<PAGE>
Travelers Series Fund Inc.
AIM Capital
Appreciation Portfolio
Smith Barney Large
Capitalization Growth
Portfolio
A N N U A L R E P O R T
October 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series
Fund Inc.
[PHOTO OF HEATH B. MCLENDON CHAIRMAN]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the annual report for the Travelers Series Fund
Inc.--AIM Capital Appreciation Portfolio and the Smith Barney Large
Capitalization Growth Portfolio for the year ended October 31, 1999. We hope you
find this report useful and informative. In this report, we summarize the
period's prevailing economic and market conditions and outline our portfolio
strategy. A detailed summary of performance and current holdings can be found in
the appropriate sections that follow.
Portfolio Highlights
AIM Capital Appreciation Portfolio
The AIM Capital Appreciation Portfolio ("Portfolio") seeks capital appreciation.
For the year ended October 31, 1999, the Portfolio returned 32.41%, including
the reinvestment of dividends and capital gains. In comparison,
mid-capitalization funds generated an average total return of 38.42% for the
same period according to Lipper, Inc. (Lipper, Inc. is a major fund-tracking
organization.) The Standard & Poor's MidCap 400 Index returned 21.07% over the
same period. (The Standard & Poor's MidCap 400 Index is a market-value weighted
index consisting of 400 domestic stocks chosen for market size liquidity and
industry group representation.)
The Portfolio's fiscal year started off well, as the stocks of mid-size
companies benefited from interest-rate cuts by the Federal Reserve Board ("Fed")
in the fall of 1998, which spurred an ongoing market rally. Historically,
mid-capitalization stocks perform well when interest rates fall.
In early 1999, investors were worried about a number of foreign economic
problems. This uncertainty led to a "flight to quality," where many investors
favored large-size company stocks because of their relative safety and
liquidity. In fact, early in 1999, the market was inhospitable to mid-cap
stocks. In the second quarter of 1999, however, small- and mid-cap stocks
returned to favor.
When the overseas crises calmed and corporate earnings improved in many
different industries, investors started looking beyond large-size companies
toward a much broader array of stocks. The technology sector in particular was
hurt after turning in a solid performance during 1998. Many investors began to
express concern that many Internet stocks were overvalued. A sell-off in the
technology
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
sector hurt the Portfolio because of its significant holdings in technology
industries. (The Standard & Poor's MidCap 400 Index, the Portfolio's benchmark,
hit its year-to-date low of 353.14 right about this time). However, the markets
rebounded when first-quarter 1999 earnings came in strong.
Near the end of April, investors started to pay more attention to mid-cap
stocks. Moreover, mid-size companies continue to report much better earnings
than their large-cap counterparts while the valuations of mid-cap stocks remain
relatively low. Concerns about interest rates shook the markets when the
Consumer Price Index ("CPI") showed an unexpected increase in inflation. In May,
the Fed hinted that it might raise interest rates and in June it did so, raising
the federal funds rate to 5% (but leaving the discount rate unchanged) and
announcing that it had shifted from a tightening to a neutral bias, indicating
that it planned no further rate hikes in the near future. (The federal funds
rate is the interest rate charged by Federal Reserve district banks with excess
reserves to banks needing overnight loans to meet reserve requirements. The
discount rate is the interest rate that the Federal Reserve charges member banks
for loans, using government securities as collateral.) That announcement sparked
a "relief" rally in the markets.
Despite healthy performance for the major indices, the average stock is off more
than 20% from its 1999 high. Late August and most of September saw a severe
sell-off as many investors became concerned about the trade deficit, the U.S.
dollar and the possibility of higher interest rates when the Fed adopted a
"tightening bias." Stock markets were negatively impacted during the third
quarter of 1999 as economic developments that had affected bonds throughout the
reporting period finally caught up with stocks. Chief concerns included the
doubling of oil prices to $25 per barrel, the U.S. dollar's depreciation against
the Japanese yen and the recent surge in the price of gold from $253 to $313 per
ounce.
Despite higher market volatility, the Portfolio's managers continued their
disciplined, earnings-driven stock selection process, focusing on the underlying
fundamentals of individual companies and not the state of the overall market. At
period-end, the technology industry represented almost half of Portfolio net
assets. The managers' investment discipline helped the Portfolio participate in
the huge run-up in Internet stocks this year. Also, their technology holdings
tended to be in companies that make the Internet possible.
One example is General Instrument, which develops products that allow voice,
video, audio and data to be delivered over cable, digital satellite (DSL) and
telephone networks. This company is the top market supplier of set-top boxes for
the home market. Another is Citrix Systems, which makes software applications
meant to juice up Windows-based networks; its products enable networked
computers (including Macintoshes, UNIX machines and pre-Windows computers) to
run Windows-based applications from a central server. Citrix is fifth on the
Fortune list of the 100 fastest-growing companies.
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
Despite the fact that transportation was the worst-performing sector in the S&P
500 during the third quarter of 1999, the Portfolio's modest air and railway
holdings managed to hold their own and appreciated solidly during the quarter.
The Portfolio's financial stocks also did better than a quick check on the
market would indicate consumer-finance holdings such as Providian and Capital
One fared well during the quarter.
According to the managers, the "wealth effect" created by the bull market in
stocks of the 1990s has helped fuel continuing growth in consumer-cyclical
industries. U.S. retailers reported strong sales in September, and discounters
had shoppers rushing for back-to-school bargains. The positive trend in
retailing helped third quarter 1999 profits and helped retailers build momentum
into the holidays. Consumer confidence remained strong and relatively unaffected
by rising interest rates during the period. Some better-known consumer-cyclical
stocks in the Portfolio include Harley-Davidson, Best Buy and Barnes & Noble.
New to the managers' top-10 list this year is America Online ("AOL"), possibly
the best-known Internet service provider (ISP) in the world. AOL(which also owns
the second best known ISP, Compuserve) provides interactive web-based
communications and services. For four quarters in a row, beginning this time
last year and ending this September, AOL beat Wall Street analysts' earnings
expectations by roughly 2%.
Another new name to the Portfolio's holdings is VERITAS Software, a company that
designs, develops and markets enterprise storage management and
high-availability products that manage off- and online data for
business-critical computing systems. VERITAS reported record third-quarter
results, continuing to solidify its position as one of the industry's top
independent software providers.
In the opinion of the managers, the Y2K problem may affect investor psychology,
but they do not see much fundamental risk to their companies' investments. Their
original opinion was that the year 2000 would be good for technology because
money previously used on Y2K could now buy new tools and software. However, the
managers may have been wrong, as people realize their systems need to be
upgraded and they have extra money.
Small- and mid-cap stocks are still historically undervalued. The investment
team expects them to continue to outperform large-cap stocks in the coming 12
months. With valuations as low as they are, the managers do not see the risk to
smaller stocks that they did at this time last year. Mid-cap stocks,
historically overshadowed by the familiar large-caps and the sizzling dot-com
small-caps, offer several unique advantages. Their management is usually a bit
more seasoned than that of small-caps and start-ups, and mid-caps have a better
chance than large-caps to beat Gross Domestic Product ("GDP") growth and to
aggressively compete in niche markets.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
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 year ended October 31, 1999, the Portfolio returned 46.88% and
handily beat the Standard & Poor's 500 Index ("S&P 500") return of 25.66% over
the same period. (The S&P 500 is a capitalization-weighted measure of 500 widely
held common stocks listed on the New York Stock Exchange, American Stock
Exchange and over-the-counter market. Investors cannot invest directly in an
index.)
With the Asian crisis now a memory, the manager believes that the recovery of
Asia, along with Latin America, means we may finally be seeing the proverbial
"light at the end of the tunnel." In his view, the number of acquisitions made
by the consumer companies over the past two years has placed them in a better
position to benefit to an even greater degree from worldwide economic recovery.
Ultimately, the manager thinks that its corporate earnings outlook is the most
important factor in determining the future behavior of large-capitalization
growth stocks. The manager tends to view many of the political and economic
headlines as background noise and continues his focus on individual company
balance sheets, products and managements. When questions exist about the
political and economic situation worldwide, it always seems to lead many
investors back to the highest-quality companies.
The manager also remains focused on companies that can, in a low inflation
economy, deliver above-average unit growth. He also wants to own companies that
have the ability, through balance sheet strength, to raise dividends, buy back
their shares and make strategic acquisitions.
In closing, thank you for investing in the Travelers Series Fund Inc. - AIM
Capital Appreciation Portfolio and Smith Barney Large Capitalization Growth
Portfolio. We look forward to continuing to help you to pursue your financial
goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
November 16, 1999
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
AIM Capital Appreciation Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Historical Performance
- ----------------------------------------------------------------------------------------------------------------------
Net Asset
Value
---------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/31/99 $12.31 $16.30 $0.00 $0.00 32.41%
- ----------------------------------------------------------------------------------------------------------------------
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+
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Year Ended 10/31/99 32.41%
- ------------------------------------------------------------------------
10/10/95* through 10/31/99 12.88
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Cumulative Total Return+
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
10/10/95* through 10/31/99 63.55%
- ------------------------------------------------------------------------
+ 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 - October 1999
[LINEGRAPH]
AIM Capital\rAppreciation Lipper Midcap\rIndex
10/10/95 10000 10000
Oct-95 10000 10190
Oct-96 10771 11962
Oct-97 12706 14450
Oct-98 12351 14029
10/31/99 16355 18224
+ Hypothetical illustration of $10,000 invested in shares of the AIM Capital
Appreciation Portfolio on October 10, 1995 (commencement of operations),
assuming reinvestment of dividends and capital gains at net asset value
through October 31, 1999. The Lipper Midcap Index ("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 Index include reinvestment of
dividends. The Index is unmanaged and is not subject to the same management
and trading expenses of a mutual fund. An investor cannot invest directly in
an index.
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 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Capitalization Growth Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Historical Performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value
---------------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/99 $ 9.90 $14.53 $0.01 $0.00 46.88%
- ------------------------------------------------------------------------------------------------------------------------------------
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+
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Year Ended 10/31/99 46.88%
- --------------------------------------------------------------------------------
5/1/98* through 10/31/99 28.32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5/1/98* through 10/31/99 45.41%
- --------------------------------------------------------------------------------
+ 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 -- October 1999
[LINEGRAPH]
Smith Barney Large Capitalization Standard & Poor's
Growth Portfolio 500 Index
5/1/98 10,000 10,000
Jul-98 10,360 10,119
Oct-98 9,900 9,959
Jan-99 13,078 11,637
Apr-99 13,878 12,181
Jul-99 13,490 12,161
10/31/99 14,541 12,514
+ 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 October 31, 1999. The Standard & Poor's 500 Index ("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. An
investor cannot invest directly in an index.
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 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
COMMON STOCK -- 95.5%
Advertising -- 3.3%
19,600 Interpublic Group of $ 796,250
Cos., Inc.
59,000 Lamar Advertising Co., 3,186,000
Class A Shares+
48,900 Omnicom Group Inc. 4,303,200
8,500 TMP Worldwide Inc.+ 530,719
21,250 Valassis Communications, 913,750
Inc.+
- --------------------------------------------------------------------------------
9,729,919
- --------------------------------------------------------------------------------
Airlines -- 0.3%
42,750 Southwest Airlines Co. 718,734
- --------------------------------------------------------------------------------
Banking -- 1.4%
18,100 Bank United Corp., Class 705,900
A Shares
19,500 Compass Bancshares Inc. 520,406
18,000 Northern Trust Corp. 1,738,125
14,100 TCF Financial Corp. 415,950
11,100 Zions Bancorporation 654,206
- --------------------------------------------------------------------------------
4,034,587
- --------------------------------------------------------------------------------
Broadcasting -- 3.2%
44,290 AMFM Inc.+ 3,100,300
58,700 AT&T Corp. - Liberty 2,329,656
Media Group+
29,188 Cox Communications, Inc.+ 1,326,230
20,500 Hispanic Broadcasting Co.+ 1,660,500
25,800 USA Networks, Inc.+ 1,162,613
- --------------------------------------------------------------------------------
9,579,299
- --------------------------------------------------------------------------------
Capital Goods -- 0.3%
10,000 SPX Corp. 847,500
- --------------------------------------------------------------------------------
Communications - Equipment and Software -- 4.2%
9,900 CMGI Inc.+ 1,083,431
11,500 General Motors Corp., Class H Shares 837,344
29,300 JDS Uniphase Corp.+ 4,889,438
75,255 Lucent Technologies, Inc. 4,835,134
25,700 Metromedia Fiber Network, Inc., Class A Shares+ 849,706
- --------------------------------------------------------------------------------
12,495,053
- --------------------------------------------------------------------------------
Computer Software -- 17.1%
18,600 Affiliated Computer Services, Class A Shares+ 706,800
50,800 America Online, Inc. 6,588,125
22,600 At Home Corp.+ 844,675
49,200 BMC Software, Inc.+ 3,158,025
13,000 Business Objects SA, Sponsored ADR+ 936,000
39,100 CDW Computer Centers, Inc.+ 2,414,425
14,100 Check Point Software Technologies Ltd.+ 1,631,194
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Computer Software -- 17.1% (continued)
54,200 Citrix Systems, Inc.+ $ 3,475,575
23,800 Compuware Corp.+ 661,938
14,000 DST Systems, Inc.+ 891,625
23,800 Electronic Arts Inc.+ 1,923,338
14,600 Inktomi Corp.+ 1,480,988
72,600 Intuit Inc.+ 2,114,475
20,000 J.D. Edwards & Co.+ 478,750
58,700 Lycos, Inc.+ 3,140,450
22,500 Microsoft Corp.+ 2,082,656
19,700 Novell, Inc.+ 395,231
19,700 RealNetworks Inc.+ 2,160,844
11,700 Siebel Systems, Inc.+ 1,284,806
29,300 Synopsys Inc.+ 1,825,756
47,800 Verio Inc.+ 1,783,538
15,900 Verisign Inc.+ 1,963,650
48,900 VERITAS Software Corp.+ 5,275,087
19,600 Yahoo! Inc.+ 3,509,625
- --------------------------------------------------------------------------------
50,727,576
- --------------------------------------------------------------------------------
Computers -- 2.3%
58,300 Adaptec, Inc.+ 2,623,500
19,300 Apple Computer, Inc.+ 1,546,412
39,500 Gateway Inc.+ 2,609,469
- --------------------------------------------------------------------------------
6,779,381
- --------------------------------------------------------------------------------
Consumer/Commercial Services -- 3.3%
28,600 Cintas Corp. 1,723,150
131,950 Concord EFS, Inc.+ 3,570,897
13,900 The Estee Lauder Cos. Inc. 648,088
73,300 Fiserv Inc.+ 2,345,600
36,687 Paychex, Inc. 1,444,551
- --------------------------------------------------------------------------------
9,732,286
- --------------------------------------------------------------------------------
Diversified -- 0.2%
28,400 Viad Corp. 697,575
- --------------------------------------------------------------------------------
Electronic Instruments and Controls -- 3.2%
8,000 AVX Corp. 320,000
14,200 Motorola, Inc. 1,383,613
30,300 PE Corp. - PE Biosystems Group 1,965,713
19,600 Sanmina Corp.+ 1,765,225
49,700 Symbol Technologies, Inc. 1,975,575
38,700 Teradyne, Inc.+ 1,489,950
12,500 Waters Corp.+ 664,062
- --------------------------------------------------------------------------------
9,564,138
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Electronics - Semiconductors and Components -- 13.7%
56,300 Altera Corp.+ $ 2,737,587
58,700 Analog Devices, Inc.+ 3,118,438
9,600 Applied Materials, Inc.+ 862,200
12,700 ASM Lithography Holding N.V.+ 922,337
16,400 Atmel Corp.+ 633,450
39,000 Conexant Systems, Inc.+ 3,641,625
77,500 Cypress Semiconductor Corp.+ 1,981,094
23,400 KLA-Tencor Corp.+ 1,852,988
39,100 Linear Technology Corp. 2,734,556
39,100 LSI Logic Corp.+ 2,079,631
29,300 Maxim Integrated Products Inc.+ 2,312,869
25,350 Microchip Technology Inc.+ 1,688,944
9,800 Novellus Systems, Inc.+ 759,500
48,900 PMC-Sierra, Inc.+ 4,608,825
58,700 Solectron Corp.+ 4,417,175
52,625 Vishay Intertechnology Inc.+ 1,286,023
39,200 Vitesse Semiconductor Corp.+ 1,798,300
39,100 Xilinx, Inc.+ 3,074,238
- --------------------------------------------------------------------------------
40,509,780
- --------------------------------------------------------------------------------
Entertainment and Leisure Time -- 1.2%
103,500 Park Place Entertainment Corp.+ 1,358,437
39,050 SFX Entertainment, Inc., Class A Shares+ 1,364,309
17,500 Westwood One Inc. 807,188
- --------------------------------------------------------------------------------
3,529,934
- --------------------------------------------------------------------------------
Financial Services -- 3.5%
11,200 American Express Co. 1,724,800
45,300 Capital One Financial Corp. 2,400,900
78,200 Charles Schwab Corp. 3,044,912
39,100 Federated Investors, Inc. 674,475
34,600 Knight/Trimark Group Inc.+ 901,763
14,910 Old Kent Financial Corp. 607,582
18,850 SLM Holding Corp. 922,472
- --------------------------------------------------------------------------------
10,276,904
- --------------------------------------------------------------------------------
Insurance -- 2.2%
19,400 AFLAC Inc. 991,825
11,700 ChoicePoint Inc.+ 723,206
18,900 MGIC Investment Corp. 1,129,275
34,950 Providian Corp. 3,809,550
- --------------------------------------------------------------------------------
6,653,856
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Manufacturing -- 5.9%
102,000 American Power Conversion Corp.+ $ 2,288,625
62,300 Corning Inc. 4,898,337
24,400 Danaher Corp. 1,178,825
68,400 EMC Corp.+ 4,993,200
46,000 Harley-Davidson, Inc. 2,728,375
19,100 Lexmark International Group, Inc., Class A Shares+ 1,490,994
- --------------------------------------------------------------------------------
17,578,356
- --------------------------------------------------------------------------------
Medical Equipment and Information Systems -- 0.5%
48,600 Biomet, Inc. 1,464,075
- --------------------------------------------------------------------------------
Medical Products and Supplies -- 2.3%
18,900 Bausch & Lomb Inc. 1,020,600
18,800 Chiron Inc.+ 536,975
11,800 Genzyme Corp. - General Division+ 451,350
72,225 Jones Pharma Inc. 2,238,975
9,700 MedImmune, Inc.+ 1,086,400
29,500 Medtronic Inc. 1,021,437
24,400 Sybron International Corp.+ 581,025
- --------------------------------------------------------------------------------
6,936,762
- --------------------------------------------------------------------------------
Medical Services -- 0.3%
19,400 Express Scripts Inc., Class A Shares+ 953,025
- --------------------------------------------------------------------------------
Oil and Gas -- 4.5%
35,000 Apache Corp. 1,365,000
37,800 Baker Hughes Inc. 1,056,037
39,100 BJ Services Co.+ 1,341,619
53,800 Cooper Cameron Corp.+ 2,081,388
18,000 Diamond Offshore Drilling 571,500
29,300 El Paso Energy Corp. 1,201,300
61,500 EOG Resources, Inc. 1,279,969
57,900 Global Industries Ltd.+ 463,200
72,700 R&B Falcon Corp.+ 904,206
43,000 Rowan Cos., Inc.+ 669,187
33,100 Santa Fe Snyder Corp.+ 285,487
32,900 Smith International, Inc.+ 1,137,106
31,600 Weatherford International, Inc. 1,070,450
- --------------------------------------------------------------------------------
13,426,449
- --------------------------------------------------------------------------------
Oil and Gas Drilling -- 0.4%
28,500 Transocean Offshore, Inc. 774,844
47,600 Varco International, Inc.+ 502,775
- --------------------------------------------------------------------------------
1,277,619
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Pharmaceuticals -- 1.9%
49,100 Biogen, Inc.+ $ 3,639,537
29,200 Forest Laboratories, Inc.+ 1,339,550
23,700 Medicis Pharmaceutical Corp., Class A Shares+ 722,850
- --------------------------------------------------------------------------------
5,701,937
- --------------------------------------------------------------------------------
Printing and Publishing -- 1.0%
39,100 Electronics for Imaging, 1,576,219
Inc.+
20,800 McGraw-Hill Cos., Inc.+ 1,240,200
- --------------------------------------------------------------------------------
2,816,419
- --------------------------------------------------------------------------------
Restaurants -- 0.8%
37,800 Brinker International, 881,213
Inc.+
33,000 Outback Steakhouse, Inc.+ 759,000
17,100 Papa John's
International, Inc.+ 639,112
- --------------------------------------------------------------------------------
2,279,325
- --------------------------------------------------------------------------------
Retail -- 10.1%
15,600 American Eagle 667,875
Outfitters, Inc.+
22,800 Barnes & Noble Inc.+ 474,525
53,800 Bed Bath & Beyond Inc.+ 1,792,212
34,100 Best Buy Co., Inc.+ 1,894,681
48,900 Circuit City Stores - 2,087,419
Circuit City Group
34,275 Dollar Tree Stores, Inc.+ 1,493,105
24,400 eToys Inc.+ 1,457,900
53,900 Family Dollar Stores, Inc. 1,111,687
18,780 Intimate Brands, Inc. 769,980
50,100 Jones Apparel Group, Inc.+ 1,584,412
38,400 Kohl's Corp.+ 2,872,800
36,800 The Kroger Co.+ 765,900
25,200 Linens 'n Things, Inc.+ 1,001,700
29,300 Lowe's Cos., Inc. 1,611,500
43,475 The Men's Wearhouse, Inc.+ 953,733
37,600 Ross Stores Inc. 775,500
117,337 Staples Inc.+ 2,603,415
20,200 Talbots Inc. 950,662
38,800 Tandy Corp. 2,441,975
56,900 The TJX Cos., Inc. 1,543,413
38,100 Tommy Hilfiger Corp.+ 1,076,325
- --------------------------------------------------------------------------------
29,930,719
- --------------------------------------------------------------------------------
Telecommunications -- 3.1%
18,500 Adelphia Communications 1,010,563
Corp.+
43,900 CenturyTel, Inc. 1,775,206
18,900 Cincinnati Bell Inc. 393,356
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Telecommunications -- 3.1% (continued)
52,200 Crown Castle International Corp.+ $ 1,004,850
28,700 Global Telesystems Group, Inc.+ 687,006
13,375 NTL Inc.+ 1,008,141
20,000 RCN Corp.+ 957,500
28,700 Univision Communications Inc., Class A Shares+ 2,441,294
- --------------------------------------------------------------------------------
9,277,916
- --------------------------------------------------------------------------------
Telecommunications Equipment -- 4.6%
33,100 ADC Telecommunications, Inc.+ 1,578,456
29,300 Comverse Technology, Inc.+ 3,325,550
37,100 General Instrument Corp.+ 1,996,444
29,300 Nokia Corp. ADR 3,385,981
4,800 QUALCOMM Inc.+ 1,069,200
39,100 Scientific-Atlanta, Inc. 2,238,475
- --------------------------------------------------------------------------------
13,594,106
- --------------------------------------------------------------------------------
Transportation - Miscellaneous -- 0.7%
43,300 Kansas City Southern Industries, Inc. 2,054,044
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $195,453,117) 283,167,274
================================================================================
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 4.5%
$13,388,000 Federal Home Loan Mortgage Corp., 5.160% due
11/1/99
(Cost -- $13,384,162) 13,384,162
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $208,837,279*) $296,551,436
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the
same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
COMMON STOCK -- 97.6%
Capital Goods -- 2.2%
27,640 General Electric Co. $ 3,746,947
- --------------------------------------------------------------------------------
Computer Software -- 8.2%
88,060 America Online, Inc.+ 11,420,281
29,000 Microsoft Corp.+ 2,684,312
- --------------------------------------------------------------------------------
14,104,593
- --------------------------------------------------------------------------------
Consumer Cyclicals -- 8.1%
70,300 The Home Depot, Inc. 5,307,650
90,380 McDonald's Corp. 3,728,175
186,615 The Walt Disney Co. 4,921,971
- --------------------------------------------------------------------------------
13,957,796
- --------------------------------------------------------------------------------
Consumer Staples -- 17.4%
94,575 Avon Products, Inc. 3,050,044
125,990 The Coca-Cola Co. 7,433,410
152,095 The Gillette Co. 5,503,938
135,890 PepsiCo, Inc. 4,713,684
46,480 The Procter & Gamble Co. 4,874,590
55,170 Wm. Wrigley Jr. Co. 4,410,152
- --------------------------------------------------------------------------------
29,985,818
- --------------------------------------------------------------------------------
Financial Services -- 22.4%
43,971 American International 4,526,265
Group, Inc.
74 Berkshire Hathaway Inc., 4,728,600
Class A Shares+
9 Berkshire Hathaway Inc., 18,810
Class B Shares+
56,265 Fannie Mae 3,980,749
112,025 Household International, 4,999,116
Inc.
92,820 Merrill Lynch & Co., Inc. 7,286,370
47,435 Morgan Stanley Dean Witter 5,232,673
& Co.
161,475 Wells Fargo Co. 7,730,616
- --------------------------------------------------------------------------------
38,503,199
- --------------------------------------------------------------------------------
Health Care -- 15.5%
63,040 Amgen Inc.+ 5,027,440
68,150 Eli Lilly and Co. 4,693,831
40,785 Johnson & Johnson 4,272,229
23,840 Merck & Co., Inc. 1,896,770
110,590 Pfizer Inc. 4,368,305
78,820 Warner-Lambert Co. 6,290,821
- --------------------------------------------------------------------------------
26,549,396
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Technology -- 23.8%
35,254 Cisco Systems, Inc.+ $ 2,608,796
126,900 Intel Corp. 9,826,819
49,140 Lucent Technologies Inc. 3,157,245
57,060 Motorola, Inc. 5,559,784
181,430 Novell, Inc.+ 3,639,939
114,080 Texas Instruments Inc. 10,238,680
74,440 Xilinx, Inc.+ 5,852,845
- --------------------------------------------------------------------------------
40,884,108
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $143,128,999) 167,731,857
- --------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.4%
$4,198,000 Chase Securities Inc., 5.100% due 11/1/99; Proceeds at
maturity -- $4,199,784; (Fully collateralized by U.S.
Treasury Notes, 8.500% due 2/15/20; Market
value -- $4,287,938)
(Cost -- $4,198,000) 4,198,000
TOTAL INVESTMENTS -- 100%
(Cost -- $147,326,999*) $171,929,857
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $208,837,279 and
$147,326,999, respectively) $296,551,436 $171,929,857
Cash 6,506 623
Dividends and interest receivable 14,261 68,776
Receivable for securities sold 4,982,796 --
Receivable for Fund shares sold -- 121,070
- --------------------------------------------------------------------------------
Total Assets 301,554,999 172,120,326
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,336,985 3,456,999
Payable for Fund shares purchased 454,726 --
Management fees payable 190,626 309,985
Accrued expenses 53,056 73,031
- --------------------------------------------------------------------------------
Total Liabilities 2,035,393 3,840,015
- --------------------------------------------------------------------------------
Total Net Assets $299,519,606 $168,280,311
================================================================================
NET ASSETS:
Par value of capital shares $ 184 $ 116
Capital paid in excess of par value 201,747,126 143,596,535
Undistributed net investment income -- 39,724
Accumulated net realized gain from security
transactions 10,058,139 41,078
Net unrealized appreciation of investments 87,714,157 24,602,858
- --------------------------------------------------------------------------------
Total Net Assets $299,519,606 $168,280,311
================================================================================
Shares Outstanding 18,376,228 11,577,964
- --------------------------------------------------------------------------------
Net Asset Value $16.30 $14.53
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 1,004,473 $ 165,490
Dividends 767,022 728,154
Less: Foreign withholding tax (5,210) --
- --------------------------------------------------------------------------------
Total Investment Income 1,766,285 893,644
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,130,329 716,521
Audit and legal 36,961 28,853
Custody 22,833 12,289
Shareholder communications 13,852 13,710
Shareholder and system servicing fees 10,912 11,903
Directors' fees 8,536 4,510
Registration fees 1,427 34,349
Other 10,396 3,981
- --------------------------------------------------------------------------------
Total Expenses 2,235,246 826,116
- --------------------------------------------------------------------------------
Net Investment Income (Loss) (468,961) 67,528
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 186,813,768 12,788,564
Cost of securities sold 166,987,753 12,727,848
- --------------------------------------------------------------------------------
Net Realized Gain 19,826,015 60,716
- --------------------------------------------------------------------------------
Changes in Net Unrealized Appreciation
of Investments:
Beginning of year 34,002,947 903,093
End of year 87,714,157 24,602,858
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 53,711,210 23,699,765
- --------------------------------------------------------------------------------
Net Gain on Investments 73,537,225 23,760,481
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 73,068,264 $23,828,009
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- ---------------------------------------------------------------------------------------------
For the Years Ended October 31,
AIM Capital Appreciation Portfolio 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (468,961) $ (136,999)
Net realized gain (loss) 19,826,015 (8,377,798)
Increase in net unrealized appreciation 53,711,210 1,117,130
- ---------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 73,068,264 (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 7):
Proceeds from sale of shares 127,822,307 64,713,956
Net asset value of shares issued
for reinvestment of dividends -- 323,315
Cost of shares reacquired (127,233,116) (34,299,732)
- ---------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 589,191 30,737,539
- ---------------------------------------------------------------------------------------------
Increase in Net Assets 73,657,455 23,016,557
NET ASSETS:
Beginning of year 225,862,151 202,845,594
- ---------------------------------------------------------------------------------------------
End of year* $ 299,519,606 $225,862,151
=============================================================================================
</TABLE>
See Notes to Financial Statements.
Travelers Series Fund Inc. 19
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- ---------------------------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney Large Capitalization Growth Portfolio 1999 1998(a)
===================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 67,528 $ 17,597
Net realized gain (loss) 60,716 (19,638)
Increase in net unrealized appreciation 23,699,765 903,093
- ---------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 23,828,009 901,052
- ---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (45,401) --
- ---------------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (45,401) --
- ---------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 126,123,445 19,937,850
Net asset value of shares issued
for reinvestment of dividends 45,401 --
Cost of shares reacquired (2,458,066) (51,979)
- ---------------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 123,710,780 19,885,871
- ---------------------------------------------------------------------------------------------------
Increase in Net Assets 147,493,388 20,786,923
NET ASSETS:
Beginning of year 20,786,923 --
- ---------------------------------------------------------------------------------------------------
End of year* $168,280,311 $20,786,923
===================================================================================================
* Includes undistributed net investment income of: $ 39,724 $ 17,597
===================================================================================================
</TABLE>
(a) For the period from May 1, 1998 (commencement of operations) to
October 31, 1998.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 thirteen
other separate investment portfolios: Smith Barney Large Cap Value, Alliance
Growth, Van Kampen Enterprise (formerly known as 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, INVESCO Global Strategic Income (formerly known as GT Global
Strategic Income), Smith Barney High Income, MFS Total Return, Smith Barney
Money Market, Smith Barney Aggressive Growth and Smith Barney MidCap 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 shareholder 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, 1999, reclassifications
were made to
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
AIM Capital Appreciation Portfolio's capital accounts to reflect permanent
book/tax differences and income and gains available for distributions under
income tax regulations. In addition, for the AIM Capital Appreciation Portfolio,
a portion of accumulated net investment loss amounting to $468,961 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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as
investment manager of the Smith Barney Large Capitalization Growth Portfolio
("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 year ended
October 31, 1999, SSB did not receive any brokerage commissions.
All officers and one Director of the Fund are employees of SSB.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
3. Investments
For the year ended October 31, 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 $194,857,679 $137,322,119
- --------------------------------------------------------------------------------
Sales 186,813,768 12,788,564
================================================================================
At October 31, 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 $92,105,220 $30,822,859
Gross unrealized depreciation (4,391,063) (6,220,001)
- --------------------------------------------------------------------------------
Net unrealized appreciation $87,714,157 $24,602,858
================================================================================
4. 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 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 October 31, 1999, the Portfolios had no securities on loan.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolios record a realized gain or
loss equal to the 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 October 31, 1999, the Portfolios had no open futures contracts.
6. 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.
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 year ended October 31, 1999, the Portfolios did not enter into any
written covered call option contracts.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
7. Capital Shares
At October 31, 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:
Year Ended Year Ended
October 31, 1999 October 31, 1998*
================================================================================
AIM Capital Appreciation
Shares sold 8,702,220 5,060,116
Shares issued on reinvestment -- 23,548
Shares reacquired (8,672,298) (2,728,617)
- --------------------------------------------------------------------------------
Net Increase 29,922 2,355,047
================================================================================
Smith Barney Large Capitalization Growth
Shares sold 9,661,334 2,105,804
Shares issued on reinvestment 3,615 --
Shares reacquired (187,705) (5,084)
- --------------------------------------------------------------------------------
Net Increase 9,477,244 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. 25
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
AIM Capital Appreciation Portfolio 1999 1998 1997 1996(1) 1995(1)(2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.31 $ 12.68 $ 10.76 $ 10.00 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(3) (0.03) (0.01) 0.02 0.02 0.02
Net realized and unrealized gain (loss) 4.02 (0.34) 1.91 0.75 (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.99 (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 $ 16.30 $ 12.31 $ 12.68 $ 10.76 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 32.41% (2.79)% 17.96% 7.71% 0.00%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $299,520 $225,862 $202,846 $112,905 $ 8,083
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(3) 0.84% 0.85% 0.85% 0.96% 1.00%+
Net investment income (loss) (0.18) (0.06) 0.20 0.22 4.07+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 76% 75% 56% 44% 6%
====================================================================================================================================
</TABLE>
(1) Per share amounts have been 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 and reimbursed expenses of $13,456 for
the period ended October 31, 1995. If such fees were not waived, the per
share decrease to net investment income and the actual annualized expense
ratio would have been $0.03 and 5.95%, respectively.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney Large Capitalization Growth Portfolio 1999 1998(1)
=============================================================================================
<S> <C> <C>
Net Asset Value, Beginning of Year $ 9.90 $ 10.00
- ---------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.00* 0.01
Net realized and unrealized gain (loss) 4.64 (0.11)#
- ---------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 4.64 (0.10)
- ---------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) --
- ---------------------------------------------------------------------------------------------
Total Distributions (0.01) --
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 14.53 $ 9.90
- ---------------------------------------------------------------------------------------------
Total Return 46.88% (1.00)%++
- ---------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $168,280 $ 20,787
- ---------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.86% 1.00%+
Net investment income 0.07 0.52+
- ---------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 1%
=============================================================================================
</TABLE>
(1) For the period from May 1, 1998 (commencement of operations) to October 31,
1998.
(2) 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 decrease to net
investment income and the actual annualized expense ratio would have been
$0.02 and 1.77%, respectively.
* 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.
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
October 31, 1999:
. Percentage of ordinary dividends paid as qualifying for the corporate
dividends received deduction:
. Smith Barney Large Capitalization Growth Portfolio 100%
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the AIM Capital Appreciation Portfolio and
Smith Barney Large Capitalization Growth Portfolio of Travelers Series Fund Inc.
as of October 31, 1999, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the years in
the four-year period then ended and for the period from October 10, 1995
(commencement of operations) to October 31, 1995, with respect to the AIM
Capital Appreciation Portfolio, and the statement of operations for the year
then ended, and the statement of changes in net assets and financial highlights
for the year then ended and for the period from May 1, 1998 (commencement of
operations) to October 31, 1998, with respect to the Smith Barney Large
Capitalization Growth Portfolio. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian. As to securities
purchased or sold but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report (continued)
- --------------------------------------------------------------------------------
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization Growth
Portfolio of Travelers Series Fund Inc. as of October 31, 1999, and the results
of their operations for the year then ended, and the changes in their net assets
and the financial highlights for the periods described above, in conformity with
generally accepted accounting principles.
New York, New York
December 15, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Michael Gellert
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
SSB Citi Fund Management LLC
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
IN0794 12/99
<PAGE>
Travelers Series Fund Inc.
Smith Barney International
Equity Portfolio
Smith Barney Pacific
Basin Portfolio
INVESCO Global Strategic
Income Portfolio
ANNUAL REPORT
October 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series
Fund Inc.
[PHOTO]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the annual report for the Travelers Series Fund Inc. -
Smith Barney International Equity, Smith Barney Pacific Basin and INVESCO Global
Strategic Income Portfolios (formerly known as GT Global Strategic Income
Portfolio) ("Portfolios") for the year ended October 31, 1999. We hope you find
this report useful and informative. For your convenience, we have summarized the
period's prevailing economic and market conditions and outlined each Portfolio's
investment strategy. A detailed summary of performance and current holdings can
be found in the appropriate sections that follow.
Portfolio Highlights
Smith Barney International Equity Portfolio
For the 12 months ended October 31, 1999, the Smith Barney International Equity
Portfolio ("Portfolio") provided a total return of 34.73%. We are proud to
report that the Portfolio's 12-month total return was better than its Lipper
Inc. peer group average of 27.27% for the same period. (Lipper is a major
fund-tracking organization.)
The Portfolio's managers think that its better performance versus the Lipper
peer group was due primarily to holdings in Asian growth stocks and the good
performance of middle-sized to smaller-sized company stocks so far in 1999
compared with the prior two years. The strength of the Japanese yen also
contributed positively to the Portfolio's total returns.
Investment Strategy
The Portfolio seeks total return on its assets from growth of capital and
income. The Portfolio seeks to achieve its objective by investing at least 65%
of its assets in a diversified portfolio of equity securities of established
non-U.S.
issuers.
The Portfolio's managers utilize a "bottom-up" approach to stock
investing--looking for promising companies and industries rather than trying to
uncover investment opportunities based on the present or future condition of the
global economy, the financial markets or the performance of particular markets.
The managers seek companies growing at a faster rate than the economic growth
rate
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Travelers Series Fund Inc. 1
<PAGE>
of their local countries. At the same time, the managers strive to maintain
a risk level no higher than that of the overall international stock market
through a broad diversification in a variety of markets.
During the past year, the managers have adjusted their stock positions as
industry and company trends warranted. The common aim is to position the
Portfolio in the highest-quality international growth stocks, consistent with
prudent diversification to help minimize risk.
International stock markets performed well compared to the U.S. market during
the Portfolio's fiscal year as many of the negative market influences of 1998
dissipated. In the managers' view, swift policy responses by central banks
around the world helped stem last year's anxieties. Moreover, ample financial
liquidity fueled genuine recovery in many troubled economies and caused many
markets to rally. (Liquidity is the ability to buy or sell an asset quickly and
in large volume without substantially affecting the asset's price.)
For many years, large-capitalization U.S. growth stocks have led the world's
financial markets. However, in recent months, international markets have assumed
leadership and provided strong absolute and relative returns versus the U.S.
markets. In the managers' view, the opportunities over the next several years,
as measured by growth, structural change and valuation, bode well for the
performance of international stocks going forward.
As the Portfolio took profits in select European situations consistent with
seeking to minimize risk, the Portfolio increased its commitment to Asian
stocks, thus modifying the composition of the Portfolio. The Portfolio's country
allocations were: 74% Europe, 18% Asia and 8% in Canada, Latin America and other
emerging markets at the beginning of the year, and changed to 54% Europe, 40%
Asia and 6% in Canada, Latin America and other emerging markets by the end of
the period.
Europe
European stock markets showed relatively modest performance during much of the
reporting period. Yet recent evidence has shown that, in conjunction with the
Asian economic recovery, business conditions in Europe are improving. The new
European currency, the Euro, after declining precipitously versus the U.S.
dollar since its January 1999 debut, has stabilized in recent months.
In the managers' view, the most notable trend in Europe this year has been the
exceptionally high level of merger and acquisition activity, driven by
industrial concentration and a desire to build economies of scale. Hostile
takeovers in a number of industries such as telecommunications, financial
services and energy have served notice to entrenched managements that inferior
strategic execution will no longer be tolerated by investors. The ready
availability of capital to fund hostile takeovers is also a new development in
Europe.
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2 1999 Annual Report to Shareholders
<PAGE>
Several core European purchases during the Portfolio's fiscal year include:
. Mannesmann, the former German capital goods supplier, which has been
recast as a pan-European telecommunications provider based on its
ownership of key franchises in Germany, France, Italy and now the United
Kingdom through its recent agreement to purchase Orange.
. Securitas of Sweden, Europe's leading security services operator, which
recently expanded significantly into the U.S. through the acquisition of
Pinkertons.
. Petroleum Geo Services, the Norwegian technological leader in the seismic
mapping of petroleum reserves. The recovery of energy commodity prices
provides a much-improved environment for exploration and production
expenditures over the next several years.
During the period, the managers also sold several of the Portfolio's
long-standing European holdings including:
. Volkswagen has done an outstanding job in cutting costs. However, the
managers think that most of the company's gains from these cost-cutting
measures were already reflected in its stock price.
. Novartis has done well cutting costs and building on the positive
developments from the merger of Sandoz and Ciba Geigy. Yet revenue growth
was noticeably slowing, and a difficult, highly competitive European
pharmaceutical industry led the Portfolio to take profits.
Asia
The developed Asian stock markets turned in exceptional performances during the
period, led by renewed confidence in Japan. After years of unremitting bad news
from Asia, economic growth resumed in many of the Asian economies such as Korea,
Singapore, Taiwan and Thailand. Currencies stabilized, allowing interest rates
to decline in many economies, which in turn caused renewed investor interest in
local company stocks.
Japan has begun a major restructuring program after several years of ineffective
policies. The financial system is being reformed, interest rates are at
extremely low levels and multinational companies have announced significant
plans to lower expenses, improve productivity and boost returns on invested
capital. In fact, Japanese economic growth has resumed and surveys of business
expectations are improving. While the managers are aware that the recovery in
Japan is fragile, they believe that Japanese stocks are inexpensive relative to
other markets given the substantial changes that are likely to occur in the
coming months.
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Travelers Series Fund Inc. 3
<PAGE>
Several Asian stocks added to the Portfolio during the period include:
. Matsushita Communications Industries of Japan, which supplies mobile
communications equipment in Japan, and is, in our view, well positioned to
benefit from a deregulating telecommunications marketplace.
. Softbank of Japan, is a well-diversified portfolio of global Internet
interests and opportunities.
. Venture Manufacturing of Singapore, another of our outsourcing investments
leveraged to the growth of the global electronics industry is also
positioned to capitalize on the trend of branded technology leaders that
subcontract their manufacturing to technologically capable subcontractors.
. Trend Micro, a Japanese developer of antivirus computer software with a
formidable list of multinational clients and joint ventures with other key
technology providers.
Emerging Markets
Emerging markets rallied sharply earlier this year as the global financial
crisis eased. Prospects of accelerating global growth in the coming months have
caused select commodity prices to firm up, and that trend has benefited
commodity-dependent export economies. The Portfolio's managers have made no
significant new investments in emerging markets because they think year 2000
concerns and resultant problems, if any, are most likely to be acute in those
economies.
Smith Barney Pacific Basin Portfolio
For the 12 months ended October 31, 1999, the Smith Barney Pacific Basin
Portfolio ("Portfolio") returned 72.83%. The Portfolio outperformed its Lipper
Inc. peer group's return of 54.00% for the same period. (Lipper is a major
fund-tracking organization.) In comparison, the Portfolio's benchmark Morgan
Stanley Capital International (MSCI) All Country Asia Pacific Index returned
54.22% for the same period. (The MSCI All Country Asia Pacific Index, comprising
equities in Australia, New Zealand, Japan and the Far East, is a common
benchmark against which the performance of Asian funds is measured.)
In the manager's view, Asia's economic recovery is well underway, albeit with a
few new twists and turns, and has been led primarily by Japan. The manager's
general optimism for Asia (ex-Japan) remains, and he has reallocated a portion
of the Portfolio's assets to Japan given its current attractiveness. Although
doubts and questions may still linger over Japan, the manager thinks there have
been clear signs lately that many investors can differentiate the forest of the
stock market from the trees of individual companies.
