
Vice President
Ellen Cordozo Sonsino
Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSBC Fund Management Inc.
Travelers Investment Adviser, Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Travelers Series Fund Inc. - Smith Barney Large Cap Value Portfolio, Alliance
Growth Portfolio and Van Kampen American Capital Enterprise Portfolio. It is not
authorized for distribution to prospective investors unless accompanied or
preceded by a current Prospectus for the Fund, which contains information
concerning the Fund's investment policies and expenses as well as other
pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
www.smithbarney.com
IN0802 6/99
<PAGE>
[GRAPHIC]
Travelers Series Fund Inc.
AIM Capital
Appreciation Portfolio
Smith Barney Large
Capitalization Growth
Portfolio
----------------------------------
S E M I - A N N U A L R E P O R T
----------------------------------
April 30, 1999
Smith Barney Mutual Funds
<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. -- AIM Capital Appreciation Portfolio and the Smith Barney Large
Capitalization Growth Portfolio for the period ended April 30, 1999. 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. We hope you find
this report to be useful and informative.
Portfolio Highlights
AIM Capital Appreciation Portfolio
The AIM Capital Appreciation Portfolio ("Portfolio") seeks capital appreciation.
For the six months ended April 30, 1999, the Portfolio returned 20.23%,
including dividends and before the deduction of any sales charges. In
comparison, mid-capitalization funds generated an average total return of 25.96%
for the same period according to Lipper, Inc., a major fund-tracking
organization.
The first quarter of 1999 was a difficult period for the Portfolio as technology
stocks, long market favorites, faced a massive selloff. Though markets rebounded
during April, total return for the quarter as a whole was a disappointing 0.07%.
Over the same period, the Lipper Midcap Fund Index produced a total return of
2.30% and the S&P 400 rose 5.09%.
Statistics showed that the U.S. economy grew at a torrid 6% pace during the
fourth quarter of 1998. Many market observers speculated that the Federal
Reserve Board might raise interest rates to slow economic growth and head off
inflation. This was one factor that caused many markets to tumble during
February 1999.
The technology sector in particular was badly bruised. Many investors began to
worry about a bubble developing, especially in high-flying Internet stocks. The
sell-off in the technology area affected the Portfolio, which has long held
significant holdings in technology industries. But the markets rebounded,
especially when first-quarter 1999 earnings reports came in quite strong.
During April, the S&P 400 rose 7.88%.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
The Portfolio's managers continued their disciplined, earnings-driven stock
selection process, closely looking at the underlying fundamentals of individual
companies, not the overall market.
The technology sector represented approximately a third of net assets. Because
of its earnings-driven investment discipline, the Portfolio did not participate
in the huge run-up in Internet stocks during 1998. Many Internet companies
simply had no earnings to report. The Portfolio's technology holdings tend to be
in the companies that make the Internet possible. One expression that the
portfolio managers use to describe their investment approach is that "they seek
to own the companies that make the bullets, not the companies that fight the
war." An example would be PMC-Sierra Inc., a company that develops semiconductor
components for the broadband and high-bandwidth communications network
industries. Increasing bandwidth, the volume of information that can be
transmitted over a network at a given time, is critical for the evolution of
information exchange and Internet commerce. Another example is Emc Corp., maker
of information storage and retrieval systems, EMC Corp. reported a 51% rise in
earnings for the first quarter of 1999, the eighth consecutive quarter its
revenue and earnings both grew in excess of 30%.
A number of Portfolio holdings, although related to technology and the Internet,
are not officially part of the technology sector. A good example is Charles
Schwab, the discount broker that is now a big player in on-line trading. The
rising value of Schwab stock made an important contribution to the Portfolio's
performance during the reporting period.
While increasing their technology holdings, the managers trimmed their health
care holdings. The stocks of health-care service providers such as hospitals and
HMOs continue to perform very poorly. Medicare reimbursement policy has eroded
hospitals' earnings, and stiff competition is preventing HMOs from raising
client fees. Long-term care provider HCR Manor Care and dialysis center operator
Total Renal Care, for example, are no longer Portfolio holdings.
Nevertheless, the managers believe that there are opportunities in health care.
Guidant, maker of stents and other devices used in cardiac care, remains one of
the Portfolio's largest holdings as a percent of net assets. In the view of the
managers, a company seems to need that kind of market niche to prosper in health
care today.
Health care is a sector where negative sentiment is taking down good stocks
along with the bad. Omnicare, for example, dispenses drugs for nursing homes and
does computerized record keeping for patients in its clients' facilities.
Omnicare's stock came under significant pressure early in 1999 despite the fact
that the company has an excellent long-term performance record and had
double-digit sales and earnings
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
growth during 1998. The investment team kept the stock in the Portfolio despite
market pressure on it, and during April it regained a good bit of lost ground.
Consumer cyclicals remain important Portfolio holdings, with specialty retailers
a major focus of investment. Restaurants also offer some good opportunities.
There was serious overbuilding in this industry a few years back, but that seems
to have come to a halt. Restaurant holdings include Outback Steakhouse and
Brinker International, owner of the Chili's chain, among others.
New to the Portfolio's top ten list is Omnicom Group, a company that operates
advertising agencies worldwide. For the first quarter of 1999, both revenue and
earnings rose 28% over first quarter of 1998. Another new name on that list is
Providian Financial Corporation, a firm that extends credit to marginal
customers by issuing secured credit cards tied to the borrowers' savings
accounts with the company. Providian reported record earnings for the first
quarter of 1999, citing a combination of strong account growth and an improved
credit loss rate.
Low unemployment, rising wages, minimal inflation and low interest rates are
bolstering consumer confidence. These factors have helped keep consumer spending
strong, and consumer spending drives about two-thirds of the U.S. economy. As a
result, the long economic expansion may continue.
In the equity markets, sentiment has favored big companies almost constantly
over the past two years, although companies in the midcap sector, where the
Portfolio invests, have been reporting much better earnings at far lower
valuations. Toward the close of the reporting period, there was evidence that
markets were starting to turn toward midcap stocks. During April, the S&P 400, a
midcap index, rose 7.88% while the large-cap S&P 500 rose 3.87%. It's too early
to tell if this will be a long-term change in market sentiment. If it is, it
would be a very favorable development for the AIM Capital Appreciation
Portfolio.
Smith Barney Large Capitalization Growth Portfolio
The Smith Barney Large Capitalization Growth Portfolio ("Portfolio") seeks
long-term growth of capital by normally investing 65% of its assets in the
equity securities of companies with market capitalizations of $5 billion or
more. For the six months ended April 30, 1999, the Portfolio returned 40.18%. In
comparison, the S&P 500 Index generated a 22.31% over the same period.
The first quarter of 1999 was another interesting one for large-capitalization
growth stocks. Investors continued to focus on companies delivering a degree of
earnings consistency, steady dividend increases, share buyback programs, and
most importantly, strategic acquisitions. The difficult worldwide economic
conditions have also played into the sector's favor as an almost Darwinian
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
survival of the fittest struggle takes place. The strong companies are getting
stronger, and the best are getting better, as the strength of their balance
sheets enables them to put increasing competitive distance between the top
companies in an industry and secondary and peripheral members.
The manager continues to believe that the large-cap growth sector will create
opportunities to build positions in the group rotationally throughout 1999.
Overall low inflation and no pricing power market conditions continue to benefit
unit growth stories. This environment, coupled with the flexibility of
high-quality balance sheets, has provided the manager with numerous investment
opportunities. He looks for continued dividend increases, share buybacks, and
strategic acquisitions within the large cap growth arena.
The stock market action in April has once again raised the question. "Is this
rotation for real?" The manager's answer has been the same over the years: he
does not know, and he views sector rotation to be like market timing, a very
difficult endeavor at best. Short-term trading, more than anything, speaks
volumes for asset allocation.
The Portfolio's manager also believes that the backdrop still remains favorable
for the large-cap growth sector. The manager plans to continue focusing on
companies with consistent earnings growth, dividend growth and high return on
equity. The recoveries of Asia and Latin America probably signal the end of the
18-month underperformance of consumer stocks and should reignite interest in the
franchise technology names.
In closing, thank you for investing in the Travelers Series Fund Inc. We look
forward to continuing to help you to pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
May 26, 1999
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
AIM Capital Appreciation 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>
4/30/99 $12.31 $14.80 $0.00 $0.00 20.23%++
- ------------------------------------------------------------------------------------
10/31/98 12.68 12.31 0.02 0.00 (2.79)
- ------------------------------------------------------------------------------------
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 $0.04 $0.00
====================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Six Months Ended 4/30/99++ 20.23%
- --------------------------------------------------------------------------------
Year Ended 4/30/99 5.93
- --------------------------------------------------------------------------------
10/10/95* through 4/30/99 11.76
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
10/10/95* through 4/30/99 48.50%
================================================================================
+ 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 1999
[GRAPHIC]
AIM Capital Appreciation Portfolio Lipper Midcap Index
10/10/95 10000 10000
4/96 10711 11727
10/96 10771 11739
4/97 10582 11530
10/97 12706 14180
4/98 14019 16201
10/98 12351 13768
4/30/99 14850 17068
+ Hypothetical illustration of $10,000 invested in shares of the AIMCapital
Appreciation Portfolio on October 10, 1995 (commencement of operations),
assuming reinvestment of dividends and capital gains at net asset value
through April 30, 1999. 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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney Large Capitalization Growth 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>
4/30/99 $ 9.90 $13.87 $0.01 $0.00 40.18%++
- ------------------------------------------------------------------------------------
5/1/98* - 10/31/98 10.00 9.90 0.00 0.00 (1.00)++
====================================================================================
Total $0.01 $0.00
====================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Six Months Ended 4/30/99++ 40.18%
- --------------------------------------------------------------------------------
5/1/98* through 4/30/99++ 13.22
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
5/1/98* through 4/30/99 38.78%
================================================================================
+ 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. 7
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Large Capitalization Growth Portfolio
vs. Standard & Poor's 500 Index+
- --------------------------------------------------------------------------------
May 1998 -- April 1999
[GRAPHIC]
Smith Barney
Large Capitalization Standard & Poor's
Growth Portfolio 500 Index
5/1/98 10000 10000
7/98 10360 10119
10/98 9900 9959
1/99 13078 11637
4/30/99 13878 12181
+ Hypothetical illustration of $10,000 invested in shares of the Smith
Barney Large Capitalization Growth Portfolio on May 1, 1998 (commencement
of operations), assuming reinvestment of dividends and capital gains at
net asset value through April 30, 1999. The Standard & Poor's 500 Index is
an index composed of widely held common stocks listed on the New York
Stock Exchange, American Stock Exchange and over-the-counter market.
Figures for the index include reinvestment of dividends. The index is
unmanaged and is not subject to the same management and trading expenses
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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
COMMON STOCK -- 90.7%
Advertising -- 2.4%
8,000 Interpublic Group of Cos., Inc. $ 620,500
28,000 Lamar Advertising Co., Class A Shares+ 941,500
45,400 Omnicom Group Inc. 3,291,500
26,700 Outdoor Systems, Inc.+ 672,506
35,500 Snyder Communications, Inc.+ 1,042,812
- ----------------------------------------------------------------------------------------------
6,568,818
- ----------------------------------------------------------------------------------------------
Aerospace & Defense -- 0.1%
6,900 Gulfstream Aerospace Corp.+ 336,375
- ----------------------------------------------------------------------------------------------
Airlines -- 0.3%
28,500 Southwest Airlines Co. 928,031
- ----------------------------------------------------------------------------------------------
Banking -- 4.3%
13,700 AmSouth Bancorporation 651,606
18,000 Astoria Financial Corp. 902,250
8,800 Bank United Corp., Class A Shares 355,300
42,900 Dime Bancorp, Inc. 989,381
22,700 First Tennessee National Corp.+ 978,938
87,600 Firstar Corp. 2,633,475
29,900 Golden State Bancorp Inc.+ 734,419
27,600 GreenPoint Financial Corp. 966,000
10,700 Mercantile Bankshares Corp. 395,900
43,450 North Fork Bancorporation, Inc. 977,625
9,500 Northern Trust Corp. 884,688
16,600 TCF Financial Corp. 481,400
12,100 Zions Bancorporation 806,919
- ----------------------------------------------------------------------------------------------
11,757,901
- ----------------------------------------------------------------------------------------------
Broadcasting -- 1.9%
28,000 AT&T Corp. - Liberty Media Group+ 1,788,500
26,490 Chancellor Media Corp., Class A Shares+ 1,453,639
8,500 Cox Communications, Inc.+ 674,687
9,400 Heftel Broadcasting Corp.+ 511,125
24,200 USA Networks, Inc.+ 904,475
- ----------------------------------------------------------------------------------------------
5,332,426
- ----------------------------------------------------------------------------------------------
Building - Residential -- 0.4%
15,000 Fleetwood Enterprises, Inc. 370,313
10,100 Kaufman & Broad Home Corp. 245,556
17,000 Masco Corp. 499,375
- ----------------------------------------------------------------------------------------------
1,115,244
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Communications - Equipment and Software -- 2.1%
42,500 Ascend Communications, Inc.+ $ 4,106,562
18,700 Metromedia Fiber Network, Inc., Class A Shares+ 1,575,475
- ----------------------------------------------------------------------------------------------
5,682,037
- ----------------------------------------------------------------------------------------------
Computer Software -- 9.1%
18,600 Affiliated Computer Services, Class A Shares+ 711,450
18,200 America Online, Inc. 2,598,050
63,100 BMC Software, Inc. 2,717,244
24,850 Cadence Design Systems, Inc.+ 337,028
18,950 CDW Computer Centers, Inc.+ 1,696,025
12,000 Check Point Software Technologies Ltd.+ 423,000
55,800 Citrix Systems, Inc.+ 2,371,500
87,600 Compuware Corp.+ 2,135,250
33,620 CSG Systems International, Inc.+ 1,298,572
14,000 DST Systems, Inc.+ 815,500
8,900 Electronics Arts Inc.+ 452,231
13,700 Intuit Inc.+ 1,179,912
17,000 Learning Company Inc. 527,000
12,200 Lycos, Inc.+ 1,216,187
9,600 Microsoft Corp.+ 780,600
37,900 Novell, Inc.+ 843,275
15,000 Policy Management Systems Corp.+ 471,563
10,800 Siebel Systems, Inc.+ 415,125
9,485 Sterling Commerce, Inc.+ 296,999
22,900 Sterling Software, Inc.+ 473,744
37,900 SunGard Data Systems Inc. 1,210,431
28,100 Synopsys Inc.+ 1,324,213
11,100 Verio Inc.+ 788,100
- ----------------------------------------------------------------------------------------------
25,082,999
- ----------------------------------------------------------------------------------------------
Computers -- 3.0%
37,000 Adaptec, Inc.+ 890,312
13,000 Apple Computer, Inc.+ 598,000
11,700 ASM Lithography Holding N.V.+ 456,300
16,200 Convergys Corp.+ 301,725
18,000 Diebold, Inc.+ 433,125
31,300 EMC Corp.+ 3,409,744
18,100 NCR Corp.+ 742,100
21,000 VERITAS Software Corp.+ 1,491,000
- ----------------------------------------------------------------------------------------------
8,322,306
- ----------------------------------------------------------------------------------------------
Consumer/Commercial Services -- 6.3%
28,400 Apollo Group Inc., Class A Shares 702,900
37,700 Ceridian Corp.+ 1,380,762
18,700 CIBER, Inc.+ 352,963
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Consumer/Commercial Services -- 6.3% (continued)
26,000 Cintas Corp. $ 1,787,500
78,900 Comdisco, Inc. 2,076,056
79,200 Concord EFS, Inc.+ 2,643,300
43,800 Fiserv Inc.+ 2,565,038
34,300 Keane, Inc. 851,069
16,900 National Data Corp. 779,513
18,190 NOVA Corp. 472,940
37,925 Paychex, Inc. 1,936,545
9,200 Quintiles Transnational Corp.+ 373,175
39,300 Stewart Enterprises Inc., Class A Shares+ 781,087
28,300 USWeb Corp.+ 634,981
- ----------------------------------------------------------------------------------------------
17,337,829
- ----------------------------------------------------------------------------------------------
Consumer Non-Durables -- 0.9%
4,400 Ball Corp. 241,725
11,000 Clorox Co. 1,269,125
25,000 Dial Corp. 850,000
- ----------------------------------------------------------------------------------------------
2,360,850
- ----------------------------------------------------------------------------------------------
Diversified -- 0.3%
25,000 Viad Corp. 826,562
- ----------------------------------------------------------------------------------------------
Electronics -- 1.7%
9,600 Arrow Electronics, Inc.+ 174,600
16,000 Maytag Corp. 1,094,000
15,000 Sanmina Corp.+ 995,625
30,800 Symbol Technologies, Inc. 1,470,700
22,500 Teradyne, Inc.+ 1,061,719
- ----------------------------------------------------------------------------------------------
4,796,644
- ----------------------------------------------------------------------------------------------
Electronics - Semiconductors and Components -- 8.2%
23,000 Altera Corp.+ 1,661,750
45,000 Analog Devices, Inc.+ 1,580,625
22,000 Applied Materials, Inc.+ 1,179,750
36,400 Atmel Corp.+ 664,300
22,100 KLA-Tencor Corp.+ 1,096,712
36,200 Linear Technology Corp. 2,058,875
36,900 LSI Logic Corp.+ 1,254,600
28,400 Maxim Integrated Products Inc. 1,590,400
25,350 Microchip Technology Inc.+ 887,250
26,000 National Semiconductor Corp.+ 325,000
9,000 Novellus Systems, Inc.+ 425,250
23,200 PMC-Sierra, Inc.+ 2,224,300
55,600 Solectron Corp.+ 2,696,600
10,000 SPX Corp. 653,125
14,000 Uniphase Corp. 1,699,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Electronics - Semiconductors and Components -- 8.2% (continued)
16,000 Vitesse Semiconductor Corp.+ $ 741,000
36,400 Xilinx, Inc. 1,660,750
- ----------------------------------------------------------------------------------------------
22,399,537
- ----------------------------------------------------------------------------------------------
Entertainment and Leisure Time -- 2.2%
7,700 Action Performance Cos., Inc. 260,837
50,500 Callaway Golf Co. 760,656
36,900 Circus Circus Enterprises, Inc.+ 777,206
42,500 Harley-Davidson, Inc. 2,534,063
20,000 MGM Grand, Inc.+ 880,000
8,500 SFX Entertainment, Inc., Class A Shares+ 524,875
7,300 Speedway Motorsports, Inc.+ 316,637
- ----------------------------------------------------------------------------------------------
6,054,274
- ----------------------------------------------------------------------------------------------
Financial Services -- 5.7%
22,800 Bear Stearns Cos. Inc. 1,063,050
14,800 Capital One Financial Corp. 2,570,575
55,600 Charles Schwab Corp. 6,102,100
10,000 Countrywide Credit Industries, Inc. 453,125
19,000 Equifax Inc. 682,813
35,000 Federated Investors, Inc. 562,188
19,000 Finova Group, Inc. 917,938
11,000 Lehman Brothers Holdings Inc. 611,187
9,000 Old Kent Financial Corp. 425,250
18,850 SLM Holding Corp. 804,659
38,800 T. Rowe Price Associates, Inc. 1,462,275
- ----------------------------------------------------------------------------------------------
15,655,160
- ----------------------------------------------------------------------------------------------
Food - Baking -- 0.5%
17,000 Flowers Industries, Inc. 361,250
12,000 Keebler Foods Co.+ 385,500
14,000 U.S. Foodservice+ 588,875
- ----------------------------------------------------------------------------------------------
1,335,625
- ----------------------------------------------------------------------------------------------
Instruments - Scientific -- 1.1%
46,900 American Power Conversion Corp.+ 1,547,700
12,300 Perkin-Elmer Corp.+ 1,329,937
- ----------------------------------------------------------------------------------------------
2,877,637
- ----------------------------------------------------------------------------------------------
Insurance -- 3.0%
16,000 AFLAC Inc. 868,000
11,000 ChoicePoint Inc.+ 653,125
4,500 HCC Insurance Holdings, Inc. 95,062
16,100 MGIC Investment Corp. 781,856
25,800 Provident Co., Inc. 1,015,875
26,950 Providian Corp. 3,478,234
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Insurance -- 3.0% (continued)
25,500 ReliaStar Financial Corp. $ 937,125
12,000 Torchmark, Corp. 410,250
- ----------------------------------------------------------------------------------------------
8,239,527
- ----------------------------------------------------------------------------------------------
Manufacturing -- 3.6%
69,775 Clayton Homes, Inc. 776,247
58,000 Corning Inc. 3,320,500
7,650 Crane Co. 221,372
21,000 Danaher Corp. 1,395,187
35,600 Leggett & Platt, Inc. 821,025
18,500 Lexmark International Group, Inc., Class A Shares+ 2,284,750
8,800 Pentair, Inc. 413,600
31,700 Shaw Industries, Inc.+ 574,563
- ----------------------------------------------------------------------------------------------
9,807,244
- ----------------------------------------------------------------------------------------------
Medical Distribution -- 0.4%
8,605 Cardinal Health, Inc. 514,687
18,924 Henry Schein, Inc.+ 495,572
- ----------------------------------------------------------------------------------------------
1,010,259
- ----------------------------------------------------------------------------------------------
Medical Equipment and Information Systems -- 2.8%
35,400 Biomet, Inc. 1,451,400
67,000 Guidant Corp. 3,597,063
15,100 IMS Health Inc. 453,000
55,400 Omnicare, Inc. 1,333,063
8,000 Waters Corp.+ 841,000
- ----------------------------------------------------------------------------------------------
7,675,526
- ----------------------------------------------------------------------------------------------
Medical Products and Supplies -- 2.0%
18,000 Bausch & Lomb Inc. 1,350,000
41,450 Jones Pharma Inc. 1,331,581
7,500 Orthodontic Centers of America, Inc.+ 92,813
10,000 Patterson Dental Co.+ 360,625
22,400 Sybron International Corp.+ 620,200
33,200 Universal Health Services, Inc., Class B Shares+ 1,720,175
- ----------------------------------------------------------------------------------------------
5,475,394
- ----------------------------------------------------------------------------------------------
Medical Services -- 1.2%
17,750 Covance Inc.+ 389,391
26,500 Express Scripts Inc., Class A Shares+ 1,951,063
37,737 Health Management Associates Inc., Class A Shares+ 589,641
11,600 Trigon Healthcare Inc.+ 368,300
- ----------------------------------------------------------------------------------------------
3,298,395
- ----------------------------------------------------------------------------------------------
Miscellaneous -- 0.1%
5,500 G&K Services Inc., Class A Shares 257,125
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Office Equipment, Products and Supplies -- 1.8%
80,250 Office Depot Inc.+ $1,765,500
108,237 Staples Inc.+ 3,247,110
- ----------------------------------------------------------------------------------------------
5,012,610
- ----------------------------------------------------------------------------------------------
Oil and Gas -- 3.1%
26,500 Apache Corp. 813,219
34,000 Baker Hughes Inc. 1,015,750
25,600 BJ Services Co.+ 684,800
4,200 Coflexip Stena Offshore ADR 186,900
35,700 Cooper Cameron Corp.+ 1,378,912
12,000 Core Laboratories N.V.+ 216,000
18,000 Diamond Offshore Drilling 595,125
27,400 El Paso Energy Corp. 1,006,950
41,500 Global Industries Ltd.+ 510,969
35,000 Rowan Cos., Inc.+ 560,000
22,800 Santa Fe Energy Resources Inc.+ 205,200
