<PAGE>
[Graphic]
Travelers Series Fund Inc.
Prospectus
February 28, 1999
Equity Funds Fixed Income Funds
- ------------------------ ----------------------------------
AIM Capital Appreciation Putnam Diversified Income Portfolio
Portfolio
MFS Total Return Portfolio
Shares of each fund are offered only to insurance company Separate Accounts
which fund certain variable annuity and variable life insurance contracts. This
prospectus should be read together with the prospectus for those contracts.
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.
<PAGE>
Contents
Travelers Series Fund Inc. consists of 13 separate investment funds, each with
its own investment objective and policies. This Prospectus relates to three of
those funds. Each fund offers different levels of potential return and involves
different levels of risk.
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<TABLE>
<CAPTION>
Fund Goals and Strategies Page
-------------------------------------------
<S> <C>
AIM Capital Appreciation Portfolio 2
MFS Total Return Portfolio 4
Putnam Diversified Income Portfolio 6
More on the Funds' Investments 8
Management 12
Share Transactions 15
Share Price 15
Dividends, Distributions and Taxes 16
Financial Highlights 17
</TABLE>
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You should know:
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
<PAGE>
Fund Goals and Strategies
AIM Capital Appreciation Portfolio
Investment goal
Capital appreciation.
Key investments
The fund invests primarily in common stocks of U.S.
companies with an emphasis on medium-sized and smaller
growth companies.
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Selection process
The subadviser emphasizes individual security selection
while diversifying the fund's investments across
industries, which may help to reduce risk. The subadviser
seeks to identify companies having a consistent record of
long-term above average growth in earnings as well as
companies that are only beginning to experience significant
and sustainable earnings growth.
In selecting individual companies for investment, the
manager looks for the following:
. New or innovative products, services or processes that
should enhance future earnings
. Increasing market share
. Experienced and effective management
. Competitive advantages
The subadviser then employs a disciplined review process to
identify and remove from the fund's portfolio any
investments that are not achieving their expected growth
potential.
Travelers Series Fund
2
<PAGE>
Principal risks of investing in the fund
While investing in smaller growth securities can bring added benefits, it may
also involve risks. Investors could lose money on their investment in the fund,
or the fund may not perform as well as other investments, if any of the
following occurs:
. The U.S. stock market declines.
. Midcap and smallcap growth stocks are temporarily out of favor.
. An adverse event, such as negative press reports about a company in the
fund's portfolio, depresses the value of the company's stock.
. The subadviser's judgment about the attractiveness, value or potential
appreciation of a particular stock proves to be incorrect.
The fund may invest in relatively new or unseasoned companies that are in their
early stages of development. Smaller, unseasoned companies present greater
risks than securities of larger, more established companies because:
. They may be dependent on a small number of products or services for their
revenues
. They may lack substantial capital reserves to make needed capital investments
or absorb losses
. They may have less experienced management
. Their securities may be less widely traded, less liquid and more volatile
. Recession or adverse economic trends are more likely to sharply and
negatively affect their earnings and financial condition
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Fund performance
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. The table shows how the fund's
average annual returns for different calendar periods compare to the return of
the Lipper Midcap Index, a broad-based unmanaged index of mid-cap stocks. Past
performance does not necessarily indicate how the fund will perform in the
future. Performance figures do not reflect expenses incurred from investing
through a Separate Account. These expenses will reduce performance. Please
refer to the Separate Account prospectus for more information on expenses.
[BAR GRAPHIC]
1996 1997 1998
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15.01% 12.15% 17.21%
This bar chart shows the performance of the fund's shares for each of the full
calendar years since its inception on October 10, 1995.
Quarterly returns:
Highest:23.76% in 4th quarter 1998
Lowest:(15.52)% in 3rd quarter 1998
Average Annual Total Returns
(for the periods ended December 31, 1998)
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<TABLE>
<CAPTION>
One Since
year inception
- ------------------------------------
<S> <C> <C>
Fund 17.21 12.27
Lipper Midcap Index 13.92 16.51*
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</TABLE>
* Index comparisons begin on October 31, 1995
Travelers Series Fund
3
<PAGE>
Fund Goals and Strategies
MFS Total Return Portfolio
Investment goals
Primary: Above average income (compared to a portfolio
invested entirely in equity securities) consistent with
the prudent employment of capital.
Secondary: Growth of capital and income.
Key investments
The fund invests in a broad range of equity and fixed
income securities of both U.S. and foreign issuers.
The fund's equity securities include common and
preferred stock; bonds, warrants or rights convertible
into stock and depositary receipts for those securities.
The fund's fixed income securities include corporate
debt obligations of any maturity, Brady bonds, U.S.
Government securities, mortgage-backed securities, zero-
coupon bonds, deferred interest bonds and payment in
kind bonds.
