<PAGE>
Travelers Series Fund Inc.
MFS Total Return Portfolio
Travelers Managed Income
Portfolio
Smith Barney Money
Market Portfolio
ANNUAL REPORT
October 31, 2000
[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.
-- MFS Total Return Portfolio, Travelers Managed Income Portfolio and Smith
Barney Money Market Portfolio ("Portfolio(s)") for the year ended October 31,
2000/1/. In this report we have summarized the period's prevailing economic and
market conditions and outlined our investment strategy. A detailed summary of
the Portfolios' performances can be found in the appropriate sections that
follow. We hope you find this report to be useful and informative.
Portfolio Highlights
MFS Total Return Portfolio
For the year ended October 31, 2000, the MFS Total Return Portfolio returned
12.77%. In comparison, the Standard & Poor's 500 Composite Index ("S&P 500")/2/
returned 6.08% and the Lehman Brothers Government/Corporate Bond Index/3/
returned 6.46%, respectively for the same period.
The Portfolio's primary investment objective is to offer above average income
(compared to a portfolio invested entirely in stocks) as is consistent with the
prudent employment of capital. The Portfolio's secondary investment objective is
growth of capital and income. The Portfolio seeks to achieve its objectives by
investing in a broad range of stocks and bonds of both U.S. and foreign issuers.
-------------
/1/ The Portfolios are underlying investment options of various variable
annuity products. A variable annuity product is a contract issued by an
insurance company in which the annuity premium (a set amount of dollars) is
immediately turned into units of a portfolio of securities. Upon
retirement, the policy holder is paid according to accumulated units whose
dollar value varies according to the performance of the securities within
the subaccounts. Its objective is to preserve, through investment, the
purchasing value of the annuity which otherwise is subject to erosion
through inflation.
/2/ The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note, an investor cannot invest directly in an
index.
/3/ The Lehman Brothers Government/Corporate Bond Index tracks the performance
of the overall bond market and is a broad measure of the performance of
government and corporate fixed-rate debt issues. Please note, an investor
cannot invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
The managers believe that several factors contributed to the Portfolio's
positive performance during the period. First and foremost, the Portfolio's
balanced investment strategy proved beneficial as many investors became more
attentive to stock valuations. The managers believed that many stocks,
especially those in the technology and telecommunications sectors, were
extended. Therefore, they kept the Portfolio underweighted in these sectors
relative to the S&P 500. At the same time, the managers identified and invested
in stocks that they believed were undervalued relative to their business
fundamentals. As a result, many of the Portfolio's holdings experienced
significant price appreciation during the period, particularly in the financial
services and energy sectors.
In addition to favorable stock selection and a shift in market sentiment during
the period, most sectors of the bond market performed better than stocks for the
first time in a few years. Given the managers' disciplined approach to asset
allocation, the bond component of the Portfolio generally contributed to the
Portfolio's overall performance during the period. The Portfolio's bond portion
benefited from a well-diversified mix of high-quality corporate bonds, mortgage
- backed securities and an emphasis on U.S. Treasuries, which outperformed all
other sectors of the bond market and most stock indices during the period.
Earlier this year, the managers determined that many multiline insurance
companies were poised for stronger earnings growth and had entered a more
favorable pricing environment driven by higher earnings. In fact,in the view of
the Portfolio's managers, this favorable environment may last for several more
years.
The managers also saw that investors were pouring money into stocks and their
retirement plans. This trend led the managers to invest in a broad range of
financial services companies including large insurance providers and asset
management companies such as St. Paul Companies, AXA Financial Inc. and Hartford
Financial Services Group Inc.
According to the managers, the market's harsh treatment of interest rate-
sensitive stocks also provided opportunities with mortgage loan providers and
related investments such as the Federal Home Loan U.S. Mortgage Corporation
("Freddie Mac")/4/. The managers think that interest rate hikes are unlikely in
the near term and that concerns about Freddie Mac's potential loss of the U.S.
government's implied guarantee have been exaggerated.
-------------
/4/ Federal Home Loan Mortgage Corporation ("Freddie Mac") are mortgage-backed
securities, issued in minimum denominations of $25,000, that are
packaged,guaranteed and sold by the Federal Home Loan Mortgage Corporation.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
While the managers have noted some global economic warning signs, they remain
comfortable with their long-term outlook for steady worldwide economic growth.
The managers believe that economically sensitive large-cap value stocks/5/ may
offer solid value, especially relative to large-cap growth stocks./6/ In many
instances, these large-cap value stocks have remained depressed from the late
1990s meltdown in many foreign economies. As a result, the managers have
remained focused on multinational industrial goods and services firms such as
Akzo Nobel N.V., Boeing Corp. and Deere & Co.
The managers believe that telecommunications companies such as Verizon
Communications ("Verizon") and SBC Communications Inc. ("SBC") provided
lackluster performance in recent months due to concerns about increased
competition, new technology and deregulation. Despite the recent weak
performance, the managers have maintained significant positions in Verizon and
SBC because they believe the long-term outlooks for both of these companies
remain extremely positive.
Going forward, the managers believe that it's important for investors to avoid
the impulse to alter their investment strategy based on short-term events--
whether unsettling turbulence in the markets or exceptional returns from a
particular market sector. The managers have stayed true to this patient
strategy. And while no guarantees can be given, they are confident that the
stocks held in the Portfolio may continue to offer growth over time.
Travelers Managed Income Portfolio
For the year ended October 31, 2000, the Travelers Managed Income Portfolio
("Portfolio") returned 4.55%. In comparison, the Lehman Brothers Intermediate
Government/Corporate Bond Index ("Lehman Index")/7/ returned 6.46% for the same
period.
The Portfolio seeks high current income as is consistent with prudent risk of
capital. The Portfolio invests primarily in U.S. corporate debt and U.S.
government securities, including mortgage and asset-backed securities, but to a
limited extent the Portfolio may also invest in foreign issues.
-------------
/5/ Value stocks are the shares of those companies whose shares are considered
to be inexpensive relative to their asset values or earning power.
/6/ Growth stocks generally provide an oppurtunity for more capital
appreciation than fixed income investments but are subject to greater
market fluctuations.
/7/ The Lehman Index is a broad-based unmanaged index of bonds issued by the
U.S. government and its agencies as well as certain corporate issuers.
Please note an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
The U.S. economy began to grow more moderately during the second quarter of
2000, and the managers think this path should continue through the remainder of
the year. In the past few months, an increase in corporate earnings problems has
caused poor performance for many corporate and high-yield bonds as well as large
segments of the stock market. The managers believe that the number of problems
has increased at a faster level than would typically be expected given the small
reduction in the pace of economic growth.
During the period, some of the most significant problems were continued poor
pricing power, the rapid pace of technological change, complications related to
acquisitions, sharp increases in the price of oil and the weak euro./8/ Due to a
combination of these problems and a significant reduction in liquidity within
the bond market, the managers believe that the prices of many corporate bonds
are behaving like stocks when faced with negative news -- shoot first and ask
questions later. The managers also believe that this has caused apprehension
among investors to spread quickly to similar companies, with a developing
"market-driven" credit crunch as the end result.
Although riskier asset classes rallied between June and August of 2000,
performance weakened in September and in turn caused lackluster performance for
the third quarter of 2000. This was the case for most stock markets,corporate
bonds, below investment-grade bonds/9/ and even long-term U.S. Treasuries.
For the first three quarters of 2000, the Standard & Poor's 500 ("S&P 500")
returned a negative 1.38% while the Lehman Index returned 7.17% for the same
period. Benefiting from the rise in oil prices, emerging market debt may be
among the better performing bond sectors so far in 2000.