22,700 Smith International, Inc.+ 1,018,663
18,000 Stolt Comex Seaway, S.A.+ 225,000
9,000 Stolt Comex Seaway, S.A. ADR, Class A Shares+ 99,000
- ----------------------------------------------------------------------------------------------
8,516,488
- ----------------------------------------------------------------------------------------------
Oil and Gas - Drilling -- 0.4%
19,200 Transocean Offshore Inc. 570,000
56,900 Varco International, Inc.+ 643,681
- ----------------------------------------------------------------------------------------------
1,213,681
- ----------------------------------------------------------------------------------------------
Pharmaceuticals -- 1.7%
15,700 Alpharma, Inc., Class A Shares 463,150
17,300 Biogen, Inc. 1,644,581
9,000 Forest Laboratories, Inc.+ 400,500
22,500 Medicis Pharmaceutical Corp., Class A Shares 547,031
44,300 Mylan Laboratories Inc. 1,005,056
15,700 Watson Pharmaceuticals, Inc.+ 635,850
- ----------------------------------------------------------------------------------------------
4,696,168
- ----------------------------------------------------------------------------------------------
Printing and Publishing -- 1.4%
33,200 Electronics for Imaging, Inc.+ 1,570,775
18,000 McGraw-Hill Cos., Inc.+ 994,500
19,000 Reader's Digest Association, Inc., Class A Shares 675,688
12,300 Valassis Communications, Inc.+ 688,800
- ----------------------------------------------------------------------------------------------
3,929,763
- ----------------------------------------------------------------------------------------------
Restaurants -- 2.0%
35,000 Brinker International, Inc.+ 966,875
37,000 Outback Steakhouse, Inc.+ 1,325,063
14,400 Papa John's International, Inc.+ 578,700
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Restaurants -- 2.0% (continued)
36,800 Starbucks Corp.+ $ 1,359,300
21,000 Tricon Global Restaurants, Inc.+ 1,351,875
- ----------------------------------------------------------------------------------------------
5,581,813
- ----------------------------------------------------------------------------------------------
Retail -- 8.1%
14,800 Abercrombie & Fitch Co., Inc., Class A Shares+ 1,407,850
48,600 Bed Bath & Beyond Inc.+ 1,734,412
16,000 Best Buy Co., Inc.+ 764,000
14,400 Circuit City Stores - Circuit City Group 885,600
17,400 Dollar General Corp. 610,088
31,975 Dollar Tree Stores, Inc.+ 1,167,087
49,500 Family Dollar Stores, Inc. 1,194,188
14,225 The Gap, Inc. 946,852
20,000 Intimate Brands, Inc. 1,000,000
24,600 Jones Apparel Group, Inc.+ 811,800
23,700 Kohl's Corp.+ 1,574,569
35,100 The Kroger Co.+ 1,906,369
5,200 Linens `n Things, Inc.+ 237,900
17,200 Lowe's Cos., Inc. 907,300
19,100 Mattel, Inc. 494,213
43,475 The Men's Wearhouse, Inc.+ 1,190,128
22,900 NIKE, Inc., Class B Shares 1,424,094
10,000 Payless ShoeSource, Inc.+ 484,375
9,200 Ross Stores, Inc. 422,625
56,900 The TJX Cos., Inc. 1,895,481
13,800 Tommy Hilfiger Corp.+ 964,275
8,900 Williams-Sonoma, Inc.+ 258,100
- ----------------------------------------------------------------------------------------------
22,281,306
- ----------------------------------------------------------------------------------------------
Telecommunications -- 2.6%
39,300 Century Telephone Enterprises, Inc. 1,581,825
16,200 Cincinnati Bell Inc. 366,525
18,200 Comcast Corp., Class A Shares 1,195,512
27,200 Global Telesystems Group, Inc. 1,798,600
9,000 NTL Inc.+ 686,250
27,800 Univision Communications Inc., Class A Shares+ 1,608,925
- ----------------------------------------------------------------------------------------------
7,237,637
- ----------------------------------------------------------------------------------------------
Telecommunications Equipment -- 3.9%
19,000 ADC Telecommunications, Inc. 908,438
27,300 Comverse Technology, Inc. 1,750,612
32,300 General Instrument Corp.+ 1,178,950
45,400 Nokia Corp. ADR 3,368,113
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Telecommunications Equipment -- 3.9% (continued)
12,000 QUALCOMM Inc.+ $ 2,400,000
36,000 Scientific-Atlanta, Inc. 1,143,000
- ----------------------------------------------------------------------------------------------
10,749,113
- ----------------------------------------------------------------------------------------------
Transportation - Miscellaneous -- 1.0%
27,400 Airborne Freight Corp. 876,800
31,200 Kansas City Southern Industries, Inc. 1,858,350
- ----------------------------------------------------------------------------------------------
2,735,150
- ----------------------------------------------------------------------------------------------
Waste Management -- 1.1%
42,740 Allied Waste Industries Inc.+ 755,964
20,000 Republic Services, Inc., Class A Shares+ 411,250
32,377 Waste Management, Inc. 1,829,300
- ----------------------------------------------------------------------------------------------
2,996,514
- ----------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $183,597,587) 249,483,968
==============================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
==============================================================================================
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 9.3%
$ 9,897,000 Federal Home Loan Bank Discount Note, 4.900% due 5/3/99 9,894,306
15,573,000 Federal Home Loan Mortgage Corp., 4.820% due 5/3/99 15,568,830
- ----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $25,463,136) 25,463,136
==============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $209,060,723*) $274,947,104
==============================================================================================
</TABLE>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
COMMON STOCK -- 94.3%
Capital Goods -- 2.0%
20,620 General Electric Co. $ 2,175,410
- ----------------------------------------------------------------------------------------------
Computer Software -- 7.7%
46,750 America Online, Inc.+ 6,673,563
21,440 Microsoft Corp.+ 1,743,340
- ----------------------------------------------------------------------------------------------
8,416,903
- ----------------------------------------------------------------------------------------------
Consumer Cyclicals -- 6.9%
48,860 The Home Depot, Inc. 2,928,546
23,060 McDonald's Corp. 977,168
115,075 The Walt Disney Co. 3,653,631
- ----------------------------------------------------------------------------------------------
7,559,345
- ----------------------------------------------------------------------------------------------
Consumer Staples -- 20.5%
69,795 Avon Products, Inc. 3,790,741
85,910 The Coca-Cola Co. 5,841,880
64,525 Gillette Co. 3,367,398
87,520 PepsiCo, Inc. 3,232,770
34,150 The Procter & Gamble Co. 3,203,697
34,730 Wm. Wrigley Jr. Co. 3,080,117
- ----------------------------------------------------------------------------------------------
22,516,603
- ----------------------------------------------------------------------------------------------
Energy -- 1.5%
24,935 Schlumberger Ltd. 1,592,723
- ----------------------------------------------------------------------------------------------
Financial Services -- 23.5%
18,757 American International Group, Inc. 2,202,775
30,725 BankAmerica, Corp. 2,212,200
45 Berkshire Hathaway Inc., Class A Shares 3,438,000
9 Berkshire Hathaway Inc., Class B Shares 22,230
25,235 Fannie Mae 1,790,108
77,755 Household International Inc. 3,912,048
44,160 Merrill Lynch & Co., Inc. 3,706,680
28,915 Morgan Stanley Dean Witter & Co. 2,868,007
131,435 Wells Fargo Co. 5,676,349
- ----------------------------------------------------------------------------------------------
25,828,397
- ----------------------------------------------------------------------------------------------
Health Care -- 13.7%
42,840 Amgen Inc.+ 2,631,983
31,710 Eli Lilly & Co. 2,334,649
33,555 Johnson & Johnson 3,271,612
14,180 Merck & Co., Inc. 996,145
17,440 Pfizer Inc. 2,006,690
55,450 Warner-Lambert Co. 3,767,134
- ----------------------------------------------------------------------------------------------
15,008,213
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
==============================================================================================
<S> <C> <C>
Technology -- 18.5%
14,117 Cisco Systems, Inc.+ $ 1,610,220
69,340 Intel Corp. 4,242,741
40,620 Lucent Technologies Inc. 2,442,278
40,690 Motorola, Inc. 3,260,286
52,210 Novell Inc. 1,161,673
47,260 Texas Instruments Inc. 4,826,427
61,400 Xilinx Inc.+ 2,801,375
- ----------------------------------------------------------------------------------------------
20,345,000
- ----------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $87,844,464) 103,442,594
==============================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
==============================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 5.7%
$6,248,000 Chase Securities Inc., 4.770% due 5/3/99; Proceeds at maturity --
$6,250,481; (Fully collateralized by U.S. Treasury Notes,
8.125% due 8/15/21; Market value -- $6,377,875)
(Cost -- $6,248,000) 6,248,000
==============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $94,092,464*) $109,690,594
==============================================================================================
</TABLE>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
===============================================================================================================
<S> <C> <C>
ASSETS:
Investments, at value
(Cost -- $209,060,723 and $94,092,464) $ 274,947,104 $ 109,690,594
Cash 10,792 15,551
Dividends and interest receivable 35,604 36,812
- ---------------------------------------------------------------------------------------------------------------
Total Assets 274,993,500 109,742,957
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,779,870 3,936,145
Management fees payable 188,410 154,410
Accrued expenses 83,580 43,791
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities 2,051,860 4,134,346
- ---------------------------------------------------------------------------------------------------------------
Total Net Assets $ 272,941,640 $ 105,608,611
===============================================================================================================
NET ASSETS:
Par value of capital shares $ 184 $ 76
Capital paid in excess of par value 203,087,253 89,447,922
Undistributed (overdistributed) net investment income -- 6,577
Accumulated net investment loss (144,767) --
Accumulated net realized gain from security transactions 4,112,589 555,906
Net unrealized appreciation of investments 65,886,381 15,598,130
- ---------------------------------------------------------------------------------------------------------------
Total Net Assets $ 272,941,640 $ 105,608,611
===============================================================================================================
Shares Outstanding 18,446,172 7,611,600
- ---------------------------------------------------------------------------------------------------------------
Net Asset Value $ 14.80 $ 13.87
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999
<TABLE>
<CAPTION>
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
===============================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 549,519 $ 87,742
Dividends 404,468 202,743
- ---------------------------------------------------------------------------------------------------------------
Total Investment Income 953,987 290,485
- ---------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,020,270 225,909
Shareholder communications 20,169 12,000
Audit and legal 17,753 18,500
Custody 13,517 5,600
Registration fees 10,019 --
Directors' fees 8,713 2,000
System servicing fees 5,923 4,500
Other 2,390 5,938
- ---------------------------------------------------------------------------------------------------------------
Total Expenses 1,098,754 274,447
- ---------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (144,767) 16,038
- ---------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 88,800,412 4,691,830
Cost of securities sold 74,919,947 4,116,286
- ---------------------------------------------------------------------------------------------------------------
Net Realized Gain 13,880,465 575,544
- ---------------------------------------------------------------------------------------------------------------
Changes in Net Unrealized Appreciation
of Investments:
Beginning of period 34,002,947 903,093
End of period 65,886,381 15,598,130
- ---------------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 31,883,434 14,695,037
- ---------------------------------------------------------------------------------------------------------------
Net Gain on Investments 45,763,899 15,270,581
- ---------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 45,619,132 $ 15,286,619
===============================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
AIM Capital Appreciation Portfolio 1999 1998
==========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment loss $ (144,767) $ (136,999)
Net realized gain (loss) 13,880,465 (8,377,798)
Increase in net unrealized appreciation 31,883,434 1,117,130
- ------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 45,619,132 (7,397,667)
- ------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (323,315)
- ------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (323,315)
- ------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 48,861,307 64,713,956
Net asset value of shares issued
for reinvestment of dividends -- 323,315
Cost of shares reacquired (47,400,950) (34,299,732)
- ------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,460,357 30,737,539
- ------------------------------------------------------------------------------------------
Increase in Net Assets 47,079,489 23,016,557
NET ASSETS:
Beginning of period 225,862,151 202,845,594
- ------------------------------------------------------------------------------------------
End of period* $ 272,941,640 $ 225,862,151
==========================================================================================
* Includes accumulated net investment loss of: $ (144,767) --
==========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
<TABLE>
<CAPTION>
Smith Barney Large Capitalization Growth Portfolio 1999 1998(a)
==========================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 16,038 $ 17,597
Net realized gain (loss) 575,544 (19,638)
Increase in net unrealized appreciation 14,695,037 903,093
- ------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 15,286,619 901,052
- ------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (27,058) --
- ------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (27,058) --
- ------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 69,562,828 19,937,850
Net asset value of shares issued
for reinvestment of dividends 27,058 --
Cost of shares reacquired (27,759) (51,979)
- ------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 69,562,127 19,885,871
- ------------------------------------------------------------------------------------------
Increase in Net Assets 84,821,688 20,786,923
NET ASSETS:
Beginning of period 20,786,923 --
- ------------------------------------------------------------------------------------------
End of period* $ 105,608,611 $ 20,786,923
==========================================================================================
* Includes undistributed net investment income of: $ 6,577 $ 17,597
==========================================================================================
</TABLE>
(a) For the period from May 1, 1998 (commencement of operations) to October
31, 1998.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization
Growth 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 eleven other
separate investment portfolios: Smith Barney Large Cap Value, Alliance Growth,
Van Kampen American Capital Enterprise, Smith Barney International Equity, Smith
Barney Pacific Basin, Travelers Managed Income (formerly known as TBC Managed
Income), Putnam Diversified Income, GT Global Strategic Income, Smith Barney
High Income, MFS Total Return and Smith Barney Money Market Portfolios. Shares
of the Fund are offered only to insurance company separate accounts that fund
certain variable annuity and variable life insurance contracts. The financial
statements and financial highlights for the other portfolios are presented in
separate semi-annual reports.
The significant accounting policies followed by the 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 asked prices; (c)
securities maturing within 60 days are valued at cost plus accreted discount or
minus amortized premium, which approximates value; (d) securities for which
market quotations are not available will be valued in good faith at fair value
by or under the direction of the Board of Directors; (e) interest income 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) 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; (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, 1998, reclassifications
were made to the AIM Capital Appreciation Portfolio's capital accounts to
reflect
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Accordingly, for the AIM Capital Appreciation
Portfolio, a portion of overdistributed net investment income amounting to
$137,355 was reclassified to paid-in capital. Net investment income, net
realized gains and net assets were not affected by this change; (j) the
Portfolios intend to comply with the applicable provisions of the Internal
Revenue Code of 1986, as amended, pertaining to regulated investment companies
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes; and (k) estimates and
assumptions are required to be made regarding assets, liabilities and changes in
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ.
2. Management Agreement and Transactions with Affiliated Persons
SSBC Fund Management Inc., ("SSBC"), formerly known as Mutual Management Corp.,
a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment
manager of the Smith Barney Large Capitalization Growth Porfolio ("SBLCG").
SBLCG pays SSBC a management fee calculated at an annual rate of 0.75% on the
average daily net assets of the Portfolio.
Travelers Investment Adviser, Inc. ("TIA"), an affiliate of SSBC, acts as the
investment manager of the AIM Capital Appreciation Portfolio ("AIMCAP"). AIMCAP
pays TIA a management fee calculated at an annual rate of 0.80% on the average
daily net assets of the Portfolio. These fees are calculated daily and paid
monthly.
TIA has also 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 services 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 also entered into a Sub-Administrative Services Agreement with SSBC. TIA
pays SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of
the Portfolio's average daily net assets.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. During the six months
ended April 30, 1999, SSB did not receive any brokerage commissions.
All officers and one Director of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. Investments
For the six months ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
Smith Barney
AIM Capital Large Capitalization
Appreciation Growth
================================================================================
Purchases $90,916,779 $73,426,023
- --------------------------------------------------------------------------------
Sales 88,800,412 4,691,830
================================================================================
At April 30, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
Smith Barney
AIM Capital Large Capitalization
Appreciation Growth
================================================================================
Gross unrealized appreciation $74,421,733 $16,497,325
Gross unrealized depreciation (8,535,352) (899,195)
- --------------------------------------------------------------------------------
Net unrealized appreciation $65,886,381 $15,598,130
================================================================================
4. Capital Loss Carryforward
At October 31, 1998, the AIM Capital Appreciation and Smith Barney Large
Capitalization Growth Portfolios had, for Federal income tax purposes,
approximately $9,589,000 and $20,000, respectively, of capital loss
carryforwards available to offset any future capital gains. To the extent that
these carryforward losses are used to offset capital gains, it is probable that
the gains so offset will not be distributed. Expiration occurs on October 31 of
the years shown below:
Total 2004 2006
================================================================================
AIM Capital Appreciation $9,589,000 $939,000 $8,650,000
- --------------------------------------------------------------------------------
Smith Barney Large Capitalization Growth 20,000 -- 20,000
================================================================================
5. Lending of Portfolio Securities
Each Portfolio has an agreement with its 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
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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, 1999, the Portfolios 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 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 portfolio.
The Portfolios bear the market risk that arise from changes in the value of the
financial instruments and securities indices (futures contracts).
At April 30, 1999, the Portfolios had no open futures contracts.
7. Options Contracts
When the Portfolios write a covered call option, an amount equal to the premium
received by the Portfolios are 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 written index options are
exercised, settlement is made in cash.
- --------------------------------------------------------------------------------
26 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
During the six months ended April 30, 1999, the Portfolios did not enter into
any written covered call option contracts.
8. Capital Shares
At April 30, 1999, 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 other share of the same
Portfolio and has an equal entitlement to any dividends and distributions made
by the Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1999 October 31, 1998*
================================================================================
AIM Capital Appreciation
Shares sold 3,534,657 5,060,116
Shares issued on reinvestment -- 23,548
Shares reacquired (3,434,791) (2,728,617)
- --------------------------------------------------------------------------------
Net Increase 99,866 2,355,047
================================================================================
Smith Barney Large Capitalization Growth
Shares sold 5,511,160 2,105,804
Shares issued on reinvestment 2,228 --
Shares reacquired (2,508) (5,084)
- --------------------------------------------------------------------------------
Net Increase 5,510,880 2,100,720
================================================================================
* Transactions for the Smith Barney Large Capitalization Growth Portfolio
are for the period May 1, 1998 (commencement of operations) through
October 31, 1998.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
AIM Capital Appreciation Portfolio 1999(1) 1998 1997 1996(2) 1995(2)(3)
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.31 $12.68 $10.76 $10.00 $10.00
- ----------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(4) (0.01) (0.01) 0.02 0.02 0.02
Net realized and unrealized
gain (loss) 2.50 (0.34) 1.91 0.75 (0.02)
- ----------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 2.49 (0.35) 1.93 0.77 --
- ----------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.02) (0.01) (0.01) --
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.02) (0.01) (0.01) --
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.80 $12.31 $12.68 $10.76 $10.00
- ----------------------------------------------------------------------------------------------------------------------------
Total Return 20.23%++ (2.79)% 17.96% 7.71% 0.00%++
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $272,942 $225,862 $202,846 $112,905 $8,083
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 0.86%+ 0.85% 0.85% 0.96% 1.00%+
Net investment income (loss) (0.11)+ (0.06) 0.20 0.22 4.07+
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 38% 75% 56% 44% 6%
============================================================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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.
- --------------------------------------------------------------------------------
28 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout the period ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney Large Capitalization Growth Portfolio 1999(1) 1998(2)
===================================================================================
<S> <C> <C>
Net Asset Value, Beginning of Period $9.90 $10.00
- -----------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.00* 0.01
Net realized and unrealized gain (loss) 3.98 (0.11)#
- -----------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.98 (0.10)
- -----------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) --
- -----------------------------------------------------------------------------------
Total Distributions (0.01) --
- -----------------------------------------------------------------------------------
Net Asset Value, End of Period $13.87 $9.90
- -----------------------------------------------------------------------------------
Total Return++ 40.18% (1.00)%
- -----------------------------------------------------------------------------------
Net Assets, End of Period (000s) $105,609 $20,787
- -----------------------------------------------------------------------------------
Ratios to Average Net Assets+:
Expenses(3) 0.91% 1.00%
Net investment income 0.05 0.52
- -----------------------------------------------------------------------------------
Portfolio Turnover Rate 8% 1%
===================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (unaudited).