Credit quality: The fund's assets may consist of both
investment grade and lower quality securities. The fund
may invest up to 20% of the fund's assets in
nonconvertible fixed income securities rated below
investment grade or unrated securities of equivalent
quality.
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Selection process
Under normal market conditions and depending on the
subadviser's view of economic and money market conditions,
fiscal and monetary policy and security values, the fund's
assets will be allocated among fixed income and equity
investments within the following ranges:
. between 40% . at least 25% in
and 75% in non-convertible
equity fixed income
securities securities
Equity investments
The subadviser uses a "bottom up" investment approach in
selecting securities based on its fundamental analysis of
an individual security's value. In selecting individual
equity securities for investment, the subadviser seeks
companies:
. that are undervalued in the market relative to their long
term potential because the market has overlooked them or
because they are temporarily out of favor in the market
due to market declines, poor economic conditions or
adverse regulatory or other changes
. that generally have low price to book, price to sales
and/or price to earnings ratios
. with relatively large market capitalizations (i.e.,
market capitalizations of $5 billion or more).
The subadviser also invests in convertible securities that
generally provide a fixed income stream and an opportunity
to participate in an increase in the market price of the
underlying common stock.
Fixed income investments
The subadviser periodically assesses the three month
outlook for inflation rate changes, economic growth and
other fiscal measures and their effect on U.S. Treasury
interest rates. Using that assessment, the subadviser
determines a probable difference between total Returns on
U.S. Treasury securities and on other types of fixed income
securities and selects those securities the subadviser
believes will deliver favorable returns.
Travelers Series Fund
4
<PAGE>
The bar chart shows the performance of the fund's shares for each of the full
calendar years since its inception on June 16, 1994.
Principal risks of investing in the fund
While investing in a mix of equity and debt securities can bring added
benefits, it may also involve additional risks. Investors could lose money in
the fund or the fund's performance could fall below other possible investments
if any of the following occurs:
. The subadviser's allocation of investments between equity and fixed income
securities could cause the fund to miss attractive investment opportunities
by underweighting markets that generate significant returns or cause the fund
to incur losses by overweighting markets that experience significant
declines.
. The subadviser's judgment about the attractiveness, value or potential
appreciation of a particular security proves to be incorrect.
. Equity investments lose their value due to a decline in the U.S. stock
market.
. Value or large capitalization stocks are temporarily out of favor.
. An adverse event, such as negative press reports about a company in the
fund's portfolio, depresses the value of the company's stock.
. Fixed income investments lose their value due to an increase in interest
rates.
. The issuer of a debt security in the fund defaults on its obligation to pay
principal or interest, has its credit rating downgraded by a rating
organization or is perceived by the market to be less creditworthy.
. Mortgage and asset backed securities are subject to the same default risks of
other fixed income securities, but it may be more difficult to enforce rights
against the assets underlying these securities in case of default.
. As a result of declining interest rates, the issuer of a security exercises
its right to prepay principal earlier than scheduled, forcing the fund to
reinvest in lower yielding securities. This is known as call risk.
. As a result of rising interest rates, the issuer of a security exercises its
right to pay principal later than scheduled, which will lock in a below-
market interest rate and reduce the value of the security. This is known as
extension risk.
. Securities with longer maturities are more sensitive to interest rate changes
and may be more volatile.
The fund may invest in lower quality securities that are speculative and have
only an adequate capacity to pay principal and interest. These securities have
a higher risk of default, tend to be less liquid, and may be more difficult to
value. Changes in economic conditions or other circumstances are more likely to
lead issuers of these securities to have a weakened capacity to make principal
and interest payments.
Many foreign countries in which the fund invests have less liquid and more
volatile markets than in the U.S. In some of the foreign countries in which the
fund invests, there is also less information available about foreign issuers
and markets because of less rigorous accounting and regulatory standards than
in the U.S. Currency fluctuations could erase investment gains or add to
investment losses. The risk of investing in foreign securities is greater in
the case of less developed countries.
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Fund performance
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. The table shows how the fund's
average annual returns for different calendar periods compare to the return of
the S&P 500 Index, a broad-based unmanaged index of U.S. stocks, and the Lehman
Brothers Government/Corporate Bond Index ("Lehman Brothers Index"), a broad-
based unmanaged index of bonds issued by the U.S. government and its agencies
as well as certain corporate issuers. Past performance does not necessarily
indicate how the fund will perform in the future. Performance figures do not
reflect expenses incurred from investing through a Separate Account. These
expenses will reduce performance. Please refer to the Separate Account
prospectus for more information on expenses.
[bar graphic]
1995 1998 1997 1998
------ ------ ------ ------
25.70% 14.51% 21.18% 11.67%
This bar chart shows the performance of the fund's shares for each of the full
calendar years since its inception on October 10, 1995.