If the economy does weaken in response to corporate problems and inflation
remains under control, the managers believe the Federal Reserve Board ("Fed")
may ease monetary policy aggressively, although it may not take place for
several quarters. If the Fed does decide to ease, the managers are concerned
that it may not help U.S. Treasuries, whose yields are already low, or corporate
bonds. The managers also believe that other sectors of the economy may perform
well in the future, assuming they are not impacted by economic problems.
-------------
/8/ The euro is the single currency of the European Monetary Union that was
adopted by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland on January 1, 1999.
/9/ Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc . or AAA, AA, A and BBB by Standard & Poor's Ratings
Service, or that have an equivalent rating by any nationally recognized
statistical rating organization, or are determined by the portfolio manager
to be of equivalent quality.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
If the economy remains strong and corporate problems dissipate, the managers
think that stocks may perform well and corporate bond spreads may tighten. In
such an environment, the managers caution that inflation trends might cause the
Fed to begin tightening. At this point, the managers believe that either
scenario is a realistic possibility. In their view, the behavior of investor and
corporate confidence from here on in may play a key role in the outcome with the
continuation of strength in consumer confidence another important factor in
preventing problems from spreading further.
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. For the year ended
October 31, 2000, the Portfolio returned 5.88%.
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.
Earlier in the period, the Federal Reserve Board ("Fed") raised interest rates
in hopes of slowing a rapidly growing economy and fending off inflation. By May
the Federal Open Market Committee/10/ ("FOMC") gradually raised the federal
funds rate/11/ ("Fed funds rate") from 5.50% to 6.50%. During the
period,however, the Fed has kept rates constant.
The managers feel that the economy continues to expand at a modest pace. The
third quarter Gross Domestic Product ("GDP")/12/ shows that the U.S. economy
grew at a 2.7% annual rate versus a 5.6% rate in the second quarter of 2000.
Unemployment remains at its 30-year low of 3.9%, and the managers believe the
Fed continues to be on the alert for inflation that may stem from factors such
as the tight labor market or the recent rise in oil prices.
Returns on money market securities have fallen and the yield curve/13/ has
flattened
-------------
/10/ The FOMC is a policy-making body of the Federal Reserve System, the U.S
central bank, that is responsible for the formulation of policy designed to
promote economic growth, full employment, stable prices and a sustainable
pattern of international trade and payments.
/11/ The Fed funds rate is the interest rate that banks with excess reserves at
a Federal Reserve district bank charge other banks that need overnight
loans. The fed funds rate often points to the direction of U.S. interest
rates.
/12/ GDP is the market value of the goods and services produced by labor and
property in the U.S. It is comprised of consumer and government purchases,
private domestic investments and net exports of goods and services.
/13/ The yield curve is the graphical depiction of the relationship between the
yield on bonds of the same credit quality but different maturities.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
over the last quarter as a result of no recent action by the Fed. One-year
securities were yielding 7.00% six months ago, but have now decreased to 6.65%.
The managers feel that the combination of reasonable economic growth, moderating
stock prices and slowing business investment may pave the way for a soft
landing.
The managers are carefully monitoring the telecommunications and automotive
sectors of the economy, as certain leaders including AT&T Corp., Lucent
Technologies and Ford Motor Corp. have come under pressure in their respective
markets. In the managers' view, the Fed may not take any action through the
first quarter of 2001; therefore, the possibility of the Fed easing is
premature. The Portfolio intends to be invested with a neutral stance and we
expect to maintain an average maturity/14/ in the 40-day area.
In closing, thank you for your investment 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 22, 2000
The information provided in this letter represents the opinions of the managers
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Portfolios. Please refer to pages 11
through 27 for a list and percentage breakdown of the Portfolios' holdings.
Also, please note any discussion of the Portfolios' holdings is as of October
31, 2000 and is subject to change.
------------
/14/ Maturity refers to the date on which the principal is required to be paid
on the bond.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
MFS Total Portfolio Return
--------------------------------------------------------------------------------
Historical Performance
Net Value Asset
------------------
Beginning End of Income Capital Gains Total
Year Ended of Year Year Dividends Distribution Returns+
================================================================================
10/31/00 $16.22 $17.16 $0.46 $0.57 12.77%
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 $1.72 $2.19
================================================================================
Travelers Managed Income Portfolio
--------------------------------------------------------------------------------
Historical Performance
Net Asset Value
--------------------
Beginning End of Income Capital Gains Total
Year Ended of Year Year Dividends Distribution Returns+
================================================================================
10/31/00 $11.49 $11.58 $0.43 $0.00 4.55%
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 $2.34 $0.24
================================================================================
It is the Funds' policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
Year Ended 10/31/00 12.77% 4.55%
--------------------------------------------------------------------------------
Five Years Ended 10/31/00 13.73 5.14
--------------------------------------------------------------------------------
6/16/94* through 10/31/00 13.20 6.03
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Returns+
--------------------------------------------------------------------------------
Travelers
MFS Total Managed
Return Income
Portfolio Portfolio
================================================================================
6/16/94* through 10/31/00 120.54% 45.33%
================================================================================
+ 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.
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of
MFS Total Return Portfolio vs. S&P 500 Index and
Lehman Brothers Government/Corporate Bond Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
Lehman Bros.
Total Return S&P 500 Gov't. Corp.
DATE Portfolio INDEX Bond Index.
------------- ------------- ------------- -------------
6/16/94 10,000 10,000 10,000
10/94 9,980 10,324 10,075
10/95 11,589 13,053 11,704
10/96 13,577 16,018 12,355
10/97 16,380 21,159 13,423
10/98 18,172 25,817 14,802
10/99 19,558 32,442 14,703
4/30/00 19,823 37,272 14,925
10/31/00 22,054 36,888 15,750
+ 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, 2000. 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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<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 2000
[GRAPH]
Traveler Lehman Bros.
Managed Income Gov't. Corp.
DATE Portfolio Bond Index.