Japan is making significant progress both on a governmental level as well as on
a corporate level. Japan's bureaucracy is deregulating its old laws in earnest
and creating new ones to replace them at a surprising rate. The
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4 1999 Annual Report to Shareholders
<PAGE>
portfolio manager is pleased to report that the Portfolio has benefited from
these structural changes in Japan.
The manager thinks that the strong relative performance of the Pacific region
reflects growing recognition on the part of many investors of structural changes
and cyclical recovery in many of its economies. The region appears to be
awakening from its lengthy torpor and the Japanese stock market has been one of
the best global performers so far this year. A combination of strong government
policies and cost-cutting and streamlining of multinational Japanese
corporations has increased his optimism about the region's long-term investment
prospects.
The portfolio manager employs a "bottom-up" investment strategy, emphasizing
individual security selection, while optimally allocating the Portfolio's assets
among companies in the Asia Pacific region. His stock selection process involves
exhaustive analysis of companies' fundamentals, in which he looks for certain
criteria such as above average earnings growth, high relative return on invested
capital, experienced and effective management and competitive advantages (i.e.,
high market share or special licenses and patents). The manager also actively
monitors and evaluates economic and political conditions in the region that may
affect the companies he invests in.
Because it is the largest nursing care outsourcing company listed on the Tokyo
Stock Exchange, Nichii Gakkan was added to the portfolio during the period. To
capitalize on the trend of Japan's revitalized economy, the manager intends to
increase the Portfolio's exposure in the information technology (IT) and office
automation industries. Pasona Softbank, a listed subsidiary of Softbank (i.e.,
the Internet super-company), was also added during the period. Pasona Softbank
is one of the few Japanese IT personnel placement company opportunities
available in the market today.
As for Asia (ex-Japan), the Portfolio's Hong Kong weightings remained unchanged
during the period. Yet the manager did pare back on the Portfolio's positions in
Korea and Australia and he increased the Portfolio's weightings in Taiwan. The
manager became a bit more cautious on the Korean market, so he sold the
Portfolio's holding in Dongwon, a food processing company, as well as cut
roughly in half the Portfolio's position in SK Telecom, a cellular provider and
nationwide paging service. In Australia, the manager sold Westfield, the
retailer and Lendlease, the real estate project management company.
In Taiwan, two new companies were added to the Portfolio--Synnex, an IC
producer, and Ritek, the world leader in opto-magnetic disc manufacturing (i.e.,
CDs, CD-ROMs and DVD blank discs). The effects of the devastating earthquake in
Taiwan that killed over 2000 people and caused billions in damage did not affect
the Pacific Portfolio as much as you might expect. None of the
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Travelers Series Fund Inc. 5
<PAGE>
companies held in the Portfolio were severely damaged or incapacitated due to
the quake. One major disruption in Taiwan was the closing of the stock exchange
for the week, a policy adopted by the Taiwanese government to prevent a massive
sell-off in the market.
The manager remains optimistic that the Asian recovery will continue into 2000
and will be led by Japan's ongoing economic recovery. He plans on remaining
heavily invested in Japan and he also intends to add to the Portfolio's
positions in Hong Kong and Korea when those markets finally show signs of
stabilizing.
INVESCO Global Strategic Income Portfolio
The primary investment objective of the INVESCO Global Strategic Income
Portfolio (formerly known as GT Global Strategic Portfolio) ("Portfolio") is to
seek high current income and secondarily, capital appreciation. For the year
ended October 31, 1999, the Portfolio returned a negative 0.96%, underperforming
its Lipper, Inc. peer group average, which returned 1.27% over the same period.
(Lipper is a major fund-tracking organization.)
Last year's "Asian flu" set a low point for most international economies.
Battered by an environment characterized by depressed demand and supply-side
shocks (massive oil inventory stockpiling), most developing economies suffered.
To exacerbate the collapse in commodity prices, the Russian crisis induced a
capital markets credit crunch felt so strongly throughout the financial markets
that the managers think it was a major cause of the U.S. Federal Reserve Board's
("Fed") monetary policy easings last year. In the view of the managers, the
events in 1998 set the stage for the economic recovery that began in 1999.
Unfortunately for Europe, that region's recovery lagged the rest of the world.
The war in Kosovo precipitated adverse effects for Europe's brand-new currency,
the Euro, whose value fell approximately 13% to a low point in the summer. To
stimulate European economies, the European Central Bank cut rates in April 1999.
Weakness did not appear to be limited to Europe, but the emerging economies as
well. In January, emerging markets had to contend with Brazil's devaluation that
further slowed the much-needed capital flows to that region. More recently, both
Europe and Latin America have shown clear signs that their economies have
bottomed out and that investor confidence may be returning. In Europe, the
surprise on the upside led to anticipation of an ECB tightening bias that has
pressured European fixed income markets.
Despite the seemingly bleak global economy, the U.S. economy remained strong
during the period. U.S. economic data, including a greater-than-expected
Consumer Price Index ("CPI") in April, caused a bond market sell-off in the U.S.
as a rate hike became priced into the market. (The CPI measures prices of a
fixed basket of goods bought by a typical consumer.)
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6 1999 Annual Report to Shareholders
<PAGE>
The Fed subsequently raised interest rates twice over the summer, citing
anticipatory inflationary pressures. In an effort to better manage market
expectations, the Fed introduced the immediate release of the Board's bias. The
first was a tightening bias announced in August, which added further pressure to
fixed-income markets. Compounding the negative sentiment were Y2K-related fears
that further reduced market liquidity.
Japan has finally started to show signs of a sustainable economic recovery.
Despite forecasts of continued sluggishness, the Japanese economy delivered
strong GDP results during the period. Reflecting such strength, the Japanese yen
appreciated approximately 7% so far this year, as sidelined investors became
more actively involved in the domestic financial markets. Yen appreciation
assisted the Asian emerging economies, as consumer goods became less expensive.
Concurrently, the cyclical rebound in commodities has begun. To lead the
commodity rebound, crude oil prices sharply increased approximately 57% on a
year-to-date basis. As a result, commodity based emerging and developing
countries reacted in tandem as positive signs of global growth began to appear.
The managers' optimistic view is based on the positive backdrop of the U.S.
economy. They are forecasting approximately 3% growth in the U.S. and for a
continuing global recovery. With regard to any Y2K-related issues, the managers
do not believe that there will be any long lasting impact on the financial
markets. As Y2K concerns abate and liquidity returns to the market, the bond
market should further improve.
Given the GDP growth outlook for moderate inflation, the investment team
anticipates that U.S. 30-year yields should trade within their recent range of
5.50% to 6.50%. Lastly, corporate mortgage-backed securities, high-yield bonds
and emerging market bonds should perform well if positive expectations are
realized.
In closing, thank you for investing in the Travelers Series Fund Inc. We look
forward to continuing to help you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
November 16, 1999
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Travelers Series Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
- ------------------------------------------------------------------------------------------
Historical Performance
- ------------------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
==========================================================================================
<S> <C> <C> <C> <C> <C>
10/31/99 $12.60 $16.92 $0.05 $0.00 34.73%
- ------------------------------------------------------------------------------------------
10/31/98 13.23 12.60 0.00 0.00 (4.76)
- ------------------------------------------------------------------------------------------
10/31/97 12.18 13.23 0.01 0.00 8.73
- ------------------------------------------------------------------------------------------
10/31/96 10.48 12.18 0.01 0.00 16.36
- ------------------------------------------------------------------------------------------
10/31/95 10.55 10.48 0.00 0.00 (0.66)
- ------------------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.55 0.00 0.00 5.50++
==========================================================================================
Total $0.07 $0.00
==========================================================================================
<CAPTION>
- ------------------------------------------------------------------------------------------
Smith Barney Pacific Basin Portfolio
- ------------------------------------------------------------------------------------------
Historical Performance
- ------------------------------------------------------------------------------------------
Net Asset Value
---------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
==========================================================================================
<S> <C> <C> <C> <C> <C>
10/31/99 $6.81 $11.77 $0.00 $0.00 72.83%
- ------------------------------------------------------------------------------------------
10/31/98 8.04 6.81 0.09 0.00 (14.09)
- ------------------------------------------------------------------------------------------
10/31/97 9.75 8.04 0.06 0.00 (17.02)
- ------------------------------------------------------------------------------------------
10/31/96 8.95 9.75 0.03 0.00 9.26
- ------------------------------------------------------------------------------------------
10/31/95 10.10 8.95 0.00 0.00 (11.39)
- ------------------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 10.10 0.00 0.00 1.00++
==========================================================================================
Total $0.18 $0.00
==========================================================================================
<CAPTION>
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INVESCO Global Strategic Income Portfolio
- ------------------------------------------------------------------------------------------
Historical Performance
- ------------------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
==========================================================================================
<S> <C> <C> <C> <C> <C>
10/31/99 $10.97 $10.22 $0.65 $0.00 (0.96)%
- ------------------------------------------------------------------------------------------
10/31/98 12.52 10.97 0.66 0.64 (2.50)
- ------------------------------------------------------------------------------------------
10/31/97 12.45 12.52 0.46 0.58 9.32
- ------------------------------------------------------------------------------------------
10/31/96 10.77 12.45 0.42 0.00 20.07
- ------------------------------------------------------------------------------------------
10/31/95 9.95 10.77 0.10 0.00 9.37
- ------------------------------------------------------------------------------------------
6/16/94*-10/31/94 10.00 9.95 0.00 0.00 (0.50)++
==========================================================================================
Total $2.29 $1.22
==========================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
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8 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Average Annual Total Return+
- --------------------------------------------------------------------------------
Smith Barney Smith Barney INVESCO Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
Year Ended 10/31/99 34.73% 72.83% (0.96)%
- --------------------------------------------------------------------------------
Five Years Ended 10/31/99 10.03 3.59 6.75
- --------------------------------------------------------------------------------
6/16/94* through 10/31/99 10.39 3.53 6.16
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
Smith Barney Smith Barney INVESCO Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
================================================================================
6/16/94* through 10/31/99 70.13% 20.48% 37.93%
================================================================================
+ 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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Travelers Series Fund Inc. 9
<PAGE>
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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+
- --------------------------------------------------------------------------------
June 1994 -- October 1999
[GRAPH]
International Equity MSCI EASFE Index
6/16/94 10,000 10,000
Oct-94 10,550 10,443
Oct-95 10,480 10,436
Oct-96 12,194 11,563
Oct-97 13,259 12,133
Oct-98 12,628 13,340
10/31/99 17,013 16,413
+ 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 October 31, 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. An investor cannot invest
directly in an index.
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 Annual Report to Shareholders
<PAGE>
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Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Pacific Basin Portfolio vs.
MSCI Pacific Index+
- --------------------------------------------------------------------------------
June 1994 -- October 1999
[GRAPH]
Pacific Basin MSCI Pacific Index
6/16/94 10,000 10,000
Oct-94 10,100 9,952
Oct-95 8,950 8,836
Oct-96 9,779 9,136
Oct-97 8,114 7,353
Oct-98 6,971 6,346
10/31/99 12,048 9,617
+ 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 October 31, 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. An investor cannot invest
directly in an index.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
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Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
INVESCO Global Strategic Income Portfolio vs.
J.P. Morgan Global Bond Index+
- --------------------------------------------------------------------------------
June 1994 -- October 1999
[GRAPH]
INVESCO Global JP Morgan Global
Strategic Income Bond\Index - Unhedged
6/16/94 10,000 10,000
Oct-94 9,950 10,391
Oct-95 10,882 11,985
Oct-96 13,066 12,716
Oct-97 14,284 13,161
Oct-98 13,927 14,869
10/31/99 13,793 14,429
+ Hypothetical illustration of $10,000 invested in shares of the INVESCO 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 October 31, 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. An investor cannot
invest directly in an index.
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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12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
STOCKS -- 98.5%
Australia -- 0.3%
264,270 Coca-Cola Amatil Ltd. $ 815,148
- --------------------------------------------------------------------------------
Canada -- 4.1%
175,000 Celestica Inc.+ 9,636,957
120,000 The Toronto-Dominion Bank 2,753,416
- --------------------------------------------------------------------------------
12,390,373
- --------------------------------------------------------------------------------
Finland -- 4.7%
123,000 Nokia Oyj 14,206,566
- --------------------------------------------------------------------------------
France -- 6.1%
35,000 Axa 4,933,360
35,000 Equant N.V.+ 3,402,952
20,000 Group Danone 5,097,858
50,000 Sidel S.A. 4,992,747
- --------------------------------------------------------------------------------
18,426,917
- --------------------------------------------------------------------------------
Germany -- 3.5%
8,000 Aixtron AG 898,064
37,000 Mannesmann AG 5,705,291
6,500 SAP AG Preferred 2,802,560
67,300 Stinnes AG 1,273,308
- --------------------------------------------------------------------------------
10,679,223
- --------------------------------------------------------------------------------
Hong Kong -- 5.2%
504,180 HSBC Holdings PLC(a) 6,051,198
600,000 Hutchison Whampoa Ltd. 6,023,554
483,557 Sun Hung Kai Properties Ltd. 3,905,425
- --------------------------------------------------------------------------------
15,980,177
- --------------------------------------------------------------------------------
Ireland -- 2.8%
461,600 Bank of Ireland 3,600,111
454,186 Independent Newspapers PLC 2,401,307
253,755 Irish Continental Group PLC 2,653,895
- --------------------------------------------------------------------------------
8,655,313
- --------------------------------------------------------------------------------
Italy -- 3.4%
550,000 Alleanza Assicurazioni(a) 5,597,238
740,000 Telecom Italia Mobile S.p.A. 4,631,903
- --------------------------------------------------------------------------------
10,229,141
- --------------------------------------------------------------------------------
Japan -- 25.6%
134,000 Canon, Inc. 3,787,850
203,000 Hosiden Corp.(a) 7,683,499
70 Japan Telecom Co., Ltd. 2,401,303
50,000 Matsushita Communication Industrial Co., Ltd. 8,394,021
See Notes to Financial Statements.
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Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Japan -- 25.6% (continued)
65,000 Murata Manufacturing Co., Ltd. $ 8,346,110
880 NTT Data Corp. 13,913,377
6,900 Shohkoh Fund & Co., Ltd. 4,218,283
44,000 Sony Corp.(a) 6,855,500
13,500 Softbank Corp. 5,601,284
191,000 Terumo Corp. 5,801,744
240,000 Tostem Corp. 5,369,874
27,000 Trend Micro Inc.(a) 5,355,500
- --------------------------------------------------------------------------------
77,728,345
- --------------------------------------------------------------------------------
Mexico -- 2.7%
3,306,000 Cifra SA de CV, Series C+ 5,148,196
70,000 Grupo Televisa S.A.-- Sponsored GDR+ 2,975,000
- --------------------------------------------------------------------------------
8,123,196
- --------------------------------------------------------------------------------
Netherlands -- 2.6%
69,041 IHC Caland N.V. 2,993,484
300,000 ING Groep N.V. Warrants, Expire 3/15/01+ 4,862,410
- --------------------------------------------------------------------------------
7,855,894
- --------------------------------------------------------------------------------
Norway -- 3.3%
135,000 Petroleum Geo Services ASA ADR 1,974,375
106,000 Tandberg Television ASA 1,256,661
180,000 Tomra Systems ASA 6,883,716
- --------------------------------------------------------------------------------
10,114,752
- --------------------------------------------------------------------------------
Poland -- 0.1%
21,400 Netia Holdings S.A. ADR(a) 342,400
- --------------------------------------------------------------------------------
Singapore -- 5.3%
243,700 DelGro Corp. Ltd. 842,214
368,800 Keppel Corp. 1,001,909
290,000 Singapore Press Holdings, Ltd. 4,967,544
1,750,000 Singapore Technologies Engineering, Ltd. 2,534,860
361,000 United Overseas Bank Ltd. 2,733,862
450,000 Venture Manufacturing (Singapore) Ltd.(a) 4,002,885
- --------------------------------------------------------------------------------
16,083,274
- --------------------------------------------------------------------------------
South Africa -- 1.2%
52,000 Anglo American Platinum Corp., Ltd. 1,497,803
432,568 Dimension Data Holdings Ltd.(a) 2,097,726
- --------------------------------------------------------------------------------
3,595,529
- --------------------------------------------------------------------------------
Spain -- 3.3%
231,000 Amadeus Global Travel Distribution S.A.(a) 1,381,562
150,000 Indra Sistemas S.A. 1,575,080
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Spain -- 3.3% (continued)
100,000 Superdiplo S.A. $ 1,832,076
317,652 Telefonica S.A. 5,221,977
- --------------------------------------------------------------------------------
10,010,695
- --------------------------------------------------------------------------------
Sweden -- 1.0%
41,800 A-com AB 482,023
175,000 Securitas AB 2,591,586
- --------------------------------------------------------------------------------
3,073,609
- --------------------------------------------------------------------------------
Switzerland -- 3.0%
150,000 Mettler-Toledo International Inc. 4,471,876
400 Roche Holding AG Genuss 4,804,095
- --------------------------------------------------------------------------------
9,275,971
- --------------------------------------------------------------------------------
United Kingdom -- 20.3%
500,000 Capita Group PLC 6,637,459
355,000 Colt Telecom Group PLC 10,613,534
800,000 Compass Group PLC 8,598,339
78,000 Filtronic PLC 1,446,293
115,000 Guardian IT PLC 1,254,882
750,000 Hays PLC 8,565,521
510,000 Invensys PLC 2,506,400
786,990 Misys PLC 6,579,558
359,000 Serco Group PLC 10,279,528
1,200,000 Telewest Communications PLC 5,099,931
109,090 Telewest Communications - N/P Rights PLC 96,663
- --------------------------------------------------------------------------------
61,678,108
- --------------------------------------------------------------------------------
TOTAL STOCKS
(Cost -- $183,878,914) 299,264,631
- --------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.5%
$4,500,000 CIBC Wood Gundy Securities Inc., 5.150% due 11/1/99;
Proceeds at maturity -- $4,501,931; (Fully collaterized
by U.S. Treasury Notes, 5.375% due 6/30/00;
Market value -- $4,514,000)
(Cost -- $4,500,000) 4,500,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $188,378,914*) $303,764,631
- --------------------------------------------------------------------------------
+ Non-income producing security.
(a) All or a portion of this security is on loan (See Note 9).
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
STOCKS -- 96.4%
Australia -- 4.2%
40,000 Austar United Communications Ltd.+(a) $ 130,009
5,730 Brambles Industries Ltd. 161,041
60,200 Computershare Ltd. 218,683
242,000 LibertyOne Ltd.+ 299,200
19,400 TABCORP Holdings Ltd. 122,894
26,815 Telstra Corp. Ltd. 136,321
- --------------------------------------------------------------------------------
1,068,148
- --------------------------------------------------------------------------------
Hong Kong -- 1.9%
1,372 Cable and Wireless HKT Ltd. 3,134
9,990 HSBC Holdings PLC 119,900
20,000 Hutchison Whampoa Ltd. 200,785
20,366 Sun Hung Kai Properties Ltd. 164,485
- --------------------------------------------------------------------------------
488,304
- --------------------------------------------------------------------------------
Japan -- 68.8%
20,000 Canon, Inc. 565,351
3,000 Drake Beam Morin - Japan Inc. 868,149
5,000 Hirose Electric Co., Ltd. 871,502
9,000 Hosiden Corp. 340,648
7,000 Ito-Yokado Co., Ltd. 559,410
12,000 Murata Manufacturing Co., Ltd. 1,540,820
4,000 Nichii Gakkan Co. 651,591
285,000 Nippon Steel Corp. 723,697
67 Nippon Telegraph & Telephone Corp. (NTT) 1,027,213
64 NTT Data Corp. 1,011,881
9,000 Pasona Softbank, Inc.+ 586,432
30,000 Sailor Pen Co., Ltd.+ 485,818
88,000 Sekisui Chemical Co., Ltd. 432,580
36,000 Sekisui House, Ltd. 389,460
10,000 Seven-Eleven Japan Co., Ltd.(a) 915,102
1,280 Shokoh Fund & Co., Ltd. 782,522
5,800 Sony Corp. 903,680
42,000 Sumitomo Bank Ltd. 675,316
10,000 Takeda Chemical Industries, Ltd. 573,975
14,000 Terumo Corp. 425,259
33,000 Tokio Marine & Fire Insurance Co., Ltd. 431,631
20,000 Tostem Corp. 447,489
12,000 Toyota Motor Corp. 415,102
9,000 Trend Micro Inc. 1,785,167
- --------------------------------------------------------------------------------
17,409,795
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
New Zealand -- 0.9%
56,000 Telecom Corp. of New Zealand Ltd.(a) $ 225,077
- --------------------------------------------------------------------------------
Philippines -- 0.6%
824,000 SM Prime Holdings 145,714
- --------------------------------------------------------------------------------
Singapore -- 5.4%
33,800 City Developments Ltd. 174,708
115,392 Datacraft Asia Ltd. 530,803
73,900 NatSteel Electronics Ltd.(a) 288,707
43,000 Star Cruises PLC 365,500
- --------------------------------------------------------------------------------
1,359,718
- --------------------------------------------------------------------------------
South Korea -- 6.0%
7,000 Hanaro Telecom Inc.+ 113,797
12,104 Kookmin Bank 188,699
6,000 Korea Electric Power Corp. 175,573
4,200 Korea Telecom Corp.+ 282,568
8,600 Pohang Iron & Steel Co., Ltd. 287,025
19,000 Samsung Corp.+ 300,959
141 SK Telecom Co., Ltd. 162,805
- --------------------------------------------------------------------------------
1,511,426
- --------------------------------------------------------------------------------
Taiwan -- 8.2%
75,250 Cathay Life Insurance Co., Ltd. 194,408
69,300 China Motor Co., Ltd. 84,496
74,200 Hon Hai Precision Industry Co., Ltd.+ 507,290
39,900 Ritek Inc. GDR+(b) 532,665
24,000 Synnex Technology International Corp. - GDR+(a) 474,600
65,190 Taiwan Semiconductor Manufacturing Co.+ 289,596
- --------------------------------------------------------------------------------
2,083,055
- --------------------------------------------------------------------------------
Thailand -- 0.4%
153,000 National Finance Public Co., Ltd.+ 50,538
147,000 National Finance Public Co., Ltd. (Alien Market)+ 56,172
- --------------------------------------------------------------------------------
106,710
- --------------------------------------------------------------------------------
TOTAL STOCKS
(Cost -- $15,227,261) 24,397,947
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 3.6%
$900,000 CIBC Wood Gundy Securities Inc., 5.150% due 11/1/99;
Proceeds at maturity -- $900,386; (Fully collateralized by
U.S. Treasury Notes, 5.375% due 6/30/00;
Market value -- $915,844)
(Cost -- $900,000) $ 900,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $16,127,261*) $25,297,947
================================================================================
+ Non-income producing security.
(a) All or a portion of this security is on loan (See Note 9).
(b) Security is exempt from registration under Rule 144A of Securities Act of
1933. These securities may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
INVESCO GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
- --------------------------------------------------------------------------------
BONDS -- 97.7%
Argentina -- 1.8%
Republic of Argentina:
365,000 11.786% due 4/10/05 $ 324,850
95,000 9.750% due 9/19/27 79,563
- --------------------------------------------------------------------------------
404,413
- --------------------------------------------------------------------------------
Aruba -- 1.1%
250,000 Sanwa Finance of Aruba AEC, 8.350% due 7/15/09(a) 257,305
- --------------------------------------------------------------------------------
Brazil -- 4.5%
Republic of Brazil:
250,000 11.625% due 4/15/04 239,687
650,000 9.375% due 4/7/08 520,813
320,000 10.125% due 5/15/27 249,200
- --------------------------------------------------------------------------------
1,009,700
- --------------------------------------------------------------------------------
Bulgaria -- 0.9%
258,000 Bulgaria Disc, 6.500% due 7/28/24 192,371
- --------------------------------------------------------------------------------
Canada -- 1.2%
295,000 CAD Government of Canada, 10.750% due 10/1/09 268,936
- --------------------------------------------------------------------------------
Colombia -- 0.3%
75,000 Republic of Colombia, 9.750% due 4/23/09 68,531
- --------------------------------------------------------------------------------
Croatia -- 0.5%
122,000 Republic of Croatia, Series A, 6.456% due 7/31/10 99,888
- --------------------------------------------------------------------------------
Germany -- 5.2%
Bundesrepublik Deutscheland:
623,776 EUR 6.500% due 10/14/05 707,320
100 EUR 6.000% due 1/5/06 111
376,323 EUR 6.500% due 7/4/27 429,098
- --------------------------------------------------------------------------------
1,136,529
- --------------------------------------------------------------------------------
Greece -- 3.7%
Hellenic Republic:
50,000,000 GRD 9.200% due 3/21/02 164,210
190,000,000 GRD 8.700% due 4/8/05 643,078
- --------------------------------------------------------------------------------
807,288
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
INVESCO GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
- --------------------------------------------------------------------------------
Jamaica -- 0.1%
37,000 Mechala Group, 12.750% due 12/30/99 $ 16,835
- --------------------------------------------------------------------------------
Korea -- 0.7%
145,000 Republic of Korea, 8.875% due 4/15/08 151,525
- --------------------------------------------------------------------------------
Malaysia -- 0.3%
65,000 Malaysia, 8.750% due 6/1/09 67,113
- --------------------------------------------------------------------------------
Mexico -- 3.0%
United Mexican States:
384,000 10.375% due 2/17/09 391,200
244,000 11.375% due 9/15/16 260,135
- --------------------------------------------------------------------------------
651,335
- --------------------------------------------------------------------------------
New Zealand -- 1.2%
500,000 Federal National Mortgage Association, 7.250% due
6/20/02 253,898
- --------------------------------------------------------------------------------
Panama -- 0.4%
85,000 Republic of Panama, 9.375% due 4/1/29 80,431
- --------------------------------------------------------------------------------
Philippines -- 0.5%
105,000 Republic of Philippines, 9.875% due 1/15/19 101,981
- --------------------------------------------------------------------------------
Russia -- 0.6%
25,019 Russian Ian, 5.96875% due 12/15/15 2,877
1,485,821 Russian Principal Loan, 6.625% due 12/15/20 138,367
5,000 Ministry Finance Russia, 3.000% due 5/14/06(b) 1,081
- --------------------------------------------------------------------------------
142,325
- --------------------------------------------------------------------------------
Turkey -- 0.5%
119,000 Republic of Turkey, 12.000% due 12/15/08 120,934
- --------------------------------------------------------------------------------
United Kingdom -- 1.5%
190,000 GBP London International Exhibition Centre, 7.710% due
11/25/16 243,182
150,000 DEM Colt Telecom Group PLC, 7.625% due 7/31/08 78,591
- --------------------------------------------------------------------------------
321,773
- --------------------------------------------------------------------------------
United States -- 68.2%
U.S. Treasury Notes:
3,780,000 5.625% due 5/15/08(a) 3,647,133
660,000 4.75% due 11/15/08(a) 597,062
270,000 6.375% due 08/15/27(a) 268,747
1,000,000 Aircraft Finance Trust, 8.000% due 5/15/24 903,750
250,000 Allied Waste North America, 10.000% due 8/1/9(b) 213,750
125,000 American Axle & Manufacturing Inc., 9.750% due
3/1/09(b) 124,063
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
INVESCO GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
- --------------------------------------------------------------------------------
United States -- 68.2% (continued)
250,000 American Plumbing & Mechanic, 11.625% due
10/15/08(b) $227,500
250,000 Ames Department Stores, 10.000% due 4/15/06 245,625
275,000 Atrium Cos. Inc. Series B, 10.500% due 5/1/09(b) 263,313
100,000 Blount Inc., 13.000% due 8/1/09(b) 102,625
90,000 CUC International Inc., 3.000% due 2/15/02 81,338
95,000 Chase Manhattan Corp., 6.250% due 1/15/06 90,013
250,000 Chattem Inc., 8.875% due 4/1/08 227,500
110,000 Circus Circus Enterprise, 9.250% due 12/1/05 110,550
360,000 Comcast Cable Communications, 6.200% due 11/15/08 332,550
225,000 Continental Mortgage Home Equity Loan Trust,
8.500% due 4/25/29 193,148
450,000 Crown Castle International Corp., step bond to yield
10.345% due 5/15/11 267,750
100,000 Drypers Corp., 10.250% due 6/15/07 83,000
65,000 Eagle Family Foods, 8.750% due 1/15/08(b) 49,888
250,000 Fairchild Corp., 10.750% due 4/15/09 214,375
65,000 Fisher Scientific International, 9.000% due 2/1/08 61,425
250,000 Florida Panthers Holdings, 9.875% due 4/15/09(b) 236,250
330,000 General Motors Acceptance Corp., 6.625% due 10/15/05 321,338
100,000 Gentek Inc., 11.000% due 8/1/09(b) 100,500
360,000 Green Tree Home Equity Loan Trust, 7.880% due
09/15/30 362,855
Hollywood Casino Corp.:
250,000 13.000% due 8/1/06(a)(b) 260,000
275,000 11.250% due 5/1/07(b) 277,406
100,000 Hollywood Park Inc., 9.250% due 2/15/07 96,500
300,000 Horseshoe Gaming Holding, 8.625% due 5/15/09(a)(b) 288,750
150,000 Intermedia Communications Inc., 9.500% due 3/1/09(b) 139,125
150,000 Level 3 Communications, 9.125% due 5/1/08 139,125
300,000 Lyondell Chemical Co., 10.875% due 5/1/09 300,750
250,000 Metris Cos. Inc., 10.000% due 11/1/04 228,325
250,000 Omnipoint Corp., 11.500% due 9/15/09(b) 262,500
250,000 Pillowtex Corp., 10.000% due 11/15/06(a) 87,500
75,000 Polaroid Corp., 11.500% due 2/15/06(a) 74,250
150,000 Primus Telecomm Group, 11.250% due 1/15/09(b) 138,375
250,000 Prison Realty Trust Inc., 12.000% due 6/1/06 247,500
150,000 R & B Falcon Corp., 12.250% due 3/15/06 158,250
200 Republic Technology, 13.750% due 7/15/09(c) 197,000
250,000 Rhythms Netconnections, 12.750% due 4/15/09(b) 225,938
150,000 Riddell Sports Inc., 10.500% due 7/15/07 126,750
320,000 Rite Aid Corp., 5.250% due 9/15/02(a) 215,200
250,000 Sequa Corp., 9.000% due 8/1/09 245,000
200,000 Stater Brothers Holdings, 10.750% due 8/15/06 204,000
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
INVESCO GLOBAL STRATEGIC INCOME PORTFOLIO
FACE
AMOUNT++ SECURITY VALUE
- --------------------------------------------------------------------------------
United States -- 68.2% (continued)
400,000 Telecorp PCS Inc., 11.625% due 4/15/04(b) $ 246,000
250,000 Triad Hospitals Holdings, 11.000% due 5/15/09(b) 245,937
100,000 United Stationers Supply, 8.375% due 4/15/08 90,500
60,000 Viasystems Inc., 9.750% due 6/1/07 48,600
250,000 Vintage Petroleum, 9.750% due 6/30/09(b) 251,875
200,000 Williams Communications Group Inc., 10.875% due
10/1/09 205,500
100,000 Willis Corroon Corp., 9.000% due 2/1/09 88,500
200 Winsloew Furniture Inc., 12.750% due 8/15/07(b)(c) 196,000
200,000 Woods Equipment Co., step coupon bond to yield
12.000% due 7/15/11(b) 184,000
100,000 Worldwide Fiber Inc., 12.000% due 8/1/09(b) 100,500
140,000 WMX Technologies, 2.000% due 1/24/05 115,150
- --------------------------------------------------------------------------------
15,010,854
- --------------------------------------------------------------------------------
Venezuela -- 1.5%
480,000 Republic of Venezuela, 9.250% due 9/15/27 322,204
- --------------------------------------------------------------------------------
TOTAL BONDS
(Cost-- $23,515,875) 21,486,169
================================================================================
CONVERTIBLE BONDS -- 1.6%
United States -- 1.6%
130,000 Goldman Sachs Group, 2.000% due 7/1/06 137,800
125,000 Hilton Hotels Corp., 5.000% due 5/15/06 97,656
135,000 Interpublic Group Co. Inc., 1.870% due 6/1/06 125,380
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(Cost-- $355,824) 360,836
================================================================================
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
PREFERRED STOCK -- 0.6%
1,000 Tribune Co., 3.140% (convertible until 5/15/29)
(Cost -- $129,193) 141,500
================================================================================
WARRANTS -- 0.1%
Argentina -- 0.1%
Republic of Argentina Warrants:
234 Expire 2/25/00+ 6,026
240 Expire 12/3/99+ 540
- --------------------------------------------------------------------------------
6,566
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
INVESCO GLOBAL STRATEGIC INCOME PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Mexico -- 0.0%
24 United Mexico States Warrant, Expire 2/18/00+ $ 1,668
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $0) 8,234
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $24,000,892*) $ 21,996,739
================================================================================
++ Face amount indicated in U.S. dollars unless otherwise indicated.
(a) All or a portion of this security is on loan (See Note 9).
(b) 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.
(c) Units represent $1,000 Sr. Note and one attached warrant.
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
Currency Abbreviations
- ----------------------
CAD -- Canadian Dollar
EUR -- Euro
GRD -- Greek Drachma
GBP -- British Pound
DEM -- German Mark
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESCO
Smith Barney Global Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
=============================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $188,378,914, $16,127,261
and $24,000,892, respectively) $ 303,764,631 $ 25,297,947 $ 21,996,739
Foreign currency, at value
(Cost -- $853,459, $32,110
and $174,543, respectively) 858,289 23,542 175,579
Collateral for securities on loan (Note 9) 18,489,683 1,549,300 4,695,148
Cash 584,178 142,635 701,301
Receivable for securities sold 3,270,165 -- 248,520
Receivable for Fund shares sold 734,721 10,144 --
Receivable for open forward foreign
currency contracts (Note 5) 33,869 -- --
Dividends and interest receivable 196,081 25,136 478,387
- ---------------------------------------------------------------------------------------------
Total Assets 327,931,617 27,048,704 28,295,674
- ---------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 9) 18,489,683 1,549,300 4,695,148
Payable for securities purchased 239,165 10,492 228,175
Management fees payable 210,705 16,880 17,836
Payable for open forward foreign
currency contracts (Note 5) 218 -- 350
Payable for Fund shares purchased 50 -- 5,251
Accrued expenses 116,887 43,510 58,161
- ---------------------------------------------------------------------------------------------
Total Liabilities 19,056,708 1,620,182 5,004,921
- ---------------------------------------------------------------------------------------------
Total Net Assets $ 308,874,909 $ 25,428,522 $ 23,290,753
=============================================================================================
NET ASSETS:
Par value of capital shares $ 183 $ 22 $ 23
Capital paid in excess of par value 209,506,869 21,324,356 25,851,356
Undistributed (overdistributed)
net investment income 1,862,808 (383,437) 1,545,396
Accumulated net realized loss from
security transactions and
foreign currencies (17,884,307) (4,674,661) (2,101,900)
Net unrealized appreciation (depreciation)
of investments and foreign currencies 115,389,356 9,162,242 (2,004,122)
- ---------------------------------------------------------------------------------------------
Total Net Assets $ 308,874,909 $ 25,428,522 $ 23,290,753
=============================================================================================
Shares Outstanding 18,251,663 2,159,857 2,279,254
- ---------------------------------------------------------------------------------------------
Net Asset Value $16.92 $11.77 $10.22
- ---------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESCO
Smith Barney Smith Barney Global
International Pacific Strategic
Equity Basin Income
Portfolio Portfolio Portfolio
=============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 2,530,828 $ 163,640 $ 785
Interest 752,376 23,980 1,976,534
Less: Foreign withholding tax (243,069) (20,408) (10,853)
- ---------------------------------------------------------------------------------------------
Total Investment Income 3,040,135 167,212 1,966,466
- ---------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,342,323 148,272 207,594
Custody 139,759 18,611 31,063
Shareholder communications 53,943 1,512 6,087
Audit and legal 39,070 25,427 29,151
Shareholder and system servicing fees 14,872 16,017 7,522
Directors' fees 5,818 2,770 4,027
Registration fees 3,144 963 --
Other 15,410 1,780 8,104
- ---------------------------------------------------------------------------------------------
Total Expenses 2,614,339 215,352 293,548
- ---------------------------------------------------------------------------------------------
Net Investment Income (Loss) 425,796 (48,140) 1,672,918
- ---------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 3 AND 5):
Realized Gain (Loss) From:
Security transactions (excluding
short-term securities) (4,523,663) 1,904,007 (1,197,445)
Foreign currency transactions (319,155) (290,280) (63,989)
- ---------------------------------------------------------------------------------------------
Net Realized Gain (Loss) (4,842,818) 1,613,727 (1,261,434)
- ---------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments
and Foreign Currencies:
Beginning of year 28,090,858 1,187,437 (1,409,300)
End of year 115,389,356 9,162,242 (2,004,122)
- ---------------------------------------------------------------------------------------------
Increase in Net Unrealized
Appreciation (Depreciation) 87,298,498 7,974,805 (594,822)
- ---------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments
and Foreign Currencies 82,455,680 9,588,532 (1,856,256)
- ---------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations $ 82,881,476 $ 9,540,392 $ (183,338)
=============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney International Equity Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 425,796 $ 859,431
Net realized loss (4,842,818) (8,006,219)
Increase (decrease) in net unrealized appreciation 87,298,498 (3,576,698)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 82,881,476 (10,723,486)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (882,111) --
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (882,111) --
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 535,212,306 304,843,574
Net asset value of shares issued for
reinvestment of dividends 882,111 --
Cost of shares reacquired (533,425,869) (288,950,485)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 2,668,548 15,893,089
- --------------------------------------------------------------------------------
Increase in Net Assets 84,667,913 5,169,603
NET ASSETS:
Beginning of year 224,206,996 219,037,393
- --------------------------------------------------------------------------------
End of year* $ 308,874,909 $ 224,206,996
================================================================================
* Includes undistributed net investment income of: $1,862,808 $882,524
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney Pacific Basin Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment loss $ (48,140) $ (4,718)
Net realized gain (loss) 1,613,727 (4,088,979)
Increase in net unrealized appreciation 7,974,805 2,049,336
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 9,540,392 (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 19,098,468 35,978,662
Net asset value of shares issued for
reinvestment of dividends -- 181,266
Cost of shares reacquired (15,938,642) (39,430,568)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions 3,159,826 (3,270,640)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 12,700,218 (5,496,267)
NET ASSETS:
Beginning of year 12,728,304 18,224,571
- --------------------------------------------------------------------------------
End of year* $ 25,428,522 $ 12,728,304
================================================================================
* Includes overdistributed net investment income of: $(383,437) $(119,780)
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended October 31,
INVESCO Global Strategic Income Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 1,672,918 $ 2,234,230
Net realized loss (1,261,434) (1,673,927)
Increase in net unrealized depreciation (594,822) (1,344,784)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Operations (183,338) (784,481)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (1,482,668) (1,618,401)
Net realized gains -- (1,549,073)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,482,668) (3,167,474)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 1,447,542 4,608,510
Net asset value of shares issued
for reinvestment of dividends 1,482,668 3,167,474
Cost of shares reacquired (6,103,981) (4,925,190)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (3,173,771) 2,850,794
- --------------------------------------------------------------------------------
Decrease in Net Assets (4,839,777) (1,101,161)
NET ASSETS:
Beginning of year 28,130,530 29,231,691
- --------------------------------------------------------------------------------
End of year* $ 23,290,753 $ 28,130,530
================================================================================
* Includes undistributed net investment income of: $1,545,396 $1,482,634
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney International Equity, Smith Barney Pacific Basin and INVESCO
Global Strategic Income (formerly known as 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 twelve 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, Van
Kampen Enterprise, formerly known as Van Kampen American Capital Enterprise
Portfolio, Smith Barney Aggressive Growth and Smith Barney Mid Cap 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 shareholder 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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, 1999, 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 International Equity
Portfolio, a portion of undistributed net investment income amounting to $413
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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH") which, in
turn, is a subsidiary of Citigroup Inc. ("Citigroup"), 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 INVESCO Global
Strategic Income Portfolio ("IGSI"). IGSI 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.
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 IGSI 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 IGSI.
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.
Smith Barney Private Trust Company, another subsidiary of Citigroup, acts as the
Fund's shareholder servicing agent.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. During the year ended
October 31, 1999, SSB received brokerage commissions in the the amounts of
$9,186 and $3,585 for SBIE and SBPB, respectively.
All officers and one Director of the Fund are employees of SSB.
3. Investments
For the year ended October 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SBIE SBPB IGSI
================================================================================
Purchases $108,986,129 $18,490,526 $31,750,684
- --------------------------------------------------------------------------------
Sales 94,516,497 16,156,408 33,662,738
================================================================================
At October 31, 1999, the gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
SBIE SBPB IGSI
================================================================================
Gross unrealized appreciation $120,729,984 $9,422,580 $ 198,998
Gross unrealized depreciation (5,344,267) (251,894) (2,203,151)
- --------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $115,385,717 $9,170,686 $(2,004,153)
================================================================================
4. Capital Loss Carryforward
At October 31, 1999, the Fund had capital loss carryforwards available to offset
future realized capital gains, if any, for Federal income tax purposes of
approximately $17,851,000, $4,675,000 and $2,005,000 for SBIE, SBPB and IGSI,
respectively. To the extent that these carryforward losses are used to offset
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 2007
================================================================================
SBIE $947,000 -- $2,625,000 $8,032,000 $6,247,000
- --------------------------------------------------------------------------------
SBPB -- -- 484,000 4,191,000 --
- --------------------------------------------------------------------------------
IGSI -- -- -- 852,000 1,153,000
================================================================================
5. Forward Foreign Currency Contracts
At October 31, 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:
Australian Dollar 552,019 $ 351,802 11/1/99 $ 3,699
Australian Dollar 101,863 64,917 11/3/99 825
Australian Dollar 318,378 202,903 11/4/99 (95)
Euro 659,417 693,116 11/1/99 4,844
British Pound 1,068,901 1,753,964 11/1/99 23,991
Singapore Dollar 136,726 82,177 11/2/99 (123)
Singapore Dollar 1,227,172 737,572 11/5/99 510
- --------------------------------------------------------------------------------
Total Unrealized Gain on Forward
Foreign Currency Contracts $33,651
================================================================================
INVESCO Global Strategic Income
To Sell:
Canadian Dollar 205,000 $139,370 1/20/00 $(350)
================================================================================
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,
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Portfolios record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transactions and
the Portfolios' basis in the contract.
The Portfolios enter into such contracts to hedge a portion of their portfolios.
The Portfolios bear the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At October 31, 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 October 31, 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 loss if the market price of the underlying security
declines.
During the year ended October 31, 1999, the Portfolios did not write any
options.
8. Reverse Repurchase Agreement
IGSI may enter into reverse repurchase agreement transactions for leveraging
purposes. A reverse repurchase agreement involves a sale by IGSI of securities
that it holds with an agreement by IGSI 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 IGSI may decline below the
repurchase price of the securities. IGSI will establish a segregated account
with its custodian, in which IGSI 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 October 31, 1999, IGSI 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.