(2) For the period from May 1, 1998 (commencement of operations) to October
31, 1998.
(3) The Manager waived all or part of its fees for the period ended October
31, 1998. If such fees were not waived, the per share effect on net
investment income and the expense ratio would have been as follows:
Net Investment Income Expense Ratio
Per Share Decreases Without Fee Waiver
------------------- ------------------
1998 $0.02 1.77%+
* Amount represents less than $0.01.
# The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
SALOMON SMITH BARNEY
---------------------------
A member of citigroup[LOGO]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSBC Fund Management Inc.
Travelers Investment Adviser, Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of the
Travelers Series Fund Inc. -- AIM Capital Appreciation and Smith Barney Large
Capitalization Growth Portfolios. It is not authorized for distribution to
prospective investors unless accompanied or preceded by a current Prospectus for
the Portfolios, which contains information concerning the Portfolios' investment
policies and expenses as well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0806 6/99
<PAGE>
[GRAPHIC]
Travelers Series Fund Inc.
Smith Barney High Income
Portfolio
Putnam Diversified Income
Portfolio
- ------------------
SEMI-ANNUAL REPORT
- ------------------
April 30, 1999
Smith Barney Mutual Funds
<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 period ended April 30, 1999. 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 ("Portfolio") seeks high current income.
Capital appreciation is a secondary objective. For the period ended April 30,
1999, the Portfolio returned 8.60%. In comparison, the Fund's Lipper Inc. peer
group ("Lipper") returned 11.86% over the same period. (Lipper is an independent
fund-tracking organization.)
The high-yield bond market finished the first quarter of 1999 on a strong note
with the big rally in the stock markets fueling renewed investor interest in
high-yield bonds. Given the continued strength in the U.S. economy, the
high-yield bond market outperformed both the U.S. Treasury and investment grade
corporate bond markets. Interest rates moved higher, with the higher quality end
of the bond markets performing poorly.
The high-yield bond market's performance in the first quarter of 1999 fell in
the middle of the performance range for the U.S. Treasuries and stocks. The
lowest quality sectors of the high-yield bond market generated the strongest
total returns. The strongest performing industry sectors during the reporting
period were basic materials (i.e., forest products, metals and mining), media
(i.e., cable TV, and broadcasting) and telecommunications. The weakest industry
sectors included healthcare and energy.
The Portfolio's performance lagged the various high-yield indices somewhat in
the first quarter with returns modestly below the domestic high-yield bond
market. The manager was held back by his lower weightings in basic materials
companies
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
and his heavier weightings in healthcare companies. He has continued
to maintain a meaningful emphasis on better quality issues and his strategy
clearly did not help performance in the first quarter of 1999. Put simply, his
expectation of slower U.S. economic growth and lower interest rates did not
materialize and does not appear likely to happen for the foreseeable future.
During the reporting period, the manager has started to eliminate
underperforming companies such as some of his deteriorating credits in
healthcare and selectively raising his exposure to basic industries that he
thinks should benefit from continued economic growth. He has even modestly
increased his energy exposure by investing in some of the higher-quality energy
issues. He believes that his pro-growth sector strategy should work well going
forward. In terms of quality, the manager has been increasing his exposure to
the middle B-rated segment of the market where he continues to find attractive
yields.
Over the course of 1999 the manager expects a continuation of solid economic
growth with modest inflation. This bodes well for the stock markets as well as
the high-yield bond market. If his expectations come true, middle quality
high-yield issues should do better. In addition, he plans to focus closely on
some of the stronger companies in select commodity sectors such as paper, energy
and steel where conditions appear to be improving. The manager remains bullish
on the total return prospects for high-yield bonds at current valuation levels,
especially given the health of the U.S. economy.
Putnam Diversified Income Portfolio
For the six months ended April 30, 1999, the Putnam Diversified Income Portfolio
("Portfolio") returned 4.36%. In comparison, the Lehman Brothers Aggregate Bond
Index posted a total return of 7.97% over the same period. (The Lehman Brothers
Aggregate Index is an unmanaged index composed of the Lehman Intermediate
Government/Corporate Bond Index and the Mortgage-Backed Securities Index, and
includes U.S. Treasury issues, agency issues, corporate bond issues and
mortgage-backed securities).
The spectacular rally of the U.S. Treasury market for much of 1998 was due, in
large part, to investors' extreme aversion to risk as many of the world's
nations boiled over with political, economic, and financial upheaval. A series
of rate cuts by the Federal Reserve Board in the U.S. in the final months of
1998 helped restore liquidity to global markets and calm investors' fears. By
the new year, strong U.S. and European economic fundamentals and modest economic
improvement in the Pacific Basin helped to renew investors' interest even more
in the so-called spread sectors -- U.S. high-yield banks, high-grade corporate
bonds, mortgage-backed securities and emerging-markets debt.
Money that had poured into the U.S. Treasury market at a rapid-fire pace began
to flow back to higher-yielding fixed-income securities around the world.
Japanese
- --------------------------------------------------------------------------------
2 1999 Semi-Annual Report to Shareholders
<PAGE>
investors, strong supporters of the U.S. government bond market last
year, also began to repatriate capital. As a result, the U.S. Treasury rally
came to a standstill in the fourth quarter of 1998 and then reversed itself in
the first quarter of 1999. By period's end, the overall performance of the
Portfolio's Treasury holdings was flat.
Within the mortgage-backed securities sector, the Portfolio's emphasized
securities that tend to have lower prepayment sensitivity. The focus for most of
the reporting period was on intermediate-term current-coupon residential
pass-through securities, and commercial mortgage-backed securities ("CMBS"). The
Portfolio's CMBS holdings did poorly for much of the period because of the
ongoing decline in the real estate sector and a historic decline in trading of
CMBS that occurred in the fall.
Given the favorable economic backdrop that continues to support real estate
fundamentals, the Portfolio's managers took advantage of the attractive prices
of CMBS and slightly increased the Portfolio's holdings in the final months of
the period. The decision benefited performance by period's end and the
Portfolio's managers plan to maintain the Portfolio's current exposure to CMBS
as it enters the second half of fiscal 1999. Toward the end of the reporting
period, the managers also began shifting their attention to higher-coupon and
older mortgage-backed issues in the residential sector as favorable
opportunities arose.
U.S. high-yield bonds, among the hardest-hit asset classes after last fall's
global financial debacle, bounced back to become leading contenders in the
fixed-income universe again. As many investors recovered their appetite for risk
and recognized the outstanding value offered by high-yield bonds, their return
to the sector bid prices up. High-yield bonds, in fact, posted the only positive
returns in the U.S. fixed-income market at the end of the first quarter of 1999.
Throughout this sector's volatility, the Portfolio's managers held steady in
their industry and security selections, confident that a turnaround would soon
be at hand. They continued to favor bonds in telecommunications, media and
finance -- fast-growing industries with long-term growth potential regardless of
market swings. With merger and acquisition activity continuing at a fast pace,
there exists a greater likelihood of credit upgrades, a trend that stands to
benefit many high-yield bonds. Going forward, the managers expect to add
selectively some high quality cyclical holdings, given the current economic and
market environments. Cyclical issues stand to benefit, should commodity prices
improve.
The Portfolio retained a focus on the core bond markets of Europe throughout the
semiannual period, primarily the Netherlands, Germany, France -- now members of
Europe's Economic and Monetary Union (EMU) -- and the United Kingdom. Signs of
slowing economic growth and repeated interest-rate cuts were the catalysts for
solid returns from European holdings in 1998, particularly when performance was
translated into a weaker U.S. dollar. In the first three months of 1999,
however,
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
a stronger U.S. dollar and a shaky start to the Euro dampened bond
returns so that when all was said and done, the Portfolio's European holdings
generally produced lackluster results. In Asia, although Japan's bond market
experienced a recent rally, it performed quite poorly throughout 1998 and its
outlook remains murky. The managers therefore limited the Portfolio's exposure
to Japanese government bonds.
Since the outset of the fiscal year, the Portfolio's managers have incrementally
increased the Portfolio's exposure to certain better-quality emerging markets
such as Bulgaria and Mexico, that they believe have greater access to capital.
They also selectively invested in Brazil, whose bond market staged a turnaround
in the first quarter of 1999.
According to the manager, the world today is quite different from the way it was
only a few years ago. There now exists a greater independence among nations and
a cross-pollination of market influences that require a comprehensive,
big-picture approach to fixed-income investing; however, diligent focus on
security selection within each sector is also critical.
While no assurances can be made, the Portfolio's managers enter the second half
of fiscal 1999 with optimism about the continued resurgence of spread securities
in the face of stabilizing global economies, investors' renewed interest,
converging interest rates and fairly subdued inflation worldwide. However, the
managers are aware that greater volatility in the world's financial markets
cannot be ruled out as the Euro begins to challenge the U.S. dollar's status as
the world's dominant reserve currency and emerging markets remain a wild card.
Conflicting signals about the direction of the U.S. economy and therefore
interest rates also bear watching. In-depth research, selectivity, and broad
diversification should remain the dominant criteria for Portfolio composition in
the months ahead.
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
June 2, 1999
- --------------------------------------------------------------------------------
4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney High Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/99 $11.97 $13.00 $0.00 $0.00 8.60%++
- --------------------------------------------------------------------------------
10/31/98 13.25 11.97 0.74 0.17 (3.38)
- --------------------------------------------------------------------------------
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 $2.12 $0.23
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Six Months Ended 4/30/99++ 8.60%
- --------------------------------------------------------------------------------
Year Ended 4/30/99 (0.26)
- --------------------------------------------------------------------------------
6/16/94* through 4/30/99 9.77
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
6/16/94* through 4/30/99 57.48%
================================================================================
+ 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney High Income Portfolio vs.
Salomon Smith Barney Intermediate High Yield Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE CHART]
Salomon Brothers
Smith Barney Intermediate
High Income High Yield Index
----------- ----------------
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
10/98 14,500 14,501
4/30/99 15,748 15,918
+ 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, 1999. The Salomon Smith Barney
Intermediate High Yield Index is comprised of 434 issues, both cash-pay
and deferred interest bonds with a remaining maturity of at least seven
years, but less than ten years. The bonds are all public, non-convertible
issues with at least $50 million outstanding. The index is unmanaged and
is not subject to the same management and trading expenses of a mutual
fund.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
- --------------------------------------------------------------------------------
6 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns+
================================================================================
4/30/99 $11.70 $12.21 $0.00 $0.00 4.36%++
- --------------------------------------------------------------------------------
10/31/98 12.31 11.70 0.42 0.14 (0.65)
- --------------------------------------------------------------------------------
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 $1.46 $0.36
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Six Months Ended 4/30/99++ 4.36%
- --------------------------------------------------------------------------------
Year Ended 4/30/99 0.97
- --------------------------------------------------------------------------------
6/16/94* through 4/30/99 7.49
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
6/16/94* through 4/30/99 42.22%
================================================================================
+ 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.
- --------------------------------------------------------------------------------
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 Smith Barney
Non-U.S. World Government Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- April 1999
[LINE CHART]
Salomon Brothers Non-U.S. Lehman Brothers
Putnam Diversified World Government Aggregate
Income Portfolio Bond Index - Unhedged Bond Index
---------------- --------------------- ---------------
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
10/98 13,628 16,254 14,651
4/30/99 14,222 15,555 14,752
+ 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, 1999. 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 Smith Barney
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 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 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
CORPORATE BONDS AND NOTES -- 93.2%
Aerospace -- 0.7%
715,000 B1* BE Aerospace Inc., Sr. Sub. Notes, 9.500% due 11/1/08 $ 765,050
500,000 B- Fairchild Corp., Guaranteed Sr. Sub. Notes,
10.750% due 4/15/09(b) 502,500
- ------------------------------------------------------------------------------------------------------
1,267,550
- ------------------------------------------------------------------------------------------------------
Airlines -- 1.0%
1,420,000 BB Airplanes Pass-Through Trust, Corporate Asset-Backed
Securities, Series 1, Class D, 10.875% due 3/15/19 1,438,758
440,000 Ba2* Continental Airlines, Inc., Notes, 8.000% due 12/15/05 440,000
- ------------------------------------------------------------------------------------------------------
1,878,758
- ------------------------------------------------------------------------------------------------------
Auto Parts -- 0.2%
315,000 B Dura Operating Corp., Sr. Sub. Notes,
9.000% due 5/1/09(b) 322,087
- ------------------------------------------------------------------------------------------------------
Automotive Aftermarket -- 0.7%
1,310,000 B1* Exide Corp., Sr. Notes, 10.000% due 4/15/05 1,323,100
- ------------------------------------------------------------------------------------------------------
Broadcasting-- 2.4%
680,000 B- Capstar Broadcasting Corp., Sr. Discount Notes,
step bond to yield 10.857% due 2/1/09 581,400
1,865,000 B1* Chancellor Media Corp., Guaranteed Sr. Sub. Notes,
9.000% due 10/1/08 2,000,212
445,000 B- Citadel Broadcasting Co., Guaranteed Sr. Sub. Notes,
9.250% due 11/15/08 479,487
640,000 CCC+ Telemundo Holdings, Inc., Sr. Discount Notes, Series B,
step bond to yield 11.586% due 8/15/08 355,200
TV Azteca S.A. de C.V., Guaranteed Sr. Notes, Series A:
920,000 B+ 10.125% due 2/15/04 823,400
425,000 B+ 10.500% due 2/15/07 368,688
- ------------------------------------------------------------------------------------------------------
4,608,387
- ------------------------------------------------------------------------------------------------------
Building Materials Chains -- 0.4%
Building Materials Corp., Sr. Notes:
565,000 BB Series B, 8.000% due 12/1/08(b) 560,762
250,000 BB Step bond to yield 10.015% due 7/1/04 261,875
- ------------------------------------------------------------------------------------------------------
822,637
- ------------------------------------------------------------------------------------------------------
Building Products -- 0.9%
440,000 B Amatek Industries Pty. Ltd., Sr. Sub. Notes,
12.000% due 2/15/08(b) 423,500
Nortek Inc., Sr. Notes:
195,000 B+ 8.875% due 8/1/08(b) 201,338
1,020,000 B+ Series B, 9.125% due 9/1/07 1,068,450
- ------------------------------------------------------------------------------------------------------
1,693,288
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
========================================================================================================
<S> <C> <C> <C>
Cable Television -- 13.8%
1,075,000 BB- Century Communications Corp., Sr. Notes,
8.750% due 10/1/07 $ 1,126,062
Charter Communications Holdings LLC/Charter
Communications Capital Corp.:
1,450,000 B+ Sr. Discount Notes, step bond to yield
9.887% due 4/1/11(b) 957,000
610,000 B+ Sr. Notes, 8.625% due 4/1/09(b) 626,775
820,000 B2* Comcast UK Cable Partners Ltd., Sr. Discount Debentures,
step bond to yield 10.615% due 11/15/07 756,450
CSC Holdings Inc., Sr. Sub. Debentures:
1,705,000 BB- 9.875% due 2/15/13 1,913,862
1,300,000 B1* 10.500% due 5/15/16 1,556,750
245,000 BB+ 7.875% due 2/15/18 252,656
2,025,000(GBP) B- Diamond Holdings PLC, Guaranteed Notes,
10.000% due 2/1/08 3,455,007
690,000 B Echostar DBS Corp., Sr. Notes, 9.375% due 2/1/09(b) 721,050
NTL Inc., Sr. Notes:
975,000 B- 11.500% due 10/1/08(b) 1,104,188
970,000 B- Step bond to yield 12.329% due 10/1/08(b) 681,425
Rogers Cablesystems, Ltd.:
2,100,000 BB- Guaranteed Sr. Sub. Debentures, 11.000% due 12/1/15 2,467,500
Sr. Secured Second Priority:
2,000,000 BB+ Debentures, 10.000% due 12/1/07 2,260,000
2,000,000 BB+ Notes, Series B, 10.000% due 3/15/05 2,260,000
Telewest Communications PLC:
Sr. Discount Notes, step bond to yield:
395,000GBP B+ 9.078% due 4/15/09(b) 430,882
395,000 B+ 9.177% due 4/15/09(b) 266,625
1,000,000 B+ Sr. Notes, 11.250% due 11/1/08(b) 1,165,000
6,700,000 B United International Holdings Inc., Sr. Discount Notes,
Series B, step bond to yield 11.155% due 2/15/08 4,505,750
- --------------------------------------------------------------------------------------------------------
26,506,982
- --------------------------------------------------------------------------------------------------------
Casinos/Gambling -- 2.3%
Circus Circus Enterprises Inc.:
395,000 BBB- Debentures, 6.700% due 11/15/2096 376,237
160,000 BB+ Sr. Sub. Debentures, 7.625% due 7/15/13 152,400
870,000 BB+ Harrah's Operating Co. Inc., Guaranteed Sr. Sub. Notes,
7.875% due 12/15/05 880,875
835,000 B Harveys Casino Resorts, Guaranteed Sr. Sub. Notes,
10.625% due 6/1/06 885,100
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
========================================================================================================
<S> <C> <C> <C>
Casinos/Gambling -- 2.3% (continued)
790,000 B Hollywood Park, Inc., Sr. Sub. Notes, 9.250% due 2/15/07(b) $ 819,625
375,000 B Isle of Capri Casinos, Inc., Sr. Sub. Notes,
8.750% due 4/15/09(b) 374,063
Station Casinos, Inc., Sr. Sub. Notes:
190,000 B+ 10.125% due 3/15/06 202,825
700,000 B+ 8.875% due 12/1/08(b) 726,250
- --------------------------------------------------------------------------------------------------------
4,417,375
- --------------------------------------------------------------------------------------------------------
Chemicals - Major -- 0.1%
245,000 B2* Huntsman Corp., Sr. Sub. Notes, 9.500% due 7/1/07(b) 242,550
- --------------------------------------------------------------------------------------------------------
Chemicals - Specialty -- 0.3%
555,000 B+ Sterling Chemicals Inc., Sr. Sub. Notes,
11.750% due 8/15/06 535,575
- --------------------------------------------------------------------------------------------------------
Coal Mining -- 0.3%
635,000 B AEI Resources Inc., Guaranteed Notes,
10.500% due 12/15/05(b) 647,700
- --------------------------------------------------------------------------------------------------------
Construction/AG Equipment/Trucks -- 0.1%
260,000 B Columbus McKinnon Corp., Guaranteed Sr. Sub. Notes,
8.500% due 4/1/08 258,700
- --------------------------------------------------------------------------------------------------------
Containers/Packaging -- 1.8%
270,000 B AEP Industries Inc., Sr. Sub. Notes,
9.875% due 11/15/07 283,500
775,000 B Huntsman Packaging Corp., Guaranteed Sr. Sub. Notes,
9.125% due 10/1/07 784,687
550,000(DEM) B Impress Metal Packaging Holdings, Sr. Sub. Notes,
9.875% due 5/29/07(b) 330,975
510,000 B Packaging Corp. of America, Sr. Sub. Notes,
9.625% due 4/1/09(b) 531,675
550,000 B Stone Container Finance Corp., Guaranteed Sr. Notes,
11.500% due 8/15/06(b) 599,500
Tekni-Plex Inc.:
435,000 B- Guaranteed Sr. Sub. Notes, Series B,
9.250% due 3/1/08 446,963
500,000 B- Sr. Sub. Notes, Series B, 11.250% due 4/1/07 545,000
- --------------------------------------------------------------------------------------------------------
3,522,300
- --------------------------------------------------------------------------------------------------------
Contract Drilling -- 0.8%
785,000 Ba3* R&B Falcon Corp., Sr. Notes, 12.250% due 3/15/06(b) 824,250
RBF Finance Corp., Guaranteed Sr. Notes:
270,000 BB- 11.000% due 3/15/06(b) 284,175
465,000 BB- 11.375% due 3/15/09(b) 490,575
- --------------------------------------------------------------------------------------------------------
1,599,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Discount Stores -- 0.8%
620,000 BB+ DR Structured Finance Securitized Lease Trust,
Pass-Through Certificates, Series A-2,
8.375% due 8/15/15 $ 621,544
675,000 BB+ Kmart Corp., Debentures, 12.500% due 3/1/05 831,938
- ------------------------------------------------------------------------------------------------------
1,453,482
- ------------------------------------------------------------------------------------------------------
Diversified Commercial Services -- 1.4%
425,000 BB- Cia. Latino Americana de Infraestructura & Servicos
S.A., Guaranteed Sr. Notes, 11.625% due 6/1/04(b) 274,125
1,100,000 B2* Intertek Finance PLC., Guaranteed Sr. Sub. Notes,
Series B, 10.250% due 11/1/06 1,091,750