----------- ------------- -------------
6/16/94 10,000 10,000
10/94 10,040 10,052
10/95 11,313 11,626
10/96 11,835 12,305
10/97 12,923 13,399
10/98 13,661 14,651
10/99 13,900 14,730
4/00 14,106 15,150
10/31/00 14,533 16,028
+ 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, 2000. 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.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 52.3%
Aerospace -- 2.0%
98,500 Boeing Co. $ 6,679,531
104,080 United Technologies Corp. 7,266,085
--------------------------------------------------------------------------------
13,945,616
--------------------------------------------------------------------------------
Automotive -- 1.2%
209,700 Delphi Automotive Systems Corp. 3,289,669
77,380 Ford Motor Co. 2,021,553
51,700 TRW, Inc. 2,171,400
35,480 Visteon Corp. 627,552
--------------------------------------------------------------------------------
8,110,174
--------------------------------------------------------------------------------
Banks and Credit Companies -- 2.5%
82,759 Bank of America Corp. 3,977,604
98,660 Chase Manhattan Corp. 4,489,030
126,930 PNC Financial Services Group 8,488,444
32,400 U.S. Bancorp 783,675
--------------------------------------------------------------------------------
17,738,753
--------------------------------------------------------------------------------
Business Machines -- 0.9%
94,730 Compaq Computer Corp. 2,880,739
34,000 International Business Machines Corp. 3,349,000
--------------------------------------------------------------------------------
6,229,739
--------------------------------------------------------------------------------
Business Services -- 0.2%
20,500 Automatic Data Processing, Inc. 1,338,906
2,900 CVS Trust Automatic Common Exchange Securities 261,000
--------------------------------------------------------------------------------
1,599,906
--------------------------------------------------------------------------------
Capital Goods -- 0.6%
103,200 Ingersoll-Rand Co. 3,895,800
--------------------------------------------------------------------------------
Cellular Phones -- 0.7%
47,440 Telephone & DataSystems Inc. 5,004,920
--------------------------------------------------------------------------------
Chemicals -- 0.9%
16,100 Air Products and Chemicals, Inc. 600,731
186,610 Rohm & Haas Co. 5,609,963
--------------------------------------------------------------------------------
6,210,694
--------------------------------------------------------------------------------
Communications Equipment -- 0.1%
24,500 Motorola Inc. 610,969
--------------------------------------------------------------------------------
Communication Services -- 4.5%
75,250 AT&T Corp. 1,744,859
116,700 Alltel Corp. 7,519,856
38,400 CenturyTel Inc. 1,478,400
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Communication Services -- 4.5% (continued)
140,884 SBC Communications Inc. $ 8,127,246
217,334 Verizon Communications 12,564,621
--------------------------------------------------------------------------------
31,434,982
--------------------------------------------------------------------------------
Computer Software -- 1.1%
42,300 BMC Software, Inc. (a) 859,219
93,980 Microsoft Corp. (a) 6,472,873
--------------------------------------------------------------------------------
7,332,092
--------------------------------------------------------------------------------
Conglomerates -- 0.6%
2,100 General Electric Co. 115,106
73,950 Honeywell International, Inc. 3,979,434
--------------------------------------------------------------------------------
4,094,540
--------------------------------------------------------------------------------
Consumer Goods and Services -- 0.9%
142,940 Fortune Brands Inc. 4,207,796
45,700 Gillette Co. 1,593,787
7,600 Kimberly-Clark Corp. 501,600
--------------------------------------------------------------------------------
6,303,183
--------------------------------------------------------------------------------
Electrical Equipment -- 0.9%
6,900 Emerson Electric Co. 506,719
170,300 W.W. Grainger Inc. 5,438,956
--------------------------------------------------------------------------------
5,945,675
--------------------------------------------------------------------------------
Entertainment -- 0.7%
16,500 Time Warner Inc. 1,252,515
60,305 Viacom Inc. 3,429,847
--------------------------------------------------------------------------------
4,682,362
--------------------------------------------------------------------------------
Financial Institutions -- 2.4%
161,330 Freddie Mac 9,679,800
115,400 Mellon Financial Corp. 5,568,050
8,800 Merrill Lynch & Co., Inc. 616,000
11,300 Morgan Stanley Dean Witter & Co. 907,531
--------------------------------------------------------------------------------
16,771,381
--------------------------------------------------------------------------------
Food and Beverages -- 0.8%
18,600 Anheuser-Busch Cos., Inc. 850,950
84,179 Archer-Daniels-Midland Co. 925,969
30,400 General Mills Inc. 1,269,200
17,100 McCormick & Co., Inc. 541,856
26,100 Quaker Oats Co. 2,128,781
--------------------------------------------------------------------------------
5,716,756
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Gaming -- 1.3%
219,590 Harrah's Entertainment, Inc. (a) $ 6,285,764
86,460 MGM Mirage, Inc. 2,988,274
--------------------------------------------------------------------------------
9,274,038
--------------------------------------------------------------------------------
Healthcare -- 3.1%
112,770 Abbott Laboratories 5,955,666
82,800 American Home Products Corp. 5,257,800
5,900 Baxter International Inc. 484,906
22,400 Bristol-Myers Squibb Co. 1,365,000
5,400 Community Health Systems, Inc. (a) 152,213
77,700 HCA-- The Healthcare Co. 3,103,144
97,509 Pharmacia Corp. 5,362,995
--------------------------------------------------------------------------------
21,681,724
--------------------------------------------------------------------------------
Insurance -- 7.4%
21,150 AFLAC INC. 1,545,272
85,570 Allstate Corp. 3,444,193
4,550 American International Group, Inc. 445,900
138,100 AXA Financial Inc. 7,466,031
29,400 Chubb Corp. 2,482,463
34,561 CIGNA Corp. 4,214,714
111,240 Hartford Financial Services Group, Inc. 8,280,428
17,450 Jefferson-Pilot Corp. 1,199,688
113,000 Lincoln National Corp. 5,466,375
18,100 Marsh & McLennan Cos., Inc. 2,366,575
72,120 Nationwide Financial Services, Inc. 3,506,835
39,680 SAFECO Corp. 959,760
198,990 St. Paul Cos. 10,198,237
--------------------------------------------------------------------------------
51,576,471
--------------------------------------------------------------------------------
Metals and Minerals -- 1.2%
129,200 Alcoa Inc. 3,706,425
105,100 Phelps Dodge Corp. 4,913,425
--------------------------------------------------------------------------------
8,619,850
--------------------------------------------------------------------------------
Oil Production -- 6.9%
44,600 Apache Corp. 2,466,937
86,106 BP Amoco PLC, Sponsored ADR 4,386,024
78,000 Coastal Corp. 5,884,125
55,600 Conoco Inc., Class A Shares 1,435,175
39,960 Cooper Cameron Corp. (a) 2,177,820
78,380 Devon Energy Corp. 3,950,352
85,253 Exxon Mobil Corp. 7,603,502
82,500 Halliburton Co. 3,057,656
20,700 Kerr-McGee Corp. 1,351,969
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Oil Production -- 6.9% (continued)
92,910 Noble Drilling Corp. (a) $ 3,861,572
70,810 Occidental Petroleum Corp. 1,407,349
141,700 Royal Dutch Petroleum Co., NY Shares 8,413,438
38,900 Transocean Sedco Forex Inc. 2,061,700
--------------------------------------------------------------------------------
48,057,619
--------------------------------------------------------------------------------
Printing and Publishing -- 0.9%
58,200 Gannett Co., Inc 3,375,600
63,000 New York Times Co., Class A Shares 2,315,250
19,700 Tribune Co. 730,131
--------------------------------------------------------------------------------
6,420,981