- --------------------------------------------------------------------------------
34 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
At October 31, 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 $17,814,150
- --------------------------------------------------------------------------------
SBPB 1,476,202
- --------------------------------------------------------------------------------
IGSI 4,604,473
================================================================================
At October 31, 1999, the cash collateral received for these securities on loan
was invested as follows:
Smith Barney International Equity Portfolio
Security Description Value
================================================================================
Time Deposits:
Banco Bilbao, Milan, 5.410% due 11/1/99 $ 74,008
Bank of Austria, 5.438% due 11/1/99 882,220
Banque Bruxelles Lambert London, 5.406% due 11/1/99 882,220
Barclays Bank PLC, 5.410% due 11/1/99 882,220
BNP, 5.410% due 11/1/99 882,220
Caisse de Depots et Consign, Paris, 5.375% due 11/1/99 882,220
Commerzbank AG,Frankfurt, 5.390% due 11/1/99 882,220
Credit Commerciale de France, 5.375% due 11/1/99 882,220
Credit Suisse, London, 5.410% due 11/1/99 882,220
Den Danske-Copenhagen, 5.375% due 11/1/99 882,220
KBC, Brussels, 5.375% due 11/1/99 882,220
Nordeutsche Landesbank G.C., 5.410% due 11/1/99 882,220
Norwest Bank, Grand Cayman, 5.344% due 11/1/99 882,220
Paribas London, 5.406% due 11/1/99 882,220
Societe Generale, 5.390% due 11/1/99 882,220
Svenska Stockholm, 5.375% due 11/1/99 882,220
Toronto Dominion, London, 5.406% due 11/1/99 882,220
Commercial Paper:
Associates First Capital, 5.352% due 11/1/99 881,827
General Electric Credit, 5.332% due 11/1/99 21,359
General Motors Acceptance Corp., 5.352% due 11/1/99 881,827
New Center Asset Trust, 5.352% due 11/1/99 644,991
UBSFinance, Inc., 5.382% due 11/1/99 881,827
Repurchase Agreement:
Bear Stearns, 5.405% due 11/1/99 988,327
- --------------------------------------------------------------------------------
Total $18,489,683
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Smith Barney Pacific Basin Portfolio
Security Description Value
================================================================================
Time Deposits:
Banco Bilbao, Milan, 5.410% due 11/1/99 $ 6,201
Bank of Austria, 5.438% due 11/1/99 73,924
Banque Bruxelles Lambert London, 5.406% due 11/1/99 73,924
Barclays Bank PLC, 5.410% due 11/1/99 73,924
BNP, 5.410% due 11/1/99 73,924
Caisse de Depots et Consign, Paris, 5.375% due 11/1/99 73,924
Commerzbank AG, Frankfurt, 5.390% due 11/1/99 73,924
Credit Commerciale de France, 5.375% due 11/1/99 73,924
Credit Suisse, London, 5.410% due 11/1/99 73,924
Den Danske-Copenhagen, 5.375% due 11/1/99 73,924
KBC, Brussels, 5.375% due 11/1/99 73,923
Nordeutsche Landesbank G.C., 5.410% due 11/1/99 73,923
Norwest Bank, Grand Cayman, 5.344% due 11/1/99 73,923
Paribas London, 5.406% due 11/1/99 73,923
Societe Generale, 5.390% due 11/1/99 73,923
Svenska Stockholm, 5.375% due 11/1/99 73,923
Toronto Dominion, London, 5.406% due 11/1/99 73,923
Commercial Paper:
Associates First Capital, 5.352% due 11/1/99 73,891
General Electric Credit, 5.332% due 11/1/99 1,790
General Motors Acceptance Corp., 5.352% due 11/1/99 73,891
New Center Asset Trust, 5.352% due 11/1/99 54,045
UBSFinance, Inc., 5.382% due 11/1/99 73,890
Repurchase Agreement:
Bear Stearns, 5.405% due 11/1/99 82,815
- --------------------------------------------------------------------------------
Total $1,549,300
================================================================================
- --------------------------------------------------------------------------------
36 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
INVESCO Global Strategic Income Portfolio
Security Description Value
================================================================================
Time Deposits:
Banco Bilbao, Milan, 5.410% due 11/1/99 $ 5,549
Bank of Austria, 5.438% due 11/1/99 66,151
Banque Bruxelles Lambert London, 5.406% due 11/1/99 66,151
Barclays Bank PLC, 5.410% due 11/1/99 66,151
BNP, 5.410% due 11/1/99 66,151
Caisse de Depots et Consign, Paris, 5.375% due 11/1/99 66,151
Commerzbank AG,Frankfurt, 5.390% due 11/1/99 66,151
Credit Commerciale de France, 5.375% due 11/1/99 66,151
Credit Suisse, London, 5.410% due 11/1/99 66,151
Den Danske-Copenhagen, 5.375% due 11/1/99 66,151
KBC, Brussels, 5.375% due 11/1/99 66,151
Nordeutsche Landesbank G.C., 5.410% due 11/1/99 66,151
Norwest Bank, Grand Cayman, 5.344% due 11/1/99 66,151
Paribas London, 5.406% due 11/1/99 66,151
Societe Generale, 5.390% due 11/1/99 66,151
Svenska Stockholm, 5.375% due 11/1/99 66,151
Toronto Dominion, London, 5.406% due 11/1/99 66,151
Commercial Paper:
Associates First Capital, 5.352% due 11/1/99 66,121
General Electric Credit, 5.332% due 11/1/99 1,602
General Motors Acceptance Corp., 5.352% due 11/1/99 66,121
New Center Asset Trust, 5.352% due 11/1/99 48,363
UBS Finance, Inc., 5.382% due 11/1/99 66,121
Repurchase Agreement:
Bear Stearns, 5.405% due 11/1/99 74,107
- --------------------------------------------------------------------------------
Total $1,386,400
================================================================================
In addition to the above noted cash collateral, IGSI held securities collateral
with a market value of $3,308,748 as of October 31, 1999.
Income earned by the Portfolios from securities loaned for the year ended
October 31, 1999 was as follows:
================================================================================
SBIE $159,015
- --------------------------------------------------------------------------------
SBPB 7,467
- --------------------------------------------------------------------------------
IGSI 5,723
================================================================================
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
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
or other political, social or economic developments, all of which could affect
the market and/or credit risk of the investments. As of October 31, 1999, 68.8%
of SBPB's total investments were concentrated in Japan.
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 IGSI 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 October 31, 1999, the Portfolios did not hold any TBA securities.
12. Capital Shares
At October 31, 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:
Year Ended Year Ended
October 31, 1999 October 31, 1998
================================================================================
Smith Barney International Equity
Shares sold 37,523,494 22,047,632
Shares issued on reinvestment 59,764 --
Shares reacquired (37,128,444) (20,807,481)
- --------------------------------------------------------------------------------
Net Increase 454,814 1,240,151
================================================================================
Smith Barney Pacific Basin
Shares sold 2,264,030 5,029,477
Shares issued on reinvestment -- 29,142
Shares reacquired (1,971,974) (5,458,082)
- --------------------------------------------------------------------------------
Net Increase (Decrease) 292,056 (399,463)
================================================================================
INVESCO Global Strategic Income
Shares sold 132,083 363,584
Shares issued on reinvestment 144,792 274,478
Shares reacquired (562,926) (407,668)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (286,051) 230,394
================================================================================
- --------------------------------------------------------------------------------
38 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
Smith Barney International
Equity Portfolio 1999 1998 1997 1996 1995
================================================================================
Net Asset Value,
Beginning of Year $12.60 $13.23 $12.18 $10.48 $10.55
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) 0.02 0.05 0.01 0.02 0.03**
Net realized and
unrealized gain (loss) 4.35 (0.68) 1.05 1.69 (0.10)
- --------------------------------------------------------------------------------
Total Income (Loss)
From Operations 4.37 (0.63) 1.06 1.71 (0.07)
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.05) -- (0.01) (0.01) --
- --------------------------------------------------------------------------------
Total Distributions (0.05) -- (0.01) (0.01) --
- --------------------------------------------------------------------------------
Net Asset Value, End of Year $16.92 $12.60 $13.23 $12.18 $10.48
- --------------------------------------------------------------------------------
Total Return 34.73% (4.76)% 8.73% 16.36% (0.66)%
- --------------------------------------------------------------------------------
Net Assets, End of Year (000s)$308,875 $224,207 $219,037 $143,323 $53,538
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 1.00% 1.00% 1.01% 1.10% 1.44%
Net investment income (loss) 0.16 0.37 0.09 0.23 0.25
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 36% 34% 38% 41% 29%
================================================================================
(1) 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.
** Includes realized gains and losses from foreign currency transactions.
- --------------------------------------------------------------------------------
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:
Smith Barney Pacific
Basin Portfolio 1999 1998(1) 1997 1996 1995
================================================================================
Net Asset Value,
Beginning of Year $6.81 $8.04 $9.75 $8.95 $10.10
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(2)(0.14) -- (0.01) 0.08 (0.04)*
Net realized and
unrealized gain (loss) 5.10 (1.14) (1.64) 0.75 (1.11)
- --------------------------------------------------------------------------------
Total Income (Loss)
From Operations 4.96 (1.14) (1.65) 0.83 (1.15)
- --------------------------------------------------------------------------------
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 Year $11.77 $6.81 $8.04 $9.75 $8.95
- --------------------------------------------------------------------------------
Total Return 72.83% (14.09)% (17.02)% 9.26% (11.39)%
- --------------------------------------------------------------------------------
Net Assets, End of Year (000s) $25,429 $12,728 $18,225 $16,657 $7,122
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 1.30% 1.56% 1.38% 1.34% 1.83%
Net investment income (loss) (0.29) (0.03) (0.08) 0.47 (0.51)
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 99% 136% 156% 59% 28%
================================================================================
(1) Per share amounts have been calculated using the average shares method.
(2) The Manager waived all or part of its fees for the years ended October 31,
1996 and October 31, 1995. If such fees were not waived, the effect on the
net investment income (loss) and the expense ratios would have been as
follows:
Per Share (Increase) Expense Ratio
Decrease to Net Without Fee Waiver
Investment Income (Loss) and Custody Credits
------------------------ -------------------
1996 $0.02 1.58%
1995 (0.03) 2.23
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.
* Includes realized gains and losses from foreign currency transactions.
- --------------------------------------------------------------------------------
40 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
INVESCO Global Strategic
Income Portfolio 1999 1998 1997(1) 1996 1995
================================================================================
Net Asset Value,
Beginning of Year $10.97 $12.52 $12.45 $10.77 $9.95
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.75 0.84 0.75 0.74 0.64*
Net realized and
unrealized gain (loss) (0.85) (1.09) 0.36 1.36 0.28
- --------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.10) (0.25) 1.11 2.10 0.92
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.65) (0.66) (0.46) (0.42) (0.10)
Net realized gains -- (0.64) (0.58) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.65) (1.30) (1.04) (0.42) (0.10)
- --------------------------------------------------------------------------------
Net Asset Value, End of Year $10.22 $10.97 $12.52 $12.45 $10.77
- --------------------------------------------------------------------------------
Total Return (0.96)% (2.50)% 9.32% 20.07% 9.37%
- --------------------------------------------------------------------------------
Net Assets, End of Year (000s) $23,291 $28,131 $29,232 $19,152 $8,397
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 1.13% 1.03% 1.07% 1.23% 1.47%
Net investment income 6.43 7.31 6.05 6.87 6.44
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 135% 280% 161% 192% 295%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) The Manager waived all or part of its fees for the years ended October 31,
1996 and October 31, 1995. If such fees were not waived, the per share
effect on net investment income and expense ratios would have been as
follows:
Expense Ratio
Per Share Decreases Without Fee Waiver
to Net Investment Income and Custody Credits
------------------------ -------------------
1996 $0.02 1.38%
1995 0.04 1.93
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.
* Includes realized gains and losses from foreign currency transactions.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Smith Barney International Equity, Smith
Barney Pacific Basin and INVESCO Global Strategic Income Portfolios of Travelers
Series Fund Inc. as of October 31, 1999, the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended and the financial highlights for each of
the years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian. As to securities
purchased or sold but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Smith
Barney International Equity, Smith Barney Pacific Basin and INVESCO Global
Strategic Income Portfolios of Travelers Series Fund Inc. as of October 31,
1999, the results of their operations for the year then ended, the changes in
their net assets for each of the years in the two-year period then ended and the
financial highlights for each of the years in the five-year period then ended,
in conformity with generally accepted accounting principles.
[LOGO APPEARS HERE]
New York, New York
December 15, 1999
- --------------------------------------------------------------------------------
42 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes IGSI hereby designates for the fiscal year ended
October 31, 1999:
. A total of 18.60% of the ordinary dividends paid by IGSI from net
investment income are derived from Federal obligations and may be
exempt from taxation at the state level.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
[This page intentionally left blank]
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors
Victor K. Atkins
A. E. Cohen
Robert A. Frankel
Michael Gellert
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
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSB Citi Fund Management LLC
Travelers Investment Advisers, Inc.
Custodian
The Chase Manhattan Bank
Annuity Administration
Travelers Annuity Investor Services
5 State House Square
1 Tower Square
Hartford, Connecticut 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 INVESCO 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
IN0252 12/99
<PAGE>
Travelers Series Fund Inc.
MFS Total Return Portfolio
Travelers Managed Income
Portfolio
Smith Barney Money
Market Portfolio
ANNUAL REPORT
October 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series
Fund Inc.
[PHOTO]
HEATH B. MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the 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 year ended October 31, 1999. We hope you find this report
useful and informative. For your convenience, we have summarized the period's
prevailing economic and market conditions and outlined each Portfolio's
investment strategy. A detailed summary of performance and current holdings can
be found in the appropriate sections that follow.
Portfolio Highlights
MFS Total Return Portfolio
The primary investment objective of the MFS Total Return Portfolio is to obtain
above-average income 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.
For the year ended October 31, 1999, the Portfolio provided a total return of
7.62%. This compares unfavorably to the 25.66% 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 favorably to the negative 0.66%
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. (The S&P 500 is a capitalization-weighted measure of 500 widely held
common stocks listed on the New York Stock Exchange, American Stock Exchange and
over-the-counter market. Investors cannot invest directly in an index.)
A spike in energy prices and a higher-than-expected rise in the Producer Price
Index ("PPI") caused some alarm among many investors in early October 1999. Many
of the fears of higher inflation became tempered however, when the inflation
numbers for September came in right where most investors expected.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
The managers do not see any indication that inflation will accelerate further.
Also, they do not believe an inflation rate in the minimal annual range of 2% to
3% poses any long-term threat for the U.S. bond and stock markets. Some analysts
suggest that the nation's low level of unemployment may be cause for worry. As
companies compete for employees, they will have to pay higher wages. In the view
of these analysts, firms' higher wage costs may ultimately mean higher prices
for consumers. Yet, these fears were at least temporarily put to rest when the
U.S. Labor Department reported in late October that the employment cost index
had risen only 0.8% in the third quarter. The index, which tracks companies'
wage and benefit expenses, had risen more sharply in the second quarter of 1999,
when it climbed 1.1%. Investors celebrated that news, along with reports of
strong economic growth. In the third quarter of 1999, the U.S. economy grew 4.8%
faster than it had in the same quarter of 1998. Signs of a healthy economy, with
few inflationary pressures, contributed to a mini-rally in stocks in late
October.
The managers believe the rest of 1999 may prove to be a good year for stocks.
They think the profits for the stocks in the S&P 500 in the second half of 1999
should be up 15% to 20% from what they were in the second half of 1998. Earnings
in the second half of 1998 were affected by the economic crisis in Asia.
The United States may also benefit as international economies, both in the
developed and emerging markets, recover. The potential of higher interest rates
is a concern, but the managers believe productivity gains should keep a lid on
inflation and interest rates. In industries across the board, the investment
team is finding that many companies are having trouble raising consumer prices.
Still, some companies have been able to realize substantial profit increases
because of productivity gains from their investments in technology. The managers
also think that the Internet may also help corporations as they purchase goods
and services at lower prices than they could through traditional channels.
The managers continue to favor technology, including the software, networking
and semiconductor industries. They anticipate that in the fourth quarter of this
year, many companies will stop buying and installing new software as they
prepare for Y2K. Moreover, they think the arrival of the new year will unleash a
lot of pent-up demand for software. Some of the semiconductor firms have done
extremely well as demand for their products has continued to rise. The
investment team also likes the wireless communications industry because of the
tremendous global demand for cellular phones. This benefits the cellular
companies as well as companies that make the handsets and the semiconductor
chips used in the phones.
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
Finally, the managers like the leisure sector, especially radio and cable TV
companies. Consolidation has helped the radio industry. Stations are also
benefiting from the Internet because of all the "dot com" companies that
advertise their Web sites on radio. The Internet has become a boon for cable TV
companies, as well, because they are providing Internet access through the
coaxial cables that already exist in most people's homes.
The managers' allocation to stocks has increased gradually in 1999 and now
comprises almost 60% of Portfolio holdings. Their goal is to keep the allocation
as close as possible to 60% stocks and 40% bonds. The performance strategy is to
generally depend on successful stock investments, with the bond portion helping
to stabilize principal during market fluctuations. Companies whose stocks are
trading at a discount are selected, although the managers have chosen them
precisely because they believe their fundamentals suggested such discounts were
not warranted. The stocks are usually sold when their valuations match their
peers.
Travelers Managed Income Portfolio
As you may know, 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
management change.
For the year ended October 31, 1999, the Travelers Managed Income Portfolio
returned 1.75%. In comparison, the Lehman Intermediate Government/Corporate Bond
Index returned a negative 0.66%. (The Lehman Intermediate Government/Corporate
Bond Index is a broad measure of the performance of intermediate (one-to-ten
year) government and corporate fixed-rate debt issues.)
Major bond markets began to stabilize following the upheavals triggered by
Russia's debt default in August 1998. Escalating concerns of how the fallout
might affect the U.S. and European economies led many investors to avoid risk
and shift assets into government securities such as U.S. Treasury bonds. As a
result, the yields of many fixed-income securities widened relative to U.S.
Treasury securities.
As the recovery of the global economy became apparent, market interest rates
began to rise. Moreover, the U.S. economy continued its expansion, increasing
concerns regarding inflationary pressures. In a preemptive strike against
inflation, the Federal Reserve Board ("Fed") raised short-term interest rates on
June 30, 1999 by 25 basis points and on August 24, 1999 by another 25 basis
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
points. (The Fed subsequently raised short-term interest rates an additional 25
basis points on November 16, 1999.)
The actions of the Fed, effectively "taking back" last year's rate decreases,
negatively impacted overall bond markets. However, the Portfolio's managers are
confident that their investment strategy of seeking credits that, over time,
will provide more potential yield in addition to purchasing fixed-income
securities with good return characteristics, have contributed positively to the
Portfolio's performance versus the benchmark.
Since assuming management responsibility, TAMIC has made a number of changes to
the Portfolio 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 the
sensitivity to interest rate volatility.) In addition, the average credit
quality was increased from a mid-"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.
While no guarantees can be made, the managers believe this restructuring of the
Portfolio should continue to provide incremental returns versus the benchmark.
Going forward, the managers do not believe that Y2K concerns will have a
significant impact on the fixed-income markets and are confident that their
investment strategy is prudent given present worldwide economic conditions.
Smith Barney Money Market Portfolio
The primary investment objective of the Smith Barney Money Market Portfolio is
to obtain maximum current income and preservation of capital. 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.
The latest economic data indicates that the U.S. economy continues to grow
rapidly, but with little indication of significant inflation. The Gross Domestic
Product ("GDP") grew at a 4.8% annual rate in the third quarter of 1999. The
factors contributing to this growth remain similar to what we reported to you
earlier this year, namely, healthy consumer demand and strong business
investment. However, we see the housing market taking a breather due to slightly
higher mortgage rates.
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
The Federal Open Market Committee ("FOMC") lowered short-term interest rates 75
basis points in the second half of 1998 in the wake of a global economic
slowdown. (The FOMC sets interest rates and credit policies for the Federal
Reserve System, the United States' central bank.) Throughout 1999, the picture
has changed dramatically and the Fed has countered with three, 25-basis-point
interest rate hikes.
Money market issuance was fairly strong in the third quarter of 1999. With
January 2000 approaching, a great deal of money market issuance has already been
completed due to Y2K concerns, more so this year than any previous year.
The short-term yield curve remains in an upward slope, with one-year securities
about 100 basis points over the targeted funds rate. (The yield curve shows the
difference between short- and long-term rates. A basis point is a measure of
fluctuation of an investment, equal to 1/100 of one percent or 0.01%.) Beyond
three months, the yield curve is fairly flat and we continue to maintain a short
average maturity in the Portfolio in anticipation of higher rates.
In closing, thank you for investing in the Travelers Series Fund Inc. We look
forward to helping you pursue your investment goals in the years ahead.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
November 16,1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
MFS Total Return Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Year Ended of Year Year Dividends Distribution Returns+
================================================================================
10/31/99 $16.23 $16.22 $0.37 $0.88 7.62%
- --------------------------------------------------------------------------------
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 $1.26 $1.62
================================================================================
- --------------------------------------------------------------------------------
Travelers Managed Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
------------------
Beginning End of Income Capital Gains Total
Year Ended of Year Year Dividends Distribution Returns+
================================================================================
10/31/99 $11.65 $11.49 $0.29 $0.07 1.75%
- --------------------------------------------------------------------------------
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 $1.91 $0.24
================================================================================
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
Year Ended 10/31/99 7.62% 1.75%
- --------------------------------------------------------------------------------
Five Years Ended 10/31/99 14.40 6.72
- --------------------------------------------------------------------------------
6/16/94* through 10/31/99 13.28 6.31
================================================================================
- --------------------------------------------------------------------------------
6 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Cumulative Total Returns+
- --------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
6/16/94* through 10/31/99 95.57% 39.00%
================================================================================
+ 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Historical Performances (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 -- October 1999
MFS Total Return Lehman Brothers Government
Portfolio S&P 500 Index Corporate Bond Index
6/16/94 10,000 10,000 10,000
Oct-94 9,980 10,324 10,075
Oct-95 11,589 13,053 11,704
Oct-96 13,577 16,018 12,335
Oct-97 16,380 21,159 13,423
Oct-98 18,172 25,817 14,802
10/31/99 19,557 32,442 14,703
+ 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 October 31, 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. An investor cannot invest
directly in an index.
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 Annual Report to Shareholders
<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 -- October 1999
TBC Managed Income Portfolio Lehman Brothers Aggregate Bond Index
6/16/94 10,000 10,000
Oct-94 10,040 10,052
Oct-95 11,313 11,626
Oct-96 11,835 12,305
Oct-97 12,923 13,399
Oct-98 13,661 14,651
10/31/99 13,900 14,730
+ 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 October 31, 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. An investor cannot invest directly in an index.
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. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
================================================================================================================
COMMON STOCK -- 48.7%
<S> <C> <C>
Aerospace -- 0.4%
43,006 Raytheon Co., Class A Shares $ 1,179,977
25,800 United Technologies Corp. 1,560,900
- -------------------------------------------------------df--------------------------------------------------------
2,740,877
- -----------------------------------------------------------------------------------------------------------------
Automotive -- 0.9%
151,400 Delphi Automotive Systems Corp. (a) 2,488,637
54,900 Ford Motor Co. 3,012,637
- -----------------------------------------------------------------------------------------------------------------
5,501,274
- -----------------------------------------------------------------------------------------------------------------
Banks & Credit Companies -- 2.5%
64,599 Bank of America Corp. 4,158,561
100,400 Bank of New York Co., Inc. 4,204,250
6,700 National City Corp. 197,650
82,000 PNC Bank Corp. 4,889,250
18,900 State Street Corp. 1,438,763
20,300 Wells Fargo Co. 971,863
- -----------------------------------------------------------------------------------------------------------------
15,860,337
- -----------------------------------------------------------------------------------------------------------------
Business Machines -- 2.3%
40,800 Hewlett-Packard Co. 3,021,750
48,200 International Business Machines Corp. 4,741,675
74,400 Motorola Inc. 7,249,350
- -----------------------------------------------------------------------------------------------------------------
15,012,775
- -----------------------------------------------------------------------------------------------------------------
Business Services -- 0.3%
22,800 CVS Trust Automatic Common Exchange Securities 1,744,200
- -----------------------------------------------------------------------------------------------------------------
Cellular Phones -- 0.6%
33,200 Telephone & Data Systems Inc. 3,826,300
- -----------------------------------------------------------------------------------------------------------------
Chemicals -- 1.2%
8,700 Dow Chemical Co. 1,028,775
102,200 Engelhard Corp. 1,801,275
25,700 PPG Industries Inc. 1,558,063
86,800 Rohm & Haas Co. 3,320,100
- -----------------------------------------------------------------------------------------------------------------
7,708,213
- -----------------------------------------------------------------------------------------------------------------
Communication Services -- 4.6%
25,500 AT&T Corp. 1,192,125
15,000 Alltel Corp. 1,248,750
40,600 Bell Atlantic Corp. (b) 2,636,462
150,700 GTE Corp. 11,302,500
43,100 Nippon Telegraph & Telephone Corp., Sponsored ADR 3,334,863
125,424 SBC Communications Inc. 6,388,785
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
==================================================================================================
Communication Services -- 4.6% (continued)
<S> <C> <C>
49,100 Sprint Corp. (FON Group) $ 3,648,744
- --------------------------------------------------------------------------------------------------
29,752,229
- --------------------------------------------------------------------------------------------------
Conglomerates -- 1.9%
126,400 Allied Signal Inc. 7,196,900
102,800 TRW Inc. 4,407,550
17,456 Tyco International Ltd. 697,149
- --------------------------------------------------------------------------------------------------
12,301,599
- --------------------------------------------------------------------------------------------------
Consumer Goods & Services -- 0.7%
72,000 Fortune Brands Inc. 2,551,500
32,900 Kimberly-Clark Corp. 2,076,813
- --------------------------------------------------------------------------------------------------
4,628,313
- --------------------------------------------------------------------------------------------------
Electrical Equipment - Utilities -- 1.3%
85,600 Emerson Electric Co. 5,141,350
50,000 FirstEnergy Corp. 1,303,125
7,000 General Electric Co. 948,937
28,800 W.W. Grainger Inc. 1,220,400
- --------------------------------------------------------------------------------------------------
8,613,812
- --------------------------------------------------------------------------------------------------
Entertainment -- 1.7%
4,000 Eastman Kodak Co. 275,750
20,400 MediaOne Group Inc. (a) 1,449,675
23,000 MGM Grand Inc. (a) 1,173,000
83,800 Time Warner Inc. 5,839,813
71,500 Walt Disney Co. 1,885,812
- --------------------------------------------------------------------------------------------------
10,624,050
- --------------------------------------------------------------------------------------------------
Financial Institutions -- 2.2%
83,400 A.G. Edwards Inc. 2,507,212
18,100 American Express Co. 2,787,400
22,300 Federal Home Loan Mortgage Corp. 1,205,594
106,800 Mellon Financial Corp. 3,944,925
22,000 Merrill Lynch & Co., Inc. 1,727,000
20,000 Morgan Stanley Dean Witter & Co. 2,206,250
- --------------------------------------------------------------------------------------------------
14,378,381
- --------------------------------------------------------------------------------------------------
Food & Beverages -- 2.0%
240,266 Archer-Daniels-Midland Co. 2,958,275
23,400 Bestfoods 1,374,750
31,400 General Mills Inc. 2,737,687
24,800 Hershey Foods Corp. 1,252,400
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
===================================================================================================
Food & Beverages -- 2.0% (continued)
<S> <C> <C>
29,600 McCormick & Co., Inc. $ 928,700
47,200 Quaker Oats Co. 3,304,000
- ---------------------------------------------------------------------------------------------------
12,555,812
- ---------------------------------------------------------------------------------------------------
Forest & Paper Products -- 1.5%
72,400 Bowater Inc. 3,801,000
69,500 Champion International Corp. 4,017,969
27,300 International Paper Co. 1,436,663
3,600 Weyerhaeuser Co. 214,875
- ---------------------------------------------------------------------------------------------------
9,470,507
- ---------------------------------------------------------------------------------------------------
Gaming -- 0.5%
99,000 Harrah's Entertainment, Inc. 2,864,812
- ---------------------------------------------------------------------------------------------------
Health Care -- 1.5%
54,600 American Home Products Corp. 2,852,850
8,900 Baxter International Inc. 577,388
11,900 Bristol-Myers Squibb Co. 914,069
49,900 Pharmacia & Upjohn Inc. 2,691,481
38,600 Smithkline Beecham, ADR 2,470,400
- ---------------------------------------------------------------------------------------------------
9,506,188
- ---------------------------------------------------------------------------------------------------
Hotels & Motels -- 0.1%
76,600 Hilton Hotels Corp. 708,550
- ---------------------------------------------------------------------------------------------------
Insurance -- 6.1%
83,100 Allstate Corp. 2,389,125
20,000 American International Group, Inc. 2,058,750
128,200 AXA Financial Inc. 4,110,412
66,900 Chubb Corp. 3,671,137
55,600 CIGNA Corp. 4,156,100
125,400 Hartford Financial Services Group, Inc. 6,497,288
36,250 Jefferson-Pilot Corp. 2,721,016
132,000 Lincoln National Corp. 6,088,500
80,400 ReliaStar Financial Corp. 3,452,175
136,300 St. Paul Cos. 4,361,600
- ---------------------------------------------------------------------------------------------------
39,506,103
- ---------------------------------------------------------------------------------------------------
Metals & Minerals -- 0.3%
21,300 Alcoa Inc. 1,293,975
52,200 Consol Energy Inc. 606,825
- ---------------------------------------------------------------------------------------------------
1,900,800
- ---------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
===================================================================================================
<S> <C> <C>
Oil Production -- 8.0%
20,400 Apache Corp. $ 795,600
208,206 BP Amoco PLC, ADR 12,023,896
35,300 Chevron Corp. 3,223,331
175,600 Coastal Corp. 7,397,150
128,400 Conoco Inc., Class A Shares 3,522,975
18,800 Exxon Corp. 1,392,375
108,800 Halliburton Co. 4,100,400
57,700 Mobil Corp. 5,568,050
65,300 National Fuel Gas Co. 3,191,538
192,700 Noble Drilling Corp. (a) 4,275,531
47,000 Royal Dutch Petroleum Co., ADR 2,817,063
12,900 Texaco Inc. 791,738
72,800 Unocal Corp. 2,511,600
- ---------------------------------------------------------------------------------------------------
51,611,247
- ---------------------------------------------------------------------------------------------------
Printing & Publishing -- 1.4%
71,800 Gannett Co., Inc. 5,537,575
90,200 The New York Times Co., Class A Shares 3,630,550
- ---------------------------------------------------------------------------------------------------
9,168,125
- ---------------------------------------------------------------------------------------------------
Railroads -- 0.4%
41,800 Burlington Northern Santa Fe Corp. 1,332,375
30,000 Canadian National Railway Co. 915,000
9,500 Norfolk Southern Corp. 232,156
- ---------------------------------------------------------------------------------------------------
2,479,531
- ---------------------------------------------------------------------------------------------------
Real Estate -- 0.0%
8,000 Boston Properties, Inc. 238,500
- ---------------------------------------------------------------------------------------------------
Retail Stores -- 0.8%
40,810 Albertson's Inc. 1,481,913
38,800 Dayton-Hudson Corp. 2,507,450
34,900 Safeway Inc. 1,232,406
- ---------------------------------------------------------------------------------------------------
5,221,769
- ---------------------------------------------------------------------------------------------------
Special Products & Services -- 1.5%
42,500 Deere & Co. 1,540,625
94,200 McDonald's Corp. 3,885,750
25,000 Sherwin-Williams Co. 559,375
40,500 Williams Cos. Inc. 1,518,750
74,300 Xerox Corp. 2,080,400
- ---------------------------------------------------------------------------------------------------
9,584,900
- ---------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
===================================================================================================
Utilities - Electric -- 2.2%
<S> <C> <C>
77,000 Carolina Power & Light Co. $ 2,656,500
28,100 CMS Energy Corp. 1,036,187
56,500 Duke Energy Corp. 3,192,250
46,600 GPU Inc. 1,581,487
75,900 Pinnacle West Capital Corp. 2,798,813
12,100 Sempra Energy 247,294
56,100 Sierra Pacific Resources 1,262,250
6,800 Southern Co. 180,625
25,000 Texas Utilities Co. 968,750
- ---------------------------------------------------------------------------------------------------
13,924,156
- ---------------------------------------------------------------------------------------------------
Utilities - Gas -- 1.8%
60,400 Columbia Energy Group 3,926,000
52,700 Eastern Enterprises 2,694,287
76,100 El Paso Energy Corp. 3,120,100
20,000 UGI Corp. 480,000
49,200 Washington Gas Light Co. 1,337,625
- ---------------------------------------------------------------------------------------------------
11,558,012
- ---------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $288,492,901) 312,991,372
===================================================================================================
CONVERTIBLE PREFERRED STOCK -- 2.3%
Consumer Goods & Services -- 0.6%
25,500 Newell Financial Trust, 5.250% 1,106,062
31,000 Newell Financial Trust, 5.250% (b) 1,344,625
24,100 Seagram Co. Ltd., 7.500% 1,191,444
- ---------------------------------------------------------------------------------------------------
3,642,131
- ---------------------------------------------------------------------------------------------------
Containers & Packaging -- 0.1%
25,000 Owens-Illinois Inc, 4.750% 825,000
- ---------------------------------------------------------------------------------------------------
Insurance -- 0.4%
90,200 Lincoln National Corp., 7.750% 2,260,637
- ---------------------------------------------------------------------------------------------------
Oil & Gas -- 0.1%
19,200 Apache Corp., 6.500% 686,400
- ---------------------------------------------------------------------------------------------------
Railroad -- 0.0%
4,300 Union Pacific Capital Trust, 6.250% 210,163
- ---------------------------------------------------------------------------------------------------
Utilities - Electric -- 0.7%
40,000 CMS Energy Corp. 8.750% 1,540,000
30,000 NiSource Inc., 7.750% 1,233,750
33,500 Texas Utilities Co., 9.250% 1,702,219
- ---------------------------------------------------------------------------------------------------
4,475,969
- ---------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
===================================================================================================
Utilities - Gas -- 0.4%
<C> <C> <C>
46,500 El Paso Energy Corp., 4.750% $ 2,464,500
- ---------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost -- $15,361,190) 14,564,800
===================================================================================================
PREFERRED STOCK -- 0.1%
Printing & Publishing -- 0.1%
16,000 NB Capital Corp., 8.350%
(Cost -- $400,000) 374,000
===================================================================================================
FOREIGN COMMON STOCK -- 3.2%
France -- 0.4%
19,400 AXA Financial, Inc. 2,734,491
- ---------------------------------------------------------------------------------------------------
Netherlands -- 1.6%
119,300 Akzo Nobel N.V. 5,133,744
84,921 ING Groep N.V. 5,005,750
- ---------------------------------------------------------------------------------------------------
10,139,494
- ---------------------------------------------------------------------------------------------------
Switzerland -- 0.7%
2,450 Nestle S.A. 4,727,308
- ---------------------------------------------------------------------------------------------------
United Kingdom -- 0.5%
314,800 Diageo PLC 3,192,320
- ---------------------------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(Cost -- $20,995,692) 20,793,613
===================================================================================================
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
CORPORATE BONDS -- 20.6%
Airlines -- 1.1%
<S> <C> <C> <C>
$ 579,000 AAA American Airlines Inc., 6.855% due 4/15/09 575,353
1,895,000 AA- Atlas Air Inc., 7.200% due 1/2/19 1,753,443
Continental Airlines Inc.:
364,565 BBB+ 9.500% due 10/15/13 381,336
92,994 BBB 10.220% due 7/2/14 98,054
1,125,253 AA+ 6.648% due 3/15/19 1,027,131
1,233,471 AA+ 6.545% due 8/2/20 1,130,341
Jet Equipment Trust(b):
250,000 A+ 9.410% due 6/15/10 271,675
182,487 A+ 8.640% due 11/1/12 189,367
100,000 BBB 10.690% due 11/1/13 113,770
300,000 BBB 11.440% due 11/1/14 357,480
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
Airlines -- 1.1% (continued)
<S> <C> <C> <C>
$ 1,498,732 AA Northwest Airlines, 6.810% due 2/1/20 $ 1,369,542
- ---------------------------------------------------------------------------------------------------
7,267,492
- ---------------------------------------------------------------------------------------------------
Automotive -- 1.6%
785,000 BBB AMERCO, 7.850% due 5/15/03 776,169
4,865,000 A+ DaimlerChrysler AG, 6.630% due 9/21/01 4,867,267
Federal-Mogul Corp.:
500,000 BB+ 7.500% due 7/1/04 475,000
671,000 BB+ 7.375% due 1/15/06 617,320
Ford Motor Co.:
1,250,000 A 7.450% due 7/16/31 1,237,500
425,000 A 8.900% due 1/15/32 487,156
345,000 A General Motors Corp., 9.400% due 7/15/21 409,256
807,000 BB+ Lear Corp., 7.960% due 5/15/05 (b) 791,869
550,000 BBB TRW Inc., 7.125% due 6/1/09 (b) 531,437
- ---------------------------------------------------------------------------------------------------
10,192,974
- ---------------------------------------------------------------------------------------------------
Bank/Finance -- 5.2%
Aristar Inc.:
801,000 A- 7.375% due 9/1/04 804,004
836,000 A- 7.250% due 6/15/06 821,370
Associates Corp.:
510,000 AA- 5.750% due 11/1/03 488,325
1,511,000 AA- 5.500% due 2/15/04 1,431,672
282,000 A Bear Stearns Co. Inc., 6.700% due 8/1/03 277,417
1,425,000 BB- Beaver Valley Funding Corp., 9.000% due 6/1/17 1,498,032
400,000 BB+ Capital One Financial Corp., 7.250% due 12/1/03 394,000
400,000 BB+ Colonial Capital II, 8.920% due 1/15/27 370,000
540,000 A Countrywide Home Loans, Inc., 6.250% due 4/15/09 492,075
925,000 A Duke Capital Corp., 7.250% due 10/1/04 931,937
280,000 BBB- First Empire Capital Trust, 8.234% due 2/1/27 269,850
Ford Motor Credit:
4,235,000 A 5.750% due 2/23/04 4,049,719
3,064,000 A 6.700% due 7/16/04 3,033,360
762,000 AAA GE Capital Corp., 8.625% due 6/15/08 (b) 842,963
General Motors Acceptance Corp.:
652,000 A 5.950% due 3/14/03 634,885
917,000 A 6.150% due 4/5/07 865,419
4,000,000 A+ The Goldman Sachs Group, Inc., 5.900% due 1/15/03 (b) 3,870,000
801,000 BB+ Green Tree Financial Corp., 10.250% due 6/1/02 833,040
GS Escrow Corp.:
2,085,000 BB+ 6.750% due 8/1/01 2,032,875
1,470,000 BB+ 7.125% due 8/1/05 1,356,075
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
Bank/Finance -- 5.2% (continued)
<S> <C> <C> <C>
$ 588,000 A+ John Deere Capital Corp., 7.000% due 10/15/02 $ 590,940
3,000,000 BBB Marlin Water Trust, 7.090% due 12/15/01 (b) 2,962,500
84,455 BBB- Midland Funding Corp. I, 10.330% due 7/23/02 89,206
109,000 BB Midland Funding Corp. II, 11.750% due 7/23/05 119,082
Providian National Bank:
500,000 BBB- 6.700% due 3/15/03 484,375
2,000,000 BBB- 6.650% due 2/1/04 1,930,000
658,000 B+ 9.525% due 2/1/27 (b) 597,957
874,000 BBB+ TXU Eastern Funding, 6.150% due 5/15/02 (b) 852,150
600,000 BBB- Washington Mutual Capital Trust, 8.375% due 6/1/27 582,750
- ---------------------------------------------------------------------------------------------------
33,505,978
- ---------------------------------------------------------------------------------------------------
Chemicals & Minerals -- 0.3%
2,133,000 BB Lyondell Chemical Co., 9.625% due 5/1/07 2,133,000
- ---------------------------------------------------------------------------------------------------
Collateralized Mortgage Obligations -- 1.2%
795,208 AAA Beneficial Mortgage Corp., 5.500% due 9/28/37 (d) 789,475
284,393 Baa2*Blackrock Capital Finance L.P., 7.750% due 9/25/26 (b) 156,417
2,150,000 A CRIIMI MAE Commercial Mortgage Trust,
7.000% due 3/2/11 (b) 1,808,687
1,479,000 AAA Ford Credit Auto Owner Trust, 6.200% due 4/15/02 1,476,227
377,000 N/R Illinois Power Special Purpose Trust, 5.260% due 6/25/03 372,781
Residential Accredit Loans, Inc.:
1,300,000 AAA 7.000% due 3/25/28 1,237,437
1,740,000 AAA 6.750% due 10/25/28 1,647,606
- ---------------------------------------------------------------------------------------------------
7,488,630
- ---------------------------------------------------------------------------------------------------
Computer Services -- 0.0%
231,000 BB+ Unisys Corp., 12.000% due 4/15/03 249,480
- ---------------------------------------------------------------------------------------------------
Consumer Goods & Services -- 0.2%
112,000 BBB- Jones Apparel, 6.250% due 10/1/01 (b) 109,620
280,000 BBB Nabisco Inc., 6.375% due 2/1/05 267,050
1,013,000 BBB- Protection One Alarm, 7.375% due 8/15/05 587,540
430,000 BBB- Tommy Hilfiger USA, 6.500% due 6/1/03 412,800
- ---------------------------------------------------------------------------------------------------
1,377,010
- ---------------------------------------------------------------------------------------------------
Entertainment/Media -- 2.0%
1,556,000 BBB- Comcast Corp., 9.125% due 10/15/06 1,622,130
1,803,000 BBB- Hearst Argyle TV Inc., 7.500% due 11/15/27 1,620,446
Joseph Seagram & Sons Inc.:
1,066,000 BBB- 5.790% due 4/15/01 1,051,343
1,565,000 BBB- 6.400% due 12/15/03 1,516,094
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(c) SECURITY VALUE
==================================================================================================
Entertainment/Media -- 2.0% (continued)
<S> <C> <C> <C>
$ 1,073,000 BBB- News America Holdings, Inc., 6.703% due 5/21/04 $ 1,048,858
Time Warner Inc.:
5,407,000 BBB 6.100% due 12/30/01 (b) 5,346,171
705,000 BBB 10.150% due 5/1/12 851,287
- --------------------------------------------------------------------------------------------------
13,056,329
- --------------------------------------------------------------------------------------------------
Forest & Paper Products -- 0.2%
Georgia-Pacific Corp.:
308,000 BBB- 9.950% due 6/15/02 329,175
200,000 BBB- 9.875% due 11/1/21 214,750
287,000 BBB- 7.250% due 6/1/28 262,246
200,000 B+ US Timberlands Co., L.P., 9.625% due 11/15/07 182,500
80,000 BBB+ UPM-Kymmene Corp., 7.450% due 11/26/27 (b) 75,100
- --------------------------------------------------------------------------------------------------
1,063,771
- --------------------------------------------------------------------------------------------------
Gaming -- 0.1%
400,000 BBB- Circus Circus Enterprises, 6.700% due 11/15/96 377,000
- --------------------------------------------------------------------------------------------------
Insurance -- 0.5%
2,692,000 A AFLAC Inc., 6.500% due 4/15/09(b) 2,523,750
176,000 BBB Atlantic Mutual Insurance Co., 8.150% due 2/15/28 (b) 138,160
600,000 BBB+ Conseco Inc., 6.400% due 6/15/01 585,750
- --------------------------------------------------------------------------------------------------
3,247,660
- --------------------------------------------------------------------------------------------------
Oil/Oil Services -- 1.4%
1,294,000 Baa2*Coastal Corp., 5.900% due 5/15/04 1,245,475
1,486,000 BBB- McDermott Inc., 9.375% due 3/15/02 1,526,865
1,007,000 A- Northern Natural Gas, 7.000% due 6/1/11 (b) 964,203
1,548,000 BBB Occidental Petroleum Corp., 10.125% due 11/15/01 1,637,010
3,377,000 A- Phillips Petroleum Co., 7.000% due 3/30/29 3,119,504
216,000 BB+ Seagull Energy Corp., 7.500% due 9/15/27 167,940
115,000 BBB Ultramar Diamond Shamrock, 7.200% due 10/15/17 108,100
- --------------------------------------------------------------------------------------------------
8,769,097
- --------------------------------------------------------------------------------------------------
Railroad -- 0.2%
Union Pacific Corp.:
396,000 BBB- 5.780% due 10/15/01 388,080
875,000 BBB- 6.340% due 11/25/03 844,375
- --------------------------------------------------------------------------------------------------
1,232,455
- --------------------------------------------------------------------------------------------------
Retail Stores -- 0.9%
Federated Department Stores:
1,725,000 BBB+ 8.500% due 6/15/03 1,791,844
1,070,000 BBB+ 6.300% due 4/1/09 991,087
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
Retail Stores -- 0.9% (continued)
<S> <C> <C> <C>
Rite Aid Corp.:
$ 945,000 BBB- 6.000% due 10/1/03 (b) $ 708,750
313,000 BBB- 7.125% due 1/15/07 222,230
917,000 BBB Safeway Inc., 7.250% due 9/15/04 915,854
1,149,000 AA Wal-Mart Stores, 6.550% due 8/10/04 1,150,436
- ---------------------------------------------------------------------------------------------------
5,780,201
- ---------------------------------------------------------------------------------------------------
Telecommunications -- 1.8%
339,000 BBB AT&T Capital Corp., 6.250% due 5/15/01 336,882
2,258,000 AA- AT&T Corp., 6.500% due 3/15/29 2,006,798
1,600,000 BB- Century Communications Corp., zero coupon bond to yield
8.788% due 1/15/08 694,000
1,000,000 B FrontierVision L.P., 11.000% due 10/15/06 1,055,000
MCI Worldcom Inc.:
100,000 A- 8.875% due 1/15/06 105,000
412,000 A- 6.950% due 8/15/28 388,825
539,000 BB+ Qwest Communications International Inc.,
7.500% due 11/1/08 536,979
Sprint Capital Corp.:
1,992,000 BBB+ 5.875% due 5/1/04 1,914,810
857,000 BBB+ 6.375% due 5/1/09 807,723
1,676,000 BBB+ 6.900% due 5/1/19 1,569,155
1,825,000 AA- TCI Communications Inc., 9.650% due 3/31/27 2,057,687
- ---------------------------------------------------------------------------------------------------
11,472,859
- ---------------------------------------------------------------------------------------------------
Utilities -- 3.9%
CalEnergy Co., Inc.:
251,000 BBB- 6.960% due 9/15/03 246,607
10,000 BBB- 7.230% due 9/15/05 9,725
486,000 BBB- 7.630% due 10/15/07 489,645
5,000 BBB- 7.520% due 9/15/08 4,994
2,600,000 BBB- CE Generation LLC, 7.416% due 12/15/18 (b) 2,459,600
Cleveland Electric Illuminating Co.:
500,000 BB+ 7.880% due 11/1/17 (b) 489,375
703,000 BB+ 9.000% due 7/1/23 713,545
CMS Energy Corp.:
619,000 BB 8.000% due 7/1/01 617,453
2,482,000 BB 8.375% due 7/1/03 2,485,103
1,900,000 BB 6.750% due 1/15/04 1,788,375
Connecticut Lighting & Power Co.:
1,500,000 N/R 8.590% due 6/5/03 (b) 1,529,250
500,000 BBB- 7.875% due 10/1/24 506,875
135,000 BBB- El Paso Electric Co., 8.900% due 2/1/06 140,738
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
Utilities -- 3.9% (continued)
<S> <C> <C> <C>
$ 707,000 BBB+ Entergy Mississippi Inc., 6.200% due 5/1/01 $ 682,255
321,294 BBB- GG1B Funding Corp., 7.430% due 1/15/11 310,049
564,000 BBB Indiana Michigan Power, 6.875% due 7/1/04 547,785
MidAmerican Funding LLC:
780,000 BBB+ 5.850% due 3/1/01 (b) 772,200
440,000 BBB+ 6.927% due 3/1/29 (b) 391,600
Niagara Mohawk Power Corp.:
491,463 BBB- 7.250% due 10/1/02 492,078
310,756 BBB- 7.625% due 10/1/05 310,756
1,003,000 BBB 8.770% due 1/1/18 1,060,673
450,000 BBB+ 8.750% due 4/1/22 461,250
140,000 BBB+ 8.500% due 7/1/23 141,400
2,400,000 BBB- Step bond to yield 6.963% due 7/1/10 1,755,000
122,000 BB- North Atlantic Energy Service Co., 9.050% due 6/1/02 122,153
230,942 BB- Northeast Utilities, 8.580% due 12/1/06 231,809
Salton Sea Funding:
78,479 BBB 7.370% due 5/30/05 77,989
1,100,000 BBB 7.840% due 5/30/10 1,100,000
1,724,331 BBB+ Seabrook, 7.830% due 1/2/19 1,639,373
400,000 BBB Texas Gas Transmission Corp., 7.250% due 7/15/27 366,500
400,000 BB+ Toledo Edison Co., 7.875% due 8/1/04 404,500
100,000 BBB Utilicorp United Inc., 8.450% due 11/15/99 100,125
1,005,155 BBB- Waterford 3 Funding - Entergy, 8.090% due 1/2/17 992,591
1,013,000 BBB- Western Massachusetts Electric Co., 7.375% due 7/1/01 1,021,864
440,000 BBB- Williams Cos. Inc., 7.625% due 7/15/19 421,850
- ---------------------------------------------------------------------------------------------------
24,885,085
- ---------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost -- $138,099,381) 132,099,021
===================================================================================================
CONVERTIBLE CORPORATE BONDS -- 1.2%
Insurance -- 0.3%
2,500,000 A+ Loews Corp., 3.125% due 9/15/07 2,093,750
- ---------------------------------------------------------------------------------------------------
Specialty Products & Services -- 0.3%
Xerox Corp.:
2,290,000 A- 0.570% due 4/21/18 1,216,563
1,670,000 A- 0.570% due 4/21/18 (b) 887,188
- ---------------------------------------------------------------------------------------------------
2,103,751
- ---------------------------------------------------------------------------------------------------
Telecommunications -- 0.6%
3,450,000 A+ Bell Atlantic Financial Services, 4.250% due 9/15/05 3,622,673
- ---------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost -- $8,314,321) 7,820,174
===================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(c) SECURITY VALUE
===================================================================================================
FOREIGN BONDS -- 0.1%
Luxembourg -- 0.1%
<S> <C> <C> <C>
$ 816,000 AAA SunAmerica Life Insurance Co., 5.750% due 2/16/09
(Cost -- $800,583) $ 732,768
===================================================================================================
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 16.3%
U.S. Treasury Notes:
4,356,000 5.250% due 5/31/01 4,323,330
12,144,000 5.875% due 10/31/01 12,164,888
880,000 6.000% due 8/15/04 882,438
9,319,000 6.000% due 8/15/09 9,311,079
U.S. Treasury Bonds:
13,254,000 9.875% due 11/15/15 17,668,112
1,672,000 5.250% due 11/15/28 1,437,318
1,955,000 5.250% due 2/15/29 1,693,577
13,493,000 6.125% due 8/15/29 13,445,640
1,855,000 Federal Home Loan Bank, 5.700% due 3/3/09 1,721,477
Federal National Mortgage Association (FNMA):
475,000 5.250% due 1/15/09 428,193
1,400,000 5.722% due 2/1/09 1,270,500
1,575,000 6.625% due 9/15/09 1,566,401
13,618,526 6.500% due 8/1/28 to 12/1/28 13,057,692
300,352 8.000% due 9/1/28 306,170
576,887 6.500% due 1/1/29 553,092
899,766 8.000% due 9/1/29 917,195
Government National Mortgage Association
(GNMA):
1,570,611 7.500% due 8/15/25 to 12/15/25 1,575,511
7,028,282 8.000% due 6/20/25 to 7/15/26 7,177,822
2,006,801 7.500% due 3/15/26 to 11/15/26 2,013,060
4,135,722 7.500% due 2/15/27 to 12/15/27 4,148,624
4,907,081 7.000% due 4/1/28 to 10/15/28 4,815,074
3,407,816 6.500% due 12/15/28 3,257,633
1,030,157 6.500% due 5/15/29 to 6/15/29 984,758
- ---------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
AGENCIES & OBLIGATIONS
(Cost -- $106,067,105) 104,719,584
===================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
===================================================================================================
SHORT-TERM SECURITIES -- 7.5%
<S> <C> <C>
$18,700,000 Federal Home Loan Bank, 5.160% due 11/1/99 $ 18,694,639
Federal Home Loan Mortgage Corp.:
9,800,000 5.150% due 11/1/99 9,797,196
12,000,000 5.120% due 11/8/99 11,984,640
8,120,000 5.100% due 11/18/99 8,098,144
- ---------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES
(Cost -- $48,574,619) 48,574,619
===================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $627,105,792**) $642,669,951
===================================================================================================
</TABLE>
(a) Non-income producing security.