1,350,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes,
11.000% due 11/1/06 1,343,250
- ------------------------------------------------------------------------------------------------------
2,709,125
- ------------------------------------------------------------------------------------------------------
Diversified Financial Services -- 0.6%
Amresco Inc., Sr. Sub. Notes, Series A:
500,000 CCC+ 10.000% due 3/15/04 397,500
885,000 CCC+ 9.875% due 3/15/05 725,700
- ------------------------------------------------------------------------------------------------------
1,123,200
- ------------------------------------------------------------------------------------------------------
Diversified Manufacturing -- 1.4%
625,000 B- Eagle-Picher Industries Inc., Guaranteed Sr. Sub. Notes,
9.375% due 3/1/08 610,938
1,775,000 B Outboard Marine Corp., Sr. Notes, 10.750% due 6/1/08(b) 1,453,281
550,000 B+ Park-Ohio Industries, Inc., Sr. Sub. Notes,
9.250% due 12/1/07 569,250
- ------------------------------------------------------------------------------------------------------
2,633,469
- ------------------------------------------------------------------------------------------------------
Drugs - Generic -- 1.7%
3,100,000 BB ICN Pharmaceuticals Inc., Sr. Notes, Series B,
9.250% due 8/15/05 3,208,500
- ------------------------------------------------------------------------------------------------------
Electric Utilities -- 0.7%
CMS Energy Corp., Sr. Notes:
440,000 BB 6.750% due 1/15/04(b) 432,850
860,000 BB 7.500% due 1/15/09 868,600
- ------------------------------------------------------------------------------------------------------
1,301,450
- ------------------------------------------------------------------------------------------------------
Electronic Components -- 1.3%
672,000 B+ Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 743,400
1,900,000 B- Viasystems Inc., Sr. Sub. Notes, 9.750% due 6/1/07 1,781,250
- ------------------------------------------------------------------------------------------------------
2,524,650
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Electronic Data Processing -- 3.0%
Unisys Corp., Sr. Notes:
3,200,000 BB- 11.750% due 10/15/04 $3,648,000
2,000,000 BB- Series B, 12.000% due 4/15/03 2,215,000
- ------------------------------------------------------------------------------------------------------
5,863,000
- ------------------------------------------------------------------------------------------------------
Engineering & Construction -- 1.7%
850,000 B Group Maintenance America Corp., Sr. Sub. Notes,
9.750% due 1/15/09(b) 869,125
630,000 B+ Integrated Electrical Services, Sr. Sub. Notes,
9.375% due 2/1/09(b) 639,450
1,660,000 B Metromedia Fiber Network, Sr. Notes,
10.000% due 11/15/08(b) 1,801,100
- ------------------------------------------------------------------------------------------------------
3,309,675
- ------------------------------------------------------------------------------------------------------
Environmental Services -- 0.3%
650,000 B+ IT Group Inc., Sr. Sub. Notes, 11.250% due 4/1/09(b) 661,375
- ------------------------------------------------------------------------------------------------------
Food Distributors -- 1.7%
1,385,000 B2* Carrols Corp., Sr. Sub. Notes, 9.500% due 12/1/08(b) 1,419,625
1,250,000 B Imperial Holly Corp., Guaranteed Sr. Sub. Notes,
9.750% due 12/15/07 1,271,875
350,000 B- Purina Mills Inc., Sr. Sub. Notes, 9.000% due 3/15/10 308,000
300,000 B SC International Services Inc., Guaranteed Sr. Sub. Notes,
Series B, 9.250% due 9/1/07 322,500
- ------------------------------------------------------------------------------------------------------
3,322,000
- ------------------------------------------------------------------------------------------------------
Foods - Specialty/Candy -- 0.3%
600,000 B- B&G Foods Inc., Guaranteed Sr. Sub. Notes,
9.625% due 8/1/07 600,000
- ------------------------------------------------------------------------------------------------------
Forest Products -- 0.6%
985,000 B Ainsworth Lumber Co. Ltd., Sr. Notes, 12.500% due 7/15/07 1,095,812
- ------------------------------------------------------------------------------------------------------
Home Furnishings -- 0.1%
175,000 B- Simmons Co., Sr. Sub. Notes, 10.250% due 3/15/09(b) 182,656
- ------------------------------------------------------------------------------------------------------
Homebuilding -- 1.0%
985,000 Ba1* D.R. Horton Inc., Guaranteed Sr. Notes,
8.000% due 2/1/09 977,612
1,020,000 BB- U.S. Home Corp., Sr. Sub. Notes, 8.875% due 2/15/09 1,009,800
- ------------------------------------------------------------------------------------------------------
1,987,412
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Hospital/Nursing Management -- 3.7%
575,000 Ba3* Fresenius Medical Care Capital Trust I, Trust Preferred
Securities, 9.000% due 12/1/06 $ 595,125
200,000 Ba3* Fresenius Medical Care Capital Trust II, Series A, Guaranteed
Trust Preferred Securities, 7.875% due 2/1/08 196,000
Integrated Health Services, Inc., Sr. Sub. Notes, Series A:
705,000 B2* 9.500% due 9/15/07 526,987
2,425,000 B2* 9.250% due 1/15/08 1,782,375
3,825,000 B- Magellan Health Services, Inc., Sr. Sub. Notes,
9.000% due 2/15/08 3,232,125
Sun Healthcare Group, Inc., Sr. Sub. Notes:
1,750,000 CCC 9.375% due 5/1/08(b) 393,750
1,600,000 CCC Series B, 9.500% due 7/1/07 360,000
- ------------------------------------------------------------------------------------------------------
7,086,362
- ------------------------------------------------------------------------------------------------------
Hotel/Resort -- 2.8%
700,000 B- Courtyard By Marriott II LP/ Courtyard Finance Co.,
Sr. Secured Notes, Series B, 10.750% due 2/1/08 729,750
HMH Properties, Inc.:
Guaranteed Sr. Notes:
325,000 BB Series A, 7.875% due 8/1/05 321,750
1,375,000 BB Series B, 7.875% due 8/1/08 1,333,750
2,340,000 BB Sr. Notes, Series C, 8.450% due 12/1/08 2,360,475
Intrawest Corp., Sr. Notes:
335,000 B+ 9.750% due 8/15/08 350,075
275,000 B+ 9.750% due 8/15/08(b) 287,375
- ------------------------------------------------------------------------------------------------------
5,383,175
- ------------------------------------------------------------------------------------------------------
Insurance - Multi-Line -- 0.7%
1,350,000 BB+ SIG Capital Trust I, Guaranteed Trust Preferred Securities,
9.500% due 8/15/27 1,012,500
450,000 BB- Veritas Capital Trust, Guaranteed Trust Preferred Securities,
10.000% due 1/1/28 405,000
- ------------------------------------------------------------------------------------------------------
1,417,500
- ------------------------------------------------------------------------------------------------------
Internet Services -- 3.9%
PSINet Inc., Sr. Notes:
2,040,000 B- 11.500% due 11/1/08 2,274,600
1,575,000 B- Series B, 10.000% due 2/15/05 1,653,750
1,625,000 NR Splitrock Services, Inc., Guaranteed Sr. Notes,
11.750% due 7/15/08 1,653,438
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Internet Services -- 3.9% (continued)
Verio Inc., Sr. Notes:
535,000 B- 10.375% due 4/1/05 $ 573,788
840,000 B- 11.250% due 12/1/08(b) 938,700
700,000 NR WAM!NET Inc., Guaranteed Sr. Discount Notes,
Series B, step bond to yield 13.066% due 3/1/05 427,000
- ------------------------------------------------------------------------------------------------------
7,521,276
- ------------------------------------------------------------------------------------------------------
Leisure/Movies/Entertainment -- 1.5%
1,065,000 B Regal Cinemas, Inc., Sr. Sub. Notes, 9.500% due 6/1/08 1,062,338
1,850,000 B- SFX Entertainment, Inc., Sr. Sub. Notes, Series B,
9.125% due 2/1/08 1,919,375
- ------------------------------------------------------------------------------------------------------
2,981,713
- ------------------------------------------------------------------------------------------------------
Machinery - Industrial/Components -- 0.4%
610,000 B- Alvey Systems Inc., Sr. Sub. Notes, 11.375% due 1/31/03 625,250
200,000 Ba3* Westinghouse Air Brake Co., Sr. Notes,
9.375% due 6/15/05(b) 206,500
- ------------------------------------------------------------------------------------------------------
831,750
- ------------------------------------------------------------------------------------------------------
Media Conglomerates -- 0.1%
125,000GBP B Polestar Corp. PLC, Sr. Notes, Series B,
10.500% due 5/30/08 205,288
- ------------------------------------------------------------------------------------------------------
Metal Fabrications -- 0.2%
310,000 BB California Steel Industries Inc., Sr. Notes,
8.500% due 4/1/09(b) 317,750
- ------------------------------------------------------------------------------------------------------
Metal/Minerals - Other -- 0.4%
800,000 B- Haynes International, Inc., Sr. Notes, 11.625% due 9/1/04 720,000
- ------------------------------------------------------------------------------------------------------
Miscellaneous-- 0.1%
190,000 B- Key Plastics Inc., Guaranteed Sr. Sub. Notes, Series B,
10.250% due 3/15/07 192,850
- ------------------------------------------------------------------------------------------------------
Multi-Sector Companies -- 0.6%
1,060,000 B- Triarc Consumer Beverage, Sr. Sub. Notes,
10.250% due 2/15/09(b) 1,070,600
- ------------------------------------------------------------------------------------------------------
Newspapers -- 0.1%
240,000 B+ Garden State Newspapers, Inc., Sr. Sub. Notes,
8.625% due 7/1/11(b) 243,600
- ------------------------------------------------------------------------------------------------------
Office Equipment/Supplies -- 0.5%
1,000,000 B3* Axiohm Transaction Solutions Inc., Guaranteed
Sr. Sub. Notes, 9.750% due 10/1/07 925,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Oil & Gas Production -- 4.5%
Belco Oil & Gas Corp., Series B:
500,000 B1* Guaranteed Sr. Sub. Notes, 10.500% due 4/1/06 $ 517,500
505,000 B1* Sr. Sub. Notes, 8.875% due 9/15/07 498,687
2,100,000 B+ Clark USA Inc., Sr. Notes, Series B, 10.875% due 12/1/05 1,806,000
Ocean Energy Inc.:
850,000 BB- Guaranteed Sr. Sub. Debentures, 9.750% due 10/1/06 879,750
3,300,000 BB- Guaranteed Sr. Sub. Notes, 10.375% due 10/15/05 3,531,000
730,000 B+ Parker Drilling Co., Guaranteed Sr. Sub. Notes, Series D,
9.750% due 11/15/06 680,725
675,000 B2* Stone Energy Corp., Guaranteed Sr. Sub. Notes,
8.750% due 9/15/07 680,063
- ------------------------------------------------------------------------------------------------------
8,593,725
- ------------------------------------------------------------------------------------------------------
Package Goods/Service -- 0.7%
150,000 B2* Chattem Inc., Guaranteed Sr. Sub. Notes, Series B,
8.875% due 4/1/08 152,250
1,255,000 B- Revlon Consumer Products Corp., Sr. Sub. Notes,
8.625% due 2/1/08 1,207,938
- ------------------------------------------------------------------------------------------------------
1,360,188
- ------------------------------------------------------------------------------------------------------
Paper -- 1.6%
875,000 BB Malette Inc., Sr. Secured Notes, 12.250% due 7/15/04 949,375
540,000 CCC+ Repap New Bruswick Inc., Sr. Notes, 10.625% due 4/15/05 448,200
Riverwood International Corp.:
570,000 B- Guaranteed Sr. Notes, 10.625% due 8/1/07 598,500
225,000 CCC+ Guaranteed Sr. Sub. Notes, 10.875% due 4/1/08 222,188
Tembec Industries Inc., Guaranteed Sr. Notes:
405,000 BB+ 9.875% due 9/30/05 431,325
430,000 BB+ 8.375% due 6/30/09 445,050
- ------------------------------------------------------------------------------------------------------
3,094,638
- ------------------------------------------------------------------------------------------------------
Photographic Products -- 0.5%
860,000 BB- Polaroid Corp., Sr. Notes, 11.500% due 2/15/06(b) 905,150
- ------------------------------------------------------------------------------------------------------
Printing/Forms -- 0.4%
805,000 BB- World Color Press Inc., Sr. Sub. Notes,
7.750% due 2/15/09(b) 798,963
- ------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts -- 1.0%
700,000 NR Ocwen Asset Investment Corp., Redeemable Notes,
11.500% due 7/1/05 595,000
1,200,000 Baa3* Trizec Finance Ltd., Guaranteed Sr. Notes,
10.875% due 10/15/05 1,326,000
- ------------------------------------------------------------------------------------------------------
1,921,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
========================================================================================================
<S> <C> <C> <C>
Rental/Leasing Companies -- 0.9%
370,000 B Nationsrent, Inc., Guaranteed Sr. Sub. Notes,
10.375% due 12/15/08 $ 386,650
1,235,000 BB- United Rentals Inc., Sr. Sub. Notes,
9.250% due 1/15/09(b) 1,256,613
- --------------------------------------------------------------------------------------------------------
1,643,263
- --------------------------------------------------------------------------------------------------------
Retail - Other Specialty Stores -- 0.5%
1,000,000 B- Advance Stores Co., Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.250% due 4/15/08 1,027,500
- --------------------------------------------------------------------------------------------------------
Savings & Loan Associations -- 1.7%
1,075,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 833,125
1,000,000 BB- Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 990,000
1,400,000 BB- Ocwen Financial Corp., Notes, 11.875% due 10/1/03 1,358,000
- --------------------------------------------------------------------------------------------------------
3,181,125
- --------------------------------------------------------------------------------------------------------
Semi-Conductors -- 0.5%
985,000 B Fairchild Semiconductor Inc., Sr. Sub. Notes,
10.125% due 3/15/07 999,775
- --------------------------------------------------------------------------------------------------------
Steel/Iron Ore -- 1.3%
1,020,000 B1* Algoma Steel Inc., First Mortgage Notes,
12.375% due 7/15/05 1,030,200
390,000 Ba3* National Steel Corp., First Mortgage Notes,
9.875% due 3/1/09(b) 412,425
985,000 B WHX Corp., Sr. Notes, 10.500% due 4/15/05 989,925
- --------------------------------------------------------------------------------------------------------
2,432,550
- --------------------------------------------------------------------------------------------------------
Telecommunications - Other -- 12.1%
COLT Telecommunications Group PLC, Sr. Notes:
200,000GBP B1* 10.125% due 11/30/07 341,340
3,150,000(DEM) B1* 7.625% due 7/31/08 1,712,419
2,535,000 NR E.Spire Communications, Inc., Sr. Discount Notes,
step bond to yield 11.404% due 7/1/08 1,267,500
Esprit Telecom Group PLC, Sr. Notes:
575,000 B- 11.500% due 12/15/07 631,063
300,000(DEM) B- 11.500% due 12/15/07 180,126
400,000 B- 10.875% due 6/15/08(b) 432,000
1,375,000 NR FaciliCom International, Inc., Sr. Notes, Series B,
10.500% due 1/15/08 1,065,625
Hermes Europe Railtel B.V., Sr. Notes:
1,550,000 B 11.500% due 8/15/07 1,705,000
450,000 B 10.375% due 1/15/09 479,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
========================================================================================================
<S> <C> <C> <C>
Telecommunications - Other -- 12.1% (continued)
Intermedia Communications Co.:
1,115,000 B Sr. Discount Notes, step bond to yield
10.827% due 5/15/06 $ 958,900
Sr. Notes:
385,000 B 9.500% due 3/1/09(b) 400,400
Series B:
200,000 B 8.500% due 1/15/08 199,500
505,000 B 8.600% due 6/1/08 506,262
355,000 CCC+ IXC Communications Inc., Sr. Sub. Notes,
9.000% due 4/15/08 360,325
MetroNet Communications Corp.:
4,675,000 B Sr. Discount Notes, Step bond to yield
10.044% due 6/15/08 3,658,188
Sr. Notes:
2,025,000 B 12.000% due 8/15/07 2,404,688
620,000 B 10.625% due 11/1/08(b) 730,050
215,000 B NEXTLINK Communications, L.C.C. / NEXTLINK
Capital, Inc., Sr. Notes, 12.500% due 4/15/06 239,725
PageMart Wireless, Inc., Sr. Discount Notes:
335,000 B3* Step bond to yield 12.150% due 2/1/05 281,400
1,075,000 NR Step bond to yield 11.250% due 2/1/08 349,375
1,500,000 B- Primus Telecommunications Group Inc., Sr. Notes,
11.750% due 8/1/04 1,582,500
RCN Corp.:
2,305,000 B3* Sr. Discount Notes, step bond to yield
10.505% due 10/15/07 1,607,738
1,010,000 B3* Sr. Notes, 10.000% due 10/15/07 1,050,400
285,000 NR Versatel Telecom International B.V., Sr. Notes,
13.250% due 5/15/08 307,800
805,000 Caa1* Viatel Inc., Sr. Notes, 11.250% due 4/15/08 833,175
- --------------------------------------------------------------------------------------------------------
23,284,749
- --------------------------------------------------------------------------------------------------------
Telephone - Cellular -- 6.5%
735,000 CCC+ Centennial Cellular Corp., Sr. Sub. Notes,
10.750% due 12/15/08(b) 799,312
2,810,000 B3* Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 12.485% due 12/15/05 2,648,425
Dolphin Telecom PLC, Sr. Discount Notes:
1,575,000 B- Step bond to yield 11.417% due 6/1/08 917,437
1,575,000(ECU) CCC+ Step bond to yield 11.625% due 6/1/08 941,488
Iridium Operating LLC / Iridium Capital Corp.,
Guaranteed Sr. Notes:
1,330,000 Caa3* Series B, 14.000% due 7/15/05 485,450
195,000 Caa3* Series C, 11.250% due 7/15/05 58,500
195,000 Caa3* Series D, 10.875% due 7/15/05 56,550
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
========================================================================================================
<S> <C> <C> <C>
Telephone - Cellular -- 6.5% (continued)
2,290,000 B- Millicom International Cellular S.A., Sr. Discount Notes,
step bond to yield 13.425% due 6/1/06 $ 1,769,025
Nextel Communications, Inc.:
875,000 B2* Sr. Redeemable Discount Notes, step bond to yield
10.943% due 9/15/07 689,063
420,000 B2* Sr. Serial Redeemable Discount Notes, step bond to yield
9.062% due 2/15/08 320,250
755,000 Ba3* Orange PLC, Sr. Notes, 8.000% due 8/1/08 777,650
1,220,000 NR Spectrasite Holdings Inc., Sr. Discount Notes, step bond
to yield 11.141% due 4/15/09(b) 716,750
Telesystems International Wireless Inc., Sr. Discount Notes:
2,550,000 CCC+ Series B, step bond to yield 11.784% due 6/30/07 1,581,000
1,425,000 CCC+ Series C, step bond to yield 10.980% due 11/1/07 783,750
- --------------------------------------------------------------------------------------------------------
12,544,650
- --------------------------------------------------------------------------------------------------------
Textiles -- 0.4%
1,450,000(DEM) B Texon International PLC, Sr. Notes, 10.000% due 2/1/08 737,274
- --------------------------------------------------------------------------------------------------------
Transportation - Marine -- 0.9%
475,000 B- Oglebay Norton Co., Sr. Sub. Notes, 10.000% due 2/1/09(b) 467,875
675,000 BB- Sea Containers Ltd., Sr. Sub. Debentures, Series A,
12.500% due 12/1/04 729,000
800,000 B+ Stena Line AB, Sr. Notes, 10.625% due 6/1/08 624,000
- --------------------------------------------------------------------------------------------------------
1,820,875
- --------------------------------------------------------------------------------------------------------
Unregulated Power Generation -- 1.8%
AES Corp., Sr. Sub. Notes:
325,000 Ba1* 10.250% due 7/15/06 347,750
1,665,000 Ba1* 8.500% due 11/1/07 1,660,837
Calpine Corp., Sr. Notes:
1,000,000 BB 10.500% due 5/15/06 1,100,000
270,000 BB 8.750% due 7/15/07 281,475
13,415 BBB- Midland Cogeneration Venture Limited Partnership,
Midland Funding Corp I, Sr. Secured Lease Obligation
Bond, Series C-94, 10.330% due 7/23/02 14,087
- --------------------------------------------------------------------------------------------------------
3,404,149
- --------------------------------------------------------------------------------------------------------
Wholesale Distributors -- 0.5%
960,000 B- Fisher Scientific International Inc., Sr. Sub. Notes,
9.000% due 2/1/08 973,200
- --------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $184,615,100) 179,241,433
========================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C> <C>
COMMON STOCK -- 0.0%
Telephone - Cellular -- 0.0%
472 Nextel Communications, Inc., Class A Shares
(Cost-- $15,279) $ 19,323
======================================================================================================
PREFERRED STOCK -- 0.7%
Broadcasting -- 0.3%
4,784 Capstar Broadcasting Corp., Series E,
12.625% Cumulative Exchangeable 576,472
- ------------------------------------------------------------------------------------------------------
Savings & Loan Associations -- 0.1%
10,100 California Federal Preferred Capital Corp., Series A,
9.125% Noncumulative Exchangeable 271,122
- ------------------------------------------------------------------------------------------------------
Telephone - Cellular -- 0.3%
6,000 Dobson Communications Corp., 13.000% Exchangeable(b) 606,000
- ------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost-- $1,410,131) 1,453,594
======================================================================================================
WARRANTS(c) -- 0.7%
Broadcasting -- 0.0%
1,950 UIH Australia/Pacific, Inc., Expire 5/15/06 1,950
- ------------------------------------------------------------------------------------------------------
Cable Television -- 0.0%
750 Wireless One Inc., Expire 10/19/00 188
- ------------------------------------------------------------------------------------------------------
Internet Services -- 0.1%
1,625 Splitrock Services, Inc., Expire 7/15/08 138,125
2,100 WAM!NET Inc., Expire 3/1/05(b) 47,775
- ------------------------------------------------------------------------------------------------------
185,900
- ------------------------------------------------------------------------------------------------------
Telecommunications - Other -- 0.5%
1,750 Allegiance Telecom, Inc., Expire 2/3/08 84,000
1,250 COLT Telecommunications Group PLC, Expire 12/31/06(b) 725,000
15,250 MetroNet Communications Corp., Expire 8/15/07(b) 76,250
1,000 Primus Telecommunications Group Inc., Expire 8/1/04 8,500
285 VersaTel Telecom International B.V., Expire 5/15/08(b) 19,950
- ------------------------------------------------------------------------------------------------------
913,700
- ------------------------------------------------------------------------------------------------------
Telecommunications - Major U.S. -- 0.0%
700 RSL Communications, Ltd., Expire 11/15/06(b) 27,300
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C> <C>
Telephone - Cellular -- 0.1%
4,950 Clearnet Communications Inc., Expire 9/15/05(b) $ 19,800
875 Globalstar Telecommunications Ltd., Expire 2/15/04(b) 48,125
925 Iridium World Communications Ltd., Expire 7/15/05(b) 128,557
- ------------------------------------------------------------------------------------------------------
196,482
- ------------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $347,211) 1,325,520
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
======================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 5.4%
$10,317,000 J.P. Morgan Securities Inc., 4.870% due 5/3/99;
Proceeds at maturity -- $10,321,187; (Fully collateralized
by U.S. Treasury Notes and Bonds, 3.625% to 11.875%,
7/15/02 to 4/15/29; Market value -- $10,523,357)
(Cost -- $10,317,000 ) 10,317,000
======================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $196,704,721**) $192,356,870
======================================================================================================
</TABLE>
+ Face amount denominated in U.S. dollars unless otherwise indicated.