--------------------------------------------------------------------------------
Radio and TV Broadcasting -- 0.8%
103,210 Comcast Corp., Special Class A Shares 4,205,808
45,560 Infinity Broadcasting Corp. (a) 1,514,870
--------------------------------------------------------------------------------
5,720,678
--------------------------------------------------------------------------------
Railroads -- 0.6%
149,250 Burlington Northern Santa Fe Corp. 3,964,453
--------------------------------------------------------------------------------
Real Estate -- 0.3%
45,900 Equity Residential Properties Trust 2,160,169
--------------------------------------------------------------------------------
Retail Stores -- 2.8%
97,680 The Gap, Inc. 2,521,365
35,900 The Home Depot, Inc. 1,543,700
269,890 The Kroger Co. (a) 6,089,393
112,990 Office Depot, Inc. (a) 939,229
102,350 Safeway Inc. (a) 5,597,266
61,170 Wal-Mart Stores,Inc. 2,775,589
--------------------------------------------------------------------------------
19,466,542
--------------------------------------------------------------------------------
Special Products and Services -- 1.8%
163,520 Deere & Co. 6,019,580
383,100 Owens-Illinois Inc. (a) 2,274,656
98,400 Williams Cos., Inc. 4,114,350
--------------------------------------------------------------------------------
12,408,586
--------------------------------------------------------------------------------
Utilities - Electric and Gas -- 2.8%
11,700 CMS Energy Corp. 315,900
52,700 CP&L Energy, Inc. 2,124,469
54,500 Dominion Resources, Inc. 3,246,156
33,700 Duke Energy Corp. 2,912,944
32,000 Exelon Corp. 1,924,000
267,300 NiSource Inc. 6,665,794
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Utilities - Electric and Gas-- 2.8% (continued)
51,300 Pinnacle West Captial Corp. $ 2,228,344
--------------------------------------------------------------------------------
19,417,607
--------------------------------------------------------------------------------
Utilities - Gas -- 1.4%
32,000 Columbia Energy Group 2,302,000
20,800 Eastern Enterprises 1,339,000
99,600 National Fuel Gas Co. 5,341,050
34,100 Washington Gas Light Co. 869,550
--------------------------------------------------------------------------------
9,851,600
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $315,979,362) 364,247,860
================================================================================
CONVERTIBLE PREFERRED STOCK -- 0.3%
Containers and Packaging -- 0.0%
38,000 Owens-Illinois Inc., 4.750% 482,125
--------------------------------------------------------------------------------
Utilities - Electric -- 0.3%
22,700 NiSource Inc., 7.750% 1,093,856
18,100 TXU Corp., 9.250% 796,400
--------------------------------------------------------------------------------
1,890,256
--------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost -- $3,377,680) 2,372,381
================================================================================
FOREIGN COMMON STOCK -- 3.2%
Netherlands -- 1.6%
188,610 Akzo Nobel N.V. 8,576,815
38,441 ING Groep N.V. 2,636,587
--------------------------------------------------------------------------------
11,213,402
--------------------------------------------------------------------------------
Switzerland -- 0.7%
1,984 Nestle S.A. 4,110,116
600 Novartis AG 909,960
--------------------------------------------------------------------------------
5,020,076
--------------------------------------------------------------------------------
United Kingdom -- 0.9%
381,294 Diageo PLC 3,607,194
190,400 HSBC Holdings PLC 2,720,552
--------------------------------------------------------------------------------
6,327,746
--------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(Cost-- $21,727,306) 22,561,224
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
SHARES SECURITY VALUE
================================================================================
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 17.8%
U.S. Treasury Notes:
$ 1,169,000 6.500% due 8/31/01 $ 1,170,392
1,700,000 6.375% due 9/30/01 1,701,326
4,664,000 6.750% due 5/15/05 4,836,708
3,686,076 4.250% due 1/15/10 3,798,944
2,459,000 6.500% due 2/15/10 2,574,843
12,320,000 5.750% due 8/15/10 12,312,238
U.S. Treasury Bonds:
10,254,000 9.875% due 11/15/15 14,151,853
8,521,000 6.125% due 8/15/29 8,827,159
2,642,000 6.250% due 5/15/30 2,814,945
Federal National Mortgage Association (FNMA):
1,325,000 7.000% due 7/15/05 1,349,844
1,400,000 5.722% due 3/25/09 1,291,062
3,325,000 6.625% due 9/15/09 3,316,688
9,654,000 7.250% due 1/15/10 10,020,369
1,182,191 7.000% due 7/1/15 1,176,281
3,855,272 7.000% due 8/1/29 to 11/1/29 3,781,753
4,959,517 7.500% due 10/1/29 4,954,855
2,747,655 7.500% due 1/1/30 2,745,073
5,815,444 7.000% due 1/1/30 to 9/1/30 5,704,543
Government National Mortgage Association (GNMA):
290,356 8.000% due 6/20/25++ 294,180
1,380,718 7.500% due 8/15/25 to 12/15/25 1,386,753
5,566,731 8.000% due 1/15/26 to 7/15/26 5,660,644
1,724,958 7.500% due 3/15/26 to 11/15/26 1,732,501
3,509,213 7.500% due 2/15/27 to 12/15/27 3,524,542
4,458,821 7.000% due 4/1/28 to 10/15/28 4,400,277
6,785,880 8.000% due 11/15/29 to 12/15/29 6,900,361
13,664,072 8.000% due 2/15/30 to 9/15/30 13,894,586
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS (Cost -- $123,778,627) 124,322,720
================================================================================
FACE
AMOUNT RATING(b) SECURITY VALUE
================================================================================
CORPORATE BONDS AND NOTES -- 18.1%
Airlines -- 0.5%
450,899 AAA American Airlines Inc., 6.855% due 4/15/09 446,717
Continental Airlines Inc.:
346,127 BBB+ 9.500% due 10/15/13 360,249
610,046 AA+ 6.648% due 9/15/17 571,413
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(b) SECURITY VALUE
=====================================================================================
<S> <C> <C>
Airlines -- 0.5% (continued)
Jet Equipment Trust:
$ 245,592 A+ 9.410% due 6/15/10 (c) $ 264,516
176,672 A+ 8.640% due 11/1/12 (c) 180,294
100,000 Baa1* 10.690% due 11/1/13 (c) 108,490
300,000 BBB 11.440% due 11/1/14 (c) 331,890
1,452,687 AA Northwest Airlines Inc., Series 99-1A, 6.810% 1,331,410
due 2/1/20
-------------------------------------------------------------------------------------
3,594,979
-------------------------------------------------------------------------------------
Automotive -- 0.8%
4,865,000 A+ DaimlerChrysler AG, 6.630% due 9/21/01 4,840,675
345,000 A General Motors Corp., 9.400% due 7/15/21 396,319
-------------------------------------------------------------------------------------
5,236,994
-------------------------------------------------------------------------------------
Bank/Finance -- 5.4%
1,530,000 AAA AIG SunAmerica Global Financing I, 7.400% 1,557,104
due 5/5/03 (c)
2,500,000 AAA AIG SunAmerica Global Financing II, 7.600% 2,559,375
due 5/15/05 (c)
Associates Corp.:
1,699,000 A+ 5.500% due 2/15/04 1,626,793
322,000 A+ 5.800% due 4/20/04 309,925
968,000 A1* BCH Cayman Islands Ltd., 7.700% due 7/15/06 970,420
121,000 Ba1* Beaver Valley Funding Corp., 9.000% due 6/1/17 126,143
400,000 Baa3* Capital One Financial Corp., 7.250% due 12/1/03 395,000
1,233,000 Aa3* Chase Manhattan Corp, 6.750% due 12/1/04 1,217,588
400,000 BB Colonial Capital II, 8.920% due 1/15/27 336,500
540,000 A Countrywide Home Loans, Inc., 6.250% due 4/15/09 486,000
Ford Motor Credit:
460,000 A 7.600% due 8/1/05 463,450
867,000 A 7.375% due 10/28/09 847,493
GE Capital Corp.:
1,232,000 AAA 7.500% due 5/15/05 1,261,260
1,168,000 AAA 8.700% due 3/1/07 1,270,200
429,000 AAA 8.850% due 3/1/07 470,291
313,000 AAA 8.750% due 5/21/07 341,953
553,000 AAA 8.500% due 7/24/08 600,696
965,000 AAA 7.375% due 1/19/10 995,156
General Motors Acceptance Corp.:
1,204,000 A 6.750% due 12/10/02 1,199,485
652,000 A 5.950% due 3/14/03 636,515
2,256,000 A 7.500% due 7/15/05 2,278,560
4,000,000 A+ The Goldman Sachs Group, Inc., 5.900% 3,910,000
due 1/15/03 (c)
2,085,000 BB+ GS Escrow Corp., 6.750% due 8/1/01 2,058,938