Quarterly returns:
Highest: 9.87% in 2nd quarter 1997
Lowest:(4.06)% in 3rd quarter 1998
Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
One Since
year inception
- --------------------------------------
<S> <C> <C>
Fund 11.67 15.26
S&P 500 Index 28.60 28.03*
Lehman Brothers Index 9.47 9.22*
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</TABLE>
* Index comparisons begin on June 30, 1994
Travelers Series Fund
5
<PAGE>
Fund Goals and Strategies
Putnam Diversified Income Portfolio
Investment goal
High current income consistent with preservation of capital.
Key investments
The fund invests primarily in debt securities of U.S.
and foreign governments and corporations.
Credit Quality: The fund may invest in securities with a
wide range of credit qualities depending on the particu-
lar sector of the fixed income securities market in
which the manager invests.
Duration: The Fund's duration will generally vary from 3
to 7 years depending on market conditions and the
subadviser's outlook for interest rates. Individual se-
curities may be of any duration.
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Selection process
The subadviser combines "top down" and "bottom up"
investment styles, with an emphasis on active sector
strategies. The subadviser believes that actively
allocating the fund's investments among sectors of the
fixed income securities markets, as opposed to investing in
any one sector, will better enable the fund to control risk
while pursuing its objective of high current income.
The subadviser allocates its investment among the following
three sectors of the fixed income securities market:
. A U.S. Government Sector, consisting primarily of
securities of the U.S. government, its agencies and
instrumentalities and related options, futures and
repurchase agreements. The subadviser allocates at least
20% of the fund to the U.S. Government Sector;
. A High Yield Sector, consisting primarily of high
yielding, lower-rated, high risk U.S. and foreign
corporate fixed-income securities commonly called "junk
bonds"; and
. An International Sector, consisting primarily of
obligations of foreign governments, their agencies and
instrumentalities, supranational entities, and foreign
corporations, including issuers in emerging markets, and
related options and futures.
The subadviser over- and underweights investments in each
sector depending on the subadviser's views on economic,
interest rate and political trends. The subadviser utilizes
proprietary techniques to organize and rank opportunities
presented by the various sectors.
In making sector allocations, the subadviser evaluates:
. Capital flows . Default trends
. Political trends . Interest rate forecasts
Specialists managing each sector then select individual
securities within each sector that represent risk/return
opportunities believed optimal. In selecting securities for
investment, the subadviser looks for favorable yield,
maturity, issue classification and quality characteristics.
Travelers Series Fund
6
<PAGE>
Principal risks of investing in the fund
While investing in fixed income securities can bring added benefits, it may
also involve additional risks. Investors could lose money in the fund or the
fund's performance could fall below other possible investments if any of the
following occurs:
. Fixed income securities lose their value due to an increase in market
interest rates in one or more regions, a decline in an issuer's credit rating
or financial condition or a default by an issuer.
. As a result of declining interest rates, the issuer of a security exercises
its right to prepay principal earlier than scheduled, forcing the fund to
reinvest in lower yielding securities. This is known as call or prepayment
risk.
. As a result of rising interest rates, the issuer of a security exercises its
right to pay principal later than scheduled, which will lock in a below-
market interest rate and reduce the value of the security. This is known as
extension risk.
. An unhedged currency in which a security is priced declines in value relative
to the U.S. dollar
. The subadviser's judgment about the attractiveness, relative yield, value or
potential appreciation of a particular security, or the stability of a
particular government proves to be incorrect.
The fund may invest in lower quality securities that are speculative and have
only an adequate capacity to pay principal and interest. These securities have
a higher risk of default, tend to be less liquid, and may be more difficult to
value. Changes in economic conditions or other circumstances are more likely to
lead issuers of these securities to have a weakened capacity to make principal
and interest payments.
Many foreign countries in which the fund invests have markets that are less
liquid and more volatile than markets in the U.S. In some of the foreign
countries in which the fund invests, there is also less information available
about foreign issuers and markets because of less rigorous accounting and
regulatory standards than in the U.S. Currency fluctuations could erase
investment gains or add to investment losses. The risk of investing in foreign
securities is greater in the case of less developed countries.
- --------------------------------------------------------------------------------
Fund performance
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. The table shows how the fund's
average annual returns for different calendar periods compare to the returns of
the Lehman Brothers Aggregate Bond Index and the Salomon Brothers Non-U.S.
World Government Bond Index, both of which are broad-based unmanaged indices.
(The Lehman index consists of a variety of domestically issued bonds. The
Salomon index consists of foreign government bonds.) Past performance does not
necessarily indicate how the fund will perform in the future. Performance
figures do not reflect expenses incurred from investing through a Separate
Account. Please refer to the Separate Account prospectus for more information
on expenses.
[BAR GRAPHIC]
1995 1996 1997 1998
------ ----- ------ -----
17.49% 8.14% 7.89% 0.67%
The bar chart shows the performance of the fund's shares for each of the full
calendar years since its inception on June 16, 1994.