(a) All ratings are by Standard & Poor's Ratings Service, except that those
identified by an asterisk (*) are rated by Moody's Investors Service, Inc.
(b) 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.
(c) Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
Currency abbreviations used in schedule:
----------------------------------------
DEM -- German Mark
ECU -- European Currency Unit
GBP -- British Pound
See page 47 for definitions of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
======================================================================================================
<S> <C> <C>
U.S. GOVERNMENT SECTOR -- 26.0%
U.S. Treasury Obligations -- 9.1%
$ 260,000 U.S. Treasury Notes, 4.750% due 11/15/08 $ 248,461
2,905,000 U.S. Treasury Bond, 6.375% due 8/15/27 3,101,727
5,340,000 U.S. Treasury Bond, 6.125% due 11/15/27 5,527,274
4,230,000 U.S. Treasury Bond, 5.500% due 8/15/28 4,028,948
1,405,000 U.S. Treasury Bond, 5.250% due 11/15/28 1,300,075
675,000 U.S. Treasury Bond, 5.250% due 2/15/29 634,392
- ------------------------------------------------------------------------------------------------------
14,840,877
- ------------------------------------------------------------------------------------------------------
U.S. Government Agencies -- 16.9%
208,858 Federal National Mortgage Association, 7.000% due 5/1/11 213,491
1,227,747 Federal National Mortgage Association,
6.000% due 5/1/13 through 7/1/13 1,217,385
13,500,450 Federal National Mortgage Association,
6.500% due 5/1/13 through 2/15/29 13,429,742
1,154 Government National Mortgage Association,
6.000% due 11/20/27 1,172
4,230,793 Government National Mortgage Association,
6.500% due 8/15/27 through 3/15/29 4,206,974
5,800,675 Government National Mortgage Association,
7.000% due 8/14/25 through 5/15/28 5,893,466
922,741 Government National Mortgage Association,
7.500% due 6/15/23 through 10/15/23 951,577
1,339,661 Government National Mortgage Association,
8.000% due 10/15/24 through 3/15/28 1,397,689
- ------------------------------------------------------------------------------------------------------
27,311,496
- ------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECTOR
(Cost -- $42,684,387) 42,152,373
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.7%
250,000 BBB Commercial Mortgage Acceptance Corp.,
7.055% due 12/15/10 246,602
380,000 Aaa* Countrywide Home Loans, 6.750% due 4/25/28 374,834
First Union-Lehman Brothers-Bank of America
Commercial Mortgage Trust:
162,026 AAA 6.280% due 6/18/07 162,799
445,000 BBB 6.778% due 3/18/13 412,598
415,000 BBB First Union-Lehman Brothers Commercial Mortgage Trust II,
7.120% due 11/18/12 397,103
1,800,000 BBB GMAC Commercial Mortgage Securities Inc.,
6.500% due 7/15/10 1,682,789
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.7% (continued)
$ 240,000 Baa2* GS Mortgage Securities Corp. II, 7.190% due 4/13/31 $ 229,575
149,000 BBB Merrill Lynch Mortgage Investors Inc.,
7.113% due 2/15/30 144,763
140,000 BBB+ Morgan Stanley Capital I, 7.150% due 6/3/30 136,763
135,000 AAA Mortgage Capital Funding Inc., 6.663% due 1/18/08 137,025
260,707 AAA PNC Mortgage Securities Corp., 6.600% due 7/25/27 262,337
137,920 AAA Rural Housing Trust, 6.330% due 4/1/26 139,028
- ------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost -- $4,448,478) 4,326,216
======================================================================================================
ASSET-BACKED SECURITIES -- 1.1%
400,000 BB Airplanes Pass Through Trust, 10.875% due 3/15/19 422,500
552,000 AAA Chase Master Credit Card Trust, 6.230% due 6/15/03 558,342
95,000 A3* ContiMortgage Home Equity Loan Trust,
7.670% due 3/15/28 93,338
535,000 AAA Green Tree Financial Corp., 6.240% due 11/1/16 538,783
125,340 AAA Green Tree Recreational Equipment & Consumer Trust,
6.550% due 7/15/28 126,036
- ------------------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost -- $1,753,447) 1,738,999
======================================================================================================
CORPORATE BONDS AND NOTES -- 45.2%
Advertising -- 0.8%
425,000 B Adams Outdoor Advertising L.P., Sr. Notes,
10.750% due 3/15/06 465,375
150,000 B1* Lamar Advertising Co., Sr. Sub. Notes,
9.625% due 12/1/06 162,000
300,000 B Outdoor Communications Inc., Sr. Sub. Notes,
9.250% due 8/15/07 320,250
Outdoor Systems, Inc., Sr. Sub. Notes:
350,000 B1* 8.875% due 6/15/07 372,750
15,000 B1* 9.375% due 10/15/09 16,200
- ------------------------------------------------------------------------------------------------------
1,336,575
- ------------------------------------------------------------------------------------------------------
Aerospace -- 1.5%
Argo-Tech Corp.:
90,000 B- Company Guaranteed, 8.625% due 10/1/07(b) 88,200
290,000 B- Sr. Sub. Notes, 8.625% due 10/1/07 284,200
BE Aerospace Inc., Sr. Sub. Notes:
550,000 B1* 8.000% due 3/1/08 550,000
50,000 B1* 9.500% due 11/1/08 53,500
850,000 AA- Boeing Co., Debentures, 6.625% due 2/15/38 802,187
290,000 B- Decrane Aircraft Holdings Inc., Sr. Sub. Notes,
12.000% due 9/30/08(b)(c) 298,700
50,000 B+ Derlan Manufacturing, Sr. Notes, 10.000% due 1/15/07 45,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Aerospace -- 1.5% (continued)
$ 50,000 B- K&F Industries, Sr. Sub. Notes, 9.250% due 10/15/07 $ 51,750
L3 Communications Corp.:
100,000 B Company Guaranteed, 8.000% due 8/1/08 101,500
Sr. Sub. Notes:
45,000 B2* 10.375% due 5/1/07 49,725
80,000 B2* 8.500% due 5/15/08 83,800
- ------------------------------------------------------------------------------------------------------
2,409,062
- ------------------------------------------------------------------------------------------------------
Agriculture -- 0.0%
26,980 NR Premium Standard Farms Inc., Sr. Secured Notes,
11.000% due 9/17/03 25,631
- ------------------------------------------------------------------------------------------------------
Airlines -- 0.7%
Canadian Airlines Corp., Sr. Notes:
150,000 B- 10.000% due 5/1/05 106,500
100,000 CCC- 12.250% due 8/1/06 42,000
280,000 CCC Cathay International Ltd., Sr. Notes,
13.000% due 4/15/08(b) 70,000
700,000 Ba2* Continental Airlines, Company Guaranteed,
8.125% due 4/1/08 687,750
90,000 B- GEO Specialty Chemicals, Inc., Sr. Sub. Notes,
10.125% due 8/1/08(b) 90,900
Trans World Airlines Inc.:
70,000 B2* Sr. Notes, 11.500% due 12/15/04 56,000
230,000 Caa1* Sr. Sub. Notes, 11.375% due 3/1/06 118,450
- ------------------------------------------------------------------------------------------------------
1,171,600
- ------------------------------------------------------------------------------------------------------
Automotive -- 0.9%
180,000 B Dura Operating Corp., Sr. Sub. Notes,
9.000% due 5/1/09(b) 184,050
350,000 B Hayes Lemmerz International Inc., Company Guaranteed,
11.000% due 7/15/06 390,250
300,000 BB- Lear Corp., Sub. Notes, 9.500% due 7/15/06 325,500
Motors & Gears Inc., Sr. Notes:
60,000 NR 10.750% due 11/15/06(b) 61,950
60,000 NR Series B, 10.750% due 11/15/06 61,950
300,000 Ba2* Navistar International Inc., Sr. Sub. Notes,
8.000% due 2/1/08 312,750
60,000 B- Safety Components International Inc., Sr. Sub. Notes,
10.125% due 7/15/07 59,925
- ------------------------------------------------------------------------------------------------------
1,396,375
- ------------------------------------------------------------------------------------------------------
Banking -- 0.4%
110,000 Ba1* Fuji JGB Investment LLC, 9.870% due 12/31/49(b) 102,850
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Banking -- 0.4% (continued)
Imperial Credit Industries Inc.:
$ 60,000 B- Company Guaranteed, 10.250% due 6/15/32 $ 48,600
30,000 B- Sr. Notes, 9.875% due 1/15/07 24,150
45,000 Baa3* North Fork Capital Trust, 8.700% due 12/15/26 50,513
280,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 217,000
45,000 BB- Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 44,550
30,000 Baa3* Riggs Capital Trust, 8.625% due 12/31/26(b) 29,813
40,000 BB Webster Capital Trust Inc., Bonds,
9.360% due 1/29/27(b) 41,750
- ------------------------------------------------------------------------------------------------------
559,226
- ------------------------------------------------------------------------------------------------------
Broadcasting -- 2.6%
85,000 B- Acme Television Financial, Sr. Discount Notes, step bond
to yield 10.875% due 9/30/04 73,100
110,000 B Affinity Group Holding Inc., Sr. Notes,
11.000% due 4/1/07 110,825
40,000 B- Azteca Holdings S.A., Sr. Notes, 11.000% due 6/15/02 36,600
Capstar Broadcasting Corp.:
155,000 B- Sr. Discount Notes, step bond to yield 12.750% due 2/1/09 132,525
240,000 B2* Sr. Sub. Notes, 9.250% due 7/1/07 256,200
Chancellor Media Corp.:
190,000 B1* Guaranteed Sr. Sub. Notes, 9.375% due 10/1/04 203,062
800,000 Ba2* Sr. Notes, 8.000% due 11/1/08(b) 826,000
305,000 B- Citadel Broadcasting Co., Sr. Sub. Notes,
10.250% due 7/1/07 337,025
520,000 B Echostar DBS Corp., Sr. Notes, 9.375% due 2/1/09(b) 543,400
Garden State Newspapers, Inc., Sr. Sub. Notes:
225,000 B+ 8.750% due 10/1/09 230,625
130,000 B+ 8.625% due 7/1/11(b) 131,950
Globo Communicacoese Participacoes S.A.:
60,000 B+ Guaranteed Sr. Notes, 10.500% due 12/20/06(b) 48,450
60,000 B+ Unsubordinated Notes, 10.625% due 12/5/08(b) 48,450
Granite Broadcasting Corp., Sr. Sub. Notes:
100,000 B- 9.375% due 12/1/05 102,000
300,000 B- 8.875% due 5/15/08 300,750
140,000 BB+ Jacor Communications Co., Sr. Sub. Notes,
8.750% due 6/15/07 151,025
195,000 NR PHI Holdings Inc., Notes, 16.000% due 5/15/01 153,913
180,000 B- Radio One Inc., Company Guaranteed, step bond to yield
11.958% due 5/15/04 187,200
100,000 B- SFX Broadcasting, Inc., Sr. Sub. Notes,
10.750% due 5/15/06 110,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Broadcasting -- 2.6% (continued)
$ 40,000 B2* Sinclair Broadcast Group, Inc., Sr. Sub. Notes,
8.750% due 12/15/07 $ 40,800
60,000 B Spanish Broadcasting Systems Inc., Sr. Notes,
11.000% due 3/15/04 65,400
25,000 B+ TV Azteca S.A. de C.V., Guaranteed Sr. Notes,
Series A, 10.500% due 2/15/07 21,688
- ------------------------------------------------------------------------------------------------------
4,111,488
- ------------------------------------------------------------------------------------------------------
Building/Construction -- 0.7%
120,000 B- Albecca Inc., Sr. Sub. Notes, 10.750% due 8/15/08 105,000
50,000 B- American Architectural Products Corp., Sr. Notes,
11.750% due 12/1/07 40,000
Building Materials Corp., Sr. Notes:
20,000 BB 8.625% due 12/15/06 20,300
140,000 BB Series B, 8.000% due 12/1/08(b) 138,950
25,000 BB- Cia. Latino Americana de Infraestructura & Servicos S.A.
11.625% due 6/1/04(b) 16,125
460,000 Ba1* D.R. Horton Inc., Guaranteed Sr. Notes, 8.000% due 2/1/09 456,550
190,000 BB GS Superhighway, Sr. Notes, 9.875% due 8/15/04 94,050
110,000 B Morris Material Handling, Sr. Notes, 9.500% due 4/1/08 60,500
50,000 B Republic Group Inc., Sr. Sub. Notes, 9.500% due 7/15/08 51,125
150,000 BBB- Southdown Inc., Sr. Sub. Notes, 10.000% due 3/1/06 165,750
- ------------------------------------------------------------------------------------------------------
1,148,350
- ------------------------------------------------------------------------------------------------------
Casinos -- 1.0%
210,000 B+ Argosy Gaming Co., Guaranteed First Mortgage Notes,
13.250% due 3/15/04 237,825
55,000 B+ Autotote Corp., Sr. Notes, 10.875% due 8/1/04 57,887
386,600 NR Colorado Gaming Entertainment Co., Sr. Notes,
12.000% due 6/1/03 417,045
400,000 BBB- Harrah's Operating Co., Inc., Company Guaranteed,
7.500% due 1/15/09 406,000
120,000 BB+ Park Place Entertainment, Sr. Sub. Notes,
7.875% due 12/15/05 118,500
75,000 BB- Players International Inc., Sr. Notes, 10.875% due 4/15/05 80,812
175,000 Ca* PRT Funding Corp., Sr. Notes, 11.625% due 4/15/04 117,469
230,000 B Trump Castle Inc., 10.250% due 4/30/03(b) 232,300
- ------------------------------------------------------------------------------------------------------
1,667,838
- ------------------------------------------------------------------------------------------------------
Chemicals -- 0.5%
Huntsman Corp., Sr. Sub. Notes:
100,000 B2* 8.330% due 7/1/07(b) 93,500
50,000 B2* 9.500% due 7/1/07(b) 49,500
200,000 BB- ISP Holdings Inc., Sr. Notes, 9.750% due 2/15/06 208,000
50,000 B2* Koppers Industries Inc., Sr. Notes, 9.875% due 12/1/07 51,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 Travelers Series Fund Inc.