588,000 A+ John Deere Capital Corp., 7.000% due 10/15/02 590,205
2,117,000 A Lehman Brothers Holdings, 7.750% due 1/15/05 2,124,939
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(b) SECURITY VALUE
=====================================================================================
<S> <C> <C> <C>
Bank/Finance -- 5.4% (continued)
Midamerican Funding LLC:
$ 780,000 BBB+ 5.850% due 3/1/01 $ 777,075
1,083,000 BBB+ 6.927% due 3/1/29 950,333
59,288 BBB- Midland Funding Corp. I, 10.330% due 7/23/02 60,326
Morgan Stanley Dean Witter & Co.:
1,061,000 AA- 7.125% due 1/15/03 1,067,631
765,000 AA- 7.750% due 6/15/05 781,256
1,800,000 BBB+ Qwest Capital Funding, 7.750% due 8/15/06 (c) 1,827,000
328,000 A+ State Street Corp., 7.650% due 6/15/10 332,100
350,000 BBB+ TXU Eastern Funding, 6.150% due 5/15/02 343,000
2,874,000 A+ Wells Fargo Bank NA, 7.800% due 6/15/10 2,956,628
-------------------------------------------------------------------------------------
37,729,338
-------------------------------------------------------------------------------------
Chemicals and Minerals -- 0.3%
2,133,000 BB Lyondell Chemical Co., 9.625% due 5/1/07 2,074,343
-------------------------------------------------------------------------------------
Collateralized Mortgage Obligations -- 2.0%
1,145,218 Aaa* Bear Stearns Commercial Mortgage Securities,
6.800% due 9/15/08 1,140,390
555,284 AAA Beneficial Mortgage Corp., 6.740% due 9/28/37 552,724
278,503 Baa2* Blackrock Capital Finance L.P., 7.750% due 9/25/26 91,906
Chase Commercial Mortgage Securities Corp.:
817,000 AAA 6.390% due 11/18/08 780,872
364,821 AAA 7.543% due 9/15/09 373,030
CRIIMI MAE Commercial Mortgage Trust:
420,000 A+ 6.701% due 5/20/08 (c) 394,159
2,150,000 A+ 7.000% due 3/2/11 1,961,539
1,918,000 Aaa* Countrywide Alternative Loan Trust, 8.000%
due 7/25/30 1,922,795
1,876,159 AAA GS Mortgage Securities Co., II, 6.060%
due 10/18/30 1,822,783
221,676 AAA Illinois Power Special Purpose Trust, 5.260%
due 6/25/03 219,965
396,000 AAA J.P. Morgan Commerical Mortgage Finance Corp.,
6.613% due 1/15/30 384,741
Residential Accredit Loans, Inc.:
1,300,000 AAA 7.000% due 3/25/28 1,239,538
1,740,000 AAA 6.750% due 10/25/28 1,655,088
351,000 AAA Residential Funding Mortgage Securities, 7.660%
due 9/25/12 357,513
368,375 AAA Starwood Asset Receivables Trust, 6.920% due 8/25/03 368,606
725,000 AAA Summit Acceptance Auto Receivables Trust,
7.510% due 2/15/07 735,875
-------------------------------------------------------------------------------------
14,001,524
-------------------------------------------------------------------------------------
Entertainment/Media -- 2.2%
606,000 BB+ CSC Holdings Inc., 8.125% due 7/15/09 590,850
1,803,000 BBB- Hearst Argyle TV Inc., 7.500% due 11/15/27 1,523,535
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(b) SECURITY VALUE
================================================================================
Entertainment/Media -- 2.2% (continued)
Joseph Seagram & Sons Inc.:
$ 1,066,000 BBB- 5.790% due 4/15/01 $ 1,060,670
1,565,000 BBB- 6.400% due 12/15/03 1,572,825
637,000 BBB- 7.500% due 12/15/18 690,349
News America Holdings, Inc.:
1,073,000 BBB- 6.703% due 5/21/04 1,040,810
831,000 BBB- 6.625% due 1/9/08 767,636
635,000 BBB- 7.300% due 4/30/28 548,481
Time Warner Inc.:
5,407,000 BBB 6.100% due 12/30/01 (c) 5,325,895
1,572,000 BBB 10.150% due 5/1/12 1,852,995
494,000 BBB 6.875% due 6/15/18 444,600
--------------------------------------------------------------------------------
15,418,646
--------------------------------------------------------------------------------
Forest Paper Products--0.3%
Georgia-Pacific Corp.:
1,929,000 Baa2* 9.950% due 6/15/02 1,991,693
200,000 Baa2* 9.875% due 11/1/21 204,750
200,000 B+ US Timberlands Co., L.P., 9.625% due 11/15/07 180,500
--------------------------------------------------------------------------------
2,376,943
--------------------------------------------------------------------------------
Insurance -- 0.3%
1,885,000 A AFLAC Inc., 6.500% due 4/15/09 1,745,981
176,000 BBB Atlantic Mutual Insurance Co., 8.150%
due 2/15/28 (c) 130,680
658,000 B+ Providian Capital I, 9.525% due 2/1/27 (c) 558,478
--------------------------------------------------------------------------------
2,435,139
--------------------------------------------------------------------------------
Oil/Oil Services -- 0.8%
351,000 BBB+ Alberta Energy Co., Ltd., 7.650% due 9/15/10 354,071
1,294,000 BBB Coastal Corp., 6.200% due 5/15/04 1,256,798
1,028,000 BBB- Gulf Canada Resources Ltd., 8.350% due 8/1/06 1,051,130
1,007,000 A- Northern Natural Gas, 7.000% due 6/1/11 (c) 950,356
888,000 BBB Occidental Petroleum Corp., 6.400% due 4/1/03 864,690
717,000 BBB Phillips Petroleum Co., 8.500% due 5/25/05 757,331
115,000 BBB Ultramar Diamond Shamrock, 7.200% due 10/15/17 103,788
--------------------------------------------------------------------------------
5,338,164
--------------------------------------------------------------------------------
Railroad -- 0.2%
Union Pacific Corp.:
696,000 BBB- 5.780% due 10/15/01 683,820
990,000 BBB- 6.340% due 11/25/03 960,300
--------------------------------------------------------------------------------
1,644,120
--------------------------------------------------------------------------------
Real Estate -- 0.1%
375,000 A Socgen Real Estate LLC, 7.640% due 12/29/49 (c) 352,031
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT RATING(b) SECURITY VALUE
================================================================================
Retail Stores -- 0.4%
Federated Department Stores:
$ 1,639,000 BBB+ 8.500% due 6/15/03 $ 1,649,244
1,070,000 BBB+ 6.300% due 4/1/09 900,138
--------------------------------------------------------------------------------
2,549,382
--------------------------------------------------------------------------------
Telecommunications -- 1.5%
339,000 A+ AT&T Capital Corp., 6.250% due 5/15/01 338,153
1,600,000 B+ Century Communications Corp.,
zero coupon bond to yield 8.788% due 1/15/08 624,000
1,080,000 BB+ Chancellor Media, Series B, 8.125% due 12/15/07 1,090,800
1,000,000 B FrontierVision L.P., 11.000% due 10/15/06 965,000
215,000 BBB Metronet Communications, step bond to yield
8.561% due 6/15/08 174,687
1,114,000 BBB+ Qwest Corp., 7.625% due 6/9/03 (c) 1,126,532
Sprint Capital Corp.:
1,622,000 BBB+ 6.500% due 11/15/01 1,613,890
1,992,000 BBB+ 5.875% due 5/1/04 1,902,360
2,235,000 A TCI Communications Inc., 9.650% due 3/31/27 2,391,450
100,000 A- Worldcom Inc., 8.875% due 1/15/06 103,125
--------------------------------------------------------------------------------
10,329,997
--------------------------------------------------------------------------------
Utilities -- 3.3%
Calenergy Co., Inc.:
10,000 BBB- 7.230% due 9/15/05 9,900
5,000 BBB- 7.520% due 9/15/08 4,931
Cleveland Electric Illuminating Co.:
500,000 Baa3* 7.880% due 11/1/17 494,375
388,000 Baa3* 9.000% due 7/1/23 397,700
CMS Energy Corp.:
619,000 BB 8.000% due 7/1/01 612,810
2,482,000 BB 8.375% due 7/1/03 2,401,335
719,000 A- Commonwealth Edison, 8.500% due 7/15/22 736,076
Connecticut Lighting & Power Co.:
137,000 BBB- 7.875% due 6/1/01 137,343
1,500,000 NR 8.590% due 6/5/03 (c) 1,483,338
500,000 BBB- 7.875% due 10/1/24 502,500
744,000 BBB+ Dominion Resources, Inc., Series B, 7.625%
due 7/15/05 751,440
516,000 BBB+ Enron Corp., 7.875% due 6/15/03 525,675
471,000 BBB+ Entergy Mississippi Inc., 6.200% due 5/1/04 456,281
306,875 BBB- GG1B Funding Corp., 7.430% due 1/15/11 299,203
236,000 BBB- Gulf States Utilities, 8.250% due 4/1/04 243,670
Niagara Mohawk Power Corp.:
1,260,414 BBB- 7.250% due 10/1/02 1,258,839
1,870,000 BBB+ 7.750% due 5/15/06 1,895,713
988,000 BBB 8.770% due 1/1/18 1,031,225
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(b) SECURITY VALUE
=============================================================================================
<S> <C> <C> <C>
Utilities -- 3 .3%(continued)
$ 77,000 BB+ North Atlantic Energy Service Co., 9.050% due 6/1/02 $ 77,866