(b) Security is 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.
(c) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(d) Variable rate - resets monthly.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 28 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===================================================================================================
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 30.3%
<S> <C> <C> <C>
U.S. Treasury Notes:
$ 8,600,000 5.750% due 10/31/02 $ 8,571,964
1,900,000 6.000% due 8/15/04 1,905,263
2,000,000 6.875% due 5/15/06 2,077,020
5,000,000 6.250% due 2/15/07 5,022,600
3,900,000 U.S. Treasury Bonds, 11.250% due 2/15/15 5,691,972
10,600,000 Federal Home Loan Mortgage Corp., 6.300% due 6/1/04 10,397,540
77,000 Federal National Mortgage Association,
6.889% due 6/17/11 75,159
- ---------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
AGENCIES & OBLIGATIONS
(Cost -- $33,924,083) 33,741,518
===================================================================================================
CORPORATE BONDS & NOTES -- 66.3%
Communications -- 2.0%
2,225,000 AA- TCI Communications Inc., 6.375% due 5/1/03 2,191,625
- ---------------------------------------------------------------------------------------------------
Financial Services -- 24.5%
5,100,000 A1* AT&T Captial Corp., 7.110% due 9/13/01 5,125,500
1,700,000 A3* Banponce Financial Corp., 7.300% due 6/5/02 1,712,750
2,025,000 A+ CIT Group Holdings, Inc., 5.500% due 10/15/01 1,981,969
5,000,000 BBB+ Comdisco, Inc., 7.250% due 9/20/01 4,989,100
3,000,000 A- Finova Captial Corp., 6.310% due 11/6/00 3,008,640
5,100,000 A1* Ford Motor Credit Co., 7.375% due 10/28/09 5,151,000
275,000 BB+ Golden State Holdings Corp., 7.000% due 8/1/03 260,906
1,050,000 BBB+ MBNA America Bank, 6.000% due 12/26/00 1,043,437
Orix Credit Alliance Inc.:
1,100,000 BBB+ 6.400% due 11/22/99 1,100,000
2,900,000 BBB+ 6.780% due 5/15/01 2,863,750
- ---------------------------------------------------------------------------------------------------
27,237,052
- ---------------------------------------------------------------------------------------------------
Health Care -- 2.1%
2,400,000 Ba2* Columbia/HCA Healthcare Corp., 6.630% due 7/15/45 2,274,000
- ---------------------------------------------------------------------------------------------------
Hotels -- 8.7%
5,000,000 BBB+ Marriott International Inc., Series C, 7.875% due 9/15/09 5,018,750
4,700,000 BBB- Park Place Entertainment Corp., 7.950% due 8/1/03 (b) 4,653,000
- ---------------------------------------------------------------------------------------------------
9,671,750
- ---------------------------------------------------------------------------------------------------
Industrial -- 0.2%
Navistar International Corp.:
75,000 Ba2* Series B, 8.000% due 2/1/08 73,500
140,000 Baa3* Sr. Notes, 7.000% due 2/1/03 136,675
- ---------------------------------------------------------------------------------------------------
210,175
- ---------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===================================================================================================
<S> <C> <C> <C>
Oil -- 2.4%
$ 2,500,000 Baa2* Midwest Energy Co., 9.375% due 10/15/29 (b) $ 2,568,750
35,000 BBB- Norcen Energy Resources Ltd., 7.375% due 5/15/06 34,387
- ---------------------------------------------------------------------------------------------------
2,603,137
- ---------------------------------------------------------------------------------------------------
Real Estate Investment Trusts -- 4.0%
4,520,000 BBB CarrAmerica Realty Corp., 6.625% due 10/1/00 4,477,196
- ---------------------------------------------------------------------------------------------------
Retail -- 5.9%
800,000 A- Dayton Hudson Corp., 6.800% due 10/1/01 801,000
3,059,000 BBB+ Federated Department Stores Inc., Sr. Notes,
8.125% due 10/15/02 3,146,946
Saks Inc.:
1,275,000 Baa3* 7.250% due 12/1/04 1,206,469
1,600,000 Baa3* 7.500% due 12/1/10 1,444,000
- ---------------------------------------------------------------------------------------------------
6,598,415
- ---------------------------------------------------------------------------------------------------
Tobacco -- 1.6%
280,000 BBB Nabisco Inc., 6.000% due 2/15/11 276,500
1,490,000 A Philip Morris Cos., 7.500% due 1/15/02 1,495,588
- ---------------------------------------------------------------------------------------------------
1,772,088
- ---------------------------------------------------------------------------------------------------
Transportation -- 1.1%
1,250,000 BBB- Union Pacific Corp., 9.650% due 6/1/00 1,271,875
- ---------------------------------------------------------------------------------------------------
Utilities -- 13.8%
2,525,000 BBB- CalEnergy Co., Inc., 7.230% due 9/15/05 2,455,563
CMS Energy Corp.:
900,000 BB 6.750% due 1/15/04 (b) 847,125
1,150,000 BB 7.625% due 11/15/04 (b) 1,111,188
4,625,000 BBB Marlin Water Trust, 7.090% due 12/15/01 (b) 4,567,187
5,100,000 Baa1*NorAm Energy Corp., 7.500% due 8/1/00 5,131,875
1,300,000 BBB UtiliCorp United Inc., 7.000% due 7/15/04 1,275,625
- ---------------------------------------------------------------------------------------------------
15,388,563
- ---------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost -- $74,576,405) 73,695,876
===================================================================================================
SHARES SECURITY VALUE
===================================================================================================
WARRANTS(c) -- 0.0%
150 Loral Orion Network Systems, Inc., Expire 1/31/07
(Cost -- $105) 1,200
===================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
======================================================================================
REPURCHASE AGREEMENT -- 3.4%
<S> <C> <C>
$ 3,752,000 CS First Boston Corp., 5.150% due 11/1/99;
Proceeds at maturity -- $3,753,608; (Fully
collateralized by U.S. Treasury Bills, due 12/31/99;
Market value -- $3,827,740)
(Cost -- $3,752,000) $ 3,752,000
======================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $112,252,593**) $ 111,190,594
======================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
(b) 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.
(c) Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 28 for definition of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================================
COMMERCIAL PAPER -- 77.6%
<S> <C> <C> <C>
$3,375,000 Abbey National N.A. matures 11/22/99 5.33% $ 3,364,566
8,000,000 American Express Credit Co. matures 11/9/99 5.33 7,990,578
7,000,000 AT&T Corp. matures 11/10/99 5.31 6,990,760
8,000,000 Atlantis One Funding Corp. matures 11/15/99 5.35 7,983,449
3,000,000 Bank of America Corp. matures 11/2/99 5.15 2,999,580
5,000,000 Bank of Nova Scotia matures 12/14/99 5.42 4,967,929
8,000,000 Bell Atlantic Financial Services matures 11/12/99 5.31 7,987,045
8,000,000 BellSouth Telecommunications matures 11/8/99 5.32 7,991,771
2,900,000 CADES matures 12/03/99 5.35 2,886,286
8,000,000 Cariplo Finance Inc. matures 11/1/99 5.33 8,000,000
5,000,000 Chase Manhattan Bank Corp. matures 11/2/99 5.36 4,999,261
8,000,000 CIT Group Holdings matures 11/15/99 5.31 7,983,573
5,000,000 Credito Italiano Delaware Inc. matures 11/19/99 5.30 4,986,800
9,000,000 Cregem North America mature 12/3/99 to 1/21/00 5.41 to 5.90 8,915,917
8,000,000 DaimlerChrysler N.A. matures 11/8/99 5.36 7,991,709
5,000,000 Den Danske Corp. matures 1/24/00 6.16 4,929,300
2,000,000 Deutsche Financial Inc. matures 1/18/00 5.52 1,976,730
8,000,000 Dresdner U.S. Finance Inc. matures 11/8/99 5.31 7,991,771
7,000,000 Ford Motor Credit matures 11/4/99 5.32 6,996,908
5,000,000 Goldman, Sachs & Co. matures 2/1/00 6.09 4,923,589
9,750,000 GTE Funding Corp. matures 11/5/99 5.31 9,744,258
8,000,000 Halifax matures 11/1/99 5.29 8,000,000
9,000,000 J.P. Morgan & Co. mature 11/15/99 to 2/17/00 5.32 to 6.10 8,930,415
7,000,000 Nationwide Building Society matures 11/18/99 5.31 6,982,514
8,000,000 Oesterreich Kontrollbank matures 11/15/99 5.31 7,983,573
8,000,000 Procter & Gamble Co. Inc., matures 11/17/99 5.31 7,981,227
2,000,000 San Paolo U.S. Finance Inc. matures 11/8/99 5.18 1,998,028
8,000,000 Shell Oil Co. matures 11/2/99 5.28 7,998,831
6,520,000 Siemens Corp. matures 11/1/99 5.30 6,520,000
8,000,000 Union Bank of Switzerland mature 11/17/99 to 12/14/99 5.27 to 5.37 7,966,014
4,000,000 USAA Capital Corp. matures 11/4/99 5.31 3,998,237
9,000,000 Walt Disney Co. matures 11/1/99 5.31 9,000,000
5,000,000 Westpac matures 2/3/00 6.01 4,923,103
- ----------------------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $214,883,722) 214,883,722
======================================================================================================================
DOMESTIC BANK OBLIGATIONS -- 1.8%
5,000,000 FCC National matures 1/20/00
(Cost -- $5,000,000) 5.56 5,000,000
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 6.1%
<S> <C> <C> <C>
$ 5,000,000 Commerzbank matures 1/18/00 6.04% $ 5,000,213
2,000,000 Credit Suisse Financial Corp. matures 1/19/00 5.57 2,000,017
5,000,000 National Westminster Bank PLC matures 12/16/99 5.41 5,000,124
5,000,000 Westdeustche Landesbank matures 12/13/99 5.40 5,000,000
- ----------------------------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $17,000,354) 17,000,354
======================================================================================================================
TIME DEPOSITS -- 14.1%
4,000,000 Banc One Corp. matures 11/1/99 5.30 4,000,000
10,000,000 Bank Austriaengellschaft matures 11/1/99 5.31 10,000,000
5,000,000 Chase Manhattan Bank matures 11/1/99 5.31 5,000,000
10,000,000 Paribas matures 11/1/99 5.31 10,000,000
10,000,000 Societe Generale matures 11/1/99 5.31 10,000,000
- ----------------------------------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $39,000,000) 39,000,000
======================================================================================================================
REPURCHASE AGREEMENT -- 0.4%
1,181,000 Morgan Stanley Dean Witter & Co., 5.19% due 11/1/99;
Proceeds at maturity -- $1,181,511; (Fully collateralized
by U.S. Treasury Bills, 5.875% due 11/15/99;
Market value -- $1,200,496) (Cost -- $1,181,000) 5.19 1,181,000
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $277,065,076**) $ 277,065,076
======================================================================================================================
</TABLE>
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<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 -- Bonds rated "BB" and "B" are regarded, on balance, as predominantly
and speculative with respect to capacity to pay interest and repay
CCC principal in accordance with the terms of the obligation. "BB"
represents a lower degree of speculation than "B," and "CCC" the highest
degree of speculation. While such bonds will likely have some quality
and protective characteristics, these are outweighted by large
uncertainties or major risk exposure to adverse conditions.
Moody's 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
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
================================================================================================
ASSETS:
<S> <C> <C> <C>
Investments, at value
(Cost -- $627,105,792, $112,252,593
and $277,065,076, respectively) $642,669,951 $111,190,594 $277,065,076
Cash -- 885 668
Receivable for securities sold 1,920,963 -- --
Receivable for Fund shares sold 16,467 253,034 --
Dividends and interest receivable 4,468,628 1,752,589 194,669
- ------------------------------------------------------------------------------------------------
Total Assets 649,076,009 113,197,102 277,260,413
- ------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 26,321,626 -- --
Management fees payable 394,702 112,840 114,958
Payable to bank 421,212 -- --
Dividends payable -- -- 365,336
Payable for Fund shares redeemed 35,155 -- --
Payable for open forward foreign
currency contracts (Note 5) 2,757 -- --
Accrued expenses 72,176 43,448 81,080
- ------------------------------------------------------------------------------------------------
Total Liabilities 27,247,628 156,288 561,374
- ------------------------------------------------------------------------------------------------
Total Net Assets $621,828,381 $113,040,814 $276,699,039
================================================================================================
NET ASSETS:
Par value of capital shares $ 383 $ 98 $ 2,767
Capital paid in excess of par value 567,360,836 112,105,477 276,696,272
Undistributed net investment income 17,561,649 4,865,481 --
Accumulated net realized gain (loss)
from security transactions 21,311,252 (2,868,243) --
Net unrealized appreciation (depreciation)
of investments and foreign currencies 15,594,261 (1,061,999) --
- ------------------------------------------------------------------------------------------------
Total Net Assets $621,828,381 $113,040,814 $276,699,039
================================================================================================
Shares Outstanding 38,345,904 9,837,825 276,699,039
- ------------------------------------------------------------------------------------------------
Net Asset Value $16.22 $11.49 $1.00
- ------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
=======================================================================================================================
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $15,944,306 $ 5,507,757 $10,900,800
Dividends 6,343,777 -- --
Less: Foreign withholding tax (99,014) -- --
- -----------------------------------------------------------------------------------------------------------------------
Total Investment Income 22,189,069 5,507,757 10,900,800
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 4,481,086 563,198 1,038,520
Custody 61,382 8,222 18,755
Shareholder communications 57,285 22,058 16,368
Audit and legal 37,502 38,638 23,734
Directors' fees 18,186 3,249 6,070
Pricing service fees 13,442 5,937 --
Shareholder and system servicing fees 10,298 11,473 6,649
Registration fees 6,100 4,138 3,751
Other 24,120 1,146 40,560
- -----------------------------------------------------------------------------------------------------------------------
Total Expenses 4,709,401 658,059 1,154,407
- -----------------------------------------------------------------------------------------------------------------------
Net Investment Income 17,479,668 4,849,698 9,746,393
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized Gain (Loss) From:
Securities transactions
(excluding short-term securities*) 21,582,067 (2,852,152) 994
Foreign currency transactions (63,659) -- --
- -----------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) 21,518,408 (2,852,152) 994
- -----------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of year 17,220,430 (555,535) --
End of year 15,594,261 (1,061,999) --
- -----------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized
Appreciation (Depreciation) (1,626,169) (506,464) --
- -----------------------------------------------------------------------------------------------------------------------
Net Gain (Loss) on Investments and
Foreign Currencies 19,892,239 (3,358,616) 994
- -----------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $37,371,907 $ 1,491,082 $ 9,747,387
=======================================================================================================================
</TABLE>
* Represents only gains from the sale of short-term securities for the Smith
Barney Money Market Portfolio.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended October 31,
MFS Total Return Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 17,479,668 $ 12,458,479
Net realized gain 21,518,408 29,863,794
Decrease in net unrealized appreciation (1,626,169) (9,196,861)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 37,371,907 33,125,412
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (12,662,011) (6,865,134)
Net realized gains (29,755,229) (11,682,166)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (42,417,240) (18,547,300)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 130,645,660 167,526,814
Net asset value of shares issued
for reinvestment of dividends 42,417,240 18,547,300
Cost of shares reacquired (8,462,964) (1,963,578)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 164,599,936 184,110,536
- --------------------------------------------------------------------------------
Increase in Net Assets 159,554,603 198,688,648
NET ASSETS:
Beginning of year 462,273,778 263,585,130
- --------------------------------------------------------------------------------
End of year* $621,828,381 $462,273,778
================================================================================
*Includes undistributed net investment income of: $ 17,561,649 $ 12,670,197
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended October 31,
Travelers Managed Income Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 4,849,698 $ 2,444,409
Net realized gain (loss) (2,852,152) 606,030
Increase in net unrealized depreciation (506,464) (1,137,406)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,491,082 1,913,033
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,440,976) (1,768,427)
Net realized gains (606,387) (75,046)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (3,047,363) (1,843,473)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 58,483,264 27,200,431
Net asset value of shares issued
for reinvestment of dividends 3,047,363 1,843,473
Cost of shares reacquired (4,489,228) (3,336,756)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 57,041,399 25,707,148
- --------------------------------------------------------------------------------
Increase in Net Assets 55,485,118 25,776,708
NET ASSETS:
Beginning of year 57,555,696 31,778,988
- --------------------------------------------------------------------------------
End of year* $113,040,814 $57,555,696
================================================================================
*Includes undistributed net investment income of: $ 4,865,481 $ 2,440,668
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney Money Market Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 9,746,393 $ 5,939,071
Net realized gain 994 50
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 9,747,387 5,939,121
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income (9,746,393) (5,939,071)
Net realized gains (994) (50)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (9,747,387) (5,939,121)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 1,748,940,316 456,432,130
Net asset value of shares issued
for reinvestment of dividends 9,720,254 5,823,491
Cost of shares reacquired (1,646,638,975) (408,746,205)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 112,021,595 53,509,416
- --------------------------------------------------------------------------------
Increase in Net Assets 112,021,595 53,509,416
NET ASSETS:
Beginning of year 164,677,444 111,168,028
- --------------------------------------------------------------------------------
End of year $ 276,699,039 $ 164,677,444
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 twelve other separate investment portfolios:
Alliance Growth, AIM Capital Appreciation, INVESCO Global Strategic Income,
formerly known as 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,
Van Kampen Enterprise, formerly known as Van Kampen American Capital Enterprise,
Smith Barney Aggressive Growth and Smith Barney Mid Cap 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 shareholder 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;
- --------------------------------------------------------------------------------
34 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
(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, 1999, 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. 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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH") which in turn
is a subsidiary of Citigroup Inc. ("Citigroup"), 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. SBMM
pays SSBC a management fee calculated at an annual rate of 0.50% of the average
daily net assets of the Portfolio. MFSTR and TMI pay TIAa 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. 35
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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.
Smith Barney Private Trust Company, another subsidiary of Citigroup, acts as the
Fund's shareholder servicing agent.
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 year ended October 31, 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 $682,308,122 $385,470,078
- --------------------------------------------------------------------------------
Sales 503,917,623 329,936,705
================================================================================
At October 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
MFSTR TMI
================================================================================
Gross unrealized appreciation $ 40,190,854 $ 324,475
Gross unrealized depreciation (24,626,695) (1,386,474)
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 15,564,159 $(1,061,999)
================================================================================
5. Forward Foreign Currency Contracts
At October 31, 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:
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Loss
================================================================================
MFS Total Return Portfolio
To Buy:
British Pound 156,021 $257,903 11/2/99 $(1,887)
British Pound 185,226 304,807 11/5/99 (870)
- --------------------------------------------------------------------------------
Total Unrealized Loss on Open
Forward Foreign Currency Contracts $(2,757)
================================================================================
- --------------------------------------------------------------------------------
36 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 October 31, 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 October 31, 1999, the Portfolios had no securities on loan.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
9. Options Contracts
Premiums paid when put or call options are purchased by the Portfolios represent
investments, which are marked-to-market daily and are included in the schedule
of investments. When a purchased option expires, the Portfolios will realize a
loss in the amount of the premium paid. When the Portfolios enter into a closing
sales transaction, the Portfolios will realize a gain or loss depending on
whether the proceeds from the closing sales transaction are greater or less than
the premium paid for the option. When the Portfolios exercise a put option, they
will realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When
the Portfolios exercise a call option, the cost of the security which the
Portfolios purchase upon exercise will be increased by the premium originally
paid.
At October 31, 1999, the Portfolios had no open purchased put or call option
contracts.
When the Portfolios write a covered call or put option, an amount equal to the
premium received by the Portfolios is recorded as a liability, the value of
which is marked-to-market daily. When a written option expires, the Portfolios
realize a gain. When the Portfolios enter into a closing purchase transaction,
the Portfolios realize a gain or loss depending upon whether the cost of the
closing transaction is greater or less than the premium originally received
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised, the cost of the security sold will be decreased by the premium
originally received. When a put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Portfolios
purchased upon exercise. When the written index options are exercised,
settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of a loss if the market price of the underlying security
declines.
During the year ended October 31, 1999, the Portfolios did not write any
options.
- --------------------------------------------------------------------------------
38 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 October 31, 1999, the Portfolios had no TBA securities.
11. Capital Loss Carryforward
At October 31, 1999, TMI had, for Federal income tax purposes, a capital loss
carryforward of approximately $2,717,000, available to offset future capital
gains through October 31, 2007. 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.
12. Capital Shares
At October 31, 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:
Year Ended Year Ended
October 31, 1999 October 31, 1998
===========================================================================
MFS Total Return Portfolio
Shares sold 7,783,928 10,257,417
Shares issued on reinvestment 2,600,689 1,123,398
Shares reacquired (514,619) (125,704)
- ---------------------------------------------------------------------------
Net Increase 9,869,998 11,255,111
===========================================================================
Travelers Managed Income Portfolio
Shares sold 5,013,814 2,314,924
Shares issued on reinvestment 269,439 157,967
Shares reacquired (386,700) (283,065)
- ---------------------------------------------------------------------------
Net Increase 4,896,553 2,189,826
===========================================================================
SB Money Market Portfolio
Shares sold 1,748,940,316 456,432,130
Shares issued on reinvestment 9,720,254 5,823,491
Shares reacquired (1,646,638,975) (408,746,205)
- ---------------------------------------------------------------------------
Net Increase 112,021,595 53,509,416
===========================================================================
- ---------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
MFS Total Return Portfolio 1999(1) 1998 1997 1996 1995
======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 16.23 $ 15.31 $ 13.13 $ 11.53 $ 9.98
- ------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(2) 0.52 0.32 0.38 0.33 0.45
Net realized and unrealized gain 0.72 1.36 2.27 1.62 1.15
- ------------------------------------------------------------------------------------------------------
Total Income
From Operations 1.24 1.68 2.65 1.95 1.60
- ------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.37) (0.28) (0.29) (0.27) (0.05)
Net realized gains (0.88) (0.48) (0.18) (0.08) --
- ------------------------------------------------------------------------------------------------------
Total Distributions (1.25) (0.76) (0.47) (0.35) (0.05)
- ------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 16.22 $ 16.23 $ 15.31 $ 13.13 $ 11.53
- ------------------------------------------------------------------------------------------------------
Total Return 7.62% 10.94% 20.64% 17.16% 16.12%
- ------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $621,828 $462,274 $263,585 $134,529 $49,363
- ------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.84% 0.84% 0.86% 0.91% 0.95%
Net investment income 3.11 3.32 3.54 3.82 4.40
- ------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 97% 118% 99% 139% 104%
======================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average share
method.
(2) The Manager has waived all or part of its fees for the year ended October
31, 1995. If such fees were not waived, 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%
- --------------------------------------------------------------------------------
40 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Travelers Managed
Income Portfolio 1999(1) 1998(1) 1997(1) 1996(1) 1995
=============================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 11.65 $ 11.55 $ 11.06 $ 11.16 $ 10.04
- ---------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(2) 0.65 0.72 0.63 0.65 0.61
Net realized and
unrealized gain (loss) (0.45) (0.06) 0.35 (0.14) 0.64
- ---------------------------------------------------------------------------------------------
Total Income From Operations 0.20 0.66 0.98 0.51 1.25
- ---------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.29) (0.54) (0.49) (0.46) (0.13)
Net realized gains (0.07) (0.02) -- (0.15) --
- ---------------------------------------------------------------------------------------------
Total Distributions (0.36) (0.56) (0.49) (0.61) (0.13)
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.49 $ 11.65 $ 11.55 $ 11.06 $ 11.16
- ---------------------------------------------------------------------------------------------
Total Return 1.75% 5.71% 9.19% 4.61% 12.68%
- ---------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $113,041 $57,556 $31,779 $23,532 $11,279
- ---------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.76% 0.84% 0.87% 0.92% 0.92%
Net investment income 5.57 6.11 6.48 6.19 6.13
- ---------------------------------------------------------------------------------------------
Portfolio Turnover Rate 411% 327% 259% 255% 170%
=============================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) The Manager has waived all or part of its fees for the year ended October
31, 1995. If such fees were not waived, 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%
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney
Money Market Portfolio 1999 1998 1997 1996 1995
======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Net investment income(1) 0.046 0.050 0.049 0.049 0.052
Distributions from net
investment income (0.046) (0.050) (0.049) (0.049) (0.052)
- ------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Total Return 4.66% 5.11% 5.05% 5.05% 5.35%
- ------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $276,699 $164,677 $111,168 $99,150 $37,487
- ------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.54% 0.64% 0.65% 0.65% 0.65%
Net investment income 4.58 4.99 4.94 4.86 5.26
======================================================================================================
</TABLE>
(1) The Manager waived all or part of its fees for the years ended October 31,
1997, October 31, 1996 and October 31, 1995. If such fees were not waived,
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
* Amount represents less than $0.001.
- --------------------------------------------------------------------------------
42 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the MFS Total Return, Travelers Managed Income
and Smith Barney Money Market Portfolios of Travelers Series Fund Inc. as of
October 31, 1999, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years in the two-
year period then ended, and the financial highlights for each of the years in
the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian. As to securities
purchased or sold but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
MFS Total Return, Travelers Managed Income and Smith Barney Money Market
Portfolios of Travelers Series Fund Inc. as of October 31, 1999, and the results
of their operations for the year then ended, the changes in their net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
KPMG LLP
New York, New York
December 15, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Travelers Series Fund Inc. hereby designates for
the fiscal year ended October 31, 1999:
. Long-term capital gain distribution paid:
MFS Total Return Portfolio $26,862,448
Travelers Managed Income Portfolio 110,504
. A total of 28.16% of the ordinary dividends paid by the MFS Total
Return Portfolio quality for the corporate dividends received
deduction.
. The following percentages of ordinary income distributions have been
derived from investments in U.S. Government and Agency Obligations.
All or a portion of the corresponding percentages may be exempt from
taxation at the state level.
MFS Total Return Portfolio 14.69%
Travelers Managed Income Portfolio 16.27
- --------------------------------------------------------------------------------
44 1999 Annual Report to Shareholders
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Michael Gellert
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
SSB Citi Fund Management LLC
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
<PAGE>
Travelers Series Fund Inc.
Smith Barney High Income
Portfolio
Putnam Diversified Income
Portfolio
ANNUAL REPORT
October 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series
Fund Inc.
[PHOTO OF HEATH B. MCLENDON]
HEATH B. MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the annual report for the Travelers Series Fund Inc. -
Smith Barney High Income and Putnam Diversified Income Portfolios ("Portfolios")
for the year ended October 31, 1999. We hope you find this report to be useful
and informative. 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
For the year ended October 31, 1999, the Smith Barney High Income Portfolio
("Portfolio") returned 5.28%. In comparison, the Salomon Smith Barney
Intermediate High Yield Market Index and the Fund's Lipper Inc. peer group
("Lipper") returned 4.07% and 6.16%, respectively, over the same period. (The
Salomon Smith Barney Intermediate High Yield Market Index is comprised of both
cash-pay and deferred interest bonds with a remaining maturity of at least seven
years, but less than ten years. Lipper is a major fund-tracking organization.)
The high-yield bond market deteriorated further during the month of October.
Heavy new issue supply pressures compounded continued negative investor
sentiment. The other bond market sectors also did not perform well in October,
as bond investors became concerned over another potential Federal Reserve Board
("Fed") rate increase in mid-November.1 Moreover, bond investor sentiment
remained extremely negative due to fears over stronger worldwide growth and
potentially higher inflation.
Despite the strength in the U.S. economy, inflation rates have remained subdued
and have not accelerated in recent months. The Fed is not only concerned about
inflation, but also the impact of stronger world economic growth on future
inflation rates.
- --------------
1 The Fed raised interest rates by 25 basis points on November 16, 1999. This
was the Fed's third increase this year, effectively reversing its three
interest rate cuts of 1998.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
The strongest performing industry sectors in the high-yield bond market during
the period were basic materials (i.e., forest products, metals, mining, etc.),
chemicals, cable and media, and telecommunications. The worst performing sectors
included health care, restaurants, consumer products and textile/apparel.
During the first half of 1999, the higher-quality high-yield bond issues
actually underperformed the lower-quality issues by a meaningful margin because
of their higher sensitivity to rising U.S. Treasury rates. Given the manager's
relatively higher-quality orientation versus his peer group, the Portfolio's
total return was negatively impacted. The Portfolio especially lagged its
high-yield peer group since a number of its high-yield fund competitors had
emphasized a combination of lower-quality issues, emerging market debt, as well
as common and preferred stock. So far, during the second half of 1999, more
aggressive high-yield bond funds have been negatively affected.
The manager eliminated several underperforming companies during the early part
of 1999. He has continued to change the Portfolio's composition, eliminating
underperforming companies and selectively raising his exposure to improving
industrial issues. The manager will continue to selectively add attractively
priced industrials in an effort to add more balance to the Portfolio. In terms
of quality, he has also increased his exposure to the middle B-rated segment of
the market where he continues to find attractive yield potential.
Putnam Diversified Income Portfolio
For the year ended October 31, 1999, the Putnam Diversified Income Portfolio
("Portfolio") returned 1.80%. In comparison, the Lehman Brothers Aggregate Bond
Index posted a total return of 0.53% over the same period. (The Lehman Brothers
Aggregate Bond Index is an unmanaged index composed of the Lehman Intermediate
Government/Corporate Bond Index and the Mortgage-Backed Securities Index, and
includes U.S. Treasury issues, agency issues, corporate bond issues and
mortgage-backed securities.)
At home and overseas, it was tough going for most bond investors during the year
ended October 31, 1999. The accelerating pace of global economic growth,
combined with the unpredictable nature of investor sentiment, created formidable
changes in most bond market sectors. The Portfolio's performance for the year
ended October 31, 1999 reflected this unfavorable global investment climate.
The Fed raised rates twice this summer -- by a quarter percentage point each
time -- in preemptive strikes against inflation.2 Yields, which move in the
opposite direction from bond prices, rose across the board as the period
- ------------
2 On Tuesday, November 16, 1999, the Federal Reserve Board raised short-term
interest rates by 25 basis points.
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
progressed. In the United States, the yield on the 30-year bellwether Treasury
bond rose from below 5% at the beginning of the Portfolio's fiscal year to
roughly 6.25% by period-end.
High-yield debt rebounded during the period only to retreat as October drew to a
close. Yields on investment-grade corporate bonds and mortgage- and asset-backed
securities experienced similar movements. For the most part, European bond
markets also remained depressed. The best relative performers for the period
included Latin American and Japanese bonds.
As unnerving as the market's volatility has been recently, the managers have
maintained the Portfolio's exposure to high-yield bonds, keeping them its anchor
weighting. Among their reasons were the extremely attractive valuations
currently available and the market's positive fundamental underpinnings --
namely, relatively subdued inflation, healthy corporate profitability and a
robust U.S. economy.
The year began with a difference in yield between high-yield bonds and U.S.
Treasuries of nearly seven percentage points. High-yield debt then rebounded
only to retreat back to a spread of roughly six percentage points when the
Portfolio's fiscal year ended. According to the managers, inflation fears,
Y2K-related liquidity concerns, the loss of momentum from volatile stock markets
and a rising default rate were to blame.
Telecommunications holdings were the Portfolio's main focus given the positive
operating results, high equity valuations, brisk merger and acquisition activity
and the dynamic, long-term growth potential of these industries. Various media
industries such as broadcasting and cable operators were also fairly
represented. However, the managers have moved the Portfolio's weighting in these
areas to neutral against its benchmark, because they believe the period of heavy
consolidation in the media industry may be ending.
Many companies in these industries have issued or are in the process of issuing
stock, prompting credit improvements and, therefore, higher bond prices.
Portfolio holdings such as NTL, Covad Communications Group and Rhythms
NetConnections have brought equity into their capital structure, thereby helping
to decrease credit risk and push the bonds' prices higher. Covad and Rhythms,
two high-speed digital communications services providers, successfully completed
initial public offerings ("IPOs"). Other high-yield bonds that performed well
for the Portfolio included Global Crossings Ltd., Metromedia Fiber Network,
Nextel, Charter Communications, Citadel, Chancellor Broadcasting and Network
Plus.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
As the period progressed, the managers selectively increased the Portfolio's
exposure to certain higher-quality cyclical issues in the paper, chemical and
energy industries. Repap New Brunswick, Ocean Energy, R&B Falcon and Lyondel are
all new holdings that the management team believes offer attractive total return
potential. Over the period, they sold energy-related securities that their
research showed did not have the capital in place to survive a period of low
energy prices.
Stricter Medicare reimbursement formulas negatively affected the performance of
several health care issues, particularly long-term nursing care bonds such as
Sun Healthcare and Mariner Post-Acute Network. Overbuilding of movieplexes has
resulted in earnings disappointments for many movie exhibition companies,
including Portfolio holding United Artists Theatres. As the fiscal year
progressed, the managers moved out of the satellite communications industry.
They believe the cost of building the necessary constellation to establish
satellite telephones to be a drag on profitability.
The managers bolstered the Portfolio's exposure to emerging markets securities,
a strategy that contributed significantly to performance, since these markets
rallied impressively during the period. The investment team emphasized bonds in
Mexico and Brazil, believing they offer attractive yields relative to their
medium-term sovereign creditworthiness. For the most part, Argentina was avoided
in order to sidestep that market's volatility. The Portfolio also holds
positions in Bulgaria, one of eastern Europe's more solidly growing economies.
Sweden, Greece, the United Kingdom, Germany and Canada were fairly represented
in the Portfolio and performed in line with most world markets. The Portfolio's
underweighting in Japanese government bonds detracted from its performance, as
these issues experienced a dramatic rebound in the second half of the period
under review. Although the managers slightly increased their exposure to Japan
near period-end, they continue to underweight that country relative to their
benchmark, fearing a glut of supply will follow government spending initiatives.
Throughout the period, the team used the Portfolio's U.S. Treasury and
government agency exposure to keep its average duration neutral, given the
uncertainty surrounding interest rates. (Duration is a measure of a fund's
sensitivity to interest rate changes.) The managers also moved in and out of
interest-only and principal-only commercial mortgage-backed securities ("CMBSs")
as market conditions and interest rate movements dictated. In general, their
CMBS holdings added relative value to the Portfolio, given strong economic
activity and solid real estate fundamentals.
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
The managers believe fiscal year 2000 holds promise for the Portfolio. They
anticipate the U.S. economy will remain in good shape and that the Fed's actions
so far in 1999 should help strengthen U.S. corporate profitability. In the long
run, the managers expect the liquidity concerns and uncertainty associated with
Y2K to be nonevents. They are confident that the Portfolio's ability to invest
in many different types of bonds should allow them to help minimize volatility
while opening up more investment opportunities.
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
November 15, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney High Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
======================================================================================
<S> <C> <C> <C> <C> <C>
10/31/99 $11.97 $11.72 $0.89 $0.00 5.28%
- --------------------------------------------------------------------------------------
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 $3.01 $0.23
======================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/99 5.28%
- --------------------------------------------------------------------------------
Five Years Ended 10/31/99 8.68
- --------------------------------------------------------------------------------
6/16/94* through 10/31/99 8.18
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
6/16/94* through 10/31/99 52.65%
================================================================================
+ Assumes the reinvestment of all dividends and capital gains distributions.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
* Commencement of operations.