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Chemicals -- 0.5% (continued)
$ 200,000 B+ PCI Chemicals, Sr. Secured Notes, 9.250% due 10/15/07 $ 168,500
Polymer Group Inc., Sr. Sub. Notes:
65,000 B 9.000% due 7/1/07 66,787
70,000 B 8.750% due 3/1/08 71,225
105,000 B+ Sterling Chemicals Holdings Inc., Sr. Discount Notes,
step bond to yield 11.184% due 8/15/08 50,400
125,000 BB- Trikem S.A., Bonds, 10.625% due 7/24/07(b) 68,750
- ------------------------------------------------------------------------------------------------------
827,912
- ------------------------------------------------------------------------------------------------------
Communications -- 0.4%
490,000 NR Cellnet Data Systems Inc., Sr. Discount Notes, step bond
to yield 14.000% due 10/1/07 191,713
90,000 NR Conecel Holdings Ltd., 14.000% due 10/1/00(b) 90,000
260,000 NR Focal Communications Corp., Sr. Discount Notes,
step bond to yield 11.513% due 2/15/08 150,800
Orbital Imaging Corp., Sr. Notes:
110,000 NR 11.625% due 3/1/05 107,250
20,000 NR 11.625% due 3/1/05(b) 19,500
- ------------------------------------------------------------------------------------------------------
559,263
- ------------------------------------------------------------------------------------------------------
Conglomerates -- 0.5%
180,000 B2* CEX Holdings Inc., Sr. Sub. Notes, 9.625% due 6/1/08 171,000
45,000 BB Desc S.A. de C.V., Company Guaranteed, 8.750% due 10/15/07 40,050
Iron Mountain Inc.:
Guaranteed Sr. Sub. Notes:
50,000 B2* 10.125% due 10/1/06 53,875
475,000 B2* 8.750% due 9/30/09 489,250
40,000 B2* Sr. Sub. Notes, 8.250% due 7/1/11(b) 40,300
30,000 BB Newport News Shipbuilding Inc., Sr. Notes,
8.625% due 12/1/06 32,250
- ------------------------------------------------------------------------------------------------------
826,725
- ------------------------------------------------------------------------------------------------------
Consumer Products -- 1.4%
120,000 BBB- Fred Meyer Inc., Notes, 7.450% due 3/1/08 126,000
French Fragrances Inc.:
40,000 B+ Guaranteed Sr. Notes, Series D, 10.375% due 5/15/07 40,800
30,000 B+ Sr. Notes, Series B, 10.375% due 5/15/07 30,600
350,000 Ba1* Fruit of the Loom Inc., Guaranteed Sr. Notes,
8.875% due 4/15/06(b) 347,375
15,000 B- Hedstrom Holdings Inc., Sr. Discount Notes,
step bond to yield 12.000% due 6/1/09 6,469
110,000 NR Interact Systems Inc., Sr. Discount Notes,
step bond to yield 14.000% due 8/1/03 40,700
85,000 NR Kasper ASL Ltd., Sr. Notes, 12.750% due 3/31/04 82,450
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Consumer Products -- 1.4% (continued)
Revlon Consumer Products Corp.:
$ 80,000 B2* Sr. Notes, 9.000% due 11/1/06 $ 81,800
325,000 B- Sr. Sub. Notes, 8.625% due 2/1/08 312,812
180,000 B+ Royster-Clark, Inc., First Mortgage Notes,
10.250% due 4/1/09(b) 182,700
650,000 B3* Signature Brands USA, Inc., Guaranteed Sr. Sub. Notes,
13.000% due 8/15/02 720,688
260,000 B- Triarc, Inc., Sr. Sub. Notes,
10.250% due 2/15/09(b) 262,600
- ------------------------------------------------------------------------------------------------------
2,234,994
- ------------------------------------------------------------------------------------------------------
Consumer Services -- 0.1%
200,000 B+ Coinmach Corp., Sr. Notes, 11.750% due 11/15/05 220,500
- ------------------------------------------------------------------------------------------------------
Containers -- 0.3%
170,000 B AEP Industries Inc., Sr. Sub. Notes, 9.875% due 11/15/07 178,500
120,000 BB Ball Corp., Guaranteed Sr. Notes, 7.750% due 8/1/06 124,500
230,000 B Packaging Corp. of America, Sr. Sub. Notes,
9.625% due 4/1/09(b) 239,775
- ------------------------------------------------------------------------------------------------------
542,775
- ------------------------------------------------------------------------------------------------------
Electric -- 0.1%
210,000 BB+ Cleveland Electric Illuminating Co., First Mortgage Bonds,
6.860% due 10/1/08 211,575
- ------------------------------------------------------------------------------------------------------
Electronics -- 0.1%
20,000 B1* Moog Inc., Sr. Sub. Notes, 10.000% due 5/1/06 20,050
160,000 B2* Zilog Inc., Sr. Secured Notes, 9.500% due 3/1/05 145,600
- ------------------------------------------------------------------------------------------------------
165,650
- ------------------------------------------------------------------------------------------------------
Energy -- 0.4%
Ocean Energy Inc.:
125,000 BB- Guaranteed Sr. Sub. Notes, 9.750% due 10/1/06 129,375
Sr. Notes:
160,000 BB- 8.875% due 7/15/07 165,200
160,000 BB- 8.375% due 7/1/08 164,400
Transamerican Energy Corp.:
15,000 C Sr. Discount Notes, step bond to yield 14.155% due 6/15/99 3,300
380,000 NR Sr. Notes, 11.500% due 6/15/02 79,800
135,000 C Sr. Sub. Notes, 16.000% due 6/30/03 13,500
- ------------------------------------------------------------------------------------------------------
555,575
- ------------------------------------------------------------------------------------------------------
Entertainment -- 2.1%
AMC Entertainment Inc., Sr. Sub. Notes:
170,000 B- 9.500% due 3/15/09 167,875
70,000 B- 9.500% due 2/1/11(b) 68,600
175,000 B Cinemark USA Inc., Sr. Sub. Notes, 9.625% due 8/1/08 182,437
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Entertainment -- 2.1% (continued)
$ 245,000 B1* Fox Family Worldwide Inc., Sr. Notes, 9.250% due 11/1/07 $ 239,487
190,000 B1* Fox Liberty Networks LLC Inc., Sr. Notes,
8.875% due 8/15/07 208,050
110,000 NR Hollywood Park Inc., Sr. Sub. Notes, 9.250% due 2/15/07(b) 114,125
60,000 B+ Paragon Corporate Holdings Inc., Sr. Notes,
9.625% due 4/1/08 38,400
600,000 BBB- Paramount Communications Inc., Sr. Debentures,
7.500% due 7/15/23 584,250
Premier Parks Inc.:
500,000 B- Sr. Discount Notes, 10.000% due 4/1/08 356,250
250,000 B1* Sr. Notes, 12.000% due 8/15/03 269,687
40,000 B- PX Escrow Corp., Sr. Discount Notes, step bond to yield
9.625% due 2/1/06 25,200
SFX Entertainment, Inc.:
150,000 B- Guaranteed Sr. Sub. Notes, Series B, 9.125% due 2/1/08 155,625
110,000 NR Sr. Sub. Notes, 9.125% due 12/1/08(b) 114,125
110,000 CCC Silver Cinemas International Inc., Sr. Sub. Notes,
10.500% due 4/15/05 55,000
400,000 B- Six Flags Theme Parks Inc., Sr. Sub. Discount Notes,
12.250% due 6/15/05 440,000
115,000 BBB Time Warner Inc., Notes, 8.180% due 8/15/07 127,794
280,000 B- United Artists Theatre Co., Sr. Sub. Notes,
9.750% due 4/15/08 240,800
- ------------------------------------------------------------------------------------------------------
3,387,705
- ------------------------------------------------------------------------------------------------------
Environment -- 0.3%
500,000 BB Allied Waste North America Inc., Guaranteed Sr. Notes,
Series B, 7.875% due 1/1/09 491,250
- ------------------------------------------------------------------------------------------------------
Financial Services -- 1.6%
65,000 CCC+ Aames Financial Corp., Sr. Notes, 9.125% due 11/1/03 47,775
Advanta Corp., Notes:
80,000 BB- 7.000% due 5/1/01 74,500
270,000 BB- 6.920% due 1/28/02 244,012
155,000 B2* Cellco Finance NV, Sr. Sub. Notes, 15.000% due 8/1/05(b) 151,125
200,000 B+ Chevy Chase Savings Bank, Sub. Debentures,
9.250% due 12/1/05 201,500
Conti Financial Corp., Sr. Notes:
250,000 B- 7.500% due 3/15/02 190,000
85,000 B- 8.375% due 8/15/03 65,450
40,000 B- 8.125% due 4/1/08 29,200
60,000 B Delta Financial Corp., 9.500% due 8/1/04 45,000
30,000 BB Dime Capital Trust, Bank Guaranteed, 9.330% due 5/6/27 31,537
1,000 Caa1* Greate Bay Property Funding, First Mortgage Notes,
10.875% due 1/15/04 720
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Financial Services -- 1.6% (continued)
$ 380,000 A Household Netherlands BV, Company Guaranteed,
6.200% due 12/1/03 $ 380,000
455,000 NR MCII Holdings, Inc., Secured Notes, 12.000% due 11/15/02 414,050
250,000 B- Nationwide Credit Inc., Sr. Notes, 10.250% due 1/15/08 133,750
25,000 BB- Ocwen Financial Corp., Notes, 11.875% due 10/1/03 24,250
30,000 B+ Pioneer Americas Acquisition Corp., Sr. Secured Notes,
9.250% due 6/15/07 26,025
99,498 Caa1* Polytama International Finance BV, Company Guaranteed,
11.250% due 6/15/07 17,910
60,000 Baa3* Provident Capital Trust, Guaranteed Notes,
8.600% due 12/1/26 65,775
370,000 BB- RBF Finance Co., Guaranteed Sr. Notes,
11.000% due 3/15/06(b) 389,425
35,000 B- Resource America Inc., Sr. Notes, 12.000% due 8/1/04 31,675
45,000 NR Sovereign Capital Trust, Guaranteed Notes, 9.000% due 4/1/07 50,119
- ------------------------------------------------------------------------------------------------------
2,613,798
- ------------------------------------------------------------------------------------------------------
Foods -- 0.4%
Ameriserv Food Distribution Inc., Sr. Notes:
25,000 B+ 8.875% due 10/15/06 23,500
45,000 B- 10.125% due 7/15/07 37,350
Aurora Foods Inc., Sr. Sub. Notes:
20,000 B+ Series B, 9.875% due 2/15/07 21,700
130,000 B+ Series D, 9.875% due 2/15/07 141,050
250,000 B FRD Acquisition Co., Sr. Notes, 12.500% due 7/15/04 250,625
170,000 CCC+ Rab Enterprises Inc., Sr. Notes, 10.500% due 5/1/05 93,500
- ------------------------------------------------------------------------------------------------------
567,725
- ------------------------------------------------------------------------------------------------------
Gaming -- 0.3%
300,000 BB- Boyd Gaming Co., Sr. Sub. Notes, 9.500% due 7/15/07 309,000
200,000 Caa3* Fitzgeralds Gaming Corp., Sr. Secured Notes,
12.250% due 12/15/04 88,000
- ------------------------------------------------------------------------------------------------------
397,000
- ------------------------------------------------------------------------------------------------------
Gas & Oil Exploration -- 1.3%
115,000 CCC+ Abraxas Petroleum Corp., Sr. Notes, 11.500% due 11/1/04 70,725
140,000 B1* Belco Oil & Gas Corp., Company Guaranteed,
10.500% due 4/1/06 144,900
Benton Oil & Gas Co., Sr. Notes:
100,000 B 11.625% due 5/1/03 67,000
15,000 B 9.375% due 11/1/07 10,050
655,000 BB- CMS Energy Corp., Sr. Notes, 8.125% due 5/15/02 673,830
20,000 CCC- Gothic Energy Corp., Sr. Discount Notes, step bond to yield
14.799% due 5/1/06(b) 7,625
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Gas & Oil Exploration -- 1.3% (continued)
Gulf Canada Resources Ltd., Sub. Debentures:
$ 150,000 Ba2* 9.625% due 7/1/05 $ 156,187
100,000 BB+ 8.375% due 11/15/05 101,500
220,000 BBB Petroleum Geo-Services, Notes, 7.500% due 3/31/07 227,975
15,000 B+ Pogo Producing Co., Sr. Sub. Notes, 8.750% due 5/15/07 14,250
70,000 B- Ram Energy Inc., Sr. Notes, 11.500% due 2/15/08 38,500
250,000 CCC+ Seven Seas Petroleum Inc., Sr. Notes,
12.500% due 5/15/05 145,000
128,000 C TransTexas Gas Corp., Sr. Sub. Notes,
13.750% due 12/31/01 32,000
160,000 B+ Triton Energy Ltd. Corp., Sr. Notes, 8.750% due 4/15/02 158,400
260,000 B+ Vintage Petroleum Inc., Sr. Sub. Notes,
9.750% due 6/30/29(b) 271,050
80,000 NR XCL Ltd., Sr. Secured Discount Notes.,
13.500% due 5/1/04(b) 63,200
- ------------------------------------------------------------------------------------------------------
2,182,192
- ------------------------------------------------------------------------------------------------------
Health Care -- 2.0%
80,000 B- Alaris Medical Systems Inc., Sr. Sub. Notes,
9.750% due 12/1/06 82,000
Columbia HCA Healthcare Corp.:
50,000 BB+ Debentures, 8.360% due 4/15/24 47,391
Notes:
80,000 BB+ 7.250% due 5/20/08 72,600
50,000 BB+ 7.690% due 6/15/25 42,375
230,000 BB+ 6.630% due 7/15/45 219,937
100,000 B Dade International Inc., Sr. Sub. Notes, 11.125% due 5/1/06 111,000
125,000 B2* Extendicare Health Services, Sr. Sub. Notes,
9.350% due 12/15/07 92,500
150,000 Ba3* Fresenius Medical Care Capital Trust II, 7.875% due 2/1/08 147,000
190,000 BBB- Healthcare Corp., Sub. Debentures, 3.250% due 4/1/03 162,925
150,000 BB ICN Pharmaceuticals Inc., Sr. Notes, Series B,
9.250% due 8/15/05 155,250
430,000 B2* Integrated Health Services, Inc., Sr. Sub. Notes,
Series A, 9.500% due 9/15/07 321,425
55,000 B- Kinetic Concepts Inc., Sr. Sub. Notes, 9.625% due 11/1/07 53,900
100,000 B- Leiner Health Products Inc., Sr. Sub. Notes,
9.625% due 7/1/07 102,500
170,000 B- Magellan Health Services, Inc., Sr. Sub. Notes,
9.000% due 2/15/08 143,650
Mariner Post-Acute Network Inc., Sr. Sub. Notes:
140,000 B3* 9.500% due 11/1/07 77,700
310,000 B3* Step bond to yield 9.843% due 11/1/07 114,700
110,000 CCC+ Mediq Inc., Sr. Discount Debentures, step bond to yield
13.000% due 6/1/09 45,100
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Health Care -- 2.0% (continued)
$ 140,000 B3* Mediq Inc./Prn Life Support Services Inc., Company
Guaranteed, 11.000% due 6/1/08 $ 120,400
Medpartners Inc., Sr. Sub. Notes:
10,000 B 6.875% due 9/1/00 9,300
240,000 B 7.375% due 10/1/06 204,000
330,000 B3* Multicare Cos. Inc., Sr. Sub. Notes, 9.000% due 8/1/07 251,625
120,000 B- Paracelsus Healthcare Corp., Sr. Sub. Notes,
10.000% due 8/15/06 86,400
100,000 Ba3* Quorum Health Group, Inc., Sr. Sub. Notes,
8.750% due 11/1/05 100,250
Sun Healthcare Group Inc., Sr. Sub. Notes:
190,000 CCC 9.375% due 5/1/08(b) 42,750
165,000 CCC Series B, 9.500% due 7/1/07(b) 37,125
Tenet Healthcare Corp.:
45,000 BB+ Sr. Notes, 8.000% due 1/15/05 44,775
Sr. Sub. Notes:
245,000 BB- 8.625% due 1/15/07 244,694
150,000 BB- 8.125% due 12/1/08(b) 145,875
- ------------------------------------------------------------------------------------------------------
3,279,147
- ------------------------------------------------------------------------------------------------------
Industrial Goods & Services -- 2.4%
250,000 B- Axia Inc., Sr. Sub. Notes, 10.750% due 7/15/08 253,750
Call-Net Enterprises Inc.:
Sr. Discount Notes:
320,000 BB- Step bond to yield 10.119% due 8/15/03 208,000
280,000 BB- Step bond to yield 9.155% due 8/15/07 198,100
130,000 BB- Sr. Notes, 8.000% due 8/15/08 127,400
90,000 B2* Eagle Geophysical Inc., Sr. Notes, 10.750% due 7/15/08 52,200
140,000 B+ Flextronics International Ltd., Sr. Sub. Notes,
8.750% due 10/15/07 145,600
30,000 BB Greenpoint Capital Trust, 9.100% due 6/1/27 31,987
HMH Properties Inc.:
350,000 Ba2* Guaranteed Sr. Notes, Series A, 7.875% due 8/1/08 339,500
50,000 Ba2* Sr. Notes, Series C, 8.450% due 12/1/08 50,437
50,000 B2* Home Interiors and Gifts Inc., Sr. Sub. Notes,
10.125% due 6/1/08 50,750
80,000 B Huntsman Packaging Corp., Guaranteed Sr. Sub. Notes,
9.125% due 10/1/07 81,000
50,000 B- Jackson Products Inc., Sr. Sub. Notes, 9.500% due 4/15/05 50,063
500,000 B North Atlantic Trading Co., Inc., Company Guaranteed,
11.000% due 6/15/04 513,750
240,000 NR Northeast Optic Network Inc., Sr. Notes,
12.750% due 8/15/08 256,200
590,000 BB+ Owens - Illinois Inc., Sr. Notes, 8.100% due 5/15/07 614,337
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Industrial Goods & Services -- 2.4% (continued)
$ 250,000 B- Panda Global Energy Co., Sr. Secured Notes,
12.500% due 4/15/04 $ 100,000
45,000 B- Sealy Mattress Co., Sr. Sub. Notes, 9.875% due 12/15/07 45,225
180,000 B3* Telecorp PCS, Inc., Sr. Discount Notes, step bond to yield
11.625% due 4/15/09(b) 101,700
600,000 BB- Unisys Corp., Sr. Notes, 7.875% due 4/1/08 628,500
- ------------------------------------------------------------------------------------------------------
3,848,499
- ------------------------------------------------------------------------------------------------------
Insurance -- 0.0%
30,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes,
11.000% due 11/1/06 29,850
- ------------------------------------------------------------------------------------------------------
Lodging -- 0.8%
100,000 B- Epic Resorts Inc., Sr. Secured Notes, 13.000% due 6/15/05 93,000
250,000 BB- Host Marriott Travel Plaza, Sr. Secured Notes,
9.500% due 5/15/05 260,938
90,000 B+ Prime Hospitality Corp., Sr. Sub. Notes, 9.750% due 4/1/07 94,725
Starwood Hotels and Resorts, Notes:
250,000 Ba1* 6.250% due 11/15/00 248,750
300,000 Ba1* 6.750% due 11/15/03 297,000
250,000 Ba1* 6.750% due 11/15/05 240,938
- ------------------------------------------------------------------------------------------------------
1,235,351
- ------------------------------------------------------------------------------------------------------
Manufacturing -- 0.2%
120,000 B- Decora Industries, Inc., Secured Notes,
11.000% due 5/1/05 114,000
35,000 B- HCC Industries Inc., Sr. Sub. Notes, 10.750% due 5/15/07 33,950
120,000 B- Roller Bearing Co., Inc., Sr. Sub. Notes,
9.625% due 6/15/07 114,900
100,000 CCC+ Samsonite Corp., Sr. Sub. Notes, 10.750% due 6/15/08 73,000
- ------------------------------------------------------------------------------------------------------
335,850
- ------------------------------------------------------------------------------------------------------
Media - Cable -- 3.9%
Adelphia Communications Corp., Sr. Notes:
100,000 B+ 10.250% due 7/15/00 105,500
1,282 B+ 9.500% due 2/15/04 1,353
150,000 B+ 8.375% due 2/1/08(b) 154,500
60,000 B+ 7.875% due 5/1/09 60,300
Allbritton Communications Co.:
250,000 B- Sr. Sub. Debentures, 9.750% due 11/30/07 267,500
550,000 B- Sr. Sub. Notes, 8.875% due 2/1/08 565,125
250,000 B+ American Media Operation Inc., Sr. Sub. Notes,
11.625% due 11/15/04 270,000
40,000 CCC+ Central European Media Enterprises, Sr. Notes,
9.375% due 8/15/04 36,400
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Media - Cable -- 3.9% (continued)
$ 320,000 BB- Century Communications Corp., Sr. Notes,
9.500% due 3/1/05 $ 352,000
Charter Communications Holdings LLC:
500,000 B+ Sr. Discount Notes, step bond to yield
9.164% due 4/1/04(b) 330,000
750,000 B+ Sr. Notes, 8.625% due 4/1/09 770,625
250,000 BB+ Comcast Corp., Sr. Sub. Notes, 9.500% due 1/15/08 268,125
CSC Holdings Inc.:
Debentures:
40,000 BB+ 8.125% due 8/15/09 43,200
50,000 BB+ 7.875% due 2/15/18 51,563
1,020,000 BB+ Sr. Notes, 7.250% due 7/15/08 1,035,300
Sr. Sub. Debentures:
25,000 BB- 9.875% due 2/15/13 28,063
250,000 BB- 10.500% due 5/15/16 299,375
Diamond Cable Communications PLC, Sr. Discount Notes:
125,000 B- Step bond to yield 11.263% due 12/15/00 112,500
235,000 B- Step bond to yield 9.975% due 2/15/07 186,238
135,000 B3* Golden Sky Systems Inc., Sr. Sub. Notes,
12.375% due 8/1/06(b) 149,175
100,000 BB- Jones Intercable, Inc., Sr. Sub. Debentures,
10.500% due 3/1/08 111,750
NTL Inc., Sr. Notes:
305,000 B- 10.000% due 2/15/07 330,163
130,000 B- 11.500% due 10/1/08(b) 147,225
40,000 NR Pegasus Communications Corp., Sr. Notes,
9.750% due 12/1/06(b) 41,400
50,000 B2* Pegasus Media & Communications Inc., Notes,
12.500% due 7/1/05 55,625
Rogers Cablesystems Ltd.:
400,000 BB+ Debentures, 10.125% due 9/1/12 446,000
40,000 BB+ Sr. Notes, 10.000% due 3/15/05 45,200
110,000 Caa3* Supercanal Holdings S.A., Sr. Notes, 11.500% due 5/15/05 52,800
- ------------------------------------------------------------------------------------------------------
6,317,005
- ------------------------------------------------------------------------------------------------------
Metals -- 1.1%
390,000 Ba2* AK Steel Corp., Sr. Notes, 7.875% due 2/15/09 393,900
140,000 Ba3* Ameristeel Corp., Sr. Notes, 8.750% due 4/15/08 142,450
150,000 CC Anker Coal Group Inc., Sr. Notes, 9.750% due 10/1/07 73,500
190,000 BB California Steel Industries, Sr. Notes, 8.500% due 4/1/09(b) 194,750
60,000 B Continental Global Group Inc., Sr. Notes,
11.000% due 4/1/07 54,150
150,000 B Lodestar Holdings Inc., Sr. Notes, 11.500% due 5/15/05 117,188
460,000 B- Neenah Corp., Sr. Sub. Notes, 11.125% due 5/1/07(b) 468,050
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
34 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Metals -- 1.1% (continued)
$ 100,000 B UCAR Global Enterprises Inc., Sr. Sub. Notes,
12.000% due 1/15/05 $ 105,500
210,000 B Weirton Steel Corp., Sr. Notes, 11.375% due 7/1/04 208,950
80,000 B WHX Corp., Sr. Notes, 10.500% due 4/15/05 80,400
- ------------------------------------------------------------------------------------------------------
1,838,838
- ------------------------------------------------------------------------------------------------------
Miscellaneous -- 2.2%
70,000 B+ Applied Power, Inc., Sr. Sub. Notes, 8.750% due 4/1/09 71,925
90,000 NR Bestel SA, Units, step bond to yield 12.750% due 5/15/05 58,950
30,000 BB+ Colonial Capital II, Company Guaranteed, 8.920% due 1/15/27 29,363
480,000 NR Diva Systems Corp., Sr. Discount Notes, step bond to yield
13.655% due 3/1/08 163,200
15,000 NR Doane Pet Care Co., Sr. Sub. Notes, 9.750% due 5/15/07(b) 15,675
150,000 Ba3* Flag Ltd., Sr. Notes, 8.250% due 1/30/08 149,250
90,000 B3* Gothic Production Corp., Sr. Notes, 11.125% due 5/1/05(b) 77,400
750,000 BB+ GS Escrow Corp., Sr. Notes, 7.000% due 8/1/03 750,937
350,000 B- Isle Capri Black Hawk LLC, First Mortgage Notes,
13.000% due 8/31/04 381,500
275,000 NR Knology Holdings, Inc., Sr. Discount Notes, step bond
to yield 12.492% due 10/15/07 169,125
Netia Holdings, Guaranteed Sr. Notes:
40,000 B 10.250% due 11/1/07 38,400
20,000 B Step bond to yield 11.533% due 11/1/07 14,200
350,000 B- Pierce Leahy Corp., Sr. Sub. Notes, 11.125% due 7/15/06 391,125
45,000 B Transtel SA, Trust Certificates, 12.500% due 11/1/07(b) 19,350
860,000 NR United Mexican States, Bonds, 10.375% due 2/17/09 922,995
240,000 BB- York Power Funding Ltd., 12.000% due 10/30/07(b) 241,200
- ------------------------------------------------------------------------------------------------------
3,494,595
- ------------------------------------------------------------------------------------------------------
Paper -- 0.8%
150,000 CCC+ APP Finance II Mauritius Ltd., Bonds, 12.000% due 12/29/49 76,875
130,000 B- Impac Group, Inc., Sr. Sub. Notes, 10.125% due 3/15/08 128,538
195,000 CCC+ Indah Kiat Finance Mauritius Ltd., Sr. Notes,
10.000% due 7/1/07 131,625
190,000 B+ Pacifica Paper, Inc., Sr. Notes, 10.000% due 3/15/09(b) 198,075
130,000 CCC+ Pindo Deli Finance Mauritius Ltd., Sr. Notes,
10.750% due 10/1/07 86,450
Riverwood International Corp.:
200,000 B- Sr. Notes, 10.250% due 4/1/06 206,500
380,000 CCC+ Sr. Sub. Notes, 10.875% due 4/1/08 375,250
220,000 CCC+ Tjiwi Kimia Finance Mauritius Ltd., Sr. Notes,
10.000% due 8/1/04 138,600
- ------------------------------------------------------------------------------------------------------
1,341,913
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Publishing -- 0.2%
$ 75,000 BB- Hollinger International Publishing Inc., Sr. Notes,
9.250% due 3/15/07 $ 78,469
200,000 B- Perry-Judd Inc., Sr. Sub. Notes, 10.625% due 12/15/07 195,000
Von Hoffman Press Inc., Sr. Sub. Notes:
30,000 B- 10.375% due 5/15/07(b) 31,013
22,824 B- 13.500% due 5/15/09(b) 23,737
- ------------------------------------------------------------------------------------------------------
328,219
- ------------------------------------------------------------------------------------------------------
Railroads -- 0.1%
TFM SA de C.V., Company Guaranteed:
25,000 B+ 10.250% due 6/15/07 23,500
120,000 B+ Step bond to yield 11.767% due 6/15/09 76,500
- ------------------------------------------------------------------------------------------------------
100,000
- ------------------------------------------------------------------------------------------------------
Retail -- 0.5%
150,000 B Mothers Work, Inc., Sr. Notes, 12.625% due 8/1/05 157,125
390,000 B+ NBTY, Inc., Sr. Sub. Notes, 8.625% due 9/15/07 371,475
United Stationers Supply, Sr. Sub. Notes:
67,000 B1* 12.750% due 5/1/05 74,538
30,000 B1* 8.375% due 4/15/08 30,225
210,000 CCC+ U.S. Office Product Co., Sr. Sub. Notes,
9.750% due 6/15/08 145,950
90,000 BB Zale Corp., Sr. Notes, 8.500% due 10/1/07 92,475
- ------------------------------------------------------------------------------------------------------
871,788
- ------------------------------------------------------------------------------------------------------
Shipping -- 0.1%
145,000 B Johnstown America Industries, Inc., Sr. Sub. Notes,
11.750% due 8/15/05 157,325