619,290 BB+ Northeast Utilities, 8.580% due 12/1/06 609,227
470,000 BBB- NRG Energy Inc., 8.700% due 3/15/05 (c) 500,263
469,000 Baa2* PNPP II Funding Corp., 9.120% due 5/30/16 494,209
1,100,000 BBB Salton Sea Funding, 7.840% due 5/30/10 1,112,375
1,341,000 BBB Sonat Inc., 7.625% due 7/15/11 1,332,619
400,000 Baa1* Texas Gas Transmission Corp., 7.250% due 7/15/27 369,500
482,000 BBB Texas Utilities, 5.940% due 10/15/01 475,975
828,000 Baa3* Toledo Edison Co., 7.875% due 8/1/04 841,455
330,000 BBB Utilicorp United Inc., 7.000% due 7/15/04 320,925
1,112,414 BBB- Waterford 3 Funding -- Entergy, 8.090% due 1/2/17 1,056,794
353,000 Baa1* Williams Gas Pipeline, 7.375% due 11/15/06 (c) 354,765
2,007,000 A+ Wisconsin Electric Power, 6.625% due 12/1/02 2,002,723
---------------------------------------------------------------------------------------------
22,791,050
---------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $128,670,537) 125,872,650
=============================================================================================
CONVERTIBLE CORPORATE BONDS AND NOTES -- 0.4%
Communication Services -- 0.2%
1,500,000 B+ American Tower Corp., 5.000% due 2/15/10 1,496,250
---------------------------------------------------------------------------------------------
Insurance -- 0.2%
1,650,000 A+ Loews Corp., 3.125% due 9/15/07 1,371,562
---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE CORPORATE BONDS AND NOTES
(Cost -- $2,818,613) 2,867,812
=============================================================================================
FOREIGN BONDS AND NOTES -- 0.3%
Luxembourg -- 0.1%
816,000 AAA AIG SunAmerica Institutional Funding II, 5.750% due 2/16/09 738,316
---------------------------------------------------------------------------------------------
Mexico -- 0.2%
1,001,000 Baa3* United Mexican States, 9.875% due 2/1/10 1,043,542
---------------------------------------------------------------------------------------------
TOTAL FOREIGN BONDS AND NOTES
(Cost -- $1,849,715) 1,781,858
=============================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM SECURITIES -- 7.6%
Federal Home Loan Bank:
$15,000,000 6.390% due 11/1/00 $ 15,000,000
8,000,000 6.370% due 11/3/00 7,997,169
10,000,000 6.380% due 11/15/00 9,975,189
Federal Home Loan Mortgage Corp.:
9,800,000 6.450% due 11/1/00 9,800,000
10,000,000 6.380% due 11/2/00 9,998,228
--------------------------------------------------------------------------------
TOTAL SHORT- TERM SECURITIES
(Cost -- $52,770,586) 52,770,586
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $650,972,426**) $696,797,091
================================================================================
(a) Non-income producing security.
(b) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(c) This security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
++ All or a portion of this security is segregated for open forward foreign
currency contracts.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 28 for definition of ratings.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
U.S. GOVERNMENT AND AGENCY OBLIGATIONS-- 38.3%
U.S. Treasury Notes:
$16,050,000 6.750% due 5/15/05 $ 16,644,332
9,620,010 3.625% due 1/15/08 9,469,649
11,450,000 5.750% due 8/15/10 11,442,786
30,000,000 U.S. T-Strip due 5/15/08 19,410,300
70,385 Federal National Mortgage Association,
6.8304% due 6/17/11 68,469
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS (Cost-- $56,745,632) 57,035,536
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
CORPORATE BONDS AND NOTES -- 54.8%
Financial Services -- 20.6%
6,400,000 A+ The CIT Group Inc., Sr. Notes, 5.910% due 11/23/05 5,928,000
5,000,000 BBB Comdisco Inc., Notes, 7.250% due 9/20/01 4,612,500
2,200,000 BB Finova Captial Corp., Notes, 9.125% due 2/27/02 1,441,000
275,000 BB+ Golden State Holdings Corp., Sr. Notes, 7.000%
due 8/1/03 263,656
1,050,000 BBB+ MBNA America Bank, Notes, 6.000% due 12/26/00 1,048,687
2,900,000 BBB+ Orix Credit Alliance, Notes, 6.780% due 5/15/01 (b) 2,900,000
5,300,000 BBB Osprey Trust, Secured Notes, 8.310% due 1/15/03 (b) 5,359,625
5,400,000 BBB PP&L Capital Funding, Sr. Notes, 7.750% due 4/15/05 5,386,500
3,700,000 A2* Telecom Newzeal Finance, 6.250% due 2/10/03 (b) 3,646,213
--------------------------------------------------------------------------------
30,586,181
--------------------------------------------------------------------------------
Food -- 3.8%
Nabisco Inc., Notes:
5,500,000 BBB 6.700% due 6/15/02 5,390,000
280,000 BBB 6.000% due 2/15/11 278,250
--------------------------------------------------------------------------------
5,668,250
--------------------------------------------------------------------------------
Healthcare -- 1.6%
2,400,000 BBB- Columbia /HCA Healthcare Corp., Notes, 6.630%
due 7/15/45 2,340,000
--------------------------------------------------------------------------------
Hotels -- 3.2%
4,700,000 BBB- Park Place Entertainment Corp., Sr. Notes, 7.950%
due 8/1/03 4,700,000
--------------------------------------------------------------------------------
Industrial -- 0.1%
Navistar International Corp.:
140,000 BBB- Sr. Notes, 7.000% due 2/1/03 134,750
75,000 BB+ Sr. Sub. Notes, Series B, 8.000% due 2/1/08 69,000
--------------------------------------------------------------------------------
203,750
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
===========================================================================================
<S> <C> <C> <C>
Paper -- 2.9%
$ 4,300,000 BBB+ International Paper Co., Notes, 8.125% due 7/8/05 (b) $ 4,407,500
-------------------------------------------------------------------------------------------
Real Estate Investment Trusts -- 4.2%
6,250,000 Baa2* Franchise Finance Corp. of America, Sr. Notes,
7.000% due 11/30/00 6,246,938
-------------------------------------------------------------------------------------------
Retail -- 3.2%
800,000 A Dayton Hudson Corp., Notes, 6.800% due 10/1/01 796,000
Saks Inc., Company Guaranteed:
3,500,000 Baa3* 7.000% due 7/15/04 2,362,500
1,275,000 Baa3* 7.250% due 12/1/04 835,125
1,600,000 Baa3* 7.375% due 2/15/19 792,000
-------------------------------------------------------------------------------------------
4,785,625
-------------------------------------------------------------------------------------------
Telecommunications -- 4.3%
6,400,000 A- Koninklijke KPN NV, Sr. Unsubordinated Notes,
7.500% due 10/1/05 (b) 6,368,000
-------------------------------------------------------------------------------------------
Transportation -- 4.6%
6,400,000 BBB CSX Corp., Debentures, 9.000% due 8/15/06 6,784,000
-------------------------------------------------------------------------------------------
Utilities -- 6.3%
CMS Energy Corp., Sr. Notes:
3,600,000 BB 6.750% due 1/15/04 3,321,000
1,150,000 BB 7.625% due 11/15/04 1,076,688
5,200,000 BBB Utilicorp United Inc., Sr. Notes, 6.875% due 10/1/04 5,031,000
-------------------------------------------------------------------------------------------
9,428,688
-------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $84,119,917) 81,518,932
===========================================================================================
SHARES SECURITY VALUE
===========================================================================================
WARRANTS(c) -- 0.0%
150 Loral Orion Network Systems, Inc., Expire 1/31/07
(Cost -- $105) 450
===========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
TRAVELERS MANAGED INCOME PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 6.9%
$10,217,000 CS First Boston Corp., 6.500% due 11/1/00;
Proceeds at maturity -- $10,218,845;
(Fully collateralized by U.S. Treasury Notes,
6.375% due 1/31/02; Market value -- $10,422,256)
(Cost -- 10,217,000) $ 10,217,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- 151,082,654**) $148,771,918
================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*) which are rated by Moody's Investors Service,
Inc.