Quarterly returns:
Highest:4.97% in 1st quarter 1995
Lowest:(3.34)% in 3rd quarter 1998
Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
One Since
year inception
- ---------------------------------------
<S> <C> <C>
Fund 0.67 7.65
Lehman Brothers Index 8.69 9.07*
Salomon Brothers Index 17.79 8.34*
- ---------------------------------------
</TABLE>
* Index comparisons begin on June 30, 1994
Travelers Series Fund
7
<PAGE>
More on the Funds' Investments
Additional investments and investment techniques
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- --------------------------------------------------------------------------------
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Each fund de- MFS Total Return Portfolio
scribes its The fund may invest without limit in ADRs and up to 20% of
investment ob- its total assets in foreign securities.
jective and
its principal
investment
strategies and
risks under
"Fund Goals
and Strate-
gies."
This section
provides addi-
tional infor-
mation about
the funds' in-
vestments and
certain port-
folio manage-
ment tech-
niques the
funds may use.
More informa-
tion about the
funds' invest-
ments and
portfolio man-
agement tech-
niques, some
of which en-
tail risks, is
included in
the statement
of additional
information
(SAI).
- --------------------------------------------------------------------------------
Equity Subject to its particular investment policies, each of these
investments funds may invest in all types of equity securities. Equity
AIM Capital securities include exchange-traded and over-the-counter (OTC)
Appreciation common and preferred stocks, warrants, rights, investment
and MFS Total grade convertible securities, receipts and shares, trust cer-
Return Portfo- tificates, limited partnership interests, shares of other in-
lios vestment companies, real estate investment trusts and equity
participations.
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Fixed income Subject to its particular investment policies, each fund may
investments invest in fixed income securities. Fixed income investments
Both fixed in- include bonds, notes (including structured notes), mortgage-
come funds related securities, asset-backed securities, convertible se-
and, to a lim- curities, Eurodollar and Yankee dollar instruments, preferred
ited extent, stocks and money market instruments. Fixed income securities
the AIM Capi- may be issued by U.S. and foreign corporations or entities;
tal Apprecia- U.S. and foreign banks; the U.S. government, its agencies,
tion Portfolio authorities, instrumentalities or sponsored enterprises;
state and municipal governments; supranational organizations;
and foreign governments and their political subdivisions.
Fixed income securities may have all types of interest rate
payment and reset terms, including fixed rate, adjustable
rate, zero coupon, contingent, deferred, payment in kind and
auction rate features.
MFS Total Each of these funds may invest in mortgage-backed and asset-
Return and backed securities. Mortgage-related securities may be issued
Putnam by private companies or by agencies of the U.S. government
Diversified and represent direct or indirect participations in, or are
Income collateralized by and payable from, mortgage loans secured by
Portfolios real property. Asset-backed securities represent participa-
tions in, or are secured by and payable from, assets such as
installment sales or loan contracts, leases, credit card re-
ceivables and other categories of receivables.
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Travelers Series Fund
8
<PAGE>
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Credit quality
Fixed income If a security receives different ratings, a fund will treat
investments the securities as being rated in the highest rating category.
(cont'd.) A fund may choose not to sell securities that are downgraded
after their purchase below the fund's minimum acceptable
credit rating. Each fund's credit standards also apply to
counterparties to OTC derivatives contracts.
Investment grade securities
Securities are investment grade if:
. They are rated, respectively, in one of the top four long-
term rating categories of a nationally recognized
statistical rating organization.
. They have received a comparable short-term or other rating.
. They are unrated securities that the manager believes are
of comparable quality to investment grade securities.
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High yield, lower quality securities
MFS Total Each of these funds may invest in fixed income securities
Return and that are high yield, lower quality securities rated by a rat-
Putnam ing organization below its top four long term rating catego-
Diversified ries or unrated securities determined by the manager or
Income subadviser to be of equivalent quality. The issuers of lower
Portfolios quality bonds may be highly leveraged and have difficulty
only servicing their debt, especially during prolonged economic
recessions or periods of rising interest rates. The prices of
lower quality securities are volatile and may go down due to
market perceptions of deteriorating issuer creditworthiness
or economic conditions. Lower quality securities may become
illiquid and hard to value in down markets.
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Foreign and Each fund may invest in foreign securities.
emerging
market Investments in securities of foreign entities and securities
investments quoted or denominated in foreign currencies involve special
risks. These include possible political and economic insta-
bility and the possible imposition of exchange controls or
other restrictions on investments. If a fund invests in secu-
rities denominated or quoted in currencies other than the
U.S. dollar, changes in foreign currency rates relative to
the U.S. dollar will affect the U.S. dollar value of the
fund's assets.