180,000 NR Pegasus Shipping, 14.500% due 6/20/08(b) 70,200
- ------------------------------------------------------------------------------------------------------
227,525
- ------------------------------------------------------------------------------------------------------
Supermarkets -- 0.2%
350,000 BB+ Southland Corp., Second Priority, Sr. Sub. Notes,
4.500% due 6/15/04 290,500
- ------------------------------------------------------------------------------------------------------
Technology -- 0.5%
70,000 B1* The DII Group, Inc., Sr. Sub. Notes, 8.500% due 9/15/07 70,700
Fairchild Semiconductor Corp.:
241,991 B Payment-in-kind, 11.740% due 3/14/08 227,472
260,000 B Sr. Sub. Notes, 10.125% due 3/15/07 263,900
50,000 B- Integrated Device Technology, Inc., Sub. Notes,
5.500% due 6/1/02 37,375
160,000 B- Verio Inc., Sr. Notes, 10.375% due 4/1/05 171,600
20,000 B- Wavetek Corp., Sr. Sub. Notes, 10.125% due 6/15/07 18,900
- ------------------------------------------------------------------------------------------------------
789,947
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
36 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Telecommunications -- 9.7%
$ 380,000 NR Allegiance Telecom, Inc., Sr. Discount Notes, step bond
to yield 12.377% due 2/15/08 $ 256,025
160,000 NR AMSC Acquisition Co., Inc., Sr. Notes, 12.250% due 4/1/08 121,600
110,000 B3* Barak I.T.C., Sr. Discount Notes, step bond to yield
12.500% due 11/15/07 63,800
250,000 B3* Benedek Communications Corp., Sr. Discount Notes,
step bond to yield 13.319% due 5/15/06 202,500
90,000 NR Birch Telecom Inc., Sr. Notes, 14.000% due 6/15/08 83,250
90,000 B CapRock Communications Corp., Sr. Notes,
12.000% due 7/15/08 95,175
540,000 NR Celcaribe SA, step bond to yield 11.062% due 3/15/04 437,400
23,000 B+ Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 25,444
55,000 B2* Cencall Comm., Sr. Discount Notes, step bond to yield
13.045% due 1/15/04 55,894
80,000 B Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 11.627% due 12/15/00 75,400
35,000 NR Cocentric Networks Inc., Sr. Notes, 12.750% due 12/15/07 39,900
415,000 B1* COLT Telecom Group, Sr. Discount Notes, step bond to yield
9.758% due 12/15/06 353,787
Covad Communications Group:
250,000 B3* Sr. Discount Notes, step bond to yield
13.868% due 3/15/08 150,000
290,000 NR Sr. Notes, 12.500% due 2/15/09(b) 295,075
215,000 NR Dobson Communications Corp., Sr. Notes,
11.750% due 4/15/07 237,037
570,000 NR DTI Holdings Inc., Sr. Discount Notes, step bond to yield
12.172% due 3/1/08 222,300
290,000 NR Econophone Inc., Sr. Discount Notes, step bond to yield
11.071% due 2/15/08 176,900
60,000 B- Esprit Telecom Group Inc., Sr. Notes,
11.500% due 12/15/07 65,850
400,000 NR Firstworld Communications Inc., Sr. Notes, step bond
to yield 13.261% due 4/15/08 212,000
700,000 BB Global Crossing Holdings Ltd., Sr. Notes,
9.625% due 5/15/08 784,000
15,000 B- Gray Communications Systems Inc., Sr. Sub. Notes,
10.625% due 10/1/06 16,050
350,000 NR GST Telecommunications/GST Network Funding,
Sr. Discount Notes, step bond to yield
11.038% due 5/1/03(b) 211,750
20,000 NR GST Telecommunications, Sr, Discount Notes, step bond
to yield 14.752% due 12/15/05(b) 25,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Telecommunications -- 9.7% (continued)
$ 360,000 NR GST USA Inc., Company Guaranteed, step bond to yield
14.606% due 12/15/05 $ 302,400
40,000 B Hermes Europe Railtel BV, Sr. Notes, 11.500% due 8/15/07 44,000
Hyperion Telecommunications, Inc.:
80,000 B+ Sr. Discount Notes, step bond to yield
13.467% due 4/15/03(b) 67,200
50,000 BB- Sr. Notes, 12.250% due 9/1/04 54,500
ICG Holdings, Inc.:
200,000 NR Company Guaranteed, step bond to yield
12.500% due 5/1/01 168,250
160,000 NR Sr. Discount Notes, step bond to yield
13.174% due 9/15/00 146,000
ICG Services, Inc., Sr. Discount Notes:
480,000 NR Step bond to yield 9.692% due 2/15/08 304,800
420,000 NR Step bond to yield 9.919% due 5/1/08 252,000
Intermedia Communications Inc.:
330,000 B Sr. Discount Notes, step bond to yield
10.750% due 7/15/02 249,975
Sr. Notes:
135,000 B 8.875% due 11/1/07 137,025
405,000 B 8.500% due 1/15/08 403,987
120,000 B 8.600% due 6/1/08 120,300
240,000 B IPC Information Systems Inc., Sr. Discount Notes,
step bond to yield 10.875% due 5/1/08 182,400
140,000 B3* IXC Communications Inc., Sr. Sub. Notes, 9.000% due 4/15/08 142,100
450,000 B- KMC Telecom Holdings, Sr. Discount Notes, step bond
to yield 13.459% due 2/15/08 262,125
120,000 B Level 3 Communications, Inc., Sr. Notes, 9.125% due 5/1/08 122,700
130,000 NR Logix Communications Enterprises, Sr. Notes,
12.250% due 6/15/08 129,025
70,000 NR Long Distance International Inc., Sr. Discount Notes,
12.250% due 4/15/08 53,900
350,000 B- McCaw International Ltd., Sr. Discount Notes, step bond
to yield 12.145% due 4/15/07 217,000
MetroNet Communications Corp.:
Sr. Discount Notes:
240,000 B Sr. Notes, 10.625% due 11/1/08(b) 282,600
250,000 B Step bond to yield 9.954% due 6/15/03 195,625
50,000 B Step bond to yield 10.750% due 11/1/07 40,375
270,000 B Microcell Communications, Sr. Discount Notes, step bond
to yield 12.199% due 6/1/06 228,825
575,000 B- Millicom International Cellular, Sr. Discount Notes,
step bond to yield 12.404% due 6/1/01 444,187
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
38 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Telecommunications -- 9.7% (continued)
Nextel Communications, Inc., Sr. Discount Notes:
$ 60,000 B2* Step bond to yield 9.323% due 9/15/02 $ 47,250
50,000 B2* Step bond to yield 8.997% due 10/31/02 38,500
50,000 B2* Step bond to yield 8.845% due 2/15/03 38,125
675,000 B2* Step bond to yield 12.442% due 8/15/04 705,375
260,000 B2* Sr. Notes, 12.000% due 11/1/08(b) 304,850
370,000 B- Nextel International, Inc., Sr. Discount Notes, step bond
to yield 12.125% due 4/15/08 172,975
500,000 B- NTL Inc., Sr. Notes, step bond to yield 10.401% due 2/1/01 440,625
40,000 NR Paging Network Inc., Sr. Notes, 13.500% due 6/6/05 19,600
350,000 NR Pathnet Inc., Sr. Notes, 12.250% due 4/15/08 192,500
520,000 Ba3* Price Communications Wireless Inc., Sr. Secured Notes,
9.125% due 12/15/06 549,900
280,000 B- Primus Telecommunications Group, Inc., Sr. Notes,
9.875% due 5/15/08 273,000
60,000 BB+ Protection One Alarm, Sr. Discount Notes,
13.625% due 6/30/05 67,050
PSINet Inc., Sr. Notes:
80,000 B- 10.000% due 2/15/05 84,000
170,000 B- 11.500% due 11/1/08 189,550
125,000 BB+ Qwest Communications International Inc., Sr. Discount
Notes, step bond to yield 8.354% due 10/15/07 102,187
50,000 B3* RCN Corp., Sr. Discount Notes, step bond to yield
10.885% due 10/15/07 34,875
270,000 NR Rhythms Netconnections, Inc., Sr. Discount Notes,
step bond to yield 12.694% due 5/15/08 160,650
250,000 BB- Rogers Cantel, Inc., Sr. Sub. Notes, 8.800% due 10/1/07 261,250
RSL Communications Ltd., Company Guaranteed:
70,000 B2* 9.125% due 3/1/08 68,950
100,000 B2* 10.500% due 11/15/08 104,500
70,000 B- Satelites Mexicanos SA, Sr. Notes, 10.125% due 11/1/04 59,850
640,000 BBB+ Sprint Capital Corp., Company Guaranteed,
5.700% due 11/15/03 630,400
Sprint Spectrum Finance Corp., Sr. Notes:
125,000 BBB+ 11.000% due 8/15/06 144,219
100,000 BBB+ Step bond to yield 9.324% due 8/15/06 91,250
200,000 B- Telecom Techniques, Sr. Sub. Notes, 9.750% due 5/15/08 203,500
80,000 NR Telehub Communications Corp., Sr. Discount Notes,
step bond to yield 13.897% due 7/31/05 57,600
50,000 CCC+ Telesystems International Wireless Inc., Sr. Discount Notes,
step bond to yield 12.782% due 11/1/07 27,500
30,000 NR Telewest PLC, Sr. Notes, 11.250% due 11/1/08(b) 34,950
200,000 CCC Teligent Inc., Sr. Notes, 11.500% due 12/1/07 200,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Telecommunications -- 9.7% (continued)
$ 270,000 B2* Time Warner Telecom LLC Inc., Sr. Notes,
9.750% due 7/15/08 $ 292,950
160,000 B United International Holdings Inc., Sr. Discount Notes,
step bond to yield 10.604% due 2/15/08 107,600
80,000 NR US Xchange LLC, Sr. Notes, 15.000% due 7/1/08 83,100
Versatel Telecom, Sr. Notes:
150,000 NR 13.250% due 5/15/08 162,000
Viasystems Inc., Sr. Sub. Notes:
30,000 B- 9.750% due 6/1/07 28,125
140,000 B- Series B, 9.750% due 6/1/07 131,250
680,000 Caa1* Viatel Inc., Sr. Discount Notes, step bond to yield
11.962% due 4/15/08 433,500
Winstar Communications Inc.:
100,000 CCC+ Sr. Discount Notes, step bond to yield
7.900% due 10/15/05(b) 138,000
Sr. Sub. Notes:
130,000 CCC 15.000% due 3/1/07 135,200
140,000 CCC 10.000% due 3/15/08 120,750
- ------------------------------------------------------------------------------------------------------
15,694,892
- ------------------------------------------------------------------------------------------------------
Telephone -- 0.7%
160,000 Caa2* 21st Century Telecom Group, Sr. Discount Notes,
step bond to yield 16.333% due 2/15/08 75,200
335,000 B BTI Telecom Corp., Sr. Notes, 10.500% due 9/15/07 319,925
70,000 NR Facilicom International Inc., Sr. Notes,
10.500% due 1/15/08 54,250
50,000 NR Onepoint Communications Corp., Sr. Notes,
14.500% due 6/1/08(b) 29,500
170,000 NR Startec Global Communications Inc., Sr. Notes,
12.000% due 5/15/08 153,850
500,000 BBB+ Worldcom Inc., Sr. Notes, 7.750% due 4/1/27 553,750
- ------------------------------------------------------------------------------------------------------
1,186,475
- ------------------------------------------------------------------------------------------------------
Textiles -- 0.3%
200,000 B Galey & Lord Inc., Sr. Sub. Notes, 9.125% due 3/1/08 154,000
340,000 BB- Guess Jeans Inc., Sr. Sub. Notes, 9.500% due 8/15/03 331,075
William Carter Co., Sr. Sub. Notes:
15,000 B- 10.375% due 12/1/06 16,163
50,000 NR 12.000% due 10/1/08 51,500
- ------------------------------------------------------------------------------------------------------
552,738
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
40 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Transportation -- 0.2%
$ 100,000 BB- Eletson Holdings Inc., Notes, 9.250% due 11/15/03 $ 96,500
40,000 BB+ International Shipholding Corp., Sr. Notes,
7.750% due 10/15/07 38,000
90,000 B+ Kitty Hawk Inc., Sr. Secured Notes, 9.950% due 11/15/04 90,225
60,000 B+ MC Shipping, Inc., Sr. Notes, 11.250% due 3/1/08 40,350
- ------------------------------------------------------------------------------------------------------
265,075
- ------------------------------------------------------------------------------------------------------
Utilities - Electric -- 0.9%
5,000 BBB- Calenergy Co., Sr. Notes, 7.630% due 10/15/07 5,294
Calpine Corp., Sr. Notes:
330,000 BB 8.750% due 7/15/07 344,025
160,000 BB 7.875% due 4/1/08 162,000
Midland Funding, Sr. Secured Lease Obligations:
440,000 BB Series A, 11.750% due 7/23/05 497,200
75,000 BB Series B, 13.250% due 7/23/06 90,844
13,954 BBB- Series C-91, 10.330% due 7/23/02 14,652
160,991 BBB- Series C-94, 10.330% due 7/23/02 169,041
80,000 BB+ Niagara Mohawk Power Corp., Sr. Notes,
7.375% due 7/1/03 82,400
Northeast Utilities, Notes:
90,666 BB- 8.380% due 3/1/05 91,347
16,506 BB- 8.580% due 12/1/06 16,609
- ------------------------------------------------------------------------------------------------------
1,473,412
- ------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $76,730,275) 73,112,403
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C>
COMMON STOCK -- 0.1%
Agriculture -- 0.0%
2,202 PSF Holding LLC(b) 27,531
- ------------------------------------------------------------------------------------------------------
Consumer Products -- 0.0%
909 Hedstrom Holdings Inc. 910
44 Mothers Work Inc. 476
- ------------------------------------------------------------------------------------------------------
1,386
- ------------------------------------------------------------------------------------------------------
Foods -- 0.0%
25 Amerking Inc. 1,000
- ------------------------------------------------------------------------------------------------------
Telecommunications -- 0.1%
47,154 Celcaribe SA 117,885
- ------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $79,220) 147,802
======================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C>
PREFERRED STOCK -- 2.1%
Banking -- 0.2%
5,400 California Fed Preferred Capital Corp. $144,956
3,500 Chevy Chase Preferred Capital Corp. 188,125
- ------------------------------------------------------------------------------------------------------
333,081
- ------------------------------------------------------------------------------------------------------
Broadcasting -- 0.5%
537 Capstar Braodcasting 60,681
713 Capstar Communications, Payment-in-kind 85,917
800 Chancellor Media 86,000
10 Paxson Communications(b) 99,331
23 Paxson Communications, 13.250% Payment-in-kind 196,733
234 Spanish Broadcasting Systems Inc. 250,380
5 Spanish Broadcasting Systems Inc., Payment-in-kind(b) 5,350
211 Viatel Inc., Payment-in-kind 51,811
- ------------------------------------------------------------------------------------------------------
836,203
- ------------------------------------------------------------------------------------------------------
Electric -- 0.0%
1,801 Public Service Co. 47,726
- ------------------------------------------------------------------------------------------------------
Environment -- 0.0%
18,621 TCR Holding Inc. 1,173
- ------------------------------------------------------------------------------------------------------
Foods -- 0.0%
1,328 AmeriKing Inc., Sr. Preferred Exchangeable, Payment-in-kind 33,864
147 Nebco Evans Holdings Co. 5,439
- ------------------------------------------------------------------------------------------------------
39,303
- ------------------------------------------------------------------------------------------------------
Gas & Oil Exploration -- 0.1%
1,500 R&B Falcon Corp. 157,125
- ------------------------------------------------------------------------------------------------------
Health Care -- 0.1%
800 Fresenius Medical Care 82,800
- ------------------------------------------------------------------------------------------------------
Media - Cable -- 0.4%
2,785 Citadel Broadcasting 320,319
2,712 CSC Holdings Inc., Payment-in-kind 318,591
- ------------------------------------------------------------------------------------------------------
638,910
- ------------------------------------------------------------------------------------------------------
Miscellaneous -- 0.0%
19 Anvil Holdings Inc. 423
- ------------------------------------------------------------------------------------------------------
Telecommunications -- 0.8%
760 Cocentric Network, Payment-in-kind 86,450
149 Dobson Communications, Payment-in-kind 142,716
5,760 Global Telesystems Inc.(b) 321,120
262 Intermedia Communications, Inc., Payment-in-kind 285,656
165 IXC Communications Inc., Payment-in-kind 161,906
900 Nextel Communications, Payment-in-kind 90,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
42 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C>
Telecommunications -- 0.8% (continued)
1,070 Nextel Communications, Series E $ 115,025
2,512 Nextlink Communications, Payment-in-kind 128,112
- ------------------------------------------------------------------------------------------------------
1,330,985
- ------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $3,300,780) 3,467,729
======================================================================================================
WARRANTS(d) -- 0.4%
Broadcasting -- 0.0%
320 Paxson Communications Corp., Expire 6/30/03 3
75 Spanish Broadcasting Systems Inc., Expire 6/30/99(b) 15,375
- ------------------------------------------------------------------------------------------------------
15,378
- ------------------------------------------------------------------------------------------------------
Chemicals -- 0.0%
40 Sterling Chemicals Holdings Inc., Expire 8/15/08 800
- ------------------------------------------------------------------------------------------------------
Gas & Oil Exploration -- 0.0%
135 Transamerican Refining Co., Expire 6/30/03(b) --
- ------------------------------------------------------------------------------------------------------
Media - Cable -- 0.0%
1,440 Diva Systems Corp., Expire 3/1/08(b) 18,720
275 UIH Australia Pacific Inc., Expire 5/15/06 275
300 Wireless One Inc., Expire 10/15/03 75
- ------------------------------------------------------------------------------------------------------
19,070
- ------------------------------------------------------------------------------------------------------
Medical Products -- 0.0%
110 Mediq, Inc., Expire 6/1/09(b) 9,570
- ------------------------------------------------------------------------------------------------------
Miscellaneous -- 0.0%
85 Club Regina Resorts Inc., Expire 12/1/04 85
1,215 Consorcio Ecuatoriano, Expire 10/1/00(b) 122
2,850 DTI Holdings Inc., Expire 3/1/08(b) 29
100 Epic Resorts, Expire 6/15/05(b) 1
125 McCaw International Ltd., Expire 4/15/07 313
860 Mexico, Expire 2/18/00 44,720
110 Orbital Imaging Corp., Expire 3/1/05(b) 4,455
221 President Riverboat Inc., Expire 9/30/99(b) 7
80 Telehub Co., Expire 7/31/05(b) 400
- ------------------------------------------------------------------------------------------------------
50,132
- ------------------------------------------------------------------------------------------------------
Technology -- 0.2%
1,080 Rhythms Netconnections, Expire 5/15/08(b) 242,125
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
======================================================================================================
<S> <C>
Telecommunications -- 0.2%
481 Allegiance Telecom Inc., Expire 2/3/08 $ 22,126
160 American Mobile Satellite Inc., Expire 4/1/08 4,800
90 Bestel, Expire 5/15/05 90
90 Birch Telecommunications, Inc., Expire 6/15/08(b) 450
51 Cellnet Data System, Expire 10/1/07 637
65 COLT Telecom Group PLC, Expire 12/31/06 37,700
120 Covad Communications Group, Expire 3/15/08(b) 155,040
65 ESAT Inc., Expire 2/1/07 4,810
400 Firstworld Communications, Expire 4/15/08(b) 4,000
40 Globalstar Telecommunications, Expire 2/15/04 2,200
395 Hyperion Communications Inc., Expire 4/1/01(b) 27,650
495 Intelcom Group Inc., Expire 9/15/05(b) 10,147
110 Interact Systems Inc., Expire 8/1/03(b) 1
125 Intermedia Communications Inc., Expire 6/1/00(b) 13,375
45 International Wireless Inc., Expire 8/15/01(b) 1
250 KMC Telecom Holdings Inc., Expire 1/31/08(b) 750
215 Knology Holdings, Inc., Expire 10/15/27(b) 430
70 Long Distance International Corp., Expire 4/13/08(b) 175
110 Loral Orion Inc., Expire 1/31/07 1,320
35 MGC Communications Inc., Expire 10/1/04(b) 5,320
50 Onepoint Communications Inc., Expire 6/1/08(b) 50
40 Paging Network Brasi Inc., Expire 6/6/05(b) --
350 Pathnet, Inc., Expire 4/15/08(b) 3,500
170 Startec Global, Expire 5/15/08(b) 170
150 Versatal Telecom Inc., Expire 5/15/08(b) 10,500
- ------------------------------------------------------------------------------------------------------
305,242
- ------------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $205,950) 642,317
======================================================================================================
TOTAL HIGH YIELD SECTOR
(Cost -- $80,316,225) 77,370,251
======================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
44 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
FOREIGN BONDS -- 18.5%
Argentina -- 1.1%
1,790,000(USD) Republic of Argentina, 11.750% due 4/7/09 $1,854,440
- ------------------------------------------------------------------------------------------------------
Brazil -- 2.4%
1,285,000(USD) Brazil Discount ZL, 6.125% due 4/15/24 853,721
4,452,376(USD) Brazil C, Bonds, 8.000% due 4/15/14 3,088,836
- ------------------------------------------------------------------------------------------------------
3,942,557
- ------------------------------------------------------------------------------------------------------
Bulgaria -- 1.3%
1,780,000(USD) Bulgaria Discount, 6.688% due 7/28/24 1,223,750
1,495,000(USD) Bulgaria Floating Rate Bond, 2.500% due 7/28/12 911,015
- ------------------------------------------------------------------------------------------------------
2,134,765
- ------------------------------------------------------------------------------------------------------
Canada -- 0.7%
1,425,000 Canada Government, 7.250% due 6/1/07(e) 1,108,159
- ------------------------------------------------------------------------------------------------------
Colombia -- 0.1%
115,000(USD) Republic of Colombia, Unsubordinated Notes,
8.625% due 4/1/08 104,938
- ------------------------------------------------------------------------------------------------------
Denmark -- 0.6%
6,900,000 Realkredit, 7.000% due 10/1/29(e) 1,004,701
- ------------------------------------------------------------------------------------------------------
France -- 1.0%
French Oat:
795,758(ECU) 5.500% due 3/12/02(e) 942,941
476,555(ECU) 6.000% due 10/25/25(e) 584,614
Ivory Coast:
800,000 Floating Rate Bond, 2.000% due 3/31/18(b) 30,966
800,000 PDI, 2.000% due 3/31/18 36,127
- ------------------------------------------------------------------------------------------------------
1,594,648
- ------------------------------------------------------------------------------------------------------
Germany -- 0.4%
439,711(ECU) Deutschland Republic, 6.500% due 7/4/27(e) 582,308
- ------------------------------------------------------------------------------------------------------
Italy -- 0.3%
294,380(ECU) BTPS, 7.250% due 11/1/26(e) 411,742
- ------------------------------------------------------------------------------------------------------
Mexico -- 3.2%
Mexico Par B:
311,999(USD) 6.250% due 12/31/19 248,624
5,375,000(USD) 6.250% due 12/31/19 4,283,213
595,000(USD) United Mexican States, 9.750% due 4/6/05 621,775
- ------------------------------------------------------------------------------------------------------
5,153,612
- ------------------------------------------------------------------------------------------------------
Netherlands -- 0.3%
487,813(ECU) Netherlands Government, 5.500% due 1/15/28(e) 563,867
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued) April 30, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Spain -- 0.3%
368,841(ECU) Spanish Government, 6.000% due 1/31/29(e) $ 448,843
- ------------------------------------------------------------------------------------------------------
Sweden -- 0.6%
Sweden Government:
3,200,000 6.000% due 2/9/05(e) 426,886
3,600,000 6.750% due 5/5/14(e) 528,363
- ------------------------------------------------------------------------------------------------------
955,249
- ------------------------------------------------------------------------------------------------------
United Kingdom -- 5.7%
United Kingdom Treasury:
4,075,000 8.000% due 12/7/00(e) 6,853,121
1,265,000 9.750% due 8/27/02(e) 2,325,589
- ------------------------------------------------------------------------------------------------------
9,178,710
- ------------------------------------------------------------------------------------------------------
Venezuela -- 0.5%
1,160,000(USD) Venezuela Par A, 6.750% due 3/31/20 855,500
- ------------------------------------------------------------------------------------------------------
TOTAL FOREIGN BONDS
(Cost -- $30,822,276) 29,894,039
======================================================================================================
REPURCHASE AGREEMENT -- 3.9%
$6,351,000 J.P. Morgan Securities, Inc., 4.860% due 5/3/99;
Proceeds at maturity -- $6,353,570; (Fully collateralized
by U.S. Treasury Bonds, 8.875% due 2/15/19;
Market value -- $6,401,020) (Cost -- $6,351,000) 6,351,000
======================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $166,375,813**) $161,832,878
======================================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except that those
identified by an asterisk (*) are rated by Moody's Investors Service, Inc.