- --------------------------------------------------------------------------------
6 1999 Annual Report to Shareholders
<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 Market Index+
- --------------------------------------------------------------------------------
June 1994 -- October 1999
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
10/31/99 15,265 15,093
+ 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 October 31, 1999. The Salomon Smith Barney Intermediate High
Yield Market 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. An investor
cannot invest directly in an index.
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>
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
================================================================================
10/31/99 $11.70 $11.24 $0.67 $0.00 1.80%
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 $2.13 $0.36
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
- --------------------------------------------------------------------------------
Average Annual Total Returns+
- --------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/99 1.80%
- --------------------------------------------------------------------------------
Five Years Ended 10/31/99 6.39
- --------------------------------------------------------------------------------
6/16/94* through 10/31/99 6.28
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Return+
- --------------------------------------------------------------------------------
================================================================================
6/16/94* through 10/31/99 38.73%
================================================================================
+ 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.
- --------------------------------------------------------------------------------
8 1999 Annual Report to Shareholders
<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 -- October 1999
Salomon Smith Barney
Non-U.S. World
Putnam Government
Diversified Bond Index+ Lehman Brothers
Income Portfolio Unhedged Aggregate 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 13,717 14,410 13,399
10/98 13,628 16,254 14,651
10/31/99 13,873 15,772 14,730
+ 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 October 31, 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. An investor cannot invest directly in an
index.
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. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
CORPORATE BONDS AND NOTES -- 94.1%
Advertising -- 0.3%
525,000EUR B- Go Outdoor Systems Holding S.A., Sr. Sub. Notes,
10.500% due 7/15/09(b) $ 571,144
- -------------------------------------------------------------------------------------------------
Aerospace -- 0.8%
715,000 B1* BE Aerospace Inc., Sr. Sub. Notes, 9.500% due 11/1/08 688,188
480,000 B- Dunlop Standard Aerospace Holdings, Sr. Notes,
11.875% due 5/15/09(b) 483,600
360,000 B- Fairchild Corp., Guaranteed Sr. Sub. Notes,
10.750% due 4/15/09 308,700
- -------------------------------------------------------------------------------------------------
1,480,488
- -------------------------------------------------------------------------------------------------
Airlines -- 0.7%
1,420,000 BB Airplanes Pass-Through Trust, Corporate Asset-Backed
Securities, Series 1, Class D, 10.875% due 3/15/19 1,266,739
- -------------------------------------------------------------------------------------------------
Aluminum -- 0.6%
Kaiser Aluminum & Chemical:
Sr. Notes:
180,000 B1* Series B, 10.875% due 10/15/06 184,050
215,000 B1* Series D, 10.875% due 10/15/06 219,838
775,000 B3* Sr. Sub. Notes, 12.750% due 2/1/03 771,125
- -------------------------------------------------------------------------------------------------
1,175,013
- -------------------------------------------------------------------------------------------------
Apparel -- 0.3%
685,000 B- Tropical Sportswear International, Guaranteed Sr. Sub. Notes,
Series A, 11.000% due 6/15/08 599,375
- -------------------------------------------------------------------------------------------------
Auto Parts -- 1.4%
975,000 B Collins & Aikman Products, Guaranteed Sr. Sub. Notes,
11.500% due 4/15/06 926,250
605,000 B Dura Operating Corp., Sr. Sub. Notes, Series B,
9.000% due 5/1/09 562,650
Hayes Lemmerz International Inc., Guaranteed Sr. Sub. Notes:
285,000 B 11.000% due 7/15/06 294,975
295,000 B Series B, 8.250% due 12/15/08 262,550
750,000 B+ Tenneco Inc., Sr. Sub. Notes, 11.625% due 10/15/09(b) 756,563
- -------------------------------------------------------------------------------------------------
2,802,988
- -------------------------------------------------------------------------------------------------
Automotive Aftermarket -- 0.6%
1,310,000 B1* Exide Corp., Sr. Notes, 10.000% due 4/15/05 1,224,850
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
==================================================================================================
<S> <C> <C> <C>
Broadcasting -- 0.5%
680,000 B Capstar Broadcasting Corp., Sr. Discount Notes,
step bond to yield 10.857% due 2/1/09 $ 581,400
445,000 B- Citadel Broadcasting Co., Guaranteed Sr. Sub. Notes,
9.250% due 11/15/08 438,325
- --------------------------------------------------------------------------------------------------
1,019,725
- --------------------------------------------------------------------------------------------------
Building Materials -- 0.2%
485,000 B Atrium Cos. Inc., Guaranteed Sr. Sub. Notes, Series B,
10.500% due 5/1/09 464,388
- --------------------------------------------------------------------------------------------------
Building Products -- 0.9%
440,000 B Amatek Industries Properties Ltd., Sr. Sub. Notes,
12.000% due 2/15/08(b) 418,000
400,000 B NCI Building Systems Inc., Sr. Sub. Notes, Series B,
9.250% due 5/1/09 379,000
1,020,000 B+ Nortek Inc., Sr. Notes, Series B, 9.125% due 9/1/07 991,950
- --------------------------------------------------------------------------------------------------
1,788,950
- --------------------------------------------------------------------------------------------------
Cable Television -- 12.7%
Adelphia Communications Corp.:
3,145,000 BB- Sr. Discount Notes, zero coupon due 1/15/08 1,364,144
2,595,000 B+ Sr. Notes, Series B, 9.875% due 3/1/07 2,646,900
170,000 BB- Century Communications Corp., Sr. Notes,
9.750% due 2/15/02 172,763
1,075,000 B+ Charter Communication Holdings, Sr. Discount Notes,
step bond to yield 9.920% due 4/1/11(b) 642,313
CSC Holdings Inc., Sr. Sub. Debentures:
2,080,000 BB- 9.875% due 2/15/13 2,168,400
1,300,000 BB- 10.500% due 5/15/16 1,407,250
2,025,000/GBP/ B- Diamond Holdings PLC, Guaranteed Notes,
10.000% due 2/1/08 3,284,359
770,000 B EchoStar DBS Corp., Sr. Notes, 9.375% due 2/1/09 762,300
570,000 B+ Insight Midwest, Sr. Notes, 9.750% due 10/1/09(b) 585,675
NTL Inc., Sr. Notes, Series B:
1,825,000 B- 11.500% due 10/1/08 1,943,625
970,000 B- Step bond to yield 12.375% due 10/1/08 654,750
1,680,000 BB- Rogers Cablesystems, Guaranteed Sr. Sub. Debentures,
11.000% due 12/1/15 1,894,200
1,000,000 B+ Telewest Communications PLC., Sr. Notes,
11.250% due 11/1/08 1,085,000
5,555,000 B United International Holdings, Inc., Sr. Discount Notes,
Series B, step bond to yield 11.235% due 2/15/08 3,187,181
6,050,000 B2* United Pan-Europe Communications N.V., Sr. Discount
Notes, step bond to yield 12.500% due 8/1/09(b) 3,206,500
- --------------------------------------------------------------------------------------------------
25,005,360
- --------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Casinos/Gambling -- 2.5%
160,000 BB+ Circus Circus Enterprises, Sr. Sub. Notes,
7.625% due 7/15/13 $ 135,600
835,000 B Harveys Casino Resorts, Sr. Sub. Notes, 10.625% due 6/1/06 845,438
Hollywood Casino Corp.:
365,000 B First Mortgage Notes, 13.000% due 8/1/06(b) 379,600
1,115,000 B Guaranteed Sr. Sub. Notes, 11.250% due 5/1/07 1,124,756
790,000 B Hollywood Park Inc., Guaranteed Sr. Sub. Notes,
Series B, 9.250% due 2/15/07 762,350
800,000 B+ Horseshoe Gaming Holdings Corp., Guaranteed Sr. Notes,
8.625% due 5/15/09 770,000
Station Casinos, Sr. Sub. Notes:
285,000 B+ 10.125% due 3/15/06 292,838
700,000 B+ 8.875% due 12/1/08 677,250
- -------------------------------------------------------------------------------------------------
4,987,832
- -------------------------------------------------------------------------------------------------
Chemicals - Major -- 1.2%
Huntsman Corp.:
5,000,000 B+ Sr. Discount Notes, zero coupon due 12/31/09(b) 1,350,000
1,055,000 B+ Sr. Sub. Notes, 10.125% due 7/1/09(b) 1,047,088
- -------------------------------------------------------------------------------------------------
2,397,088
- -------------------------------------------------------------------------------------------------
Chemicals - Specialty -- 0.2%
Lyondell Chemical Co., Sr. Secured Notes:
405,000 BB Series A, 9.625% due 5/1/07 405,000
55,000 BB Series B, 9.875% due 5/1/07 54,450
- -------------------------------------------------------------------------------------------------
459,450
- -------------------------------------------------------------------------------------------------
Coal Mining -- 0.4%
895,000 B AEI Resources Inc., Guaranteed Sr. Sub. Notes,
10.500% due 12/15/05(b) 787,600
- -------------------------------------------------------------------------------------------------
Construction/AG Equipment/Trucks -- 0.1%
260,000 B Columbus McKinnon Corp., Guaranteed Sr. Sub. Notes,
8.500% due 4/1/08 236,600
- -------------------------------------------------------------------------------------------------
Containers/Packaging -- 3.0%
1,070,000 B AEP Industries Inc., Sr. Sub. Notes, 9.875% due 11/15/07 1,016,500
700,000/EUR/B1* BSN Financing Co., Guaranteed Sr. Sub. Notes,
10.250% due 8/1/09(b) 750,488
290,000 B BWAY Corp., Guaranteed Sr. Sub. Notes, Series B,
10.250% due 4/15/07 290,725
775,000 B Huntsman Packaging Corp., Guaranteed Sr. Sub. Notes,
9.125% due 10/1/07 734,313
1,635,000 B Stone Container Corp., Guaranteed Sr. Notes,
11.500% due 8/15/06(b) 1,716,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Containers/Packaging -- 3.0% (continued)
Tekni-Plex Inc.:
435,000 B- Guaranteed Sr. Sub. Notes, Series B, 9.250% due 3/1/08 $ 419,775
920,000 B- Sr. Sub. Notes, Series B, 11.250% due 4/1/07 968,300
- -------------------------------------------------------------------------------------------------
5,896,851
- -------------------------------------------------------------------------------------------------
Contract Drilling -- 1.4%
1,060,000 BB Pride International Inc., Sr. Notes, 10.000% due 6/1/09 1,065,300
RBF Finance Corp.:
725,000 BB- Guaranteed Sr. Secured Notes, 11.375% due 3/15/09 769,406
785,000 Ba3* Sr. Notes, 12.250% due 3/15/06 828,175
- -------------------------------------------------------------------------------------------------
2,662,881
- -------------------------------------------------------------------------------------------------
Discount Stores -- 1.2%
1,560,000 B+ Ames Department Stores Inc., Sr. Notes, 10.000% due 4/15/06 1,532,700
675,000 BB+ Kmart Corp., Debentures, 12.500% due 3/1/05 803,250
- -------------------------------------------------------------------------------------------------
2,335,950
- -------------------------------------------------------------------------------------------------
Diversified Commercial Services -- 1.2%
1,100,000 B2* Intertek Finance PLC, Guaranteed Sr. Sub. Notes,
10.250% due 11/1/06 1,020,250
1,350,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes, Series B,
11.000% due 11/1/06 1,309,500
- -------------------------------------------------------------------------------------------------
2,329,750
- -------------------------------------------------------------------------------------------------
Diversified Financial Services -- 0.4%
Amresco Inc., Sr. Sub. Notes:
500,000 CCC+ 10.000% due 3/15/04 315,000
885,000 CCC+ 9.875% due 3/15/05 531,000
- -------------------------------------------------------------------------------------------------
846,000
- -------------------------------------------------------------------------------------------------
Diversified Manufacture -- 0.5%
505,000 B- Blount Inc., Sr. Sub. Notes, 13.000% due 8/1/09(b) 518,256
550,000 B+ Park-Ohio Industries, Inc., Sr. Sub. Notes,
9.250% due 12/1/07 514,250
- -------------------------------------------------------------------------------------------------
1,032,506
- -------------------------------------------------------------------------------------------------
Drugs - Generic -- 1.5%
3,175,000 BB ICN Pharmaceuticals, Inc., Series B, Sr. Notes,
9.250% due 8/15/05 3,020,219
- -------------------------------------------------------------------------------------------------
Electronic Components -- 0.9%
672,000 B+ Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 710,640
1,415,000 B- Viasystems Inc., Sr. Sub. Notes, 9.750% due 6/1/07 1,146,150
- -------------------------------------------------------------------------------------------------
1,856,790
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Engineering & Construction -- 2.0%
515,000 B- American Plumbing & Mechanic, Guaranteed Sr.
Sub. Notes, 11.625% due 10/15/08(b) $ 468,650
850,000 B- Group Maintenance American Corp., Guaranteed
Sr. Sub. Notes, 9.750% due 1/15/09 816,000
630,000 BB- Integrated Electrical Services Inc., Guaranteed Sr.
Sub. Notes, Series B, 9.375% due 2/1/09 611,100
915,000 B+ Metromedia Fiber Network, Inc., Sr. Notes,
10.000% due 11/15/08 905,850
1,080,000 BB- Williams Communications Group Inc., Sr. Notes,
10.875% due 10/1/09 1,109,700
- -------------------------------------------------------------------------------------------------
3,911,300
- -------------------------------------------------------------------------------------------------
Environmental Services -- 2.8%
5,000,000 B+ Allied Waste North America, Inc., Sr. Sub. Notes,
10.000% due 8/1/09(b) 4,275,000
650,000 B+ IT Group Inc., Guaranteed Sr. Sub. Notes, Series B,
11.250% due 4/1/09(b) 611,000
635,000 B+ URS Corp., Sr. Sub. Notes, Series B, 12.250% due 5/1/09 647,700
- -------------------------------------------------------------------------------------------------
5,533,700
- -------------------------------------------------------------------------------------------------
Food Distributors -- 1.5%
1,385,000 B2* Carrols Corp., Guaranteed Sr. Sub. Notes,
9.500% due 12/1/08 1,163,400
1,250,000 B Imperial Holly Corp., Guaranteed Sr. Sub. Notes,
9.750% due 12/15/07 1,171,875
620,000 B- Premier International Foods PLC, Sr. Notes,
12.000% due 9/1/09(b) 624,650
- -------------------------------------------------------------------------------------------------
2,959,925
- -------------------------------------------------------------------------------------------------
Foods - Specialty/Candy -- 0.3%
600,000 B- B&G Foods Inc., Guaranteed Sr. Sub. Notes,
9.625% due 8/1/07 538,500
- -------------------------------------------------------------------------------------------------
Forest Products -- 0.6%
985,000 B Ainsworth Lumber Co. Ltd., Sr. Notes, 12.500% due 7/15/07 1,085,962
- -------------------------------------------------------------------------------------------------
Home Furnishings -- 0.3%
525,000 B Falcon Products Inc., Guaranteed Sr. Sub. Notes,
Series B, 11.375% due 6/15/09 496,125
- -------------------------------------------------------------------------------------------------
Homebuilding -- 0.5%
1,020,000 BB- U.S. Home Corp., Sr. Sub. Notes, 8.875% due 2/15/09 918,000
- -------------------------------------------------------------------------------------------------
Hospital/Nursing Management -- 2.2%
575,000 Ba3* Fresenius Medical Care Capital Trust I, Trust Preferred
Securities, 9.000% due 12/1/06 557,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Hospital/Nursing Management -- 2.2% (continued)
510,000 Ba3* Fresenius Medical Care Capital Trust II, Series A,
Guaranteed Trust Preferred Securities, 7.875% due 2/1/08 $ 453,900
3,920,000 B- Magellan Health Services, Inc., Sr. Sub. Notes,
9.000% due 2/15/08 3,312,400
- -------------------------------------------------------------------------------------------------
4,324,050
- -------------------------------------------------------------------------------------------------
Hotels/Resorts -- 2.5%
700,000 B- Courtyard By Marriott II LP/Courtyard Finance Co.,
Sr. Secured Notes, Series B, 10.750% due 2/1/08 665,000
2,500,000 BB HMH Properties, Inc., Guaranteed Sr. Notes, Series C,
8.450% due 12/1/08 2,228,125
1,345,000 B+ Intrawest Corp., Sr. Notes, 9.750% due 8/15/08 1,304,650
Sun International Hotels Ltd., Guaranteed Sr. Sub. Notes:
225,000 Ba3* 9.000% due 3/15/07 209,250
470,000 Ba3* 8.625% due 12/15/07 433,575
- -------------------------------------------------------------------------------------------------
4,840,600
- -------------------------------------------------------------------------------------------------
Industrial Specialties -- 0.3%
450,000EUR B1* Leica Geosystems Finance, Guaranteed Sr. Sub. Notes,
9.875% due 12/15/09(b) 472,997
- -------------------------------------------------------------------------------------------------
Insurance - Multi-Line -- 0.7%
1,350,000 BB+ SIG Capital Trust I, Guaranteed Trust Preferred
Securities, 9.500% due 8/15/27 1,009,125
450,000 B Veritas Capital Trust, Guaranteed Trust Preferred Securities,
10.000% due 1/1/28 340,875
- -------------------------------------------------------------------------------------------------
1,350,000
- -------------------------------------------------------------------------------------------------
Internet Services -- 4.4%
430,000 Caa2* Cybernet Internet Services International, Sr. Notes,
14.000% due 7/1/09(b) 369,800
PSINet Inc., Sr. Notes:
2,040,000 B- 11.500% due 11/1/08 2,142,000
1,025,000 B- 11.000% due 8/1/09(b) 1,045,500
425,000EUR B- 11.000% due 8/1/09(b) 452,303
1,575,000 B- Series B, 10.000% due 2/15/05 1,551,375
1,625,000 NR Splitrock Services, Inc., Guaranteed Sr. Notes,
11.750% due 7/15/08 1,495,000
Verio Inc., Sr. Notes:
535,000 B- 10.375% due 4/1/05 539,013
840,000 B- 11.250% due 12/1/08 875,700
185,000 CCC+ WAM!NET Inc., Guaranteed Sr. Discount Notes, Series B,
step bond to yield 12.554% due 3/1/05 108,919
- -------------------------------------------------------------------------------------------------
8,579,610
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
================================================================================================
<S> <C> <C> <C>
Leisure/Movies/Entertainment -- 1.1%
500,000 B- AMC Entertainment Inc., Sr. Sub. Notes, 9.500% due 2/1/11 $ 433,750
1,850,000 B- SFX Entertainment, Inc., Guaranteed Sr. Sub. Notes,
Series B, 9.125% due 2/1/08 1,711,250
- ------------------------------------------------------------------------------------------------
2,145,000
- ------------------------------------------------------------------------------------------------
Machinery - Industrial Components -- 0.3%
610,000 B- Alvey Systems Inc., Sr. Sub. Notes, 11.375% due 1/31/03 621,437
- ------------------------------------------------------------------------------------------------
Media Conglomerates -- 0.1%
125,000GBP B Polestar Corp. PLC, Sr. Notes, Series B,
10.500% due 5/30/08 198,959
- ------------------------------------------------------------------------------------------------
Medical Specialties -- 0.3%
505,000 B- Hangar Orthopedic Group, Sr. Sub. Notes,
11.250% due 6/15/09(b) 497,425
- ------------------------------------------------------------------------------------------------
Metals/Minerals - Other -- 0.3%
700,000 B- Haynes International, Inc., Sr. Notes, 11.625% due 9/1/04 655,375
- ------------------------------------------------------------------------------------------------
Miscellaneous -- 0.1%
190,000 B- Key Plastics Inc., Guaranteed Sr. Sub. Notes, Series B,
10.250% due 3/15/07 156,275
- ------------------------------------------------------------------------------------------------
Multi-Sector Companies -- 0.5%
1,060,000 B- Triarc Consumer Beverage, Sr. Sub. Notes,
10.250% due 2/15/09(b) 999,050
- ------------------------------------------------------------------------------------------------
Newspapers -- 0.9%
2,000,000 B+ Garden State Newspapers, Inc., Sr. Sub. Notes,
8.625% due 7/1/11 1,805,000
- ------------------------------------------------------------------------------------------------
Oil/Gas Production -- 6.2%
Belco Oil & Gas Corp., Series B:
500,000 B1* Guaranteed Sr. Sub. Notes, 10.500% due 4/1/06 512,500
505,000 B1* Sr. Sub. Notes, 8.875% due 9/15/07 481,012
465,000 B Canadian Forest Oil, Guaranteed Sr. Sub. Notes,
10.500% due 1/15/06 476,625
185,000 B Chesapeake Energy Corp., Sr. Notes, 9.625% due 5/1/05 174,825
2,100,000 B+ Clark USA Inc., Sr. Notes, Series B, 10.875% due 12/1/05 1,680,000
1,165,000 B+ Nuevo Energy Co., Sr. Sub. Notes, 9.500% due 6/1/08(b) 1,138,788
Ocean Energy, Inc., Guaranteed Sr. Sub. Notes:
3,300,000 BB- 10.375% due 10/15/05 3,456,750
850,000 BB- 9.750% due 10/1/06 875,500
970,000 B+ Parker Drilling Co., Guaranteed Sr. Sub. Notes, Series D,
9.750% due 11/15/06 937,263
Plain Resources Inc., Sr. Sub. Notes:
1,125,000 B 10.250% due 3/15/06(b) 1,136,250
315,000 B 10.250% due 3/15/06 318,150
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Oil/Gas Production -- 6.2% (continued)
675,000 B Stone Energy Corp., Guaranteed Sr. Sub. Notes,
8.750% due 9/15/07 $ 648,000
375,000 B+ Vintage Petroleum, Sr. Sub. Notes, 9.750% due 6/30/09 377,813
- -------------------------------------------------------------------------------------------------
12,213,476
- -------------------------------------------------------------------------------------------------
Oil/Gas Transmission -- 0.3%
585,000 BB- Leviathan Gas Pipeline Partners, Guaranteed
Sr. Sub. Notes, 10.375% due 6/1/09 596,700
- -------------------------------------------------------------------------------------------------
Oilfield Services/Equipment -- 0.1%
145,000 B- Parker Drilling Co., Guaranteed Sr. Sub. Notes, Series D,
5.500% due 8/1/04 102,950
- -------------------------------------------------------------------------------------------------
Paper -- 3.1%
1,130,000 B Doman Industries Ltd., Sr. Notes, 8.750% due 3/15/04 923,775
1,075,000EUR B Kappa Beheer BV, Guaranteed Sr. Sub. Notes,
10.625% due 7/15/09(b) 1,151,123
1,160,000 CCC+ Repap New Brunswick Inc., Sr. Secured Notes,
10.625% due 4/15/05 1,029,500
Riverwood International Corp.:
730,000 B- Guaranteed Sr. Notes, 10.625% due 8/1/07 746,425
1,370,000 CCC+ Guaranteed Sr. Sub. Notes, 10.875% due 4/1/08 1,328,900
890,000 BB+ Tembec Industries Inc., Guaranteed Sr. Notes,
9.875% due 9/30/05 925,600
- -------------------------------------------------------------------------------------------------
6,105,323
- -------------------------------------------------------------------------------------------------
Pharmaceuticals - Other -- 0.4%
765,000 B King Pharmaceutical Inc., Guaranteed Sr. Sub. Notes,
10.750% due 2/15/09 780,300
- -------------------------------------------------------------------------------------------------
Photographic Products -- 0.4%
860,000 BB- Polaroid Corp., Sr. Notes, 11.500% due 2/15/06 851,400
- -------------------------------------------------------------------------------------------------
Printing/Forms -- 0.3%
680,000 Baa3* World Color Press Inc., Sr. Sub. Notes, 7.750% due 2/15/09 640,050
- -------------------------------------------------------------------------------------------------
Real Estate Investment Trusts -- 1.0%
700,000 NR Ocwen Asset Investment Corp., Redeemable Notes,
11.500% due 7/1/05 591,500
1,200,000 Baa3* Trizec Finance Ltd., Guaranteed Sr. Notes,
10.875% due 10/15/05 1,272,000
- -------------------------------------------------------------------------------------------------
1,863,500
- -------------------------------------------------------------------------------------------------
Recreational Products/Toys -- 0.4%
700,000EUR B2* Head Holding, Sr. Notes, 10.750% due 7/15/06(b) 717,378
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Rental/Leasing Companies -- 1.2%
840,000 BB- Avis Rent A Car Inc., Sr. Sub. Notes, 11.000% due 5/1/09(b) $ 871,500
370,000 B NationsRent, Inc., Guaranteed Sr. Sub. Notes,
10.375% due 12/15/08 359,825
1,235,000 BB- United Rentals Inc., Guaranteed Sr. Sub. Notes,
9.250% due 1/15/09 1,120,763
- -------------------------------------------------------------------------------------------------
2,352,088
- -------------------------------------------------------------------------------------------------
Restaurants -- 0.4%
1,095,000 B Advantica Restaurant Group, Sr. Notes,
11.250% due 1/15/08 845,887
- -------------------------------------------------------------------------------------------------
Retail - Food Chains -- 0.3%
140,000 CCC+ Pathmark Stores, Sub. Notes, 12.625% due 6/15/02 141,225
405,000 B+ Stater Brothers Holdings, Sr. Notes, 10.750% due 8/15/06(b) 413,100
- -------------------------------------------------------------------------------------------------
554,325
- -------------------------------------------------------------------------------------------------
Retail - Other Specialties -- 0.5%
1,000,000 B- Advance Stores Co., Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.250% due 4/15/08 920,000
- -------------------------------------------------------------------------------------------------
Savings & Loan Associations -- 1.4%
1,075,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 682,625
1,000,000 B+ Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 950,000
1,205,000 B+ Ocwen Financial Corp., Notes, 11.875% due 10/1/03 1,126,675
- -------------------------------------------------------------------------------------------------
2,759,300
- -------------------------------------------------------------------------------------------------
Semiconductors -- 0.5%
985,000 B Fairchild Semiconductor Inc., Sr. Sub. Notes,
10.125% due 3/15/07 977,612
- -------------------------------------------------------------------------------------------------
Steel/Iron Ore -- 1.8%
715,000 B+ Russel Metals Corp., Sr. Notes, 10.000% due 6/1/09 669,419
2,035,000 B+ WCI Steel Inc., Sr. Notes, 10.000% due 12/1/04 1,999,388
985,000 B- WHX Corp., Sr. Notes, 10.500% due 4/15/05 916,050
- -------------------------------------------------------------------------------------------------
3,584,857
- -------------------------------------------------------------------------------------------------
Telecommunications - Major U.S. -- 0.1%
285,000 B Primus Telecommunications Group Inc., Sr. Notes,
11.750% due 8/1/04(b) 281,438
- -------------------------------------------------------------------------------------------------
Telecommunications - Other -- 10.1%
1,310,000 NR E.Spire Communications, Inc., Sr. Notes, step bond to yield
12.172% due 7/1/08 530,550
425,000EUR B+ ESAT Telecom, Sr. Notes, 11.8750% due 11/1/09 456,770
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Telecommunications - Other -- 10.1% (continued)
Esprit Telecom, Sr. Notes:
299,999DEM B- 11.500% due 12/15/06 $ 164,436
575,000 B- 11.500% due 12/15/07 590,812
400,000 B- 10.875% due 6/15/08 402,000
1,375,000 NR FaciliCom International Inc., Sr. Notes,
10.500% due 1/15/08 1,278,750
Hermes Europe Railtel B.V., Sr. Notes:
1,550,000 B 11.500% due 8/15/07 1,542,250
450,000 B 10.375% due 1/15/09 427,500
ICG Holdings Inc.:
915,000 B- Guaranteed Sr. Discount Notes, step bond to yield
12.855% due 9/15/05 695,400
650,000 B- Sr. Discount Notes, step bond to yield
12.934% due 9/15/05 559,000
Intermedia Communications Co.:
Sr. Discount Notes:
390,000 B Step bond to yield 10.357% due 5/15/06 316,875
460,000 B Step bond to yield 11.213% due 7/15/07 318,550
385,000 B Sr. Notes, 9.500% due 3/1/09 357,088
900,000 B- KMC Telecom Holding, Sr. Notes, 13.500% due 5/15/09(b) 884,250
3,200,000 B Level 3 Communications Inc., Sr. Discount Notes,
step bond to yield 11.200% due 12/1/08 1,880,000
Microcell Telecommunications Inc., Sr. Discount Notes:
405,000 B3* Step bond to yield 11.842% due 6/1/06 337,163
1,905,000 B- Step bond to yield 11.759% due 6/1/09 1,176,338
NEXTLINK Communications, Inc., L.C.C./Nextlink Capital, Inc.:
1,605,000 B Sr. Discount Notes, step bond to yield 12.039% due 6/1/09 950,963
Sr. Notes:
215,000 B 12.500% due 4/15/06 228,975
1,675,000 B 10.750% due 6/1/09 1,700,125
1,050,000 BB- Orange PLC, Sr. Notes, 9.000% due 6/1/09(b) 1,086,750
1,175,000 B- Primus Telecommunications Group Inc., Sr. Notes,
11.750% due 8/1/04 1,145,625
Tele 1 Europe B.V., Sr. Notes:
400,000EUR B- 13.000% due 2/15/09(b) 422,544
610,000 B- 13.000% due 5/15/09(b) 585,600
285,000 NR VersaTel Telecom International B.V., Sr. Notes,
13.250% due 5/15/08 285,713
805,000 B- Viatel, Inc., Sr. Notes, 11.250% due 4/15/08 760,725
825,000 B Worldwide Fiber, Inc., Sr. Notes, 12.000% due 8/1/09(b) 829,125
- -------------------------------------------------------------------------------------------------
19,913,877
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
FACE
AMOUNT+ RATING(a) SECURITY VALUE
================================================================================================
<S> <C> <C> <C>
Telephone - Cellular -- 6.8%
AirGate PCS Inc., Sr. Sub. Discount Notes:
870,000 NR Step bond to yield 13.213% due 10/1/09 $ 535,050
275,000 CCC Step bond to yield 13.548% due 10/1/09 140,937
735,000 CCC+ Centennial Cellular Corp., Sr. Sub. Notes,
10.750% due 12/15/08 768,075
1,000,000CAD B Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 13.794% due 5/15/08 414,712
1,975,000 B Crown Castle International Corp., Sr. Discount Notes,
step bond to yield 11.061% due 5/15/11 1,175,125
555,000 NR Dobson/Sygnet Communications, Sr. Notes,
12.250% due 12/15/08 591,769
Dolphin Telecom PLC., Sr. Discount Notes:
1,575,000 CCC+ Step bond to yield 11.417% due 6/1/08 702,844
1,575,000EUR CCC+ Step bond to yield 11.625% due 6/1/08 670,473
2,850,000 B- Millicom International Cellular S.A., Sr. Discount Notes,
step bond to yield 13.904% due 6/1/06 2,059,125
Nextel Communications, Inc., Sr. Discount Notes:
1,515,000 B- Step bond to yield 10.824% due 9/15/07 1,136,250
545,000 B- Step bond to yield 10.547% due 2/15/08 386,950
255,000 B3* Nextel Partners Inc. Sr. Discount Notes, step bond to
yield 13.110% due 2/1/09 155,869
665,000 B3* Omnipoint Corp., Sr. Notes, 11.500% due 9/15/09(b) 698,250
1,220,000 NR Spectrasite Holdings, Inc., Sr. Discount Notes,
step bond to yield 11.141% due 4/15/09 634,400
950,000 B3* TeleCorp PCS Inc., Sr. Discount Notes, step bond to
yield 12.335% due 4/15/09(b) 584,250
Telesystems International Wireless Inc., Sr. Discount Notes:
2,350,000 CCC+ Series B, step bond to yield 11.659% due 6/30/07 1,169,125
1,425,000 CCC+ Series C, step bond to yield 10.980% due 11/1/07 598,500
735,000 B3* Triton PCS Inc., Guaranteed Sr. Sub. Discount Notes,
step bond to yield 11.744% due 5/1/08 507,150
745,000 B3* US Unwired Inc., Sr. Discount Notes, step bond to yield
13.345% due 11/1/04(b) 394,850
- ------------------------------------------------------------------------------------------------
13,323,704
- ------------------------------------------------------------------------------------------------
Textiles -- 0.3%
1,450,000DEM B3* Texon International PLC, Sr. Notes, 10.000% due 2/1/08 677,897
- ------------------------------------------------------------------------------------------------
Transportation - Marine -- 0.6%
475,000 B- Oglebay Norton Co., Sr. Sub. Notes, 10.000% due 2/1/09 457,188
675,000 BB- Sea Containers Ltd., Sr. Sub. Debentures, Series A,
12.500% due 12/1/04 715,500
- ------------------------------------------------------------------------------------------------
1,172,688
- ------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Unregulated Power Generation -- 2.2%
AES Corp.:
1,870,000 Ba1* Sr. Notes, 9.500% due 6/1/09 $ 1,874,675
1,340,000 Ba3* Sr. Sub. Notes, 10.250% due 7/15/06 1,353,400
1,000,000 BB+ Calpine Corp., Sr. Notes, 10.500% due 5/15/06 1,037,500
- -------------------------------------------------------------------------------------------------
4,265,575
- -------------------------------------------------------------------------------------------------
Wholesale Distributors -- 0.5%
440,000 B Buhrmann US Inc., Sr. Sub. Notes, 12.250% due 11/1/09(b) 435,600
675,000 B- Fisher Scientific International Inc., Sr. Sub. Notes,
9.000% due 2/1/08 637,875
- -------------------------------------------------------------------------------------------------
1,073,475
- -------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $195,672,847) 184,911,627
=================================================================================================
SHARES SECURITY VALUE
=================================================================================================
PREFERRED STOCK -- 0.4%
Broadcasting -- 0.3%
5,085 Capstar Broadcasting Corp., Series E,
12.625% Cumulative Exchangeable 600,030
- -------------------------------------------------------------------------------------------------
Savings and Loan Associations -- 0.1%
10,100 California Federal Preferred Capital Corp., Series A,
9.125% Noncumulative Exchangeable 224,725
- -------------------------------------------------------------------------------------------------
Telephone - Cellular -- 0.0%
190 Dobson Communications Corp., 13.000% Exchangeable(b) 17,860
- -------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $1,460,616) 842,615
=================================================================================================
WARRANTS(c) -- 0.2%
Broadcasting -- 0.0%
1,075 Australis Holdings Ltd., Expire 10/30/01(b) 0
1,950 UIH Australia/Pacific Inc., Expire 5/15/06 58,500
- -------------------------------------------------------------------------------------------------
58,500
- -------------------------------------------------------------------------------------------------
Cable Television -- 0.0%
750 Wireless One Inc., Expire 10/19/00 188
- -------------------------------------------------------------------------------------------------
Internet Services -- 0.1%
1,625 Splitrock Services, Inc., Expire 7/15/08 154,375
2,100 WAM!NET Inc., Expire 3/1/05(b) 47,775
430 Znet Internet Services, Expire 7/1/09(b) 51,600
- -------------------------------------------------------------------------------------------------
253,750
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Telecommunications - Other -- 0.1%
700 RSL Communications Ltd., Expire 11/15/06(b) $ 28,000
Tele1 Europe B.V.:
375 Expire 5/15/09 30,000
400EUR Expire 5/15/09 33,635
285 VersaTel Telecom International B.V., Expire 5/15/08(b) 41,325
- -------------------------------------------------------------------------------------------------
132,960
- -------------------------------------------------------------------------------------------------
Telephone Cellular -- 0.0%
925 Iridium World Communications Ltd., Expire 7/15/05(b) 9
- -------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $240,653) 445,407
=================================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 5.3%
$10,380,000 Goldman Sachs & Co., 5.180% due 11/1/99;
Proceeds at maturity -- $10,384,481; (Fully
collateralized by U.S. Treasury Bills, Notes and Bonds,
0.000% to 10.000% due 12/2/99 to 11/15/27;
Market value -- $10,730,870) (Cost -- $10,380,000) 10,380,000
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $207,754,116**) $196,579,649
=================================================================================================
</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 this schedule:
---------------------------------------------
CAD -- Canadian Dollar
DEM -- German Mark
EUR -- Euro
GBP -- British Pound
See page 48 for definitions of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C>
U.S. GOVERNMENT SECTOR -- 21.9%
U.S. Treasury Obligations -- 13.9%
$ 460,000 U.S. Treasury Notes, 4.250% due 11/15/03 $ 432,124
U.S. Treasury Bonds:
16,345,000 5.250% due 5/15/04 15,882,600
1,190,000 5.500% due 5/15/09+ 1,141,388
2,905,000 6.375% due 8/15/27 2,891,521
950,000 6.125% due 11/15/27+ 917,320
- -------------------------------------------------------------------------------------------------
21,264,953
- -------------------------------------------------------------------------------------------------
U.S. Government Agencies -- 8.0%
Federal National Mortgage Association (FNMA):
315,559 6.500% due 5/1/13 - 2/15/29 302,543
183,679 7.000% due 5/1/11 183,507
Government National Mortgage Association (GNMA):
1,154 6.000% due 11/20/27 1,164
1,630,692 6.500% due 8/15/27 - 7/15/29 1,558,828
5,395,843 7.000% due 11/15/25 - 5/15/28 5,294,671
823,407 7.500% due 6/15/23 - 10/15/23 825,976
3,992,989 8.000% due 10/15/24 - 3/15/28 4,088,021
- -------------------------------------------------------------------------------------------------
12,254,710
- -------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECTOR
(Cost -- $34,039,890) 33,519,663
=================================================================================================
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.1%
340,000 BBB Commercial Mortgage Acceptance Corp.,
7.054% due 12/15/10 313,597
380,000 Aaa* Countrywide Home Loans, 6.750% due 4/25/28 357,260
405,000 BBB GGP Ala Moana, 7.650% due 9/10/04 403,228
GGP Ivanhoe:
176,000 BBB 7.920% due 10/10/04 176,000
210,000 BBB- 8.670% due 10/10/04 210,000
905,000 BBB GMAC Commercial Mortgage Securities Inc.,
6.500% due 7/15/10 799,334
240,000 Baa2* GS Mortgage Securities Corp. II, 7.190% due 4/13/31 216,300
149,000 BBB Merrill Lynch Mortgage Investors Inc., 7.113% due 2/15/30 136,312
205,000 BBB+ Morgan Stanley Capital Inc., 7.150% due 6/5/30 191,034
213,884 AAA PNC Mortgage Securities Corp., 6.600% due 7/25/27 214,419
121,258 AAA Rural Housing Trust, 6.330% due 4/1/26 119,789
=================================================================================================
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost -- $3,280,136) 3,137,273
=================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
ASSET-BACKED SECURITIES -- 0.7%
$ 400,000 BB Airplanes Pass-Through Trust, 10.875% due 3/15/19 $ 408,000
95,000 Baa3* ContiMortgage Home Equity Loan Trust,
7.670% due 3/15/28 87,578
535,000 AAA Green Tree Financial Corp., 6.240% due 11/1/16 527,205
99,534 AAA Green Tree Recreational, Equipment & Consumer Trust,
6.550% due 7/15/28 100,150
- -------------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost -- $1,170,095) 1,122,933
=================================================================================================
CORPORATE BONDS AND NOTES -- 47.6%
Advertising -- 0.9%
275,000 B Adams Outdoor Advertising L.P., Sr. Notes,
10.750% due 3/15/06 283,937
230,000 B- AOA Holding LLC/AOA Capital Corp., Sr. Notes,
10.375% due 6/1/06(b) 229,137
Lamar Advertising Co., Guaranteed Sr. Sub. Notes:
150,000 B1* 9.625% due 12/1/06 153,375
300,000 B1* 9.250% due 8/15/07 306,750
Outdoor Systems, Inc., Guaranteed Sr. Sub. Notes:
350,000 B1* 8.875% due 6/15/07 357,875
15,000 B1* 9.375% due 10/15/09 15,637
- -------------------------------------------------------------------------------------------------
1,346,711
- -------------------------------------------------------------------------------------------------
Aerospace -- 0.9%
Argo-Tech Corp., Guaranteed Sr. Sub. Notes:
290,000 B- 8.625% due 10/1/07 247,225
90,000 NR Series D, 8.625% due 10/1/07 76,725
BE Aerospace Inc., Sr. Sub. Notes:
550,000 B1* 8.000% due 3/1/08 490,875
50,000 B1* 9.500% due 11/1/08 48,125
290,000 B- Decrane Aircraft Holdings Inc., Sr. Sub. Notes,
12.000% due 9/30/08(b) 289,275
50,000 B- K&F Industries, Sr. Sub. Notes, 9.250% due 10/15/07 49,000
L-3 Communications Corp., Sr. Sub. Notes:
100,000 B Series B, Guaranteed Sr. Sub. Notes, 8.000% due 8/1/08 95,750
Sr. Sub. Notes:
80,000 B 8.500% due 5/15/08 75,600
45,000 B Series B, 10.375% due 5/1/07 46,575
- -------------------------------------------------------------------------------------------------
1,419,150
- -------------------------------------------------------------------------------------------------
Agriculture -- 0.0%
26,980 NR Premium Standard Farms Inc., Sr. Secured Notes,
11.000% due 9/17/03 24,821
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===============================================================================================
Airlines -- 0.8%
<S> <C> <C> <C>
$ 700,000 Ba2* Calair LLC/Calair Capital Corp., Guaranteed Sr. Notes,
8.125% due 4/1/08 $ 655,375
Canadian Airlines Corp., Sr. Notes:
150,000 B- 10.000% due 5/1/05 119,250
100,000 CCC- 12.250% due 8/1/06 65,000
280,000 Caa1* Cathay International Ltd., Sr. Notes,
13.000% due 4/15/08(b) 137,200
90,000 B- GEO Specialty Chemicals, Inc., Sr. Sub. Notes,
10.125% due 8/1/08(b) 82,575
Trans World Airlines, Inc.:
70,000 B2* Sr. Notes, 11.500% due 12/15/04 51,800
230,000 Caa1* Sr. Sub. Notes, 11.375% due 3/1/06 115,000
- -----------------------------------------------------------------------------------------------
1,226,200
- -----------------------------------------------------------------------------------------------
Automotive -- 0.7%
180,000 B Dura Operating Corp., Sr. Sub. Notes,
9.000% due 5/1/09(b) 167,400
300,000 BB- Lear Corp., Sub. Notes, 9.500% due 7/15/06 312,750
120,000 B Motors and Gears, Inc., Sr. Notes, Series D,
10.750% due 11/15/06 118,200
300,000 Ba2* Navistar International Inc., Sr. Sub. Notes,
8.000% due 2/1/08 294,000
60,000 B- Safety Components International Corp., Sr. Sub. Notes,
10.125% due 7/15/07 46,200
90,000 B Transportation Manufacturing Operations Inc.,
Guaranteed Sr. Sub. Notes, 11.250% due 5/1/09(b) 90,225
- -----------------------------------------------------------------------------------------------
1,028,775
- -----------------------------------------------------------------------------------------------
Banking -- 0.3%
60,000 B- Imperial Credit Capital Trust I, Guaranteed Notes,
Series B, 10.250% due 6/14/02 48,450
30,000 B- Imperial Credit Industries Inc., Sr. Notes, Series B,
9.875% due 1/15/07 22,875
45,000 Baa3* North Fork Capital Trust, 8.700% due 12/15/26 47,250
280,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 177,800
45,000 B+ Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 42,750
30,000 Baa3* Riggs Capital Trust, 8.625% due 12/31/26(b) 28,050
40,000 BB Webster Capital Trust Inc., Bonds, 9.360% due 1/29/27(b) 39,250
- -----------------------------------------------------------------------------------------------
406,425
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===============================================================================================
<S> <C> <C> <C>
Broadcasting -- 2.9%
$ 225,000 B- Acme Television Financial, Sr. Discount Notes,
step bond to yield 10.187% due 9/30/04 $ 198,281
110,000 B Affinity Group Holding Inc., Sr. Notes, 11.000% due 4/1/07 109,725
AMFM Inc.:
530,000 Ba2* Guaranteed Sr. Notes, 8.000% due 11/1/08 524,700
190,000 B1* Guaranteed Sr. Sub. Notes, 9.375% due 10/1/04 193,800
40,000 B- Azteca Holdings S.A., Sr. Notes, 11.000% due 6/15/02 32,600
Capstar Broadcasting Corp.:
155,000 B Sr. Discount Notes, step bond to yield 12.750% due 2/1/02 132,525
Sr. Sub. Notes:
100,000 B1* 10.750% due 5/15/06 109,125
240,000 B1* 9.250% due 7/1/07 243,300
240,000 CCC+ CD Radio Inc., Sr. Notes, 14.500% due 5/18/09(b) 207,000
305,000 B- Citadel Broadcasting Co., Sr. Sub Notes, 10.250% due 7/1/07 315,675
520,000 B EchoStar DBS Corp., Sr. Notes, 9.375% due 2/1/09(b) 514,800
Garden State Newspapers, Inc., Sr. Sub. Notes:
225,000 B+ 8.750% due 10/1/09 210,937
130,000 B+ 8.625% due 7/1/11(b) 117,325
Globo Communicacoes e Participacoes S.A.:
60,000 B+ Guaranteed Sr. Notes, 10.500% due 12/20/06(b) 46,350
60,000 B+ Unsubordinated Notes, 10.625% due 12/5/08(b) 45,000
Granite Broadcasting Corp., Sr. Sub. Notes:
100,000 B- 9.375% due 12/1/05 100,750
300,000 B- 8.875% due 5/15/08 288,000
140,000 BB+ Jacor Communications Co., Sr. Sub. Notes,
8.750% due 6/15/07 145,600
110,000 B3* Paxon Communications, Sr. Sub. Notes,
11.625% due 10/1/02 114,263
195,000 NR PHI Holdings Inc., Notes, 16.000% due 5/15/01 165,418
180,000 B- Radio One, Inc., Guaranteed Sr. Sub. Notes, Series B,