MFS Total Emerging market investments offer the potential of signifi-
Return and cant gains but also involve greater risks than investing in
Putnam more developed countries. Political or economic instability,
Diversified lack of market liquidity and government actions such as cur-
Income rency controls or seizure of private business or property may
Portfolios be more likely in emerging markets.
only
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Sovereign government and supranational debt
MFS Total These funds may invest in all types of fixed income securi-
Return and ties of governmental issuers in all countries, including
Putnam emerging markets. These sovereign debt securities may in-
Diversified clude:
Income
Portfolios . Fixed income securities issued or guaranteed by
only governments, governmental agencies or instrumentalities and
political subdivisions located in emerging market
countries.
Travelers Series Fund
9
<PAGE>
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Foreign and . Participations in loans between emerging market governments
emerging and financial institutions.
market . Fixed income securities issued by government owned,
investments controlled or sponsored entities located in emerging market
(cont'd.) countries.
. Interests in entities organized and operated for the
purpose of restructuring the investment characteristics of
instruments issued by any of the above issuers.
. Brady Bonds.
. Fixed income securities issued by corporate issuers, banks
and finance companies located in emerging market countries.
. Fixed income securities issued by supranational entities
such as the World Bank or the European Economic Community
(A supranational entity is a bank, commission or company
established or financially supported by the national
governments of one or more countries to promote
reconstruction or development.)
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Derivatives Each fund may, but need not, use derivative contracts, such
and hedging as futures and options on securities, securities indices or
techniques currencies; options on these futures; forward currency con-
tracts; and interest rate or currency swaps for any of the
following purposes:
. To hedge against the economic impact of adverse changes in
the market value of its securities, due to changes in stock
market prices, currency exchange rates or interest rates
. As a substitute for buying or selling securities
. To enhance the fund's return
A derivative contract will obligate or entitle a fund to de-
liver or receive an asset or cash payment that is based on
the change in value of one or more securities, currencies or
indices. Even a small investment in derivative contracts can
have a big impact on a fund's stock market, currency and in-
terest rate exposure. Therefore, using derivatives can dis-
proportionately increase losses and reduce opportunities for
gains when stock prices, currency rates or interest rates are
changing. A fund may not fully benefit from or may lose money
on derivatives if changes in their value do not correspond
accurately to changes in the value of the fund's holdings.
The other parties to certain derivative contracts present the
same types of credit risk as issuers of fixed income securi-
ties. Derivatives can also make a fund less liquid and harder
to value, especially in declining markets.
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Securities Each fund may engage in securities lending to increase its
lending net investment income. Each fund will only lend securities if
the loans are callable by the fund at any time and the loans
are continuously secured by cash or liquid securities equal
to no less than the market value, determined daily, of the
securities loaned. The risks in lending securities consist of
possible delay in receiving additional collateral, delay in
recovery of securities when the loan is called or possible
loss of collateral should the borrower fail financially.
Travelers Series Fund
10
<PAGE>
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-------------------------
Travelers Series Fund
Defensive Each fund may depart from its principal investment strategies
investing in response to adverse market, economic or political condi-
tions by taking temporary defensive positions in all types of
money market and short-term debt securities. If a fund takes
a temporary defensive position, it may be unable to achieve
its investment goal.
- --------------------------------------------------------------------------------
Portfolio
turnover Each fund may engage in active and frequent trading to
achieve its principal investment strategies. Frequent trading
also increases transaction costs, which could detract from a
fund's performance.
- --------------------------------------------------------------------------------
11
<PAGE>
Management
The manager
Travelers Investment Adviser Inc. (TIA) is a wholly owned subsidiary of The
Plaza Corporation, which is an indirect wholly owned subsidiary of Citigroup.
Citigroup businesses produce a broad range of financial services -- asset
management, banking and consumer finance, credit and charge cards, insurance,
investments, investment banking and trading -- and use diverse channels to make
them available to consumer and corporate customers around the world. TIA is
located at 388 Greenwich Street, New York, New York 10013. TIA acts as
investment manager to investment companies having aggregate assets of
approximately $2.3 billion. TIA has engaged subadvisers to select investments
for funds for which TIA serves as manager.
TIA manages the investment operations of the funds covered in this Prospectus
(TIA funds) and receives for these services from each fund the fee indicated:
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Actual management fee
paid for the fiscal year Contractual management
ended October 31, 1998 fee paid
(as a percentage (as a percentage
of the fund's of the fund's
Fund average daily net assets) average daily net assets)
------------------------------------------------------------------------------
<S> <C> <C>
AIM Capital Appreciation
Portfolio 0.80% 0.80%
MFS Total Return
Portfolio 0.80% 0.80%
Putnam Diversified
Income Portfolio 0.75% 0.75%
------------------------------------------------------------------------------
</TABLE>
Travelers Series Fund
12
<PAGE>
The Subadvisers and Portfolio Managers
Each of the TIA funds' investments are selected by a subadviser which is
supervised by TIA. The table below sets forth the name and business experience
of each fund's portfolio manager(s), who are employed by the subadviser.