(b) 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.
(c) Security has been issued with attached warrants.
(d) Non-income producing security.
(e) Security is segregated for forward exchange contracts.
+ Face amount denominated in local currency unless otherwise indicated.
** Aggregate cost for Federal income tax purposes is substantially the same.
Currency abbreviations used in schedule:
----------------------------------------
ECU -- European Currency Unit
USD -- U.S. Dollar
See page 47 for definitions of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
46 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"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 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, -- Bonds rated "BB", "B", "CCC", and "CC" are regarded, on balance, as
B, predominantly speculative with respect to capacity to pay interest and
CCC, repay principal in accordance with the terms of the obligation.
and "BB" represents the lowest degree of speculation and "CC" the highest
CC 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 Investors Service, Inc. ("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 rated "Aaa" are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large 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 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 rated "Baa" are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
B -- Bonds rated "B" generally lack characteristics of desirable investments.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Caa -- Bonds 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 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 47
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
================================================================================
ASSETS:
Investments, at value (Cost -- $196,704,721 $ 192,356,870 $ 161,832,878
and $166,375,813, respectively)
Dividends and interest receivable 3,992,172 2,871,271
Receivable for securities sold 1,721,584 809,532
Receivable for open forward foreign currency
contracts (Note 5) 163,082 661,962
Receivable for closed forward foreign
currency contracts -- 6,902
Receivable from broker -- 8,125
- --------------------------------------------------------------------------------
Total Assets 198,233,708 166,190,670
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,756,491 4,906
Management fees payable 250,958 99,593
Payable to bank 19,808 13,108
Payable for open forward foreign currency
contracts (Note 5) 3,514 554,486
Payable for closed forward foreign
currency contracts -- 40,222
Accrued expenses 49,720 87,352
- --------------------------------------------------------------------------------
Total Liabilities 2,080,491 799,667
- --------------------------------------------------------------------------------
Total Net Assets $ 196,153,217 $ 165,391,003
================================================================================
NET ASSETS:
Par value of capital shares $ 151 $ 135
Capital paid in excess of par value 184,923,588 157,652,821
Undistributed net investment income 22,547,922 15,426,388
Accumulated net realized loss from
security transactions, foreign
currencies and futures contracts (7,120,032) (3,248,936)
Net unrealized depreciation of investments,
foreign currencies and futures contracts (4,198,412) (4,439,405)
- --------------------------------------------------------------------------------
Total Net Assets $ 196,153,217 $ 165,391,003
================================================================================
Shares Outstanding 15,083,954 13,543,587
- --------------------------------------------------------------------------------
Net Asset Value $13.00 $12.21
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
48 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations (unaudited) April 30, 1999
- --------------------------------------------------------------------------------
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
================================================================================
INVESTMENT INCOME:
Interest $ 9,191,768 $ 6,669,178
Dividends 46,034 180,061
- --------------------------------------------------------------------------------
Total Investment Income 9,237,802 6,849,239
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 544,790 609,924
Shareholder communications 15,373 14,959
Audit and legal 12,561 11,468
Custody 5,915 29,917
Directors' fees 4,009 3,840
Shareholder and system servicing fees 3,957 3,491
Pricing service fees -- 22,439
Other 10,437 7,878
- --------------------------------------------------------------------------------
Total Expenses 597,042 703,916
- --------------------------------------------------------------------------------
Net Investment Income 8,640,760 6,145,323
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND
FUTURES CONTRACTS (NOTE 3, 5 AND 7):
Realized Gain (Loss) From:
Security transactions (excluding
short-term securities) (3,893,147) (1,442,892)
Foreign currency transactions (40,988) 472,150
Futures contracts -- 64,500
- --------------------------------------------------------------------------------
Net Realized Loss (3,934,135) (906,242)
- --------------------------------------------------------------------------------
Change in Net Unrealized Depreciation
of Investments,
Foreign Currencies and Futures Contracts:
Beginning of period (14,005,924) (6,152,634)
End of period (4,198,412) (4,439,405)
- --------------------------------------------------------------------------------
Decrease in Net Unrealized Depreciation 9,807,512 1,713,229
- --------------------------------------------------------------------------------
Net Gain on Investments,
Foreign Currencies and Futures Contracts 5,873,377 806,987
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 14,514,137 $ 6,952,310
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 49
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
Smith Barney High Income Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 8,640,760 $ 13,970,601
Net realized loss (3,934,135) (3,248,398)
(Increase) decrease in net unrealized
depreciation 9,807,512 (17,723,769)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations 14,514,137 (7,001,566)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (8,703,060)
Net realized gains -- (2,002,944)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (10,706,004)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 26,873,497 49,965,742
Net asset value of shares issued
for reinvestment of dividends -- 10,706,004
Cost of shares reacquired (5,493,045) (6,431,646)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 21,380,452 54,240,100
- --------------------------------------------------------------------------------
Increase in Net Assets 35,894,589 36,532,530
NET ASSETS:
Beginning of period 160,258,628 123,726,098
- --------------------------------------------------------------------------------
End of period* $ 196,153,217 $ 160,258,628
================================================================================
* Includes undistributed net
investment income of: $ 22,547,922 $ 13,909,654
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
50 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (unaudited)
and the Year Ended October 31, 1998
Putnam Diversified Income Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 6,145,323 $ 10,863,964
Net realized loss (906,242) (3,980,162)
(Increase) decrease in net unrealized
depreciation 1,713,229 (8,769,072)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations 6,952,310 (1,885,270)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (5,006,574)
Net realized gains -- (1,644,355)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (6,650,929)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 10,049,405 41,078,403
Net asset value of shares issued
for reinvestment of dividends -- 6,650,929
Cost of shares reacquired (8,505,327) (3,899,578)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,544,078 43,829,754
- --------------------------------------------------------------------------------
Increase in Net Assets 8,496,388 35,293,555
NET ASSETS:
Beginning of period 156,894,615 121,601,060
- --------------------------------------------------------------------------------
End of period* $ 165,391,003 $ 156,894,615
================================================================================
* Includes undistributed net
investment income of: $ 15,426,388 $ 9,261,510
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 51
<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, Smith Barney
International Equity, Smith Barney Pacific Basin, Travelers Managed Income
(formerly known as 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 for which market quotations are not available will be valued in good
faith at fair value by or under the direction of the Board of Directors; (d)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (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) interest income, adjusted for accretion of original issue discount, is
recorded on an accrual basis; (g) gains or losses on the sale of securities are
calculated by using the specific identification method; (h) dividends and
distributions to shareholders are recorded on the ex-dividend date; (i) the
accounting records of the Portfolios are maintained in U.S. dollars. All assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars based on the rate of exchange of such currencies against U.S. dollars on
the date of valuation. Purchases and sales of securities, and income and
expenses are translated at the rate of exchange quoted on the respective date
that such transactions are recorded. Differences between income or expense
amounts recorded and collected or paid are adjusted when reported by the
custodian bank; (j) 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, 1998, reclassifications
were made to the Portfolios' capital accounts to reflect permanent book/tax
differences and income and gains available for distribution under income
- --------------------------------------------------------------------------------
52 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
tax regulations. Net investment income, net realized gains and net assets were
not affected by this change; (k) the Portfolios intend to comply with the
requirements of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes;
and (l) estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ.
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
SSBC Fund Management Corp. ("SSBC"), formerly known as Mutual Management Corp.,
a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as the
investment manager of the Smith Barney High Income Portfolio ("SBHI"). SBHI pays
SSBC a management fee calculated at an annual rate of 0.60% of the average daily
net assets of the Portfolio. In addition, Travelers Investment Adviser, Inc.
("TIA"), an affiliate of SSBC, acts as the investment manager of the Putnam
Diversified Income Portfolio ("PDIP"). 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 SSBC. TIA pays
SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of PDIP.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. During the six months
ended April 30, 1999, SSB did not receive any brokerage commissions.
All officers and one Director of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 53
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
3. Investments
During the six months ended April 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SBHI PDIP
================================================================================
Purchases $ 79,701,742 $100,055,643
- --------------------------------------------------------------------------------
Sales 56,564,500 87,647,692
================================================================================
At April 30, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
SBHI PDIP
================================================================================
Gross unrealized appreciation $ 5,986,493 $ 3,074,082
Gross unrealized depreciation (10,334,344) (7,612,209)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (4,347,851) $ (4,538,127)
================================================================================
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, 1999, 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
- --------------------------------------------------------------------------------
54 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
There were no open covered call option written contracts as of April 30, 1999.
5. Foreign Currency Exchange Contracts
At April 30, 1999, 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 or loss on the contracts is
reflected in the accompanying financial statements as follows:
Smith Barney High Income Portfolio
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
To Sell:
British Pound 131,583 $ 211,556 9/22/99 $ 2,908
British Pound 1,785,840 2,871,217 9/22/99 39,469
British Pound 219,550 352,986 9/22/99 4,852
British Pound 243,944 392,206 9/22/99 (1,334)
British Pound 487,875 784,390 9/22/99 (2,180)
European Currency Unit 640,631 679,651 6/10/99 21,200
German Mark 334,771 181,583 6/10/99 5,597
German Mark 3,362,734 1,823,981 6/10/99 56,217
German Mark 636,415 345,198 6/10/99 10,639
German Mark 1,327,958 720,298 6/10/99 22,200
- --------------------------------------------------------------------------------
Net Unrealized Gain on Open
Forward Foreign Currency
Contracts $159,568
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 55
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
To Buy:
Australian Dollar 23,519 $ 15,591 6/16/99 $ 1,057
Australian Dollar 1,131,100 749,799 6/16/99 30,307
Euro Dollar 2,900,300 3,078,239 6/16/99 (104,173)
Euro Dollar 2,952,700 3,133,854 6/16/99 (106,144)
Euro Dollar 4,366,700 4,634,605 6/16/99 (144,050)
Euro Dollar 618,500 656,446 6/16/99 (7,730)
Japanese Yen 143,014,165 1,205,815 6/16/99 32,413
Japanese Yen 381,769,000 3,218,861 6/16/99 87,040
Swedish Krona 6,056,032 721,862 6/16/99 (18,666)
Swedish Krona 5,234,800 623,973 6/16/99 (23,690)
- --------------------------------------------------------------------------------
(253,636)
- --------------------------------------------------------------------------------
To Sell:
British Pound (5,871,400) (9,448,926) 6/16/99 4,028
Canadian Dollar (1,672,100) (1,148,446) 6/16/99 (50,782)
Danish Krone (1,577,447) (225,306) 6/16/99 1,861
Euro Dollar (100,300) (106,454) 6/16/99 3,576
Euro Dollar (2,197,500) (2,332,321) 6/16/99 78,337
Euro Dollar (5,568,500) (5,910,138) 6/16/99 204,632
Euro Dollar (4,243,700) (4,504,059) 6/16/99 147,121
Euro Dollar (1,460,700) (1,550,317) 6/16/99 48,755
Euro Dollar (653,400) (693,487) 6/16/99 22,835
Japanese Yen (23,951,400) (201,945) 6/16/99 (5,622)
Japanese Yen (8,903,800) (75,072) 6/16/99 (2,024)
Japanese Yen (167,737,128) (1,414,265) 6/16/99 (39,370)
Japanese Yen (111,586,497) (940,834) 6/16/99 (26,191)
Japanese Yen (21,037,485) (177,376) 6/16/99 (4,912)
Japanese Yen (88,365,850) (745,051) 6/16/99 (21,132)
- --------------------------------------------------------------------------------
361,112
- --------------------------------------------------------------------------------
Total Unrealized Gain
on Forward Foreign
Currency Contracts $ 107,476
================================================================================
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.
- --------------------------------------------------------------------------------
56 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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 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, 1999, the PDIP had the following open futures contracts:
Net
# of Basis Market Unrealized
Contracts to Sell Contracts Expiration Value Value Gain
================================================================================
U.S. Treasury Long Bond 4 6/99 $490,357 $480,750 $9,607
================================================================================
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, 1999, the Portfolios had no securities on loan.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 57
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
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 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, 1999, the Portfolios did not hold any TBA securities.
10. Capital Loss Carryforwards
At October 31, 1998, the Smith Barney High Income Portfolio and the Putnam
Diversified Income Portfolio had, for Federal income tax purposes, approximately
$3,001,000 and $2,321,000, respectively, of capital loss carryforwards available
to offset future realized gains before expiration in 2006. To the extent that
these carryforward losses are used to offset gains, it is probable that the
gains so offset will not be distributed.
- --------------------------------------------------------------------------------
58 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
11. Capital Shares
At April 30, 1999, the Fund had six billion shares of $0.00001 par value capital
stock authorized. Each share of a Portfolio represents an equal proportionate
interest in that Portfolio with each share of the same Portfolio and has an
equal entitlement to any dividends and distributions made by the Portfolio.
Transactions in shares of each Portfolio were as follows:
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
================================================================================
Smith Barney High Income Portfolio
Shares sold 2,123,140 3,735,587
Shares issued on reinvestment -- 816,629
Shares reacquired (431,573) (497,339)
- --------------------------------------------------------------------------------
Net Increase 1,691,567 4,054,877
================================================================================
Putnam Diversified Income Portfolio
Shares sold 838,684 3,309,769
Shares issued on reinvestment -- 543,375
Shares reacquired (707,821) (321,876)
- --------------------------------------------------------------------------------
Net Increase 130,863 3,531,268
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 59
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each capital stock outstanding throughout each year ended October
31, except where noted:
<TABLE>
<CAPTION>
Smith Barney
High Income Portfolio 1999(1) 1998(2) 1997 1996 1995 1994(3)
======================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.97 $13.25 $12.09 $11.26 $10.07 $10.00
- --------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income(4) 0.46 1.21 0.88 1.14 0.93 0.29
Net realized and
unrealized gain (loss) 0.57 (1.58) 1.00 0.19 0.48 (0.22)
- --------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 1.03 (0.37) 1.88 1.33 1.41 0.07
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.74) (0.66) (0.50) (0.22) --
Net realized gains -- (0.17) (0.06) -- -- --
- --------------------------------------------------------------------------------------
Total Distributions -- (0.91) (0.72) (0.50) (0.22) --
- --------------------------------------------------------------------------------------
Net Asset Value,
End of Period $13.00 $11.97 $13.25 $12.09 $11.26 $10.07
- --------------------------------------------------------------------------------------
Total Return 8.60%++ (3.38)% 16.24% 12.17% 14.30% 0.70%++
- --------------------------------------------------------------------------------------
Net Assets, End
of Period (millions) $196 $160 $124 $66 $20 $3
- --------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(4) 0.66%+ 0.67% 0.70% 0.84% 0.70% 0.69%+
Net investment income 9.50+ 9.12 9.36 9.79 9.54 7.55+
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 82% 89% 104% 57% 15%
======================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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 $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:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- --------------------
1995 1994 1995 1994
---- ---- ---- ----
$0.04 $0.07 1.07% 2.60%+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
60 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Putnam Diversified
Income Portfolio 1999(1) 1998 1997 1996(2) 1995 1994(3)
======================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.70 $12.31 $11.99 $11.46 $10.18 $10.00
- --------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income(4) 0.45 0.57 0.67 0.78 0.79 0.23
Net realized and
unrealized gain (loss) 0.06 (0.62) 0.30 0.27 0.58 (0.05)
- --------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.51 (0.05) 0.97 1.05 1.37 0.18
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.42) (0.56) (0.39) (0.09) --
Net realized gains -- (0.14) (0.09) (0.13) -- --
- --------------------------------------------------------------------------------------
Total Distributions -- (0.56) (0.65) (0.52) (0.09) --
- --------------------------------------------------------------------------------------
Net Asset Value,
End of Period $12.21 $11.70 $12.31 $11.99 $11.46 $10.18
- --------------------------------------------------------------------------------------
Total Return 4.36%++ (0.65)% 8.44% 9.43% 13.55% 1.80%++
- --------------------------------------------------------------------------------------
Net Assets, End
of Period (millions) $165 $157 $122 $81 $32 $7
- --------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses(4) 0.87%+ 0.87% 0.88% 0.96% 0.97% 0.98%+
Net investment income 7.55+ 7.48 6.99 7.57 7.53 6.14+
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 56% 191% 253% 255% 276% 20%
======================================================================================
</TABLE>
(1) For the six months ended April 30, 1999 (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:
Expense Ratios
Net Investment Income Without Fee Waivers
Per Share Decreases and Reimbursement
--------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
$0.04 $0.07 1.31% 2.92%+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 61
<PAGE>
SALOMON SMITH BARNEY
---------------------------
A member of citigroup[LOGO]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Rainer Greeven
Susan M. Heilbron
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
John C. Bianchi
Vice President
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSBC Fund Management Inc.
Travelers Investment Adviser, Inc.
Custodian
PNC Bank, N.A.
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, CT 06183
This report is submitted for the general information of the shareholders of
Travelers Series Fund Inc. -- Smith Barney High Income and Putnam Diversified
Income Portfolios. It is not authorized for distribution to prospective
investors unless accompanied or preceded by a current Prospectus for the
Portfolios, which contains information concerning the Portfolios' investment
policies and expenses as well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0805 6/998