7.000% due 5/15/04 188,550
40,000 B2* Sinclair Broadcast Group, Inc., Sr. Sub. Notes,
8.750% due 12/15/07 37,400
Spanish Broadcasting Systems Inc., Sr. Notes:
60,000 NR 11.000% due 3/15/04 66,000
240,000 B- 9.625% due 11/1/09 241,200
90,000 B+ TV Azteca SA, Guaranteed Sr. Notes,
10.500% due 2/15/07 72,000
- -----------------------------------------------------------------------------------------------
4,420,324
- -----------------------------------------------------------------------------------------------
Building/Construction -- 0.6%
120,000 B- Albecca Inc., Sr. Sub. Notes, 10.750% due 8/15/08 94,500
50,000 CCC+ American Architectural Products Corp., Sr. Notes,
11.750% due 12/1/07 20,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING (a) SECURITY VALUE
===============================================================================================
<S> <C> <C> <C>
Building/Construction -- 0.6% (continued)
$ 50,000 B Atrium Cos. Inc., Guaranteed Sr. Sub. Notes, Series B,
10.500% due 5/1/09 $ 47,875
Building Materials Corp., Sr. Notes:
20,000 BB 8.625% due 12/15/06 19,800
140,000 BB 8.000% due 12/1/08(b) 128,800
25,000 B+ Cia. Latino Americana de Infraestuctura & Servicos S.A.,
Guaranteed Sr. Notes, 11.625% due 6/1/04 15,250
460,000 Ba1* D.R. Horton, Inc., Guaranteed Sr. Notes, 8.000% due 2/1/09 395,600
190,000 BB GS Superhighway, Sr. Notes, 9.875% due 8/15/04 110,200
100,000 B NCI Building Systems Inc., Series B, Sr. Sub. Notes,
9.250% due 5/1/09 94,750
50,000 NR Republic Group Inc., Sr. Sub. Notes, 9.500% due 7/15/08 47,375
- -----------------------------------------------------------------------------------------------
974,150
- -----------------------------------------------------------------------------------------------
Business Services -- 0.3%
30,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes,
11.000% due 11/1/06 29,100
350,000 B- Pierce Leahy Corp., Sr. Sub. Notes, 11.125% due 7/15/06 371,000
- -----------------------------------------------------------------------------------------------
400,100
- -----------------------------------------------------------------------------------------------
Casinos/Gaming -- 2.0%
55,000 B+ Autotote Corp., Sr. Notes, 10.875% due 8/1/04 56,375
300,000 B+ Boyd Gaming Co., Sr. Sub. Notes, 9.500% due 7/15/07 292,500
386,600 NR Colorado Gaming Entertainment Co., Sr. Notes,
12.000% due 6/1/03 320,779
200,000 Caa3* Fitzgeralds Gaming Corp., Sr. Secured Notes,
12.250% due 12/15/04 110,000
400,000 BBB- Harrah's Operating Co., Inc., Guaranteed Sr. Notes,
7.500% due 1/15/09 386,000
290,000 B Hollywood Casino Corp., Guaranteed Sr. Secured Notes,
11.250% due 5/1/07 292,537
200,000 B+ Horseshoe Gaming Holding Corp., Guaranteed Sr. Sub. Notes,
Series B, 8.625% due 5/15/09 192,500
350,000 B- Isle Capri Black Hawk LLC/Isle of Capri Black Hawk
Capital Corp., First Mortgage Notes, Series B,
13.000% due 8/31/04 384,125
120,000 BB+ Park Place Entertainment, Sr. Sub. Notes,
7.875% due 12/15/05 113,100
75,000 BB- Players International Inc., Sr. Notes, 10.875% due 4/15/05 78,562
600,000 B Trump Atlantic City Associates/Trump Atlantic City
Funding, Inc., First Mortgage Notes, 11.250% due 5/1/06 489,000
230,000 B Trump Castle Inc., Notes, 10.250% due 4/30/03(b) 232,893
- -----------------------------------------------------------------------------------------------
2,948,371
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Chemicals -- 1.5%
- -------------------------------------------------------------------------------------------------
Huntsman Corp., Sr. Sub. Notes:
$ 100,000 B2* 8.873% due 7/1/07(b) $ 92,500
50,000 B2* 9.500% due 7/1/07(b) 46,500
370,000 B+ 10.125% due 7/1/09(b) 367,225
200,000 BB- ISP Holdings Inc., Sr. Notes, 9.750% due 2/15/06 199,250
50,000 B2* Koppers Industries Inc., Sr. Notes, 9.875% due 12/1/07 44,000
950,000 BB Lyondell Chemical Co., Series A, Secured Notes,
9.625% due 5/1/07 950,000
450,000 B+ PCI Chemicals, Sr. Secured Notes, 9.250% due 10/15/07 334,687
Polymer Group Inc., Sr. Sub. Notes:
65,000 B 9.000% due 7/1/07 62,237
70,000 B 8.750% due 3/1/08 65,975
Sterling Chemicals, Inc.:
105,000 B Sr. Discount Notes, step bond to yield
13.112% due 8/15/08 24,150
110,000 BB- Sr. Secured Notes, 12.375% due 7/15/06(b) 107,250
125,000 B+ Trikem S.A., Sub. Notes, 10.625% due 7/24/07(b) 71,875
- -------------------------------------------------------------------------------------------------
2,365,649
- -------------------------------------------------------------------------------------------------
Communications -- 0.3%
700,000 NR CellNet Data Systems, Inc., Sr. Discount Notes,
step bond to yield 15.867% due 10/1/07 272,125
90,000 NR Conecel Holdings Ltd., 14.000% due 10/1/00(b)(c) 8,100
260,000 NR Focal Communications Corp., Sr. Discount Notes,
step bond to yield 11.513% due 2/15/08 149,500
Orbital Imaging Corp., Sr. Notes:
110,000 CCC+ 11.625% due 3/1/05 75,075
20,000 CCC+ 11.625% due 3/1/05(b) 13,650
- -------------------------------------------------------------------------------------------------
518,450
- -------------------------------------------------------------------------------------------------
Conglomerates -- 0.5%
Iron Mountain Inc.:
Guaranteed Sr. Sub. Notes:
50,000 B2* 10.125% due 10/1/06 51,375
725,000 B2* 8.750% due 9/30/09 688,750
40,000 B2* Sr. Sub. Notes, 8.250% due 6/26/07 36,500
30,000 BB Newport News Shipbuilding Inc., Sr. Notes,
8.625% due 12/1/06 29,850
- -------------------------------------------------------------------------------------------------
806,475
- -------------------------------------------------------------------------------------------------
Consumer Products -- 0.7%
French Fragrances, Inc.:
40,000 B+ Guaranteed Sr. Notes, Series D, 10.375% due 5/15/07 36,000
30,000 B+ Sr. Notes, Series B, 10.375% due 5/15/07 27,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Consumer Products -- 0.7% (continued)
$ 340,000 B3* Fruit of the Loom, Inc., Guaranteed Sr. Notes,
8.875% due 4/15/06 $ 139,400
15,000 B- Hedstrom Holdings Inc., Sr. Discount Notes,
step bond to yield 12.000% due 6/1/09 6,206
110,000 NR InterAct Systems Inc., Sr. Discount Notes,
step bond to yield 10.314% due 8/1/03 40,562
85,000 NR Kasper ASL Ltd., Sr. Notes, 12.750% due 3/31/04 82,343
Revlon Consumer Products Corp.:
80,000 B Sr. Notes, 9.000% due 11/1/06 63,200
500,000 B- Sr. Sub. Notes, 8.625% due 2/1/08 271,250
180,000 B+ Royster-Clark, Inc., First Mortgage Bonds,
10.250% due 4/1/09 163,800
45,000 B- Sealy Mattress Co., Sr. Sub. Notes, 9.875% due 12/15/07 43,650
260,000 B- Triarc Cos., Inc., Sr. Sub. Notes, 10.250% due 2/15/09(b) 245,050
- -------------------------------------------------------------------------------------------------
1,118,461
- -------------------------------------------------------------------------------------------------
Consumer Services -- 0.1%
200,000 B Coinmach Laundry Corp., Sr. Notes, 11.750% due 11/15/05 206,500
- -------------------------------------------------------------------------------------------------
Containers -- 0.3%
170,000 B AEP Industries Inc., Sr. Sub. Notes, 9.875% due 11/15/07 161,500
120,000 BB Ball Corp., Guaranteed Sr. Notes, 7.750% due 8/1/06 116,100
230,000 B Packaging Corp., Sr. Sub. Notes, 9.625% due 4/1/09(b) 231,150
- -------------------------------------------------------------------------------------------------
508,750
- -------------------------------------------------------------------------------------------------
Electronics -- 0.7%
1,000,000 BB- Amkor Technologies Inc., Sr. Notes, 9.250% due 5/1/06(b) 977,500
20,000 B1* Moog Inc., Sr. Sub. Notes, 10.000% due 5/1/06 19,875
140,000 B2* Zilog Inc., Sr. Secured Notes, 9.500% due 3/1/05 129,500
- -------------------------------------------------------------------------------------------------
1,126,875
- -------------------------------------------------------------------------------------------------
Energy -- 2.4%
140,000 B1* Belco Oil & Gas Corp., Guaranteed Sr. Sub. Notes,
Series B, 10.500% due 4/1/06 143,500
Benton Oil & Gas Co., Sr. Notes:
100,000 B 11.625% due 5/1/03 76,875
15,000 B 9.375% due 11/1/07 9,431
655,000 BB CMS Energy Corp., Sr. Notes, 8.125% due 5/15/02 653,363
Gulf Canada Resources Ltd.:
100,000 BB+ Sr. Notes, 8.350% due 8/1/06 98,625
Sub. Debentures:
50,000 Ba2* 9.625% due 7/1/05 50,875
100,000 BB+ 8.375% due 11/15/05 97,000
500,000 BB- Leviathan Gas Pipe Line Partners, L.P./Leviathan Finance Corp.,
Guaranteed Sr. Sub. Notes, Series B, 10.375% due 6/1/09 510,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Energy -- 2.4% (continued)
$1,000,000 B+ Nuevo Energy Co., Sr. Sub. Notes, 9.500% due 6/1/08(b) $ 977,500
Ocean Energy, Inc.:
Guaranteed Sr. Sub. Notes:
125,000 BB- 9.750% due 10/1/06 128,750
160,000 BB- Series B, 8.875% due 7/15/07 158,800
160,000 BB- Sr. Notes, Series B, 8.375% due 7/1/08 154,800
15,000 B+ Pogo Producing Co., Sr. Sub. Notes, 8.750% due 5/15/07 14,063
250,000 CCC+ Seven Seas Petroleum Inc., Sr. Notes, 12.500% due 5/15/05 97,500
160,000 B+ Triton Energy Ltd. Corp., Sr. Notes, 8.750% due 4/15/02 158,000
260,000 B+ Vintage Petroleum Inc., Sr. Sub. Notes, 9.750% due 6/30/09 261,950
80,000 NR XCL Ltd., Sr. Secured Discount Notes, 13.500% due 5/1/04(b) 28,000
- -------------------------------------------------------------------------------------------------
3,619,032
- -------------------------------------------------------------------------------------------------
Entertainment -- 0.9%
AMC Entertainment Inc., Sr. Sub. Notes:
30,000 B- 9.500% due 3/15/09 26,250
20,000 B- 9.500% due 2/1/11(b) 17,350
125,000 B Cinemark USA Inc., Sr. Sub. Notes, 9.625% due 8/1/08 111,250
245,000 B1* Fox Family Worldwide Inc., Sr. Notes, 9.250% due 11/1/07 227,850
190,000 BBB- Fox Liberty Networks LLC Inc., Sr. Notes,
8.875% due 8/15/07 193,325
110,000 B Hollywood Park Inc., Sr. Sub. Notes,
9.250% due 2/15/07(b) 106,150
40,000 B- Panavision Inc., Sr. Sub. Discount Exchange Notes,
step bond to yield 9.625% due 2/1/06 20,800
60,000 NR Paragon Corporate Holdings Inc., Sr. Notes,
9.625% due 4/1/08 20,925
260,000 B- Premier Parks Inc, Sr. Discount Notes,
10.000% due 4/1/08 171,600
SFX Entertainment, Inc., Guaranteed Sr. Sub. Notes:
110,000 B- 9.125% due 12/1/08(b) 101,750
150,000 B- Series B, 9.125% due 2/1/08 138,750
110,000 CCC Silver Cinemas International Inc., Sr. Sub. Notes,
10.500% due 4/15/05 49,500
115,000 BBB Time Warner Inc., Notes, 8.180% due 8/15/07 121,325
280,000 CCC United Artists Theatre Co., Sr. Sub. Notes,
9.750% due 4/15/08 67,200
- -------------------------------------------------------------------------------------------------
1,374,025
- -------------------------------------------------------------------------------------------------
Environment -- 0.6%
Allied Waste North America, Inc.:
500,000 BB- Guaranteed Sr. Notes, Series B, 7.875% due 1/1/09 420,000
550,000 B+ Sr. Sub. Notes, 10.000% due 8/1/09(b) 470,250
- -------------------------------------------------------------------------------------------------
890,250
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Financial Services -- 1.9%
$ 65,000 CCC+ Aames Financial Corp., Sr. Notes, 9.125% due 11/1/03 $ 39,000
Advanta Corp., Notes:
80,000 BB- 7.000% due 5/1/01 75,000
270,000 BB- 6.920% due 1/28/02 244,350
190,000 B Ameriserve Financial Capital, Secured Notes,
12.000% due 9/15/06(b) 171,000
Amresco Inc., Series:
Sr. Sub. Notes:
130,000 CCC- Series 97-A, 10.000% due 3/15/04 81,900
50,000 CCC- Series 98-A, 9.875% due 3/15/05 30,000
155,000 B1* Cellco Finance NV, Sr. Sub. Notes, 15.000% due 8/1/05(b) 160,425
200,000 B+ Chevy Chase Savings Bank, Sub. Debenture,
9.250% due 12/1/05 196,500
30,000 BB Colonial Capital II, Guaranteed Capital Securities,
Series A, 8.920% due 1/15/27 27,750
ContiFinancial Corp., Sr. Notes:
250,000 Caa2* 7.500% due 3/15/02 60,000
600,000 Caa2* 8.375% due 8/15/03 144,000
70,000 Caa2* 8.125% due 4/1/08 16,800
180,000 B Delta Financial Corp., 9.500% due 8/1/04 144,000
750,000 BB+ Golden State Holdings Inc., Sr. Notes, 7.000% due 8/1/03 711,562
1,000 Caa1* Greate Bay Property Funding, First Mortgage Notes,
10.875% due 1/15/04(c) 716
250,000 B- Nationwide Credit Inc., Sr. Notes, 10.250% due 1/15/08 139,687
25,000 B+ Ocwen Financial Corp., Notes, 11.875% due 10/1/03 23,375
30,000 B+ Pioneer Americas Acquisition Corp., Sr. Secured Notes,
9.250% due 6/15/07 22,987
106,170 Caa1* Polytama International Finance BV, Guaranteed Notes,
11.250% due 6/15/07 20,585
60,000 Baa3* Provident Capital Trust, Guaranteed Notes,
8.600% due 12/1/26 61,575
370,000 BB- RBF Finance Co., Guaranteed Sr. Secured Notes,
11.000% due 3/15/06(b) 388,500
165,000 B- Resource America Inc., Sr. Notes, 12.000% due 8/1/04 135,300
- -------------------------------------------------------------------------------------------------
2,895,012
- -------------------------------------------------------------------------------------------------
Foods -- 0.4%
45,000 CCC+ Ameriserv Food Distribution Inc., Sr. Notes,
10.125% due 7/15/07 22,500
Aurora Foods Inc., Sr. Sub. Notes:
130,000 B+ Series B, 9.875% due 2/15/07 132,275
20,000 B+ Series D, 9.875% due 2/15/07 20,350
15,000 B- Doane Pet Care Co., Sr. Sub. Notes,
9.750% due 5/15/07(b) 14,363
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Foods -- 0.4% (continued)
$ 250,000 B FRD Acquisition Co., Sr. Notes, 12.500% due 7/15/04 $ 150,000
170,000 CCC+ Rab Enterprises Inc., Sr. Notes, 10.500% due 5/1/05 107,100
140,000 B Vlasic Foods International Inc., Series B, Sr. Sub. Notes,
10.250% due 7/1/09 130,550
- -------------------------------------------------------------------------------------------------
577,138
- -------------------------------------------------------------------------------------------------
Health Care -- 2.4%
80,000 B- Alaris Medical Systems Inc., Sr. Sub. Notes,
9.750% due 12/1/06 71,000
Columbia HCA Healthcare Corp.:
50,000 BB+ Debentures, 8.360% due 4/15/24 46,250
Notes:
30,000 BB+ 7.250% due 5/20/08 26,512
50,000 BB+ 7.690% due 6/15/25 40,187
230,000 Ba2* 6.630% due 7/15/45 217,925
100,000 B2* Dade International Inc., Sr. Sub. Notes,
11.125% due 5/1/06 105,750
125,000 B2* Extendicare Health Services, Sr. Sub. Notes,
9.350% due 12/15/07 67,500
150,000 Ba3* Fresenius Medical Care Capital Trust, 7.875% due 2/1/08 133,500
190,000 BBB- Healthcare Corp., Sub. Debentures, 3.250% due 4/1/03 142,975
ICN Pharmaceuticals Inc., Sr. Notes:
150,000 BB 9.250% due 8/15/05 142,687
470,000 BB 8.750% due 11/15/08(b) 434,750
260,000 Caa3* Integrated Health Services, Inc., Sr. Sub. Notes,
9.500% due 9/15/07 23,400
55,000 B- Kinetic Concepts Inc., Sr. Sub. Notes, 9.625% due 11/1/07 40,081
100,000 B- Leiner Health Products Inc., Sr. Sub. Notes,
9.625% due 7/1/07 80,000
100,000 B- Lifepoint Hospital Holdings, Sr. Sub. Notes,
10.750% due 5/15/09(b) 98,500
Mariner Post-Acute Network Inc., Sr. Sub. Notes:
140,000 C 9.500% due 11/1/07 5,600
310,000 C Series B, step bond to yield 9.843% due 11/1/07 9,300
Mediq Inc., Sr. Discount Debentures:
140,000 B3* 11.000% due 6/1/08 42,000
110,000 NR Step bond to yield 13.000% due 6/1/09 44,000
Medpartners Inc., Sr. Sub. Notes:
10,000 B 6.875% due 9/1/00 9,500
20,000 B 7.375% due 10/1/06 16,400
330,000 CCC+ Multicare Cos. Inc., Sr. Sub. Notes, 9.000% due 8/1/07 99,000
120,000 B- Paracelsus Healthcare Corp., Sr. Sub. Notes,
10.000% due 8/15/06 77,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Health Care -- 2.4% (continued)
$ 100,000 Ba3* Quorum Health Group, Inc., Sr. Sub. Notes,
8.750% due 11/1/05 $ 92,000
Sun Healthcare Group Inc., Sr. Sub. Notes:
165,000 Ca* 9.500% due 7/1/07(b)(c) 20,625
190,000 Ca* 9.375% due 5/1/08(c) 23,750
Tenet Healthcare Corp.:
45,000 BB+ Sr. Notes, 8.000% due 1/15/05 42,356
Sr. Sub. Notes:
245,000 BB- 8.625% due 1/15/07 234,281
150,000 BB- 8.125% due 12/1/08(b) 136,313
1,190,000 B- Triad Hospitals Holdings, Sr. Sub. Notes,
11.000% due 5/15/09(b) 1,170,663
- -------------------------------------------------------------------------------------------------
3,694,055
- -------------------------------------------------------------------------------------------------
Industrial Goods & Services -- 1.3%
70,000 NR Applied Power Inc., Sr. Sub. Notes, 8.750% due 4/1/09 65,800
250,000 B- Axia Inc., Sr. Sub. Notes, 10.750% due 7/15/08 233,750
360,000 B- Better Minerals & Aggregates, Sr. Sub. Notes,
13.000% due 9/15/09(b) 360,000
140,000 B+ Flextronics International Ltd., Sr. Sub. Notes,
8.750% due 10/15/07 138,600
50,000 B2* Home Interiors and Gifts Inc., Sr. Sub. Notes,
10.125% due 6/1/08 42,000
80,000 B Huntsman Packaging Corp., Sr. Sub. Notes,
9.125% due 10/1/07 75,800
50,000 B- Jackson Products Inc., Sr. Sub. Notes, 9.500% due 4/15/05 44,500
500,000 B North Atlantic Trading Co., Inc., Guaranteed Sr. Notes,
Series B, 11.000% due 6/15/04 452,500
590,000 BB+ Owens - Illinois Inc., Sr. Notes, 8.100% due 5/15/07 567,138
- -------------------------------------------------------------------------------------------------
1,980,088
- -------------------------------------------------------------------------------------------------
Lodging -- 1.2%
100,000 B- Epic Resorts Inc., Sr. Secured Notes, 13.000% due 6/15/05 92,375
HMH Properties, Inc.:
350,000 BB Guaranteed Sr. Notes, Series B, 7.875% due 8/1/08 304,500
50,000 BB Sr. Notes, 8.450% due 12/1/08 44,563
500,000 BB- Host Marriott Travel Plaza, Sr. Secured Notes,
9.500% due 5/15/05 525,000
90,000 B+ Prime Hospitality Corp., Sr. Sub. Notes, 9.750% due 4/1/07 82,125
Starwood Hotels and Resorts Worldwide Inc., Notes:
250,000 Ba1* 6.250% due 11/15/00 246,875
300,000 Ba1* 6.750% due 11/15/03 283,875
250,000 Ba1* 6.750% due 11/15/05 222,813
- -------------------------------------------------------------------------------------------------
1,802,126
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Manufacturing -- 0.4%
$ 240,000 B- Blount Inc., Sr. Sub. Notes, 13.000% due 8/1/09(b) $ 246,300
120,000 B- Decora Industries, Inc., Secured Notes, 11.000% due 5/1/05 110,850
35,000 CCC+ HCC Industries Inc., Sr. Sub. Notes, 10.750% due 5/15/07 28,000
120,000 B- Roller Bearing Co., Inc., Sr. Sub. Notes, 9.625% due 6/15/07 107,400
100,000 CCC+ Samsonite Corp., Sr. Sub. Notes, 10.750% due 6/15/08 84,000
- -------------------------------------------------------------------------------------------------
576,550
- -------------------------------------------------------------------------------------------------
Media - Cable -- 3.7%
Adelphia Communications Corp., Sr. Notes:
100,000 B+ 10.250% due 7/15/00 102,500
1,282 B+ 9.500% due 2/15/04 1,261
150,000 B+ 8.375% due 2/1/08(b) 133,574
60,000 B+ 7.875% due 5/1/09 54,450
Allbritton Communications Co.:
250,000 B- Sr. Sub. Debentures, 9.750% due 11/30/07 250,625
550,000 B- Sr. Sub. Notes, 8.875% due 2/1/08 528,000
100,000 B- American Media Operation Inc., Sr. Sub. Notes,
11.625% due 11/15/04 97,500
40,000 CC Central European Media Enterprises, Sr. Notes,
9.375% due 8/15/04 15,200
320,000 BB- Century Communications Corp., Sr. Notes,
9.500% due 3/1/05 326,400
Charter Communications Holdings LLC:
500,000 B+ Sr. Discount Notes, step bond to yield 9.535% due 4/1/04 298,750
600,000 B+ Sr. Notes, 8.625% due 4/1/09 568,500
CSC Holdings Inc.:
Debentures:
40,000 BB+ 8.125% due 8/15/09 40,150
50,000 BB+ 7.875% due 2/15/18 47,500
1,020,000 BB+ Sr. Notes, 7.250% due 7/15/08 971,550
Sr. Sub. Debentures:
25,000 BB- 9.875% due 2/15/13 26,063
250,000 BB- 10.500% due 5/15/16 270,625
Diamond Cable Communications PLC, Sr. Discount Notes:
125,000 B- Step bond to yield 11.263% due 12/15/00 113,906
235,000 B3* Step bond to yield 9.975% due 2/15/07 183,888
150,000 Ba3* FLAG Ltd., Sr. Notes, 8.250% due 1/30/08 133,125
135,000 NR Golden Sky Systems Inc., Sr. Sub. Notes,
12.375% due 8/1/06(b) 148,163
100,000 BB+ Jones Intercable, Inc., Sr. Sub. Debenture,
10.500% due 3/1/08 106,750
275,000 NR KNOLOGY Holdings, Inc., Sr. Discount Notes,
step bond to yield 12.492% due 10/15/07 153,313
</TABLE>
See Notes to Financial statements.
- --------------------------------------------------------------------------------
34 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Media - Cable -- 3.7% (continued)
NTL Inc., Sr. Notes:
$ 305,000 B- 10.000% due 2/15/07 $ 311,100
130,000 B- 11.500% due 10/1/08(b) 138,450
40,000 B3* Pegasus Communications Corp., Sr. Notes,
9.750% due 12/1/06(b) 39,900
50,000 B2* Pegasus Media & Communications Inc., Notes,
12.500% due 7/1/05 54,750
Rogers Cablesystems Ltd.:
400,000 BB+ Debentures, 10.125% due 9/1/12 431,500
40,000 BB+ Sr. Notes, 10.000% due 3/15/05 42,900
110,000 Caa3* Supercanal Holdings S.A., Sr. Notes, 11.500% due 5/15/05 57,750
- -------------------------------------------------------------------------------------------------
5,648,143
- -------------------------------------------------------------------------------------------------
Metals -- 1.1%
390,000 BB AK Steel Corp., Sr. Notes, 7.875% due 2/15/09 356,850
140,000 BB- AmeriSteel Corp., Sr. Notes, 8.750% due 4/15/08 140,350
120,000 Ca* Anker Coal Group Inc., Sr. Notes, 9.750% due 10/1/07(b)(c) 65,813
190,000 BB California Steel Industries, Sr. Notes, 8.500% due 4/1/09(b) 179,075
60,000 B- Continental Global Group Inc., Sr. Notes,
11.000% due 4/1/07 40,725
200,000 B Lodestar Holdings Inc., Sr. Notes, 11.500% due 5/15/05 155,250
460,000 B- Neenah Corp., Sr. Sub. Notes, 11.125% due 5/1/07(b) 431,250
100,000 B UCAR Global Enterprises Inc., Sr. Sub. Notes,
12.000% due 1/15/05 104,500
210,000 B Weirton Steel Corp., Sr. Notes, 11.375% due 7/1/04 179,550
- -------------------------------------------------------------------------------------------------
1,653,363
- -------------------------------------------------------------------------------------------------
Paper -- 1.1%
150,000 CCC+ APP Finance II Mauritius Ltd., Bonds,
12.000% due 12/29/49 91,500
130,000 B- Impac Group, Inc., Sr. Sub. Notes, 10.125% due 3/15/08 116,675
195,000 CCC+ Indah Kiat Finance Mauritius Ltd., Sr. Notes,
10.000% due 7/1/07 123,825
190,000 B+ Pacifica Paper, Inc., Sr. Notes, 10.000% due 3/15/09(b) 194,275
250,000 CCC+ Pindo Deli Finance Mauritius Ltd., Sr. Notes,
10.750% due 10/1/07 161,250
429,000 CCC+ Repap New Brunswick, Sr. Notes, 10.625% due 4/15/05 380,738
Riverwood International Corp.:
145,000 B- Sr. Notes, 10.250% due 4/1/06 145,544
370,000 CCC+ Sr. Sub. Notes, 10.875% due 4/1/08 358,900
220,000 CCC+ Tjiwi Kimia Finance Mauritius Ltd., Sr. Notes,
10.000% due 8/1/04 139,700
- -------------------------------------------------------------------------------------------------
1,712,407
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 35
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
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 $ 73,688
200,000 B- Perry-Judd Inc., Sr. Sub. Notes, 10.625% due 12/15/07 182,000
Von Hoffman Press Inc., Sr. Sub. Notes:
30,000 B- 10.375% due 5/15/07(b) 30,413
24,356 NR 13.500% due 5/15/09(b) 22,164
- -------------------------------------------------------------------------------------------------
308,265
- -------------------------------------------------------------------------------------------------
Retail -- 0.9%
350,000 BB+ 7-Eleven, Inc., Sr. Sub. Second Priority Notes,
4.500% due 6/15/04 286,563
150,000 B Mothers Work Inc., Sr. Notes, 12.625% due 8/1/05 155,813
390,000 B+ NBTY Inc., Sr. Sub. Notes, 8.625% due 9/15/07 326,625
280,000 BB- Sbarro Inc., Sr. Notes, 11.000% due 9/15/09(b) 276,150
67,000 B1* United Stationers Supply, Sr. Sub. Notes,
12.750% due 5/1/05 72,360
210,000 CCC+ U.S. Office Products Co., Sr. Sub. Notes, 9.750% due 6/15/08 111,300
90,000 BB+ Zale Corp., Sr. Notes, 8.500% due 10/1/07 89,325
- -------------------------------------------------------------------------------------------------
1,318,136
- -------------------------------------------------------------------------------------------------
Technology -- 1.1%
Cybernet Internet Services International, Inc.:
120,000 Caa2* Sr. Notes, 14.000% due 7/1/09(b) 103,200
440,000 NR Step bond to yield 13.000% due 8/15/09(b) 242,000
70,000 B1* DII Group Inc., Sr. Sub. Notes, 8.500% due 9/15/07 68,163
480,000 NR DIVA Systems Corp., Sr. Discount Notes, step bond to
yield 13.655% due 3/1/08 143,400
260,000 B Fairchild Semiconductor Corp., Sr. Sub. Notes,
10.125% due 3/15/07 258,050
50,000 B- Integrated Device Technology, Inc., Sub. Notes,
5.500% due 6/1/02 49,750
600,000 BB+ Unisys Corp., Sr. Notes, 7.875% due 4/1/08 573,000
160,000 B- Verio Inc., Sr. Notes, 10.375% due 4/1/05 161,200
20,000 B- Wavetek Corp., Sr. Sub. Notes, 10.125% due 6/15/07 16,950
- -------------------------------------------------------------------------------------------------
1,615,713
- -------------------------------------------------------------------------------------------------
Telecommunications -- 11.3%
310,000 B+ Alaska Communications Systems, Sr. Sub. Notes,
9.375% due 5/15/09(b) 297,600
320,000 B Allegiance Telecom Inc., Sr. Discount Notes,
step bond to yield 12.377% due 2/15/08 215,600
110,000 B3* Barak I.T.C., Sr. Discount Notes, step bond to yield
12.750% due 11/15/07 62,013
480,000 B3* Benedek Communications Corp., Sr. Discount Notes,
step bond to yield 13.865% due 5/15/06 420,000
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
36 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Telecommunications -- 11.3% (continued)
$ 90,000 NR Birch Telecom Inc., Sr. Notes, 14.000% due 6/15/08 $ 90,788
CapRock Communications Corp., Sr. Notes:
50,000 B 12.000% due 7/15/08 48,875
110,000 B 11.500% due 5/1/09 106,425
540,000 NR Celcaribe SA, Sr. Notes, 14.500% due 3/15/04 434,700
23,000 B+ Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 24,323
80,000 B3* Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 11.627% due 12/15/05 75,700
415,000 B1* COLT Telecom Group, Sr. Discount Notes, step bond to
yield 9.758% due 12/15/06 343,413
35,000 B- Concentric Networks Inc., Sr. Notes, 12.750% due 12/15/07 36,138
Covad Communications Group:
290,000 B- Sr. Discount Notes, step bond to yield
14.225% due 3/15/08 174,026
250,000 B- Sr. Notes, 12.500% due 2/15/09(b) 246,250
215,000 NR Dobson Communication Corp., Sr. Notes,
11.750% due 4/15/07 230,588
570,000 NR DTI Holdings Inc., Sr. Discount Notes, step bond to
yield 12.172% due 3/1/08 198,788
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 61,650
40,000 B- Exodus Communications, Sr. Notes, 11.250% due 7/1/08(b) 40,800
400,000 NR FirstWorld Communications Inc., Sr. Discount Notes,
step bond to yield 13.693% due 4/15/08 212,000
540,000 BB Global Crossing Holdings Ltd., Sr. Notes,
9.625% due 5/15/08 546,750
15,000 B- Gray Communications Systems Inc., Sr. Sub. Notes,
10.625% due 10/1/06 15,600
20,000 NR GST Telecommunications, Sr., Discount Notes,
step bond to yield 14.752% due 12/15/05 20,000
350,000 NR GST Telecommunications/GST Network Funding,
Sr. Discount Notes, step bond to yield
10.500% due 5/1/03(b) 164,500
470,000 NR GST USA Inc., Guaranteed Sr. Discount Notes,
step bond to yield 14.615% due 12/15/05 371,300
40,000 B Hermes Europe Railtel BV, Sr. Notes, 11.500% due 8/15/07 39,800
Hyperion Telecommunications, Inc.:
80,000 B+ Sr. Discount Notes, step bond to yield
13.467% due 4/15/03(b) 68,400
50,000 BB- Sr. Notes, 12.250% due 9/1/04 53,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Telecommunications -- 11.3% (continued)
ICG Holdings, Inc.:
$ 200,000 B- Guaranteed Sr. Secured Discount Notes, step bond to
yield 12.500% due 5/1/06 $ 152,000
160,000 B- Sr. Discount Notes, step bond to yield
13.174% due 9/15/00 137,600
ICG Services, Inc., Sr. Discount Notes:
480,000 B- Step bond to yield 9.692% due 2/15/08 276,000
380,000 B- Step bond to yield 9.924% due 5/1/08 205,200
135,000 B- Innova S. de R.L., Sr. Notes, 12.875% due 4/1/07 112,050
240,000 B+ Insight Midwest Capital, Sr. Notes, 9.750% due 10/1/09(b) 246,600
Intermedia Communications Inc.:
230,000 B Sr. Discount Notes, step bond to yield
10.750% due 7/15/02 159,275
Sr. Notes:
135,000 B 8.875% due 11/1/07 119,475
225,000 B 8.500% due 1/15/08 198,000
80,000 B 8.600% due 6/1/08 70,800
240,000 B IPC Information Systems Inc., Sr. Discount Notes,
step bond to yield 10.875% due 5/1/08 184,800
KMC Telecom Holdings:
500,000 B- Sr. Discount Notes, step bond to yield
13.751% due 2/15/08 270,000
240,000 B- Sr. Notes, 13.500% due 5/15/09(b) 235,800
120,000 B Level 3 Communications Inc., Sr. Notes, 9.125% due 5/1/08 111,300
130,000 NR Logix Communications Enterprises, Sr. Notes,
12.250% due 6/15/08 110,175
350,000 B- McCaw International Ltd., Sr. Discount Notes,
step bond to yield 12.145% due 4/15/07 210,875
270,000 B3* Microcell Communications, Sr. Discount Notes,
step bond to yield 12.199% due 6/1/06 224,775
575,000 B- Millicom International Cellular, Sr. Discount Notes,
step bond to yield 12.404% due 6/1/01 415,438
Nextel Communications, Inc.:
Sr. Discount Notes:
30,000 B1* Step bond to yield 10.650% due 9/15/02 22,500
2,050,000 B1* Step bond to yield 9.991% due 2/15/03 1,455,500
675,000 B1* Step bond to yield 12.982% due 8/15/04 686,813
260,000 B1* Sr. Notes, 12.000% due 11/1/08(b) 289,900
370,000 B- Nextel International, Inc., Sr. Discount Notes,
step bond to yield 12.125% due 4/15/08 188,700
240,000 NR NorthEast Optic Network Inc., Sr. Notes,
12.750% due 8/15/08 247,800
500,000 B- NTL Inc., Sr. Notes, step bond to yield 11.173% due 2/1/01 437,500
90,000 B2* Omnipoint Corp., Sr. Notes, 11.500% due 9/15/09(b) 94,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
38 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Telecommunications -- 11.3% (continued)
$ 40,000 NR Paging Network Inc., Sr. Notes, 13.500% due 6/6/05 $ 8,400
350,000 NR Pathnet Inc., Sr. Notes, 12.250% due 4/15/08 192,500
520,000 Ba2* Price Communications Wireless Inc., Sr. Secured Notes,
9.125% due 12/15/06 525,200
200,000 B- Primus Telecom Group, Inc., Sr. Notes,
9.875% due 5/15/08 174,500
60,000 B+ Protection One Alarm, Sr. Discount Notes,
13.625% due 6/30/05 36,000
PSINet Inc., Sr. Notes:
80,000 B- 10.000% due 2/15/05 78,800
170,000 B- 11.500% due 11/1/08 178,500
125,000 BB+ Qwest Communications International Inc., Sr. Discount Notes,
step bond to yield 9.470% due 10/15/07 97,500
50,000 B3* RCN Corp., Sr. Discount Notes, step bond to yield
11.125% due 10/15/07 34,688
270,000 B3* Rhythms Netconnections, Inc., Sr. Discount Notes,
step bond to yield 13.695% due 5/15/08 132,975
250,000 BB- Rogers Cantel, Inc., Sr. Sub. Notes, 8.800% due 10/1/07 255,625
RSL Communications PLC, Guaranteed Sr. Notes:
70,000 B2* 9.125% due 3/1/08 58,975
100,000 B2* 10.500% due 11/15/08 91,000
70,000 B- Satelites Mexicanos S.A., Sr. Notes, Series B,
10.125% due 11/1/04 52,500
200,000 B- Telecommunications Techniques Co., LLC,
Guaranteed Sr. Sub. Notes, 9.750% due 5/15/08 190,500
230,000 B3* Telecorp PCS, Inc., Sr. Discount Notes,
step bond to yield 11.576% due 4/15/04(b) 141,450
80,000 NR Telehub Communications Corp., Sr. Discount Notes,
step bond to yield 13.882% due 7/31/05 12,800
30,000 B+ Telewest PLC, Sr. Notes, 11.250% due 11/1/08(b) 32,550
200,000 CCC Teligent Inc., Sr. Notes, 11.500% due 12/1/07 184,000
270,000 B2* Time Warner Telecom LLC Inc., Sr. Notes,
9.750% due 7/15/08 276,750
45,000 B Transtel Pass Through Trust, Trust Certificates,
12.500% due 11/1/07(b) 21,825
United Pan-Europe Communications NV:
480,000 B2* Sr. Discount Notes, step bond to yield
12.500% due 8/1/09(b) 254,400
200,000 B2* Sr. Notes, 10.875% due 8/1/09(b) 195,500
190,000 CCC+ US Unwired Inc., Sr. Discount Notes,
step bond to yield 13.375% due 11/1/09(b) 100,700
80,000 NR US Xchange, LLC, Sr. Notes, 15.000% due 7/1/08 82,300
150,000 NR VersaTel Telecom International N.V., Sr. Notes,
13.250% due 5/15/08 150,375
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 39
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Telecommunications -- 11.3% (continued)
Viasystems Inc., Sr. Sub. Notes:
$ 400,000 B- 9.750% due 6/1/07 $ 324,000
140,000 B- Series B, 9.750% due 6/1/07 113,400
1,180,000 B- Viatel Inc., Sr. Discount Notes, step bond to yield
12.094% due 4/15/08 660,800
WinStar Communications Inc., Sr. Sub. Notes:
130,000 CCC 15.000% due 3/1/07 154,375
490,000 CCC 10.000% due 3/15/08 426,300
150,000 CCC Step bond to yield 7.907% due 3/15/08 134,250
230,000 B Worldwide Fiber Inc., Sr. Notes, 12.000% due 8/1/09 231,150
- -------------------------------------------------------------------------------------------------
17,243,891
- -------------------------------------------------------------------------------------------------
Telephone -- 0.9%
160,000 Caa2* 21st Century Telecom Group, Sr. Discount Notes,
step bond to yield 12.246% due 2/15/08 70,400
90,000 NR Bestel S.A., Sr. Discount Notes, step bond to yield
12.750% due 5/15/05 56,250
335,000 B BTI Telecom Corp., Sr. Notes, 10.500% due 9/15/07 291,450
Call-Net Enterprises Inc.:
Sr. Discount Notes:
300,000 B+ Step bond to yield 10.198% due 8/15/03 169,500
270,000 B+ Step bond to yield 9.155% due 8/15/07 183,263
220,000 B+ Step bond to yield 10.781% due 5/15/09 123,750
130,000 B+ Sr. Notes, 8.000% due 8/15/08 115,700
70,000 NR FaciliCom International Inc., Sr. Notes, 10.500% due 1/15/08 65,100
Netia Holdings B.V.:
20,000 B Guaranteed Sr. Discount Notes, step bond to yield
11.533% due 11/1/07 12,750
40,000 B Guaranteed Sr. Notes, 10.250% due 11/1/07 33,800
50,000 NR Onepoint Communications Corp., Sr. Notes,
14.500% due 6/1/08(b) 30,500
170,000 NR Startec Global Communications Inc., Sr. Notes,
12.000% due 5/15/08 152,150
- -------------------------------------------------------------------------------------------------
1,304,613
- -------------------------------------------------------------------------------------------------
Textiles -- 0.3%
200,000 B Galey & Lord Inc., Sr. Sub. Notes, 9.125% due 3/1/08 26,000
340,000 BB- Guess Jeans Inc., Sr. Sub. Notes, 9.500% due 8/15/03 329,375
William Carter Co., Sr. Sub. Notes:
15,000 B- 10.375% due 12/1/06 14,513
50,000 NR 12.000% due 10/1/08 49,875
- -------------------------------------------------------------------------------------------------
419,763
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
40 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Transportation -- 0.4%
- -------------------------------------------------------------------------------------------------
$ 100,000 BB- Eletson Holdings Inc., Notes, 9.250% due 11/15/03 $ 90,250
40,000 BB+ International Shipholding Corp., Sr. Notes,
7.750% due 10/15/07 35,900
300,000 B Johnstown America Industries, Inc., Sr. Sub. Notes,
11.750% due 8/15/05 307,500
90,000 B+ Kitty Hawk Inc., Sr. Secured Notes, 9.950% due 11/15/04 87,637
60,000 NR MRS Logistica S.A., Notes, Series B, 10.625% due 8/15/05 42,600
180,000 NR Pegasus Shipping (Hellas) Ltd., 14.500% due 6/20/08(c) 18,000
120,000 B+ TFM S.A. de C.V., Guaranteed Sr. Discount Notes,
step bond to yield 11.767% due 6/15/09 72,300
25,000 BB- Transportacion Maritima Mexicana S.A. de C.V., Notes,
9.250% due 5/15/03 19,250
- -------------------------------------------------------------------------------------------------
673,437
- -------------------------------------------------------------------------------------------------
Utilities -- 1.6%
5,000 BBB- Calenergy Co., Sr. Notes, 7.630% due 10/15/07 5,037
Calpine Corp., Sr. Notes:
330,000 BB+ 8.750% due 7/15/07 331,650
160,000 BB+ 7.875% due 4/1/08 151,200
210,000 BB+ Cleveland Electric Illuminating Co., First Mortgage Bonds,
6.860% due 10/1/08 197,925
Midland Funding, Sr. Secured Lease Obligations:
440,000 BB Series A, 11.750% due 7/23/05 480,700
575,000 BB Series B, 13.250% due 7/23/06 690,000
12,549 BBB- Series C-91, 10.330% due 7/23/02 13,255
144,781 BBB- Series C-94, 10.330% due 7/23/02 152,925
10,585 BBB- Niagara Mohawk Power Corp., Sr. Notes, 7.375% due 7/1/03 10,585
Northeast Utilities, Notes:
90,666 BB- 8.380% due 3/1/05 90,892
16,506 BB- 8.580% due 12/1/06 16,567
250,000 B- Panda Global Energy Co., Sr. Secured Notes,
12.500% due 4/15/04 124,688
240,000 BB- York Power Funding, Guaranteed Notes,
12.000% due 10/30/07(b) 244,800
- -------------------------------------------------------------------------------------------------
2,510,224
- -------------------------------------------------------------------------------------------------
TOTAL CORPORATE DEBENTURES
(Cost -- $82,055,272) 72,662,418
=================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund, Inc. 41
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
COMMON STOCK -- 0.3%
- -------------------------------------------------------------------------------------------------
Agriculture -- 0.0%
2,202 PSF Holding LLC $ 27,532
- -------------------------------------------------------------------------------------------------
Broadcasting -- 0.1%
1,600 AMFM Inc. 112,000
1,600 Spanish Broadcasting Systems Inc. Class B(b) 31,952
- -------------------------------------------------------------------------------------------------
143,952
- -------------------------------------------------------------------------------------------------
Consumer Products -- 0.0%
909 Hedstrom Holdings Inc. 910
44 Mothers Work Inc. 506
- -------------------------------------------------------------------------------------------------
1,416
- -------------------------------------------------------------------------------------------------
Foods -- 0.0%
25 AmeriKing Inc. 250
- -------------------------------------------------------------------------------------------------
Telecommunications -- 0.2%
2,393 Adelphia Business Solutions, Inc. 67,901
63,432 Celcaribe SA(b) 65,047
547 Intermedia Communications Inc., 14,222
40 Paging Network do Brasil Holding Co., Class B Shares 0
4,030 WinStar Communications, Inc. 156,414
1,636 Viatel, Inc. 54,602
- -------------------------------------------------------------------------------------------------
358,186
- -------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $298,954) 531,336
- -------------------------------------------------------------------------------------------------
PREFERRED STOCK -- 2.5%
Banking -- 0.4%
5,400 California Federal Preferred Capital Corp.,
9.125% Noncumulative Exchangeable, Series A 120,150
3,500 Chevy Chase Preferred Capital Corp.,
10.375% Noncumulative Exchangeable, Series A 182,875
2,500 First Republic Preferred Capital Corp.,
10.500% Noncumulative Exchangeable, Series A 245,195
- -------------------------------------------------------------------------------------------------
548,220
- -------------------------------------------------------------------------------------------------
Broadcasting -- 0.7%
AMFM Inc.:
569 12.000% Sr. Exchangeable 67,000
758 12.625% Cumulative Exchangeable, Series E 89,444
1,930 Citadel Broadcasting Co., 13.250% Exchangeable,
Series A(b) 220,124
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
42 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Broadcasting -- 0.7% (continued)
Pason Communications Corp.:
11 9.750% Convertible(b) $ 124,467
24 13.250% Cumulative Jr. Exchangeable 269,340
Spanish Broadcasting Systems Inc.:
250 14.250% Sr. Exchangeable, Series A 266,250
5 14.250% Sr. Exchangeable, Series A(b) 5,325
- -------------------------------------------------------------------------------------------------
1,041,950
- -------------------------------------------------------------------------------------------------
Energy -- 0.1%
1,557 R&B Falcon Corp., 13.875% Sr. Cumulative Redeemable 152,609
- -------------------------------------------------------------------------------------------------
Foods -- 0.0%
1,415 AmeriKing Inc., 13.000% Sr. Exchangeable 24,055
155 Nebco Evans Holdings Co., 11.250% Sr. Redeemable
Exchangeable 4,650
- -------------------------------------------------------------------------------------------------
28,705
- -------------------------------------------------------------------------------------------------
Health Care -- 0.1%
800 Fresenius Medical Care Trust I,
9.000% Guaranteed Trust Preferred Securities 77,600
- -------------------------------------------------------------------------------------------------
Media - Cable -- 0.2%
CSC Holdings Inc.:
2,816 11.125% Redeemable Exchangeable, Series M 301,312
48 11.750% Redeemable Exchangeable, Series H 5,184
- -------------------------------------------------------------------------------------------------
306,496
- -------------------------------------------------------------------------------------------------
Telecommunications -- 1.0%
812 Concentric Network Corp., 13.500% Sr. Redeemable
Exchangeable, Series B 77,156
Dobson Communications Corp.:
157 12.250% Sr. Redeemable Exchangeable 152,290
2,170 13.000% Sr. Exchangeable 203,980
5,760 Global Telesystems Inc., 7.250% Cumulative Convertible(b) 260,640
280 Intermedia Communications, Inc., 13.500% Exchangeable,
Series B 266,055
175 IXC Communications, Inc., 12.500% Jr. Exchangeable, Series B 200,473
Nextel Communications, Inc.:
940 13.000% Sr. Exchangeable, Series D 99,170
1,120 11.125% Exchangeable, Series E 115,640
2,783 NEXTLINK Communications, Inc.,
14.000% Sr. Exchangeable Redeemable 133,590
- -------------------------------------------------------------------------------------------------
1,508,994
- -------------------------------------------------------------------------------------------------
Textiles -- 0.0%
19 Anvil Holdings Inc., 13.000 Sr. Exchangeable, Series B 418
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Utilities -- 0.0%
1,201 Public Service Co. of New Hampshire,
10.600% Cumulative, Series A $ 30,025
- -------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $3,692,788) 3,695,017
=================================================================================================
WARRANTS(e) -- 0.2%
Aerospace -- 0.0%
290 Decrane Aircraft Holdings Inc., Expire 9/30/08 0
- -------------------------------------------------------------------------------------------------
Broadcasting -- 0.0%
720 CDRadio Inc., Expire 5/15/09(b) 37,800
320 Paxson Communications Corp., Expire 6/30/03 1,280
- -------------------------------------------------------------------------------------------------
39,080
- -------------------------------------------------------------------------------------------------
Chemicals -- 0.0%
40 Sterling Chemicals Holdings Inc., Expire 8/15/08 560
- -------------------------------------------------------------------------------------------------
Energy -- 0.0%
1,500 R&B Falcon Corp., Expire 5/1/09(b) 37,500
- -------------------------------------------------------------------------------------------------
Media - Cable -- 0.0%
1,440 DIVA Systems Corp., Expire 3/1/08 11,520
275 UIH Australia Pacific Inc., Expire 5/15/06 8,250
300 Wireless One Inc., Expire 10/19/00 75
- -------------------------------------------------------------------------------------------------
19,845
- -------------------------------------------------------------------------------------------------
Medical Products -- 0.0%
110 Mediq, Inc., Expire 6/1/09(b) 3,520
- -------------------------------------------------------------------------------------------------
Miscellaneous -- 0.0%
85 Club Regina Resorts Inc., Expire 12/1/04 85
1,215 Consorcio Ecuatoriano, Expire 10/1/00 122
2,850 DTI Holdings Inc., Expire 3/1/08(b) 29
100 Epic Resorts, Expire 6/15/05(b) 0
125 McCaw International Ltd., Expire 4/15/07 313
110 Orbital Imaging Corp., Expire 3/1/05(b) 3,300
80 Telehub Communications Co., Expire 7/31/05(b) 40
- -------------------------------------------------------------------------------------------------
3,889
- -------------------------------------------------------------------------------------------------
Technology -- 0.1%
120 Cybernet Internet Services International, Expire 7/1/09(b) 14,400
1,080 Rhythms NetConnections Inc., Expire 5/15/08(b) 118,973
- -------------------------------------------------------------------------------------------------
133,373
- -------------------------------------------------------------------------------------------------
Telecommunications -- 0.1%
90 Bestel S.A., Expire 5/15/05 270
90 Birch Telecommunications, Inc., Expire 6/15/08 4,950
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
44 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Telecommunications -- 0.1% (continued)
51 CellNet Data System, Expire 10/1/07(b) $ 485
65 COLT Telecom Group PLC, Expire 12/31/06(b) 59,150
65 ESAT Inc., Expire 2/1/07(b) 4,940
400 Firstworld Communications, Expire 4/15/08(b) 28,000