<TABLE>
<CAPTION>
Fund Portfolio Manager and Subadviser Business Experience
<S> <C> <C>
AIM Capital Appreciation Kenneth A. Zschappel (since inception) Vice President, A I M Capital.
Portfolio A I M Capital Management, Inc.
11 Greenway Plaza,
Suite 100
Houston, TX 77046
Charles D. Scavone (since inception) Vice President, A I M Capital.
A I M Capital Management Associate Portfolio Manager, Van
Kampen Capital Asset Management,
Inc. from 1994 to 1996. Prior to
that, Equity Research
Analyst/Assistant Portfolio
Manager, Texas Commerce
Investment Management Company
from 1991 to 1994.
David P. Barnard (since inception) Vice President, A I M Capital.
A I M Capital Management
Robert M. Kippes (since inception) Vice President, A I M Capital.
A I M Capital Management
- ---------------------------------------------------------------------------------------------------
MFS Total Return David M. Calabro (since inception) Senior Vice President, MFS.
Portfolio Massachusetts Financial Services
Company
500 Boylston Street
Boston, MA 02116
Geoffrey L. Kurinsky (since inception) Senior Vice President, MFS.
MFS
Constantinos Mokas (since 1998) Vice President, MFS.
MFS
Lisa B. Nurme (since inception) Senior Vice President, MFS.
MFS
Maura A. Shaughnessy (since inception) Senior Vice President, MFS.
MFS
- ---------------------------------------------------------------------------------------------------
Putnam Diversified Jennifer Evans Leichter (since 1998) Managing Director and Chief
Income Portfolio Putnam Investment Management, Inc. Investment Officer, Corporate
One Post Office Square Credit Group, Putnam Management.
Boston, MA 02109
- ---------------------------------------------------------------------------------------------------
</TABLE>
Travelers Series Fund
13
<PAGE>
Year 2000 Issue. Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the funds. Individual companies and governmental issuers that
securities held by a fund may also be adversely affected by the cost of
addressing their Year 2000 systems problems, which could be substantial. The
managers are addressing the Year 2000 issue for their systems. The funds have
been informed by their other service providers that they are taking similar
measures. Although the funds do not expect the Year 2000 issue to adversely
affect them, the funds cannot guarantee that their efforts or the efforts of
their service providers to correct the problem will be successful.
Additional information about the subadvisers
A I M Capital Management, Inc. AIM is a wholly owned subsidiary of A I M
Advisors, Inc., a registered investment adviser. AIM and A I M Advisors, Inc.
manage approximately $109 billion in assets.
Massachusetts Financial Services Company. MFS and its predecessor organizations
have a history of money management dating from 1924. The MFS organization
manages approximately $100 billion on behalf of 4 million investor accounts.
Putnam Investment Management, Inc. Putnam has managed mutual funds since 1937.
Putnam and its affiliates manage approximately $290 billion in assets.
Travelers Series Fund
14
<PAGE>
Share Transactions
Availability of the funds
Shares of the funds are available only through the purchase of variable annuity
or variable life insurance contracts issued by insurance companies through
their separate accounts. The variable insurance products may or may not make
investments in all the funds described in this prospectus.
The interests of different variable insurance products investing in a fund
could conflict due to differences of tax treatment and other considerations.
The company currently does not foresee any disadvantages to investors arising
from the fact that each fund may offer its shares to different insurance
company separate accounts that serve as the investment medium for their
variable annuity and variable life products. Nevertheless, the Board of
Directors intends to monitor events to identify any material irreconcilable
conflicts which may arise, and to determine what action, if any, should be
taken in response to these conflicts. If a conflict were to occur, one or more
insurance companies' separate accounts might be required to withdraw their
investments in one or more funds and shares of another fund may be substituted.
In addition, the sale of shares may be suspended or terminated if required by
law or regulatory authority or is in the best interests of the funds'
shareholders.
Redemption of shares
The redemption price of the shares of each fund will be the net asset value
next determined after receipt by the fund of a redemption order from a separate
account, which may be more or less than the price paid for the shares. The fund
will ordinarily make payment within one business day after receipt of a
redemption request in good order, though redemption proceeds must be remitted
to a separate account on or before the third day following receipt of the
request in good order, except on a day on which the New York Stock Exchange is
closed or as permitted by the SEC in extraordinary circumstances.
Share Price
Each fund's net asset value is the value of its assets minus its liabilities.
Each fund calculates its net asset value every day the New York Stock Exchange
is open. This calculation is done when regular trading closes on the Exchange
(normally 4:00 p.m., Eastern time). If the New York Stock Exchange closes
early, each fund accelerates the calculation of its net asset value to the
actual closing time.