(b) This 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, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
================================================================================
COMMERCIAL PAPER-- 71.3%
$ 9,500,000 Abbey National N. A. mature 11/3/00 to
1/19/01 6.58% to 6.63% $ 9,454,733
7,000,000 ABN AMRO Bank N.V. matures 12/15/00 6.55 6,944,817
10,000,000 AIG Funding matures 11/13/00 6.50 9,978,400
8,000,000 Alcoa Inc. mature 11/17/00 to 12/21/00 6.54 to 6.55 7,946,512
7,000,000 American Express Credit Co. matures
11/8/00 6.51 6,991,180
11,250,000 Anz Delaware Inc. matures 11/7/00 6.51 to 6.53 11,237,836
3,000,000 AT&T Corp. matures 11/1/00 6.58 3,000,000
8,000,000 Bank of Nova Scotia matures 12/12/00 6.54 7,941,051
8,000,000 Barclays U.S. Funding mature 11/2/00 to 6.52 to 6.54 7,994,237
11/10/00
5,000,000 Baus Funding LLC matures 11/7/00 6.56 4,994,575
7,000,000 BCI Funding Corp. matures 11/3/00 6.53 6,997,472
5,000,000 Chase Manhattan Bank Corp. matures
11/9/00 6.58 4,992,811
8,000,000 Coca-Cola Co. mature 12/12/00 to 2/9/01 6.57 to 6.60 7,909,297
9,000,000 Cregem North America Inc. mature
11/13/00 to 1/3/01 6.60 to 6.80 8,933,772
5,000,000 DaimlerChrysler North America Holding Co.
matures 11/9/00 6.62 4,992,778
5,000,000 Den Danske Corp. matures 1/19/01 6.64 4,928,352
3,000,000 Dresdner U.S. Finance Inc. matures 12/7/00 6.61 2,980,590
8,000,000 E.I. Du Pont de Nemours & Co. matures
11/9/00 6.50 7,988,516
11,000,000 General Electric Capital Corp. mature
1/22/01 to 2/14/01 6.59 to 6.80 10,815,946
7,000,000 General Motors Acceptance Corp. matures
11/21/00 6.52 6,974,800
3,000,000 Goldman, Sachs & Co. matures 11/1/00 6.85 3,000,000
5,000,000 Halifax PLC matures 11/6/00 6.59 4,995,500
10,000,000 J.P. Morgan & Co. matures 1/8/01 6.67 9,876,844
3,000,000 Merrill Lynch matures 11/1/00 6.72 3,000,000
3,000,000 Nationwide Building Society matures
1/18/01 6.69 2,957,425
4,000,000O esterreichische Kontrollbank matures
12/4/00 6.54 3,976,240
3,000,000 Province De Quebec matures 12/14/00 6.65 2,976,744
5,000,000 Royal Bank of Canada matures 12/21/00 6.52 4,955,208
7,000,000 Sao Paolo U.S. Finance Inc. matures
11/7/00 6.52 6,992,440
5,000,000 Sara Lee Corp. matures 11/6/00 6.50 4,995,507
8,000,000 Societe Generale mature 2/2/00 to 2/12/01 6.65 to 6.66 7,856,925
7,000,000 Svenska Handelsbanken matures 11/13/00 6.52 6,984,880
10,000,000 Transamerica Finance Corp. mature 11/2/00
to 11/16/00 6.51 to 6.58 9,985,597
3,000,000 Walt Disney Co. matures 11/3/00 6.49 2,998,922
8,000,000 Wells Fargo Co. matures 12/18/00 6.57 7,932,529
--------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost-- $227,482,436) 227,482,436
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
===============================================================================================
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 4.7%
$10,000,000 Federal Home Loan Mortgage Corp. mature
12/21/00 to 12/26/00 6.49% to 6.51% $ 9,906,396
5,000,000 Federal National Mortgage Association
matures 12/14/00 6.50 4,961,718
-----------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS (Cost -- $14,868,114) 14,868,114
===============================================================================================
BANK NOTES -- 3.5%
6,000,000 Bank of America mature 12/19/00 to 2/5/01 6.60 to 6.83 6,000,000
5,000,000 Harris Bank matures 11/10/00 6.52 5,000,000
-----------------------------------------------------------------------------------------------
TOTAL BANK NOTES
(Cost -- $11,000,000) 11,000,000
===============================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 10.3%
5,000,000 Bank Austria AG matures 12/22/00 6.59 5,000,229
5,000,000 Bayerische Hypo-Und Vereinsbank matures 1/11/01 6.68 5,000,096
5,000,000 Canadian Imperial Bank Commerce NY matures 2/28/01 6.69 5,000,080
5,000,000 Commerzbank matures 2/28/01 6.70 5,000,160
5,000,000 Credit Agricole Indosuez matures 12/5/00 6.53 5,000,014
3,000,000 Deutsche Bank matures 12/1/00 6.90 3,000,000
5,000,000 National Westminster Bank PLC matures 11/24/00 6.58 5,000,031
-----------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $33,000,610) 33,000,610
===============================================================================================
TIME DEPOSITS -- 9.4%
10,000,000 Bank of Montreal matures 11/1/00 6.63 10,000,000
5,000,000 Canadian Imperial Bank Commerce matures 11/1/00 6.56 5,000,000
5,000,000 Chase Manhattan Bank matures 11/1/00 6.63 5,000,000
10,000,000 HSBC Bank USA matures 11/1/00 6.63 10,000,000
-----------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $30,000,000) 30,000,000
===============================================================================================
REPURCHASE AGREEMENT -- 0.8%
2,592,000 Morgan Stanley Dean Witter & Co.,
6.50% due 11/1/00; Proceeds at maturity --
$2,592,468; (Fully collateralized by U.S.