40 Globalstar Telecommunications, Expire 2/15/04(b) 4,400
495 Intelcom Group Inc., Expire 9/15/05 8,663
110 InterAct Systems Inc., Expire 8/1/03 0
45 International Wireless Inc., Expire 8/15/01 0
250 KMC Telecom Holdings Inc., Expire 4/15/08(b) 750
215 Knology Holdings, Inc., Expire 10/15/07(b) 430
110 Loral Orion Inc., Expire 1/15/07 1,237
35 MGC Communications Inc., Expire 10/1/04(b) 5,250
50 Onepoint Communications Inc., Expire 6/1/08 50
350 Pathnet, Inc., Expire 4/15/08(b) 3,500
170 Startec Global Communications, Expire 5/15/08 170
150 VersaTel Telecom International N.V., Expire 5/15/08(b) 21,750
- -------------------------------------------------------------------------------------------------
143,995
- -------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $221,777) 381,762
=================================================================================================
TOTAL HIGH YIELD SECTOR
(Cost -- $86,268,791) 77,270,533
=================================================================================================
<CAPTION>
FACE
AMOUNT++ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
FOREIGN BONDS -- 20.4%
Argentina -- 1.2%
1,790,000USD BB Republic of Argentina, Global Bonds, 11.750% due 4/7/09 1,767,625
- -------------------------------------------------------------------------------------------------
Australia -- 1.7%
3,615,000 AAA Commonwealth of Australia, Bonds, 8.750% due 8/15/08 2,626,722
- -------------------------------------------------------------------------------------------------
Brazil -- 2.7%
Federal Republic of Brazil:
4,366,940USD B+ Capitalization Bonds, Payment-in-kind 8.000% due 4/15/14 2,925,851
790,000USD B+ Discount Notes, Series ZL, 6.938% due 4/15/24 550,531
665,000USD B+ Global Bonds, 14.500% due 10/15/09 689,605
- -------------------------------------------------------------------------------------------------
4,165,987
- -------------------------------------------------------------------------------------------------
Bulgaria -- 1.0%
Republic of Bulgaria:
1,780,000USD B2* Discount Bonds, 6.688% due 7/28/24 1,327,213
410,000USD B2* Interest Reduction Bonds, 2.500% due 7/28/12 276,750
- -------------------------------------------------------------------------------------------------
1,603,963
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT++ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Canada -- 1.3%
Government of Canada, Bonds:
2,935,000 Aa1* 5.750% due 6/1/29 $ 1,912,609
120,000 AAA Series WB60, 7.250% due 6/1/07 86,339
- -------------------------------------------------------------------------------------------------
1,998,948
- -------------------------------------------------------------------------------------------------
Colombia -- 0.1%
115,000USD BB+ Republic of Colombia, Notes, 8.625% due 4/1/08 97,175
- -------------------------------------------------------------------------------------------------
Denmark -- 0.1%
673,000 Aa3* Realkredit Danmark A/S, Mortgage Notes,
7.000% due 10/1/29 93,098
- -------------------------------------------------------------------------------------------------
Germany -- 2.6%
Federal Republic of Germany, Bonds:
3,550,000EUR Aaa* 4.125% due 8/27/04 3,656,793
275,000EUR AAA Series 98, 5.625% due 1/21/02 279,515
- -------------------------------------------------------------------------------------------------
3,936,308
- -------------------------------------------------------------------------------------------------
Mexico -- 3.6%
United Mexican States:
1,630,000USD NR Bonds, Series XW, 10.375% due 2/17/09 1,660,563
595,000USD Ba1* Medium Term Notes, 9.750% due 4/6/05 597,975
4,267,000USD Ba1* Par Bonds, 6.250% due 12/31/19 3,205,584
- -------------------------------------------------------------------------------------------------
5,464,122
- -------------------------------------------------------------------------------------------------
Russia -- 0.6%
Russian Federation, Bonds:
615,000USD B3* 10.000% due 6/26/07(b) 303,656
575,000USD B3* 12.750% due 6/24/28(b) 318,406
3,125,000USD NR Vnesheconombank, Principle Loans, 6.063% due 12/15/20(c) 291,992
- -------------------------------------------------------------------------------------------------
914,054
- -------------------------------------------------------------------------------------------------
Sweden -- 1.8%
Kingdon of Sweden:
3,200,000 AAA Bonds, 6.000% due 2/9/05 397,915
18,200,000 AAA Debentures, 6.750% due 5/5/14 2,373,628
- -------------------------------------------------------------------------------------------------
2,771,543
- -------------------------------------------------------------------------------------------------
United Kingdom -- 2.8%
United Kingdom Gilt Bonds:
1,315,000 AAA 8.000% due 12/7/00 2,205,477
860,000 AAA 9.750% due 8/27/02 1,534,374
310,000 AAA 10.000% due 9/8/03 572,520
- -------------------------------------------------------------------------------------------------
4,312,371
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
46 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Venezuela -- 0.9%
Republic of Venezuela:
425,000USD B+ Bonds, 9.250% due 9/15/27 $ 286,981
404,760 B+ Debt Conversion Bonds, 6.750% due 12/18/07 326,084
1,160,000 B+ Par Bonds, Series DL, 6.750% due 3/31/20 807,650
- -------------------------------------------------------------------------------------------------
1,420,715
- -------------------------------------------------------------------------------------------------
TOTAL FOREIGN BONDS
(Cost -- $31,912,301) 31,172,631
=================================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.3%
$6,618,000 J.P. Morgan Securities, Inc., 5.200% due 11/1/99;
Proceeds at maturity -- $6,620,868; (Fully collateralized
by U.S. Treasury Bonds, 8.125% due 5/15/21;
Market value -- $6,758,302) (Cost -- $6,618,000) 6,618,000
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $163,289,213**) $152,841,033
=================================================================================================
</TABLE>
+ Security has been segregated by the custodian for open futures contracts
commitments.
(a) All ratings are by Standard & Poor's Ratings Services, except 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 is in default.
(d) Security has been issued with attached warrants.
(e) Non-income producing security.
++ Face amount denominated in local currency unless otherwise indicated.
** Aggregate cost for Federal income tax purposes is substantially the same.
Currency abbreviations used in this schedule:
---------------------------------------------
EUR -- Euro
USD -- United States Dollar
See page 48 for definitions of ratings.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 47
<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, B, -- Bonds rated "BB", "B", "CCC", and "CC" are regarded, on balance, as
CCC, predominantly speculative with respect to capacity to pay interest and
and CC repay principal in accordance with the terms of the obligation. "BB"
represents the lowest degree of speculation and "CC" the highest
degree of speculation. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
Moody's 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.
- --------------------------------------------------------------------------------
48 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
=============================================================================================
<S> <C> <C>
ASSETS:
Investments, at value (Cost -- $207,754,116 $196,579,649 $152,841,033
and $163,289,213, respectively)
Foreign currency, at value (Cost -- $73,198) -- 23,500
Dividends and interest receivable 4,185,129 3,444,670
Receivable for Fund shares sold 320,280 --
Receivable for open forward foreign currency
contracts (Note 5) 8,830 221,125
Receivable for securities sold -- 615,476
- ---------------------------------------------------------------------------------------------
Total Assets 201,093,888 157,145,804
- ---------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,267,170 347,955
Payable for open forward foreign currency
contracts (Note 5) 71,260 330,298
Management fees payable 250,137 91,257
Payable to bank 433,416 15,724
Payable for Fund shares purchased 6,975 198,662
Payable to broker-- variation margin -- 4,985
Accrued expenses 60,539 50,242
- ---------------------------------------------------------------------------------------------
Total Liabilities 2,089,497 1,039,123
- ---------------------------------------------------------------------------------------------
Total Net Assets $199,004,391 $156,106,681
=============================================================================================
NET ASSETS:
Par value of capital shares $ 170 $ 139
Capital paid in excess of par value 207,494,795 161,436,229
Undistributed net investment income 18,142,914 12,807,689
Accumulated net realized loss from security
transactions and foreign currencies (15,396,295) (7,591,418)
Net unrealized depreciation of investments
and foreign currencies (11,237,193) (10,545,958)
- ---------------------------------------------------------------------------------------------
Total Net Assets $199,004,391 $156,106,681
=============================================================================================
Shares Outstanding 16,972,702 13,895,033
- ---------------------------------------------------------------------------------------------
Net Asset Value $11.72 $11.24
- ---------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 49
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
========================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 135,204 $ 379,309
Interest 19,018,280 13,542,692
- --------------------------------------------------------------------------------------------------------
Total Investment Income 19,153,484 13,922,001
- --------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,133,695 1,201,897
Audit and legal 28,053 34,453
Shareholder communications 27,479 17,532
Shareholder and system servicing fees 11,476 11,674
Custody 15,641 9,836
Directors' fees 7,935 5,146
Pricing service fees 6,051 48,000
Registration fees -- 1,700
Other 17,704 3,510
- --------------------------------------------------------------------------------------------------------
Total Expenses 1,248,034 1,333,748
- --------------------------------------------------------------------------------------------------------
Net Investment Income 17,905,450 12,588,253
- --------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES
AND FUTURES CONTRACTS (NOTES 3, 5 AND 7):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) (12,343,038) (6,194,533)
Futures contracts -- 78,395
Foreign currency transactions 109,679 777,023
- --------------------------------------------------------------------------------------------------------
Net Realized Loss (12,233,359) (5,339,115)
- --------------------------------------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments,
Foreign Currencies and Futures Contracts:
Beginning of year (14,005,924) (6,152,634)
End of year (11,237,193) (10,545,958)
- --------------------------------------------------------------------------------------------------------
(Increase) Decrease in Net Unrealized Depreciation 2,768,731 (4,393,324)
- --------------------------------------------------------------------------------------------------------
Net Loss on Investments, Foreign Currencies
and Futures Contracts (9,464,628) (9,732,439)
- --------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 8,440,822 $ 2,855,814
========================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
50 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended October 31,
Smith Barney High Income Portfolio 1999 1998
===================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 17,905,450 $ 13,970,601
Net realized loss (12,233,359) (3,248,398)
(Increase) decrease in net unrealized depreciation 2,768,731 (17,723,769)
- ---------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 8,440,822 (7,001,566)
- ---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (13,646,737) (8,703,060)
Net realized gains -- (2,002,944)
- ---------------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (13,646,737) (10,706,004)
- ---------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 42,775,495 49,965,742
Net asset value of shares issued
for reinvestment of dividends 13,646,737 10,706,004
Cost of shares reacquired (12,470,554) (6,431,646)
- ---------------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 43,951,678 54,240,100
- ---------------------------------------------------------------------------------------------------
Increase in Net Assets 38,745,763 36,532,530
NET ASSETS:
Beginning of year 160,258,628 123,726,098
- ---------------------------------------------------------------------------------------------------
End of year* $199,004,391 $160,258,628
===================================================================================================
* Includes undistributed net investment income of: $18,142,914 $13,909,654
===================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 51
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended October 31,
Putnam Diversified Income Portfolio 1999 1998
==================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $12,588,253 $10,863,964
Net realized loss (5,339,115) (3,980,162)
Increase in net unrealized depreciation (4,393,324) (8,769,072)
- --------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 2,855,814 (1,885,270)
- --------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (8,971,238) (5,006,574)
Net realized gains -- (1,644,355)
- --------------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (8,971,238) (6,650,929)
- --------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 11):
Net proceeds from sale of shares 15,890,169 41,078,403
Net asset value of shares issued
for reinvestment of dividends 8,971,238 6,650,929
Cost of shares reacquired (19,533,917) (3,899,578)
- --------------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 5,327,490 43,829,754
- --------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (787,934) 35,293,555
NET ASSETS:
Beginning of year 156,894,615 121,601,060
- --------------------------------------------------------------------------------------------------
End of year* $156,106,681 $156,894,615
==================================================================================================
* Includes undistributed net investment income of: $12,807,689 $9,261,510
==================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
52 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 thirteen
other separate investment portfolios: AIM Capital Appreciation, Alliance Growth,
Van Kampen Enterprise (formerly known as 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), INVESCO Global Strategic Income (formerly known as GT Global
Strategic Income), MFS Total Return, Smith Barney Money Market, Smith Barney
Large Capitalization Growth, Smith Barney Aggressive Growth and Smith Barney Mid
Cap 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 shareholder 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 amortization of premium and accretion of
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
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 53
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
accounting principles. At October 31, 1999, reclassifications were made to the
Portfolios' capital accounts to reflect permanent book/tax differences and
income and gains available for distribution under income tax regulations. Net
investment 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 them
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.
The 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.
In addition, the Portfolios may enter into 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.
2. Management Agreement and Transactions with Affiliated Persons
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), which, in
turn, is a subsidiary of Citigroup Inc. ("Citigroup"), 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.
- --------------------------------------------------------------------------------
54 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Smith Barney Private Trust Company, another subsidiary Citigroup, acts as the
Fund's shareholder servicing agent.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. During the year ended
October 31, 1999, SSB did not receive any brokerage commissions.
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended October 31, 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 $170,619,640 $194,605,279
- --------------------------------------------------------------------------------
Sales 127,140,685 177,668,777
================================================================================
At October 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
SBHI PDIP
================================================================================
Gross unrealized appreciation $ 1,591,593 $ 1,552,034
Gross unrealized depreciation (12,766,060) (12,000,214)
- --------------------------------------------------------------------------------
Net unrealized depreciation $(11,174,467) $ (10,448,180)
================================================================================
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 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 October 31, 1999, there were no open 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. When the Portfolios enter into a closing purchase transaction,
the Portfolios
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 55
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
realize a gain or loss depending upon whether the cost of the closing
transaction is greater or less than the premium originally received without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is eliminated. When a written call option is
exercised, the cost of the security sold will be decreased by the premium
originally received. When a written put option is exercised, the amount of the
premium originally received will reduce the cost of the security which the
Portfolios purchased upon exercise. When written index options are exercised,
settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of loss if the market price of the underlying security
declines.
There were no open covered written call option contracts or written put option
contracts as of October 31, 1999.
5. Foreign Currency Exchange Contracts
At October 31, 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
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
===========================================================================================
<S> <C> <C> <C> <C>
To Sell:
British Pound 2,676,665 $4,394,334 12/22/99 $(24,545)
Canadian Dollar 617,500 420,287 12/8/99 680
Euro 6,273,428 6,617,842 12/15/99 (41,658)
Euro 228,563 241,111 12/15/99 6,468
Euro 207,667 219,068 12/15/99 1,682
- -------------------------------------------------------------------------------------------
(57,373)
- -------------------------------------------------------------------------------------------
To Buy:
British Pound 208,238 341,868 12/22/99 (506)
British Pound 237,000 389,088 12/22/99 (600)
Euro 299,317 315,750 12/15/99 (3,951)
- -------------------------------------------------------------------------------------------
(5,057)
- -------------------------------------------------------------------------------------------
Net Unrealized Loss on Open Forward
Foreign Currency Contracts $(62,430)
===========================================================================================
</TABLE>
- --------------------------------------------------------------------------------
56 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio
<TABLE>
<CAPTION>
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
=========================================================================================
<S> <C> <C> <C> <C>
To Buy:
Australian Dollar 897,150 $574,139 2/3/00 $(14,239)
Australian Dollar 448,575 287,070 2/3/00 (10,407)
Australian Dollar 448,575 287,070 2/3/00 (10,095)
British Pound 444,500 731,687 2/3/00 (3,414)
Canadian Dollar 1,418,700 967,273 2/3/00 (462)
Danish Krone 3,682,253 525,443 2/3/00 (4,377)
Euro 2,686,700 2,853,395 2/3/00 (26,747)
Euro 2,019,500 2,144,799 2/3/00 (17,883)
Euro 569,900 605,259 2/3/00 (11,002)
Japanese Yen 381,769,000 3,723,486 2/3/00 135,701
Japanese Yen 143,014,165 1,394,852 2/3/00 50,734
- -----------------------------------------------------------------------------------------
87,809
- -----------------------------------------------------------------------------------------
To Sell:
Australian Dollar 3,061,981 1,959,542 2/3/00 29,214
British Pound 351,400 578,436 2/3/00 499
Canadian Dollar 4,664,400 3,180,200 2/3/00 (47,628)
Euro 560,100 594,851 2/3/00 4,977
Euro 694,850 737,962 2/3/00 (14,883)
Euro 694,850 737,962 2/3/00 (14,984)
Euro 1,067,600 1,133,839 2/3/00 (11,898)
Japanese Yen 23,951,400 233,604 2/3/00 (8,681)
Japanese Yen 136,561,328 1,331,916 2/3/00 (49,048)
Japanese Yen 8,903,800 86,841 2/3/00 (3,245)
Japanese Yen 88,365,850 861,854 2/3/00 (32,486)
Japanese Yen 21,037,485 205,184 2/3/00 (7,463)
Japanese Yen 111,586,497 1,088,330 2/3/00 (41,356)
- -----------------------------------------------------------------------------------------
(196,982)
- -----------------------------------------------------------------------------------------
Net Unrealized Loss on Forward
Foreign Currency Contracts $(109,173)
=========================================================================================
</TABLE>
6. Repurchase Agreements
The Portfolios purchase (and their custodian takes possession of) U.S.
government securities from banks and securities dealers subject to agreements to
resell the securities to the sellers at a future date (generally, the next
business day) at an agreed-upon higher repurchase price. The Portfolios require
continual maintenance of the market value of the collateral in amounts at least
equal to the repurchase price.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 57
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 October 31, 1999, the PDIP had the following open futures contracts:
<TABLE>
<CAPTION>
# of Basis Market Unrealized
Contracts Expiration Value Value Gain (Loss)
=====================================================================================================
<S> <C> <C> <C> <C> <C>
Contracts to Sell:
3 Month Euro Euribor 1 3/00 $251,033 $251,131 $(98)
3 Month Euro Euribor 1 3/01 252,264 252,375 (111)
3 Month Euro Euribor 1 6/00 254,065 254,163 (98)
3 Month Euro Euribor 1 6/01 252,694 252,818 (124)
3 Month Euro Euribor 1 9/00 253,447 253,532 (85)
3 Month Euro Euribor 1 12/99 254,736 254,781 (45)
3 Month Euro Euribor 1 12/00 248,726 248,837 (111)
3 Month Euroyen 30 9/00 7,151,159 7,151,346 (187)
U.S. Treasury Long Bond 15 12/99 1,738,865 1,703,906 34,959
- -----------------------------------------------------------------------------------------------------
34,100
- -----------------------------------------------------------------------------------------------------
Contracts to Buy:
Euro-Schatz 9 12/99 987,207 988,194 987
3 Month Euroyen 12 3/00 2,801,139 2,800,921 (218)
3 Month Euroyen 18 6/00 4,278,036 4,277,924 (112)
U.S. Treasury Long Bond 10 12/99 1,110,700 1,135,938 25,238
- -----------------------------------------------------------------------------------------------------
25,895
- -----------------------------------------------------------------------------------------------------
Net Unrealized Gain $59,995
=====================================================================================================
</TABLE>
8. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash,
- --------------------------------------------------------------------------------
58 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 October 31, 1999, the Portfolios had no securities on loan.
9. Securities Traded on a When-Issued or To-Be-Announced Basis
PDIP may trade securities on a when-issued basis or on a to-be-announced ("TBA")
basis.
In a when-issued transaction the securities are purchased or sold by the
Portfolio with payment and delivery taking place in the future in order to
secure what is considered to be an advantageous price and yield to the 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 October 31, 1999, the Portfolios did not hold any TBA securities.
10. Capital Loss Carryforwards
At October 31, 1999, the Smith Barney High Income Portfolio and the Putnam
Diversified Income Portfolio had, for Federal income tax purposes, approximately
$15,317,000 and $7,407,000, respectively, of capital loss carryforwards
available to offset future realized gains. To the extent that these carryforward
losses are used to offset gains, it is probable that the gains so offset will
not be distributed. Expirations occur on October 31 of the years below:
Total 2006 2007
================================================================================
Smith Barney High Income Portfolio $15,317,000 $3,001,000 $12,316,000
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 7,407,000 2,321,000 5,086,000
================================================================================
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 59
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
11. Capital Shares
At October 31, 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:
Year Ended Year Ended
October 31, 1999 October 31, 1998
================================================================================
Smith Barney High Income Portfolio
Shares sold 3,430,771 3,735,587
Shares issued on reinvestment 1,159,451 816,629
Shares reacquired (1,009,907) (497,339)
- --------------------------------------------------------------------------------
Net Increase 3,580,315 4,054,877
================================================================================
Putnam Diversified Income Portfolio
Shares sold 1,352,553 3,309,769
Shares issued on reinvestment 798,153 543,375
Shares reacquired (1,668,397) (321,876)
- --------------------------------------------------------------------------------
Net Increase 482,309 3,531,268
================================================================================
- --------------------------------------------------------------------------------
60 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney
High Income Portfolio 1999 1998(1) 1997 1996 1995
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.97 $13.25 $12.09 $11.26 $10.07
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.92 1.21 0.88 1.14 0.93
Net realized and unrealized gain (loss) (0.28) (1.58) 1.00 0.19 0.48
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.64 (0.37) 1.88 1.33 1.41
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.89) (0.74) (0.66) (0.50) (0.22)
Net realized gains -- (0.17) (0.06) -- --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.89) (0.91) (0.72) (0.50) (0.22)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $11.72 $11.97 $13.25 $12.09 $11.26
- ----------------------------------------------------------------------------------------------------------
Total Return 5.28% (3.38)% 16.24% 12.17% 14.30%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $199 $160 $124 $66 $20
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.66% 0.67% 0.70% 0.84% 0.70%
Net investment income 9.44 9.12 9.36 9.79 9.54
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 73% 82% 89% 104% 57%
==========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) The Manager waived all or part of its fees for the year ended October 31,
1995. If such fees were not waived, the per share decrease on net
investment income and the actual expense ratio would have been $0.04 and
1.07%, respectively.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 61
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Putnam Diversified
Income Portfolio 1999 1998 1997 1996(1) 1995
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.70 $12.31 $11.99 $11.46 $10.18
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.91 0.57 0.67 0.78 0.79
Net realized and unrealized gain (loss) (0.70) (0.62) 0.30 0.27 0.58
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.21 (0.05) 0.97 1.05 1.37
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.67) (0.42) (0.56) (0.39) (0.09)
Net realized gains -- (0.14) (0.09) (0.13) --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.67) (0.56) (0.65) (0.52) (0.09)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $11.24 $11.70 $12.31 $11.99 $11.46
- ----------------------------------------------------------------------------------------------------------
Total Return 1.80% (0.65)% 8.44% 9.43% 13.55%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $156 $157 $122 $81 $32
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.83% 0.87% 0.88% 0.96% 0.97%
Net investment income 7.85 7.48 6.99 7.57 7.53
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 118% 191% 253% 255% 276%
==========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) The Manager waived all or part of its fees for the year ended October 31,
1995. If such fees were not waived, the per share decrease on net
investment income and the actual expense ratio would have been $0.04 and
1.31%, respectively.
- --------------------------------------------------------------------------------
62 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Smith Barney High Income Portfolio and
Putnam Diversified Income Portfolio of Travelers Series Fund Inc. as of October
31, 1999, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended and financial highlights for each of the years in the five-year
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian. As to securities
purchased or sold but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Smith Barney High Income Portfolio and Putnam Diversified Income Portfolio of
Travelers Series Fund Inc. as of October 31, 1999, and the results of their
operations for the year then ended, the changes in their net assets for each of
the years in the two-year period then ended and financial highlights for each of
the years in the five-year period then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
New York, New York
December 15, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 63
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Putnam Diversified Income Portfolio hereby
designates for the fiscal year ended October 31, 1999:
. A corporate dividends received deduction of 4.73%
A total of 7.13% of the ordinary dividends paid by the Fund from net investment
income are derived from Federal obligations and may be exempt from taxation at
the state level.
- --------------------------------------------------------------------------------
64 1999 Annual Report to Shareholders
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors Investment Managers
Victor K. Atkins SSB Citi Fund Management LLC
A.E. Cohen Travelers Investment Adviser, Inc.
Robert A. Frankel
Michael Gellert Custodian
Rainer Greeven PNC Bank, N.A.
Susan M. Heilbron
Heath B. McLendon, Chairman Annuity Administration
Travelers Annuity Investor Services
Officers 5 State House Square
Heath B. McLendon 1 Tower Square
President and Hartford, Connecticut 06183
Chief Executive Officer
Lewis E. Daidone
Senior Vice President This report is submitted for the general
and Treasurer information of the shareholders of Travelers
Series Fund Inc. -- Smith Barney High Income and
John C. Bianchi Putnam Diversified Income Portfolios. It is not
Vice President authorized for distribution to prospective
investors unless accompanied or preceded by a
Paul A. Brook current Prospectus for the Portfolios, which
Controller contains information concerning the Portfolios'
investment policies and expenses as well as other
Christina T. Sydor pertinent information.
Secretary
Salomon Smith Barney is a service mark of Salomon
Smith Barney Inc.
Travelers Series Fund Inc.
388 Greenwich Street
New York, New York 10013
IN0254 12/99
<PAGE>
Travelers Series Fund Inc.
Smith Barney Large Cap
Value Portfolio
Alliance Growth Portfolio
Van Kampen
Enterprise Portfolio
ANNUAL REPORT
October 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE
<PAGE>
Travelers Series Fund Inc.
[PHOTO]
HEATH B. MCLENDON
Chairman
Dear Shareholder:
We are pleased to provide the annual report of the Travelers Series Fund Inc.-
Smith Barney Large Cap Value, Alliance Growth and Van Kampen Enterprise
Portfolios ("Portfolios") for the year ended October 31, 1999. We hope you find
this report to be useful and informative. In this report, we summarize the
year's prevailing economic and market conditions and outline each Portfolio's
investment strategy. A detailed summary of performance and current holdings for
each Portfolio can be found in the appropriate sections that follow.
Portfolio Highlights
Smith Barney Large Cap Value Portfolio
For the year ended October 31, 1999, the Smith Barney Large Cap Value Portfolio
("Portfolio") had a total return of 8.52%. The Standard & Poor's 500 Index ("S&P
500")/1/ returned 25.66% and the Portfolio's Lipper/2/ peer group of equity
income funds returned 15.66% for the same period. (Lipper, Inc. is a major fund-
tracking organization.)
Market Update & Outlook
In the view of the managers, the "healing" of the global economy was the
dominant influence on market activity throughout the Portfolio's fiscal year, as
growth among foreign economies accelerated and investors struggled to calculate
the implications of a rapidly changing global economy. These events were in
contrast to last year, when declining rates and deflation were the major issues,
as oil prices soared and economic activity showed no signs of slowing. When the
balance of risks swung toward U.S. stocks and away from global risks, several
factors such as tightening labor markets, a strong recovery in manufacturing
industries, unrestrained consumer spending and rising commodity prices caused
the Federal Reserve Board ("Fed") to reverse its three rate reductions of last
fall.
- --------------------
/1/ The 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.
/2/ The Lipper peer group is comprised of 44 equity income funds as of October
31, 1999.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
With the U.S. economy growing and declining rates no longer driving stock market
performance, investor focus gradually shifted toward corporate profits.
Consequently, in April, many investors, encouraged by signs of economic
improvement, aggressively shifted from relatively expensive growth stocks into
value-oriented securities likely to benefit from improved global demand.
In fact, the return difference between the S&P Barra Value/3/ and S&P Barra
Growth/4/ indices in April was the largest absolute monthly spread between the
benchmarks since their inception in 1974. As interest rates rose toward the
highest levels in two years, the stock market's strong performance was largely
confined to a narrow group of stocks, and the relative outperformance of value
stocks versus growth stocks proved to be short lived.
Overall, the managers are optimistic about the stock market's prospects over the
next few months. In the interim, the investment team expects the duel between
interest rates and corporate earnings to continue. The managers believe that the
interpretation of inflation and economic data will be the primary influence on
the market's direction over the near term.
The managers continue to view strengthening global demand as an attractive
investment theme, and believe solid relative performance among select securities
in the raw materials, capital goods and energy sectors is likely in the coming
months. They have identified a handful of attractively valued, high-quality
companies they believe are positioned to benefit from this expected higher
demand.
Alcoa, up 63.0%, was among the best performing stocks in the Portfolio and is a
clear beneficiary of better global economic conditions. In previous months, as
demand collapsed and aluminum prices fell, Alcoa's focus on aggressively
reducing costs and the implementation of strict financial goals for each of
their business units reduced its dependability on pricing and allowed the
company to maintain significantly higher levels of profitability versus its
peers. With aluminum prices now rising, a superior operating structure, and
merger synergies from its recent Alumax acquisition, the managers expect Alcoa
to generate strong earnings growth in the future.
- --------------
/3/ The S&P Barra Value Index is a capitalization-weighted index composed of
stocks of the S&P 500 with higher book-to-price ratios relative to the S&P
as a whole.
/4/ The S&P Barra Growth Index is a capitalization-weighted index composed of
stocks of the S&P 500 with lower book-to-price ratios relative to the S&P
as a whole.
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
The Portfolio's investment team continued to maintain meaningful exposure to the
financial industry and selectively added holdings throughout 1999. The impact of
the Euro on the evolution of the European capital markets, surging worldwide
merger volumes, regulatory changes and favorable demographic trends are among
several factors creating attractive growth opportunities for well-positioned
financial services firms.
Although fears of rising rates tempered the performance of financial stocks,
Marsh & McLennan, up 35.3%, nevertheless logged one of the best performances
among the Portfolio's largest holdings. Accounts of price increases by senior
insurance executives suggest to the managers that prices will likely remain the
same for the rest of 1999 and rise somewhat during 2000. As the world's largest
insurance broker, they think Marsh is well positioned to benefit from any such
"turn" in pricing and they believe brokerage revenues will accelerate steadily
over the next 12 months. Merger benefits and strong performance from its Putnam
Investments division have also supported Marsh's strong earnings momentum.
Enron, up 40.0%, and Sprint, higher by 77.0%, have established strong
competitive positions within deregulated industries and were stellar performers
during the Portfolio's fiscal year. The scope of Enron's global wholesale and
retail energy franchise alone created a formidable barrier to entry and the
company strengthened its competitive position during the period. The managers
believe Enron has important advantages that should allow it to continue
generating higher earnings growth driven by deregulation of the U.S. electricity
markets, outsourcing by major corporations and deregulation of the European gas
and electricity markets.
Sprint, the nation's third largest provider of long distance services, continued
to enter new markets and benefit from burgeoning demand for wireless
communication devices and Internet services. The company's shares also benefited
from merger-related catalysts when BellSouth, in an unexpected move, assembled a
competing bid against MCI Worldcom's initial offer for the company. Ultimately,
Sprint agreed to an acquisition by MCI Worldcom in a $115 billion deal that, if
completed, would be the largest corporate takeover in history.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
American Home Products came under pressure for fundamental reasons, including an
earnings shortfall related to weakness in its agricultural chemicals business
and uncertainty associated with several lawsuits filed against the company. The
managers believe American Home Products is actively exploring ways to improve
its agricultural unit and, with the recent settlement, legal concerns are
fading. Going forward, the stock is anticipated to do well as earnings rise and
an impressive array of products are introduced to the marketplace.
Although Raytheon, down by 46.9%, has grown through acquisitions to become a
large and competitive player in the aerospace/defense industry, the stock's
performance was disappointing during the period. The company revised earnings
downward several times during the second half of the Portfolio's fiscal year.
Delayed procurement decisions, failure to book international awards on a timely
basis and an unfavorable program mix were cited as reasons for the reduction.
Nevertheless, the managers remain positive about Raytheon's prospects because of
expected future increases in defense spending.
The team eliminated positions in First Union, down 29.7%, after management
lowered earnings expectations twice in just three months and it became apparent
operational momentum would not materialize for the remainder of 1999.
Higher-than-expected technology costs, sluggish revenue growth and lower
merger-related cost savings versus expectations contributed to a string of First
Union disappointments.
Alliance Growth Portfolio
For the year ended October 31, 1999, the Alliance Growth Portfolio ("Portfolio")
generated a total return of 35.51%, outperforming the S&P 500 return of 25.66%.
Twelve months ago, the stock market was just beginning its recovery from the
sharp drop brought on by the collapse of Asian markets. At that time, the view
of the managers was that the U.S. market decline was more in the nature of a
financial panic than the start of a bear market. Rather than taking defensive
measures, the investment team took advantage of the opportunity to buy depressed
stocks in their most favored industries, primarily technology and financial
services. The stock market recovered rapidly in the ensuing six months and the
managers are pleased to report that the performance of the Alliance Growth
Portfolio was ahead of the major market averages during the period.
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
This past summer upside market momentum gave way to fears that the Federal
Reserve Board ("Fed") would raise rates until there were clear signs that the
economy was decelerating. The Fed is determined to act preemptively to ensure
that an overheated economy does not lead to the return of inflation. This Fed
reversal of interest rates resulted in relatively poor performance by the
financial sector. Yet the managers continue to think that financial services
companies offer an attractive combination of above-average long-term growth at
reasonable valuations and their emphasis has been maintained on this group.
The telecommunications sector continues to be the Portfolio's largest area of
concentration. Surging data traffic, the explosive growth of the Internet and
worldwide deregulation make this, in the view of the managers, still the most
attractive area of the market.
At the close of the Portfolio's fiscal year, the market seemed to have shaken
off its interest rate fears and began to move back up. The managers generally do
not make market timing bets, preferring instead to remain invested in those
stocks that they think afford the best combination of growth at a reasonable
price. The investment team believes that falling rates are probably behind us.
Further gains in the stock market may be driven by earnings gains rather than
valuation gains. In other words, investors should remember that long-term growth
in the stock market has generally tracked earnings growth. The more rapid gains
of recent years were above historical trends and are unlikely to persist.
Van Kampen Enterprise Portfolio
For the year ended October 31, 1999, the Van Kampen Enterprise Portfolio
("Portfolio") generated a total return of 26.48%. In comparison, the S&P 500
returned 25.66%. The managers attribute the Portfolio's underperformance largely
to the poor returns of some of the Portfolio's health care and financial
holdings, and to a relative underweighting in technology stocks for a portion of
the reporting period. As a group, technology stocks were among the market's best
performers during this period.
The Van Kampen Enterprise 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
As long as the original criteria for purchasing a particular stock holds true
and its value remains relatively attractive, the stock usually remains in the
Portfolio.
The reporting period was characterized by considerable market volatility.