Each fund generally values its fund securities based on market prices or
quotations. To the extent a fund holds securities denominated in a foreign
currency the fund's currency conversions are done when the London stock
exchange closes, which is 12 noon Eastern time. When reliable market prices are
not readily available, or when the manager believes that they are unreliable or
that the value of a security has been materially affected by events occurring
after a foreign exchange closes, the funds may price those securities at fair
value. Fair value is determined in accordance with procedures approved by the
fund's board. A fund that uses fair value to price securities may value those
securities higher or lower than another fund that uses market quotations to
price the same securities.
International markets may be open on days when U.S. markets are closed, and the
value of foreign securities owned by the fund could change on days when fund
shares may not be purchased or redeemed.
Travelers Series Fund
15
<PAGE>
Dividends, Distributions and Taxes
Each fund intends to qualify and be taxed as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code"), as
amended. In order to qualify to be taxed as a regulated investment company,
each fund must meet certain income and diversification tests and distribution
requirements. As a regulated investment company meeting these requirements, a
fund will not be subject to federal income tax on its net investment income and
net capital gains that it distributes to its shareholders. All income and
capital gain distributions are automatically reinvested in additional shares of
the fund at net asset value and are includable in gross income of the separate
accounts holding such shares. See the accompanying contract prospectus for
information regarding the federal income tax treatment of distributions to the
Separate Accounts and to holders of the Contracts.
Each fund is also subject to asset diversification regulations promulgated by
the U.S. Treasury Department under the Code. The regulations generally provide
that, as of the end of each calendar quarter or within 30 days thereafter, no
more than 55% of the total assets of each fund may be represented by any one
investment, no more than 70% by any two investments, no more than 80% by any
three investments, and no more than 90% by any four investments. For this
purpose all securities of the same issuer are considered a single investment.
An alternative diversification test may be satisfied under certain
circumstances. If a fund should fail to comply with these regulations or fails
to qualify for the special tax treatment afforded regulated investment
companies under the Code, Contracts invested in that fund would not be treated
as annuity, endowment or life insurance contracts under the Code.
Travelers Series Fund
16
<PAGE>
Financial Highlights
The financial highlights tables are intended to help you understand the
performance of each fund for the past five years (or since inception if less
than five years). The information in the following tables was audited by KPMG
LLP, independent accountants, whose report, along with each fund's financial
statements, are included in the annual report (available upon request). Certain
information reflects financial results for a single share. Total returns
represent the rate that a shareholder would have earned (or lost) on a share of
a fund assuming reinvestment of all dividends and distributions.
For a share of capital stock outstanding throughout each year ended October 31.
<TABLE>
<CAPTION>
AIM Capital Appreciation
1998 1997 1996(1) 1995(1)(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $ 12.68 $ 10.76 $ 10.00 $10.00
- --------------------------------------------------------------------------------
Income (loss) from operations:
Net investment income (loss)
(3) (0.01) 0.02 0.02 0.02
Net realized and unrealized
gain (loss) (0.34) 1.91 0.75 (0.02)
- --------------------------------------------------------------------------------
Total income (loss) from
operations (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 year $ 12.31 $ 12.68 $ 10.76 $10.00
- --------------------------------------------------------------------------------
Total return (2.79)% 17.96% 7.71% 0.00%(4)
- --------------------------------------------------------------------------------
Net assets, end of year (000's) $225,862 $202,846 $112,905 $8,083
- --------------------------------------------------------------------------------
Ratios to average net assets:
Expenses (3) 0.85% 0.85% 0.96% 1.00%(5)
Net investment income (loss) (0.06) 0.20 0.22 4.07(5)
- --------------------------------------------------------------------------------
Portfolio turnover rate 75% 56% 44% 6%
- --------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts calculated using the monthly average shares method.
(2) For the period from October 10, 1995 (commencement of operations) to
October 31, 1995.
(3) The manager waived all of its fees with respect to the fund for the period
ended October 31, 1995. In addition, the manager reimbursed the fund for
$13,456 in expenses for the period ended October 31, 1995. 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 for the
fund would have been:
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995
----------------------------------
<S> <C>
Per Share Decreases in
Net Investment Income $0.03
----------------------------------
Expense Ratios Without
Fee Waivers and
Reimbursement 5.95%(5)
----------------------------------
</TABLE>
(4) Not Annualized.
(5) Annualized.
Travelers Series Fund
17
<PAGE>
For a share of capital stock outstanding throughout each year ended October 31.
<TABLE>
<CAPTION>
MFS Total Return
1998 1997 1996 1995 1994(1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 15.31 $ 13.13 $ 11.53 $ 9.98 $10.00
- --------------------------------------------------------------------------------
Income (loss) from
operations:
Net investment income (2) 0.32 0.38 0.33 0.45 0.13
Net realized and unrealized
gain (loss) 1.36 2.27 1.62 1.15 (0.15)
- --------------------------------------------------------------------------------
Total income (loss) from
operations 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 year $16.23 $ 15.31 $ 13.13 $ 11.53 $ 9.98
- --------------------------------------------------------------------------------
Total return 10.94% 20.64% 17.16% 16.12% (0.20)%(3)
- --------------------------------------------------------------------------------
Net assets, end of year
(000's) $462,274 $263,585 $134,529 $49,363 $8,504
- --------------------------------------------------------------------------------
Ratios to average net
assets:
Expenses (2) 0.84% 0.86% 0.91% 0.95% 0.93%(4)
Net investment income 3.32 3.54 3.82 4.40 3.51(4)
- --------------------------------------------------------------------------------
Portfolio turnover rate 118% 99% 139% 104% 18%
- --------------------------------------------------------------------------------
</TABLE>
(1) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(2) 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 fund 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 decreases in net investment income and the ratios of expenses to
average net assets for the fund would have been as follows:
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
-----------------------------------------
<S> <C> <C>
Per Share Decreases in
Net Investment Income $0.01 $0.06
-----------------------------------------
Expense Ratios Without
Fee Waivers and
Reimbursement 1.06% 2.51%(4)
-----------------------------------------
</TABLE>
(3) Not annualized.
(4) Annualized.
18
<PAGE>
For a share of capital stock outstanding throughout each year ended October 31.
<TABLE>
<CAPTION>
Putnam Diversified Income
1998 1997 1996(1) 1995 1994(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $12.31 $ 11.99 $ 11.46 $ 10.18 $10.00
- --------------------------------------------------------------------------------
Income (loss) from
operations:
Net investment income (3) 0.57 0.67 0.78 0.79 0.23
Net realized and unrealized
gain (loss) (0.62) 0.30 0.27 0.58 (0.05)
- --------------------------------------------------------------------------------
Total income (loss) from
operations (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 year $11.70 $ 12.31 $ 11.99 $ 11.46 $10.18
- --------------------------------------------------------------------------------
Total return (0.65)% 8.44% 9.43% 13.55% 1.80%(4)
- --------------------------------------------------------------------------------
Net assets, end of year
(000's) $156,895 $121,601 $81,076 $31,514 $6,763
- --------------------------------------------------------------------------------
Ratios to average net assets:
Expenses (3) 0.87% 0.88% 0.96% 0.97% 0.98%(5)
Net investment income 7.48 6.99 7.57 7.53 6.14(5)
- --------------------------------------------------------------------------------
Portfolio turnover rate 191% 253% 2.55% 276% 20%
- --------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts calculated using the monthly average shares method.
(2) For the period from June 16, 1994 (commencement of operations) to October
31, 1994.
(3) The manager waived all or part of its fees for the year ended October 31,
1995 and the period ended October 31, 1994. In addition, the manager
reimbursed the fund 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 decreases in net investment income and the ratios of expenses to
average net assets of the fund would have been as follows:
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
-----------------------------------------
<S> <C> <C>
Per Share Decreases in
Net Investment Income $0.04 $0.07
-----------------------------------------
Expense Ratios Without
Fee Waivers and
Reimbursement 1.31% 2.92%(5)
-----------------------------------------
</TABLE>
(4) Not annualized.
(5) Annualized.
Travelers Series Fund
19
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Travelers Series Fund Inc.
Additional Information
Shareholder reports. Annual and semiannual reports to shareholders provide
additional information about the fund's investments. These reports discuss the
market conditions and investment strategies that affected the fund's
performance.
The fund sends one report to a household if more than one account has the same
address. Contact an appropriate representative of a participating life
insurance company or your Salomon Smith Barney Financial Consultant if you do
not want this policy to apply to you.
Statement of additional information. The statement of additional (SAI)
information provides more detailed information about the fund. It is
incorporated by reference into this prospectus.
You can make inquiries about the funds or obtain shareholder reports or the
statement of additional information (without charge) by calling 1-800-842-8573
or writing to Travelers Series Fund, 388 Greenwich Street, MF2, New York, NY
10013.
You can also review the fund's shareholder reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. Information about the public reference room
may be obtained by calling 1-800-SEC-0330. You may obtain copies of these
materials upon payment of a duplicating fee, by writing to the Public Reference
Section of the Commission, Washington, D.C. 20549-60019. You can get the same
reports and information free from the Commission's Internet web site at
http://www.sec.gov
If someone makes a statement about the fund that is not in this prospectus, you
should not rely upon that information. The fund is not offering to sell its
shares to any person to whom the fund may not lawfully sell its shares.
AIM Capital Appreciation Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
(Investment Company Act file no. 811-08372)
CE-1 5/99