Following a significant market decline in the third quarter of 1998 -- resulting
from weakening international economies -- the stock market staged an impressive
rally through much of the period under review. This market appreciation was
reflected in the Dow Jones Industrial Average, which began the reporting period
at slightly more than 8,700, but surpassed the 10,000 milestone in late March
and the 11,000 barrier in early May. (The Dow Jones Industrial Average is a
price-adjusted average of 30 actively traded stocks.)
Concerns that the Fed would increase interest rates somewhat dampened investor
enthusiasm during the third quarter of 1999. Late in the period, however, the
market began to recover and approached the higher levels of previous months. In
the view of the managers, the stock market's rise was caused primarily by
sustained U.S. economic growth, subdued inflation and ongoing favorable
corporate earnings.
In response to the strong fundamentals of technology companies, the managers
increased the Portfolio's weighting in technology stocks while trimming their
holdings in sectors such as health care, financial services and retail. These
changes generally benefited the Portfolio's performance, as technology stocks
were boosted by the strong U.S. economy, improving economic conditions overseas
and increased corporate spending to improve productivity. The managers
eliminated some investments in defensive retail stocks such as grocery store
companies because of lower expected sales growth.
Investments in the technology and broadcast sectors positively contributed to
the Portfolio's performance during the reporting period.
Of course, not all of the managers'stock picks were successful. Several of their
investments in the health care sector underperformed significantly. Despite
positive earnings reports, many of the Portfolio's health care holdings
performed poorly as investors grew concerned about how possible changes in
Medicare reimbursements would affect the future profitability of HMOs.
- --------------------------------------------------------------------------------
6 1999 Annual Report to Shareholders
<PAGE>
Looking forward, the managers do not expect substantial changes in market
conditions. They anticipate continued moderate economic growth and contained
inflation. As long as both conditions remain favorable, the managers are
committed to investing in companies they believe are in a good position to
deliver strong or consistent earnings growth.
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
November 16, 1999
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns+
================================================================================
10/31/99 $18.94 $19.83 $0.24 $0.52 8.52%
- --------------------------------------------------------------------------------
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 $0.86 $1.27
================================================================================
- --------------------------------------------------------------------------------
Alliance Growth Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
---------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns+
================================================================================
10/31/99 $22.14 $28.35 $0.15 $1.45 35.51%
- --------------------------------------------------------------------------------
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 $0.32 $3.93
================================================================================
- --------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio
- --------------------------------------------------------------------------------
Historical Performance
- --------------------------------------------------------------------------------
Net Asset Value
--------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns+
================================================================================
10/31/99 $20.56 $25.52 $0.07 $0.39 26.48 %
- --------------------------------------------------------------------------------
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 $0.23 $1.99
================================================================================
- --------------------------------------------------------------------------------
8 1999 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
Large Cap Growth Van Kampen
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
Year Ended 10/31/99 8.52% 35.51% 26.48%
- --------------------------------------------------------------------------------
Five Years Ended 10/31/99 17.06 26.50 22.45
- --------------------------------------------------------------------------------
6/16/94* through 10/31/99 16.07 25.90 21.56
================================================================================
- --------------------------------------------------------------------------------
Cumulative Total Returns+
- --------------------------------------------------------------------------------
Smith Barney Alliance
Large Cap Growth Van Kampen
Value Portfolio Portfolio Enterprise Portfolio
================================================================================
6/16/94* through 10/31/99 122.90% 245.04% 185.76%
================================================================================
+ 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. 9
<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 -- October 1999
[LINE GRAPH]
Smith Barney
Large Cap Value Portfolio S&P 500 Index
6/16/94 10,000 10,000
Oct-94 10,140 10,324
Oct-95 12,189 13,053
Oct-96 15,181 16,018
Oct-97 18,731 21,159
Oct-98 20,539 25,817
Oct-99 22,290 32,442
+ 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 October 31, 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. An
investor cannot invest directly in an index.
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 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 -- October 1999
[GRAPH]
Alliance S&P Russell
Growth 500 1000
Portfolio Index Index
6/16/94 10,000 10,000 10,000
Oct-94 10,650 10,324 10,191
Oct-95 13,439 13,053 12,612
Oct-96 17,007 16,018 15,501
Oct-97 22,549 21,159 20,236
Oct-98 25,463 25,817 24,039
Oct-99 34,504 32,442 30,189
+ 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 October 31, 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. An investor cannot invest
directly in an index.
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. 11
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Van Kampen Enterprise Portfolio vs.
S&P 500 Index+
- --------------------------------------------------------------------------------
June 1994 -- October 1999
[GRAPH]
Van Kampen S&P
Entreprise 500
Portfolio Index
6/16/94 10,000 10,000
Oct-94 10,380 10,324
Oct-95 12,948 13,053
Oct-96 15,972 16,018
Oct-97 20,733 21,159
Oct-98 22,593 25,817
Oct-99 28,576 32,442
+ Hypothetical illustration of $10,000 invested in shares of the Van Kampen
Enterprise Portfolio on June 16, 1994 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through October 31, 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. An investor cannot invest directly in an index.
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.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
============================================================================
COMMON STOCK -- 95.3%
Capital Goods -- 12.1%
25,800 AlliedSignal Inc. $ 1,468,988
215,000 Emerson Electric Co. 12,913,437
140,000 General Electric Co. 18,978,750
130,000 Honeywell Inc. 13,706,875
240,000 Pitney Bowes Inc. 10,935,000
290,000 Xerox Corp. 8,120,000
- ----------------------------------------------------------------------------
66,123,050
- ----------------------------------------------------------------------------
Consumer Cyclicals -- 4.7%
135,000 General Motors Corp. 9,483,750
525,000 Masco Corp. 16,012,500
- ----------------------------------------------------------------------------
25,496,250
- ----------------------------------------------------------------------------
Consumer Staples -- 7.9%
225,000 Avon Products, Inc. 7,256,250
125,000 H.J. Heinz Co. 5,968,750
190,000 Kimberly-Clark Corp. 11,993,750
115,000 The McGraw-Hill Companies, Inc. 6,856,875
325,000 PepsiCo, Inc. 11,273,437
- ----------------------------------------------------------------------------
43,349,062
- ----------------------------------------------------------------------------
Energy -- 19.0%
75,000 Atlantic Richfield Co. 6,989,063
114,000 BP Amoco PLC, Sponsored ADR 6,583,500
110,000 Chevron Corp. 10,044,375
234,000 Conoco Inc., Class A Shares 6,420,375
307,968 Conoco Inc., Class B Shares 8,353,632
550,000 Enron Corp. 21,965,625
120,000 Exxon Corp. 8,887,500
140,025 Halliburton Co. 5,277,192
140,000 Mobil Corp. 13,510,000
415,000 The Williams Cos., Inc. 15,562,500
- ----------------------------------------------------------------------------
103,593,762
- ----------------------------------------------------------------------------
Financial Services -- 10.7%
175,000 Bank of America Corp. 11,265,625
215,000 The Chase Manhattan Corp. 18,785,625
180,000 Marsh & McLennan Cos., Inc. 14,231,250
390,000 Mellon Financial Corp. 14,405,625
- ----------------------------------------------------------------------------
58,688,125
- ----------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Health Care -- 8.0%
220,000 American Home Products Corp. $ 11,495,000
80,000 Baxter International Inc. 5,190,000
200,000 Bristol-Myers Squibb Co. 15,362,500
215,000 Pharmacia & Upjohn, Inc. 11,596,563
- --------------------------------------------------------------------------------
43,644,063
- --------------------------------------------------------------------------------
Insurance -- 6.3%
198,000 The Chubb Corp. 10,865,250
60,000 CIGNA Corp. 4,485,000
215,000 The Hartford Financial Services Group, Inc. 11,139,687
235,000 UnumProvident Corp. 7,740,313
- --------------------------------------------------------------------------------
34,230,250
- --------------------------------------------------------------------------------
Raw and Intermediate Materials -- 7.6%
175,000 Alcoa Inc. 10,631,250
45,000 The Dow Chemical Co. 5,321,250
142,552 E.I. du Pont de Nemours & Co. 9,185,756
225,000 International Paper Co. 11,840,625
75,000 Reynolds Metals Co. 4,532,812
- --------------------------------------------------------------------------------
41,511,693
- --------------------------------------------------------------------------------
Technology -- 3.3%
180,000 Raytheon Co., Class A Shares 4,938,750
213,000 United Technologies Corp. 12,886,500
- --------------------------------------------------------------------------------
17,825,250
- --------------------------------------------------------------------------------
Telecommunications -- 10.6%
300,000 AT&T Corp. 14,025,000
170,000 GTE Corp. 12,750,000
263,200 SBC Communications Inc. 13,406,750
240,000 Sprint Corp. 17,835,000
- --------------------------------------------------------------------------------
58,016,750
- --------------------------------------------------------------------------------
Transportation -- 1.3%
130,000 Union Pacific Corp. 7,247,500
- --------------------------------------------------------------------------------
Utilities -- 3.8%
200,000 Duke Energy Corp. 11,300,000
245,000 Unicom Corp. 9,386,563
- --------------------------------------------------------------------------------
20,686,563
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $457,348,398) 520,412,318
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 4.7%
$25,427,000 Goldman, Sachs & Co., 5.180% due 11/1/99;
Proceeds at maturity -- $25,437,976;
(Fully collateralized by U.S. Treasury
Bills due 12/2/99, Notes 4.75% to 6.875%
due 3/31/00 to 11/15/08, and Bonds
6.125% to 10.00% due 5/15/10 to 11/15/27;
Market value -- $25,935,546)
(Cost -- $25,427,000) $ 25,427,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $482,775,398*) $545,839,318
================================================================================
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 96.4%
Aerospace -- 1.0%
796,200 Loral Space & Communications Ltd.* $ 11,992,762
- --------------------------------------------------------------------------------
Airlines -- 0.8%
242,000 Continental Airlines, Inc., Class B Shares* 9,801,000
- --------------------------------------------------------------------------------
Banks -- 6.6%
447,400 Bank of America Corp. 28,801,375
249,000 Bank One Corp. 9,353,062
590,900 The Bank of Tokyo-Mitsubishi, Ltd., ADR 9,749,850
334,208 The Chase Manhattan Corp. 29,201,424
- --------------------------------------------------------------------------------
77,105,711
- --------------------------------------------------------------------------------
Beverages -- 0.4%
97,000 Coca-Cola Enterprises Inc. 2,479,563
115,500 The Pepsi Bottling Group, Inc. 2,100,656
- --------------------------------------------------------------------------------
4,580,219
- --------------------------------------------------------------------------------
Drugs -- 4.1%
284,000 Bristol-Myers Squibb Co. 21,814,750
208,800 Merck & Co., Inc 16,612,650
204,000 Schering-Plough Corp. 10,098,000
- --------------------------------------------------------------------------------
48,525,400
- --------------------------------------------------------------------------------
Electronics -- 13.2%
133,000 Altera Corp.* 6,467,125
139,000 Applied Materials, Inc. * 12,483,937
278,850 Cisco Sysytems, Inc.* 20,634,900
170,000 Flextronics International Ltd.* 12,070,000
68,700 Ingram Micro Inc., Chase A Shares* 764,288
179,000 Micron Technology, Inc.* 12,764,937
506,900 Sanmina Corp.* 45,652,681
405,600 SCI Systems, Inc.* 20,026,500
327,800 Solectron Corp.* 24,666,950
- --------------------------------------------------------------------------------
155,531,318
- --------------------------------------------------------------------------------
Energy -- 1.3%
122,000 Kerr-McGee Corp. 6,557,500
132,000 Total Fina S.A., Sponsored ADR 8,802,750
- --------------------------------------------------------------------------------
15,360,250
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Financial Services -- 8.0%
525,000 Associates First Capital Corp., Class A Shares $19,162,500
530,548 The CIT Group, Inc., Class A Shares 12,666,834
223,100 Household International, Inc. 9,955,837
250,000 Koger Equity 3,875,000
1,049,762 MBNA Corp. 28,999,675
1,187,200 Newcourt Credit Group Inc. 19,514,600
- --------------------------------------------------------------------------------
94,174,446
- --------------------------------------------------------------------------------
Food Services, Lodging -- 0.2%
270,300 Humphrey Hospitality Trust, Inc. 1,790,738
- --------------------------------------------------------------------------------
Hospital Supplies & Services -- 2.0%
303,000 Boston Scientific Corp.* 6,097,875
272,000 Health Management Associates, Inc.* 2,414,000
566,230 McKesson HBOC, Inc. 11,359,989
103,200 Medtronic, Inc. 3,573,300
- --------------------------------------------------------------------------------
23,445,164
- --------------------------------------------------------------------------------
Insurance -- 4.5%
171,000 Ace Ltd. 3,323,813
441,265 American International Group, Inc. 45,422,716
36,000 Providian Financial Corp. 3,924,000
- --------------------------------------------------------------------------------
52,670,529
- --------------------------------------------------------------------------------
Leisure Related -- 1.8%
647,215 Cendant Corp. 10,679,048
165,700 Royal Caribbean Cruises Ltd. 8,792,456
80,000 The Walt Disney Co. 2,110,000
- --------------------------------------------------------------------------------
21,581,504
- --------------------------------------------------------------------------------
Miscellaneous -- 1.6%
466,796 Tyco International Ltd. 18,642,665
- --------------------------------------------------------------------------------
Printing, Publishing & Broadcasting -- 7.9%
43,000 Adelphia Communications Corp., Class A Shares* 2,348,875
1,429,428 AT&T Corp. - Liberty Media Group,
Class A Shares 56,730,424
353,800 CBS Corp.* 17,269,863
111,500 MediaOne Group, Inc.* 7,923,469
219,400 The News Corp. Ltd., Sponsored ADR 6,499,725
25,000 UnitedGlobalCom Inc.* 2,175,000
- --------------------------------------------------------------------------------
92,947,356
- --------------------------------------------------------------------------------
Real Estate -- 1.0%
140,000 Entertainment Properties Trust 1,968,750
418,400 JP Realty, Inc. 7,165,100
121,900 The Macerich Co. 2,438,000
- --------------------------------------------------------------------------------
11,571,850
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Retail -- 4.8%
69,000 The Gap, Inc. $ 2,561,625
284,700 The Home Depot, Inc. 21,494,850
284,000 The Kroger Co. 5,910,750
281,850 The Limited, Inc. 11,591,081
110,000 Safeway Inc.* 3,884,375
164,000 Tandy Corp. 10,321,751
- --------------------------------------------------------------------------------
55,764,432
- --------------------------------------------------------------------------------
Technology -- 8.9%
1,291,900 Ceridian Corp. 28,341,056
350,000 International Business Machines Corp. 34,431,250
792,175 Sterling Commerce, Inc.* 18,566,602
1,059,400 Sterling Software, Inc.* 23,240,587
- --------------------------------------------------------------------------------
104,579,495
- --------------------------------------------------------------------------------
Telecommunications -- 22.9%
86,800 COLT Telecom Group PLC, Sponsored ADR* 10,285,800
747,504 Global TeleSystems Group, Inc.* 17,893,377
432,600 Globalstar Telecommunications Ltd.* 9,544,238
98,000 IXC Communications, Inc.* 4,232,375
325,300 Mannesmann AG 50,160,304
554,950 MCI WorldCom, Inc.* 47,621,647
182,000 Millicom International Cellular S.A.* 6,142,500
670,700 Nextel Communications, Inc., Class A Shares* 57,805,956
63,000 Nokia Oyj, Sponsored ADR 7,280,438
266,250 NTL Inc.* 20,068,594
146,400 Orange PLC, ADR* 18,226,800
257,000 Pacific Gateway Exchange, Inc.* 5,846,750
90,000 Qwest Communications International Inc.* 3,240,000
1 Reuters Group PLC, Sponsored ADR 55
43,000 Vodafone AirTouch PLC, Sponsored ADR 2,061,313
82,000 VoiceStream Wireless Corp.* 8,097,500
- --------------------------------------------------------------------------------
268,507,647
- --------------------------------------------------------------------------------
Tobacco -- 1.1%
507,400 Philip Morris Cos., Inc. 12,780,137
- --------------------------------------------------------------------------------
Utility - Telephone -- 4.3%
477,000 Cable & Wireless PLC 5,568,992
609,000 Sprint Corp. 45,256,312
- --------------------------------------------------------------------------------
50,825,304
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $830,120,315) 1,132,177,927
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
CONVERTIBLE PREFERRED STOCK -- 0.7%
Financial Services -- 0.1%
56,800 Automatic Common Exchange Security Trust II,
$1.55 Trust Automatic Common Exchange
Securities $ 596,400
- --------------------------------------------------------------------------------
Printing, Publishing & Broadcasting -- 0.6%
12,100 Adelphia Communications Corp., 5.50%
Redeemable, Series D 2,079,687
167,000 The Reader's Digest Association, Inc.,
$1.93 Trust Automatic Common Exchange
Securities 4,968,250
- --------------------------------------------------------------------------------
7,047,937
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost -- $7,906,659) 7,644,337
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
CONVERTIBLE BOND -- 1.0%
Telecommunications -- 1.0%
$11,165,000 Global TeleSystems Group, Inc., Sr. Sub.
Debentures, 5.75% due 7/1/10
(Cost -- $9,555,995) 11,737,206
================================================================================
SHORT-TERM INVESTMENT -- 1.9%
22,700,000 Federal Farm Credit Bank, 5.16% due 11/1/99
(Cost -- $22,693,493) 22,693,493
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $870,276,462**) $1,174,252,963
================================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
========================================================================
COMMON STOCK -- 92.9%
Advertising -- 1.2%
41,000 Omnicom Group Inc. $ 3,608,000
- ------------------------------------------------------------------------
Apparel Manufacturers -- 0.7%
72,000 Jones Apparel Group, Inc.* 2,277,000
- ------------------------------------------------------------------------
Automotive -- 0.4%
22,000 Harley-Davidson, Inc. 1,304,875
- ------------------------------------------------------------------------
Banking -- 3.3%
44,000 Bank of America Corp. 2,832,500
29,000 The Chase Manhattan Corp. 2,533,875
61,000 Fleet Boston Corp. 2,661,125
50,000 Wells Fargo Co. 2,393,750
- ------------------------------------------------------------------------
10,421,250
- ------------------------------------------------------------------------
Brewery -- 0.4%
19,000 Anheuser-Busch Cos., Inc. 1,364,437
- ------------------------------------------------------------------------
Broadcast Media and Cable Television -- 4.3%
70,600 CBS Corp.* 3,446,162
40,274 Clear Channel Communications, Inc.* 3,237,023
41,500 Metro-Goldwyn-Mayer Inc.* 762,563
34,200 Time Warner Inc. 2,383,313
42,000 Univision Communications Inc.* 3,572,625
- ------------------------------------------------------------------------
13,401,686
- ------------------------------------------------------------------------
Casinos -- 0.9%
33,000 Harrah's Entertainment, Inc.* 954,937
19,000 MGM Grand, Inc.* 969,000
75,000 Park Place Entertainment Corp.* 984,375
- ------------------------------------------------------------------------
2,908,312
- ------------------------------------------------------------------------
Circuits -- 1.6%
22,000 Analog Devices, Inc.* 1,168,750
14,000 Linear Technology Corp. 979,125
30,000 Sanmina Corp.* 2,701,875
- ------------------------------------------------------------------------
4,849,750
- ------------------------------------------------------------------------
Cosmetics & Toiletries -- 1.3%
21,000 Kimberly-Clark Corp. 1,325,625
27,000 The Procter & Gamble Co. 2,831,625
- ------------------------------------------------------------------------
4,157,250
- ------------------------------------------------------------------------
Electrical - Integrated -- 0.5%
26,300 The AES Corp.* 1,484,306
- ------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Electronic Components - Semiconductors -- 7.6%
35,000 Altera Corp.* $ 1,701,875
121,000 Intel Corp. 9,369,937
32,000 LSI Logic Corp.* 1,702,000
23,000 Micron Technology, Inc. 1,640,188
20,000 STMicroelectonics N.V. 1,817,500
13,000 Solectron Corp.* 978,250
46,000 Texas Instruments Inc. 4,128,500
30,000 Xilinx, Inc.* 2,358,750
- --------------------------------------------------------------------------------
23,697,000
- --------------------------------------------------------------------------------
Energy -- 2.0%
36,000 Apache Corp. 1,404,000
72,000 Baker Hughes Inc. 2,011,500
30,000 Devon Energy Corp. 1,166,250
19,200 Enron Corp. 766,800
45,000 Noble Drilling Corp.* 998,438
- --------------------------------------------------------------------------------
6,346,988
- --------------------------------------------------------------------------------
Finance - Credit Cards -- 1.4%
17,000 American Express Co. 2,618,000
16,000 Providian Financial Corp. 1,744,000
- --------------------------------------------------------------------------------
4,362,000
- --------------------------------------------------------------------------------
Financial Services -- 1.2%
22,000 Lehman Brothers Holdings Inc. 1,621,125
36,000 MGIC Investment Corp. 2,151,000
- --------------------------------------------------------------------------------
3,772,125
- --------------------------------------------------------------------------------
Food & Beverage -- 1.6%
101,000 The Pepsi Bottling Group, Inc. 1,836,938
44,000 The Quaker Oats Co. 3,080,000
- --------------------------------------------------------------------------------
4,916,938
- --------------------------------------------------------------------------------
Health Care - Hospital/Medical Services -- 1.2%
69,600 Lincare Holdings Inc.* 1,957,500
14,000 United HealthCare Corp. 723,625
16,200 Wellpoint Health Networks Inc.* 939,600
- --------------------------------------------------------------------------------
3,620,725
- --------------------------------------------------------------------------------
Health Care - Products -- 2.8%
8,000 Allergan, Inc. 859,000
24,500 Baxter International Inc. 1,589,437
27,700 Guidant Corp.* 1,367,687
47,000 Johnson & Johnson 4,923,250
- --------------------------------------------------------------------------------
8,739,374
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Instruments - Medical/Scientific -- 1.3%
19,000 Honeywell Inc. $ 2,003,312
14,000 PE Corp. - PE Biosystems Group 908,250
20,000 Waters Corp.* 1,062,500
- --------------------------------------------------------------------------------
3,974,062
- --------------------------------------------------------------------------------
Insurance -- 3.2%
47,000 AFLAC Inc. 2,402,875
16,250 American International Group, Inc. 1,672,734
32,000 Lincoln National Corp. 1,476,000
44,000 Marsh & McLennan Cos., Inc. 3,478,750
24,000 UnumProvident Corp. 790,500
- --------------------------------------------------------------------------------
9,820,859
- --------------------------------------------------------------------------------
Machinery -- 0.8%
27,000 Applied Materials, Inc.* 2,424,937
- --------------------------------------------------------------------------------
Manufacturing -- 4.9%
50,000 Corning Inc. 3,931,250
54,000 General Electric Co. 7,320,375
102,200 Tyco International Ltd. 4,081,613
- --------------------------------------------------------------------------------
15,333,238
- --------------------------------------------------------------------------------
Medical - Biomedical -- 1.0%
19,000 Amgen Inc.* 1,515,250
20,000 Biogen, Inc.* 1,482,500
- --------------------------------------------------------------------------------
2,997,750
- --------------------------------------------------------------------------------
Medical - Drugs -- 7.0%
23,400 Abbott Laboratories 944,775
68,500 American Home Products Corp. 3,579,125
112,400 Bristol-Myers Squibb Co. 8,633,725
21,000 Eli Lilly and Co. 1,446,375
37,500 Pfizer Inc. 1,481,250
15,000 Pharmacia & Upjohn, Inc. 809,063
100,000 Schering-Plough Corp. 4,950,000
- --------------------------------------------------------------------------------
21,844,313
- --------------------------------------------------------------------------------
Multi - Industry -- 0.5%
30,700 The Seagram Co., Ltd. 1,515,813
- --------------------------------------------------------------------------------
Paper & Related Products -- 0.9%
37,000 Boise Cascade Corp. 1,318,125
31,000 International Paper Co. 1,631,375
- --------------------------------------------------------------------------------
2,949,500
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Retail - Department/Discount -- 7.6%
20,000 AnnTaylor Stores Corp.* $ 851,250
26,000 Best Buy Co., Inc.* 1,444,625
36,000 Circuit City Stores-Circuit City Group 1,536,750
16,200 Costco Wholesale Corp.* 1,301,062
59,300 Dayton Hudson Corp. 3,832,262
71,300 Family Dollar Stores, Inc. 1,470,562
63,000 The Home Depot, Inc. 4,756,500
124,900 The TJX Cos., Inc. 3,387,913
90,000 Wal-Mart Stores, Inc. 5,101,875
- --------------------------------------------------------------------------------
23,682,799
- --------------------------------------------------------------------------------
Savings & Loans -- 0.5%
43,000 Washington Mutual, Inc. 1,545,313
- --------------------------------------------------------------------------------
Steel -- 0.5%
55,000 USX-U.S. Steel Group 1,405,938
- --------------------------------------------------------------------------------
Technology - Computers & Office Equipment -- 5.7%
15,000 Apple Computer, Inc.* 1,201,875
80,200 EMC Corp.* 5,854,600
14,000 Gateway Inc.* 924,875
15,200 International Business Machines Corp. 1,495,300
16,000 Lexmark International Group, Inc.,
Class A Shares* 1,249,000
41,000 Sun Microsystems, Inc.* 4,338,313
42,000 Tandy Corp. 2,643,375
- --------------------------------------------------------------------------------
17,707,338
- --------------------------------------------------------------------------------
Technology - Computer Services -- 3.1%
63,000 America Online, Inc.* 8,170,312
9,000 Yahoo! Inc.* 1,611,563
- --------------------------------------------------------------------------------
9,781,875
- --------------------------------------------------------------------------------
Technology - Computer Software -- 8.2%
14,000 Adobe Systems Inc. 979,125
32,500 BMC Software, Inc.* 2,086,094
50,900 Citrix Systems, Inc. * 3,263,962
144,800 Microsoft Corp.* 13,403,050
42,000 Novell, Inc.* 842,625
92,000 Oracle Corp.* 4,375,750
6,000 VERITAS Software Corp.* 647,250
- --------------------------------------------------------------------------------
25,597,856
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Telecommunications Equipment -- 11.4%
143,000 Cisco Systems, Inc.* $ 10,582,000
34,050 Comverse Technology, Inc.* 3,864,675
31,000 General Instrument Corp.* 1,668,187
16,800 JDS Uniphase Corp.* 2,803,500
85,855 Lucent Technologies, Inc. 5,516,184
22,000 Motorola, Inc. 2,143,625
43,600 Nokia Oyj, Sponsored ADR 5,038,525
42,000 Nortel Networks Corp. 2,601,375
6,000 QUALCOMM Inc.* 1,336,500
- --------------------------------------------------------------------------------
35,554,571
- --------------------------------------------------------------------------------
Telecommunication Services -- 0.9%
44,000 First Data Corp. 2,010,250
9,000 Nextel Communications, Inc., Class A Shares 775,688
3,000 Williams Communications Group, Inc.* 95,625
- --------------------------------------------------------------------------------
2,881,563
- --------------------------------------------------------------------------------
Utilities - Telephone -- 3.0%
62,000 ALLTEL Corp. 5,161,500
48,000 MCI WorldCom, Inc.* 4,119,000
- --------------------------------------------------------------------------------
9,280,500
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $217,475,908) 289,530,241
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM INVESTMENTS -- 7.1%
U.S. Treasury Bills:
$3,000,000 4.47% due 11/4/99 2,998,138
3,000,000 4.54% due 11/4/99 2,998,108
400,000 4.40% due 11/12/99 399,364
3,300,000 4.45% due 11/12/99 3,294,697
600,000 4.60% due 11/12/99 599,003
150,000 4.66% due 11/12/99 149,748
1,450,000 4.40% due 12/2/99 1,444,152
3,600,000 4.47% due 12/2/99 3,585,249
400,000 4.50% due 12/2/99 398,350
400,000 4.32% due 12/9/99 398,080
1,000,000 4.34% due 12/9/99 995,178
800,000 4.65% due 2/17/00 788,336
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 1999
- --------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM INVESTMENTS -- 7.1% (continued)
U.S. Treasury Bills:
$1,200,000 4.72% due 2/17/00 $ 1,182,504
2,600,000 4.75% due 2/17/00 2,562,092
300,000 4.88% due 2/17/00 295,626
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $22,089,304) 22,088,625
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $239,565,212**) $311,618,866
================================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
Portfolio Portfolio Portfolio
===========================================================================================================
ASSETS:
<S> <C> <C> <C>
Investments, at value
(Cost -- $482,775,398, $870,276,462
and $239,565,212, respectively) $545,839,318 $1,174,252,963 $311,618,866
Cash 10,454 166,543 --
Receivable for Fund shares sold 243,319 -- --
Receivable for securities sold 2,062,171 6,185,552 7,045,575
Dividends and interest receivable 674,309 761,092 84,364
- -----------------------------------------------------------------------------------------------------------
Total Assets 548,829,571 1,181,366,150 318,748,805
- -----------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 4,747,558 13,233,914 4,743,962
Management fees payable 282,558 680,267 348,227
Payable to bank -- -- 13,533
Payable for Fund shares purchased 49,026 1,472,515 197,156
Accrued expenses 70,583 65,515 36,421
- -----------------------------------------------------------------------------------------------------------
Total Liabilities 5,149,725 15,452,211 5,339,299
- -----------------------------------------------------------------------------------------------------------
Total Net Assets $543,679,846 $1,165,913,939 $313,409,506
===========================================================================================================
NET ASSETS:
Par value of shares of capital stock $ 274 $ 411 $ 123
Capital paid in excess of par value 461,663,072 756,102,621 197,534,086
Undistributed net investment income 6,775,481 1,549,118 15,787
Accumulated net realized gain
from security transactions 12,177,099 104,272,524 43,805,856
Net unrealized appreciation
of investments and foreign currencies 63,063,920 303,989,265 72,053,654
- -----------------------------------------------------------------------------------------------------------
Total Net Assets $543,679,846 $1,165,913,939 $313,409,506
===========================================================================================================
Shares Outstanding 27,423,892 41,126,607 12,279,654
- -----------------------------------------------------------------------------------------------------------
Net Asset Value $19.83 $28.35 $25.52
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
Portfolio Portfolio Portfolio
================================================================================================================================
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 9,787,850 $ 7,738,420 $ 1,698,895
Interest 402,866 2,071,286 493,719
Less: Foreign withholding tax (14,321) (102,139) (5,321)
- --------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 10,176,395 9,707,567 2,187,293
- --------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 3,270,973 8,113,794 2,079,152
Audit and legal 34,557 37,399 35,597
Shareholder communications 24,886 39,763 14,599
Custody 21,257 68,579 19,166
Registration fees 13,675 9,012 2,799
Directors' fees 13,589 21,757 8,254
Shareholder and system servicing fees 11,039 11,255 10,235
Other 6,880 6,254 1,614
- --------------------------------------------------------------------------------------------------------------------------------
Total Expenses 3,396,856 8,307,813 2,171,416
- --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 6,779,539 1,399,754 15,877
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 213,111,154 537,915,918 361,141,099
Cost of securities sold 200,897,786 433,286,543 316,684,980
- --------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain 12,213,368 104,629,375 44,456,119
- --------------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments and foreign currencies:
Beginning of year 47,492,899 123,575,840 50,007,621
End of year 63,063,920 303,989,265 72,053,654
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 15,571,021 180,413,425 22,046,033
- --------------------------------------------------------------------------------------------------------------------------------
Net Gain on Investments 27,784,389 285,042,800 66,502,152
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 34,563,928 $286,442,554 $ 66,518,029
================================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
For the Years Ended
October 31,
Smith Barney Large Cap Value Portfolio 1999 1998
===============================================================================
OPERATIONS:
Net investment income $ 6,779,539 $ 6,028,674
Net realized gain 12,213,368 12,824,294
Increase in net unrealized appreciation 15,571,021 6,701,077
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 34,563,928 25,554,045
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (6,005,632) (4,308,078)
Net realized gains (12,877,750) (10,768,673)
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (18,883,382) (15,076,751)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 103,656,845 120,636,096
Net asset value of shares issued
for reinvestment of dividends 18,883,382 15,076,751
Cost of shares reacquired (18,111,176) (9,952,696)
- -------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 104,429,051 125,760,151
- -------------------------------------------------------------------------------
Increase in Net Assets 120,109,597 136,237,445
NET ASSETS
Beginning of year 423,570,249 287,332,804
- -------------------------------------------------------------------------------
End of year* $543,679,846 $423,570,249
===============================================================================
* Includes undistributed net investment income of: $ 6,775,481 $ 6,006,162
===============================================================================
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years
Ended October 31,
Alliance Growth Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 1,399,754 $ 4,103,580
Net realized gain 104,629,375 55,878,888
Increase in net unrealized appreciation 180,413,425 11,060,073
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 286,442,554 71,042,541
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (5,587,187) (1,174,337)
Net realized gains (54,556,034)(45,386,333)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (60,143,221)(46,560,670)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 134,587,353 176,224,362
Net asset value of shares issued
for reinvestment of dividends 60,143,221 46,560,670
Cost of shares reacquired (30,058,605)(16,850,281)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 164,671,969 205,934,751
- --------------------------------------------------------------------------------
Increase in Net Assets 390,971,302 230,416,622
NET ASSETS:
Beginning of year 774,942,637 544,526,015
- --------------------------------------------------------------------------------
End of year* $1,165,913,939 $774,942,637
================================================================================
* Includes undistributed net investment income of: $ 1,549,118 $ 5,844,057
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the
Years Ended
October 31,
Van Kampen Enterprise Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 15,877 $ 849,639
Net realized gain 44,456,119 4,871,186
Increase in net unrealized appreciation 22,046,033 11,470,817
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 66,518,029 17,191,642
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (845,726) (569,909)
Net realized gains (4,790,402) (13,326,876)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,636,128) (13,896,785)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 20,092,068 46,202,993
Net asset value of shares issued
for reinvestment of dividends 5,636,128 13,896,785
Cost of shares reacquired (22,251,170) (10,927,001)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 3,477,026 49,172,777
- --------------------------------------------------------------------------------
Increase in Net Assets 64,358,927 52,467,634
NET ASSETS:
Beginning of year 249,050,579 196,582,945
- --------------------------------------------------------------------------------
End of year* $313,409,506 $249,050,579
================================================================================
* Includes undistributed net investment income of: $15,787 $845,636
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Large Cap Value Portfolio, Alliance Growth Portfolio and Van
Kampen Enterprise Portfolio (formerly known as 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 twelve 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, INVESCO
Global Strategic Income (formerly known as GT Global Strategic Income), Smith
Barney High Income, MFS Total Return, Smith Barney Money Market, Smith Barney
Large Capitalization Growth, Smith Barney Aggressive Growth and Smith Barney Mid
Cap 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 shareholder 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
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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, 1999, reclassifications were made to the
capital accounts of the Smith Barney Large Cap Value Portfolio and the Alliance
Growth Portfolio to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. In addition, for the
Smith Barney Large Cap Value Portfolio, a portion of undistributed net
investment income and accumulated net realized gains amounting to $530 and $745,
respectively, has been reclassified to paid-in capital. 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.
2. Management Agreement and Transactions with Affiliated Persons
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH") which in turn
is a subsidiary of Citigroup Inc. ("Citigroup"), 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 Enterprise ("VKEP") Portfolios. AGP and VKEP 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 Asset Management, Inc. ("VKAM").
Pursuant to each sub-advisory agreement, Alliance Capital and VKAM 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 VKEP, respectively. These fees are
calculated daily and paid monthly.
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 AGPand VKEP.
Smith Barney Private Trust Company, another subsidiary of Citigroup, acts as the
Fund's shareholder servicing agent.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for its portfolio agency transactions. For the year ended October
31, 1999, SSB received brokerage commissions of $210,493.
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended October 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were:
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
- -------------------------------------------------------------
Purchases $276,173,471 $636,484,006 $342,866,685
- -------------------------------------------------------------
Sales 213,111,154 537,915,918 361,141,099
=============================================================
At October 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
- --------------------------------------------------------------------------------
Gross unrealized appreciation $ 89,428,680 $388,226,013 $75,907,372
Gross unrealized depreciation (26,364,760) (84,249,512) (3,853,718)
- --------------------------------------------------------------------------------
Net unrealized appreciation $ 63,063,920 $303,976,501 $72,053,654
================================================================================
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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred.
When the contract is closed, the Portfolios record a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing
transactions and the Portfolios'basis in the contract.
Only AGP and VKEP 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 October 31, 1999, AGP and VKEP had no open futures contracts.
6. Options Contracts
AGP and VKEP 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 October 31, 1999, AGP and VKEP had no open purchased put or call option
contracts.
When AGP and VKEP 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
- --------------------------------------------------------------------------------
34 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
loss is realized depending upon whether the cost of the closing transaction is
greater or less than the premium originally received, without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is eliminated. When a written call option is exercised, the cost of
the security sold will be decreased by the premium originally received. When a
written put option is exercised, the amount of the premium originally received
will reduce the cost of the security purchased upon exercise. When written index
options are exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk 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 year ended October 31, 1999, AGP and VKEP 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 October 31, 1999, there were no securities on loan.
8. Capital Shares
At October 31, 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.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Smith Barney Large Cap Value
Shares sold 5,029,254 6,115,029
Shares issued on reinvestment 909,604 741,966
Shares reacquired (882,294) (539,460)
- --------------------------------------------------------------------------------
Net Increase 5,056,564 6,317,535
- --------------------------------------------------------------------------------
Alliance Growth
Shares sold 5,046,095 7,720,017
Shares issued on reinvestment 2,193,407 1,945,703
Shares reacquired (1,109,900) (822,127)
- --------------------------------------------------------------------------------
Net Increase 6,129,602 8,843,593
- --------------------------------------------------------------------------------
Van Kampen Enterprise
Shares sold 844,070 2,160,649
Shares issued on reinvestment 232,706 616,265
Shares reacquired (912,198) (545,496)
- --------------------------------------------------------------------------------
Net Increase 164,578 2,231,418
================================================================================
- --------------------------------------------------------------------------------
36 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney Large Cap
Value Portfolio 1999(1) 1998(1) 1997 1996 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 18.94 $ 17.90 $14.84 $12.12 $10.14
- ---------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(2) 0.27 0.31 0.25 0.32 0.28
Net realized and unrealized gain 1.38 1.47 3.16 2.62 1.76
- ---------------------------------------------------------------------------------------------------
Total Income From Operations 1.65 1.78 3.41 2.94 2.04
- ---------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.24) (0.21) (0.18) (0.17) (0.06)
Net realized gains (0.52) (0.53) (0.17) (0.05) --
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.76) (0.74) (0.35) (0.22) (0.06)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 19.83 $ 18.94 $17.90 $14.84 $12.12
- ---------------------------------------------------------------------------------------------------
Total Return 8.52% 9.65% 23.38% 24.55% 20.21%
- ---------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 544 $ 424 $ 287 $ 139 $ 39
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.67% 0.68% 0.69% 0.73% 0.73%
Net investment income 1.35 1.59 2.01 2.35 2.70
- ---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 43% 36% 46% 32% 38%
===================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) The Manager has waived all or part of its fees for the year ended October
31, 1995. If such fees were not waived, the per share decreases in net
investment income and the ratios of expenses to average net assets would
have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.02 0.94%
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlight (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For a share of capital stock outstanding throughout each year ended October 31:
Alliance Growth Portfolio 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $22.14 $20.82 $16.30 $13.28 $10.65
- ------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(1) 0.02 0.11 0.05 0.04 0.14
Net realized and unrealized gain 7.79 2.69 5.11 3.39 2.61
- -------------------------------------------------------------------------------------------------------
Total Income From Operations 7.81 2.80 5.16 3.43 2.75
- -------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.15) (0.04) (0.02) (0.09) (0.02)
Net realized gains (1.45) (1.44) (0.62) (0.32) (0.10)
- -------------------------------------------------------------------------------------------------------
Total Distributions (1.60) (1.48) (0.64) (0.41) (0.12)
- -------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $28.35 $22.14 $20.82 $16.30 $13.28
- -------------------------------------------------------------------------------------------------------
Total Return 35.51% 12.92% 32.59% 26.55% 26.18%
- -------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $1,166 $ 775 $ 545 $ 295 $ 112
- -------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.82% 0.82% 0.82% 0.87% 0.90%
Net investment income 0.14 0.59 0.32 0.39 1.24
- --------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 54% 40% 66% 88% 78%
========================================================================================================
</TABLE>
(1) The Manager has waived all or part of its fees for the year ended
October 31, 1995. If such fees were not waived, the per share decreases in
net investment income and the ratios of expenses to average net assets
would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
in Net Investment Income and Reimbursement
------------------------ -------------------
1995 $0.01 0.97%
- --------------------------------------------------------------------------------
38 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Van Kampen
Enterprise Portfolio 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Brginning of Year $20.56 $19.89 $15.37 $12.89 $10.38
- -------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(1) 0.00* 0.06 0.06 0.05 0.03
Net realized and unrealized gain 5.42 1.83 4.51 2.87 2.53
- -------------------------------------------------------------------------------------------------
Total Income From Operations 5.42 1.89 4.57 2.92 2.56
- -------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.07) (0.05) (0.05) (0.04) (0.02)
Net realized gains (0.39) (1.17) -- (0.40) (0.03)
- -------------------------------------------------------------------------------------------------
Total Distributions (0.46) (1.22) (0.05) (0.44) (0.05)
- -------------------------------------------------------------------------------------------------
Net Assets, End of Year $25.52 $20.56 $19.89 $15.37 $12.89
- -------------------------------------------------------------------------------------------------
Total Return 26.48% 8.97% 29.81% 23.35% 24.74%
- -------------------------------------------------------------------------------------------------
Net Assets, End of Year(000s) $313,410 $249,051 $196,583 $103,691 $32,447
- -------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.73% 0.73% 0.74% 0.83% 0.88%
Net investment income 0.01 0.35 0.41 0.53 0.65
- -------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 120% 68% 75% 112% 180%
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) The Manager has waived all or part of its fees for the year ended October
31, 1995. If such fees were not waived, the per share decreases in net
investment income and the ratios of expenses to average net assets would
have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers
to Net Investment Income and Reimbursement
------------------------ --------------------
1995 $0.06 1.26%
* Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Smith Barney Large Cap Value Portfolio,
Alliance Growth Portfolio and Van Kampen Enterprise Portfolio of Travelers
Series Fund Inc. as of October 31, 1999, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian. As to securities
purchased or sold but not received or delivered, we performed other appropriate
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Smith Barney Large Cap Value Portfolio, Alliance Growth Portfolio and Van Kampen
Enterprise Portfolio of Travelers Series Fund Inc. as of October 31, 1999, the
results of their operations for the year then ended, the changes in their net
assets for each of the years in the two-year period then ended, and financial
highlights for each of the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
New York, New York
December 15, 1999
- --------------------------------------------------------------------------------
40 1999 Annual Report to Shareholder
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Travelers Series Fund Inc. hereby designates for
the fiscal year ended October 31, 1999:
-- Long-term capital gain distributions paid:
Large Cap Value Portfolio $12,878,495
Alliance Growth Portfolio 52,017,692
Van Kampen Enterprise Portfolio 4,790,402
-- Percentages of ordinary income distributions designated as qualifying
for the dividends received deduction available to corporate
shareholders:
Large Cap Value Portfolio 100.00%
Alliance Growth Portfolio 56.92
Van Kampen Enterprise Portfolio 100.00
-- The following percentages of ordinary income distributions have been
derived from investments in U.S. Government and Agency Obligations. All
or a portion of the corresponding percentages may be exempt from
taxation at the state level.
Alliance Growth Portfolio 0.81%
Van Kampen Enterprise Portfolio 22.52
- --------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
SALOMON SMITH BARNEY
--------------------
Amember of citigroup
Directors
Victor K. Atkins
A.E. Cohen
Robert A. Frankel
Michael Gellert
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
Ellen Cardozo Sonsino
Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSB Citi Fund Management LLC
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 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
IN0251 12/99