Treasury due Note, 5.50% due 12/31/00; Market
value -- $2,609,286) (Cost -- $2,592,000) 2,592,000
===============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $318,943,160**) $318,943,160
===============================================================================================
</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 "Aa" to "Caa," 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 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 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
========================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $650,972,426, $151,082,654
and $318,943,160, respectively) $ 696,797,091 $ 148,771,918 $ 318,943,160
Cash 112,257 867 29
Dividends and interest receivable 5,058,719 2,310,890 494,817
Receivable for securities sold 7,223,470 -- --
----------------------------------------------------------------------------------------
Total Assets 709,191,537 151,083,675 319,438,006
----------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 11,431,834 -- --
Management fees payable 485,171 140,162 134,062
Payable for open forward foreign currency
contracts (Note 5) 296 -- --
Payable for Fund shares purchased 188,268 77,450 --
Deferred compensation payable -- -- 452
Dividends payable -- -- 635,284
Accrued expenses 76,199 31,414 68,015
----------------------------------------------------------------------------------------
Total Liabilities 12,181,768 249,026 837,813
----------------------------------------------------------------------------------------
Total Net Assets $ 697,009,769 $ 150,834,649 $ 318,600,193
========================================================================================
NET ASSETS:
Par value of capital shares $ 406 $ 130 $ 3,186
Capital paid in excess of par value 603,536,830 148,968,039 318,597,007
Undistributed net investment income 21,793,821 8,560,037 --
Accumulated net realized gain (loss)
from security transactions 25,830,761 (4,382,821) --
Net unrealized appreciation (depreciation)
of investments and foreign currencies 45,847,951 (2,310,736) --
----------------------------------------------------------------------------------------
Total Net Assets $ 697,009,769 $ 150,834,649 $ 318,600,193
========================================================================================
Shares Outstanding 40,607,925 13,030,335 318,600,193
----------------------------------------------------------------------------------------
Net Asset Value $ 17.16 $ 11.58 $ 1.00
----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Travelers Smith Barney
MFS Total Managed Money
Return Income Market
Portfolio Portfolio Portfolio
========================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 19,539,872 $ 9,459,870 $ 19,308,361
Dividends 7,591,569 -- --
Less: Foreign withholding tax (114,106) -- --
----------------------------------------------------------------------------------------
Total Investment Income 27,017,335 9,459,870 19,308,361
----------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 5,085,377 846,508 1,539,190
Custody 63,613 6,385 34,915
Shareholder communications 43,055 9,422 17,568
Audit and legal 26,836 11,557 25,474
Pricing service fees 17,896 -- --
Shareholder and system servicing fees 16,243 16,886 9,457
Directors' fees 13,678 4,385 6,515
Registration fees 2,722 -- 4,026
Other 4,864 4,690 2,306
----------------------------------------------------------------------------------------
Total Expenses 5,274,284 899,833 1,639,451
----------------------------------------------------------------------------------------
Net Investment Income 21,743,051 8,560,037 17,668,910
----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized Gain (Loss) From Security
Transactions
(excluding short-term securities*):
Proceeds from sales 644,669,537 207,374,424 16,094,105,250
Cost of securities sold 618,391,649 208,889,002 16,094,105,215
----------------------------------------------------------------------------------------
Net Realized Gain (Loss) 26,277,888 (1,514,578) 35
----------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of year 15,594,261 (1,061,999) --
End of year 45,847,951 (2,310,736) --
----------------------------------------------------------------------------------------
Increase in Net Unrealized
Appreciation (Depreciation) 30,253,690 (1,248,737) --
----------------------------------------------------------------------------------------
Net Gain (Loss) on Investments and
Foreign Currencies 56,531,578 (2,763,315) 35
----------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 78,274,629 $ 5,796,722 $ 17,668,945
========================================================================================
</TABLE>
* Represents only gains from the sale of short-term securities for the Smith
Barney Money Market Portfolio.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Years Ended October 31,
MFS Total Return Portfolio 2000 1999
================================================================================
OPERATIONS:
Net investment income $ 21,743,051 $ 17,479,668
Net realized gain 26,277,888 21,518,408
Increase (decrease) in net unrealized appreciation 30,253,690 (1,626,169)
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 78,274,629 37,371,907
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (17,520,200) (12,662,011)
Net realized gains (21,749,058) (29,755,229)
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (39,269,258) (42,417,240)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 49,808,519 130,645,660
Net asset value of shares issued
for reinvestment of dividends 39,269,258 42,417,240
Cost of shares reacquired (52,901,760) (8,462,964)
--------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 36,176,017 164,599,936
--------------------------------------------------------------------------------
Increase in Net Assets 75,181,388 159,554,603
NET ASSETS:
Beginning of year 621,828,381 462,273,778
--------------------------------------------------------------------------------
End of year * $ 697,009,769 $ 621,828,381
================================================================================
* Includes undistributed net investment income of: $21,793,821 $ 17,561,649
================================================================================
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 2000 1999
================================================================================
OPERATIONS:
Net investment income $ 8,560,037 $ 4,849,698
Net realized loss (1,514,578) (2,852,152)
Increase in net unrealized depreciation (1,248,737) (506,464)
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 5,796,722 1,491,082
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (4,865,205) (2,440,976)
Net realized gains -- (606,387)
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (4,865,205) (3,047,363)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 38,416,609 58,483,264
Net asset value of shares issued
for reinvestment of dividends 4,865,205 3,047,363
Cost of shares reacquired (6,419,496) (4,489,228)
--------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 36,862,318 57,041,399
--------------------------------------------------------------------------------
Increase in Net Assets 37,793,835 55,485,118
NET ASSETS:
Beginning of year 113,040,814 57,555,696
--------------------------------------------------------------------------------
End of year * $150,834,649 $113,040,814
================================================================================
* Includes undistributed net investment income of: $8,560,037 $4,865,481
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney Money Market Portfolio 2000 1999
================================================================================
OPERATIONS:
Net investment income $ 17,668,910 $ 9,746,393
Net realized gain 35 994
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 17,668,945 9,747,387
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income (17,668,910) (9,746,393)
Net realized gains (35) (994)
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (17,668,945) (9,747,387)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 1,419,611,349 1,748,940,316
Net asset value of shares issued
for reinvestment of dividends 17,398,620 9,720,254
Cost of shares reacquired (1,395,108,815) (1,646,638,975)
--------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 41,901,154 112,021,595
--------------------------------------------------------------------------------
Increase in Net Assets 41,901,154 112,021,595
NET ASSETS:
Beginning of year 276,699,039 164,677,444
--------------------------------------------------------------------------------
End of year $ 318,600,193 $ 276,699,039
================================================================================
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 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,
Salomon Brothers Global High Yield (formerly known as INVESCO Global 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, 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;
(i) the character of income and gains to be distributed are determined in
--------------------------------------------------------------------------------
34 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
accordance with income tax regulations which may differ from generally accepted
accounting principles. At October 31, 2000, reclassifications were made to the
capital accounts of MFS Total Return Portfolio and the Travelers Managed Income
Portfolio to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, for the
Travelers Managed Income Portfolio, a portion of undistributed net investment
income amounting to $276 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 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"), 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 TIA a management fee calculated at an annual rate
of 0.80% and 0.65%, respectively, of the average daily net assets of each
Portfolio. These fees are calculated daily and paid monthly.
TIA has sub-advisory agreements with Massachusetts Financial Services Company
("MFS") and Travelers Asset Management International Company LLC ("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.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset-based
fees that vary according to the account size and type of account. PFPC is
responsible for shareholder recordkeeping and financial processing for all
shareholder accounts and is paid by CFTC. For the year ended October 31, 2000,
each of the Portfolios paid transfer agent fees of $5,000 to CFTC.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for portfolio agency transactions.
All officers and one Director of the Fund are employees of SSB.
4. Investments
During the year ended October 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were as follows:
MFSTR TMI
================================================================================
Purchases $ 644,031,130 $ 240,892,260
--------------------------------------------------------------------------------
Sales 644,669,537 207,374,424
================================================================================
At October 31, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
MFSTR TMI
================================================================================
Gross unrealized appreciation $ 60,741,194 $ 595,047
--------------------------------------------------------------------------------
Gross unrealized depreciation (14,916,529) (2,905,783)
--------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 45,824,665 $ (2,310,736)
================================================================================
--------------------------------------------------------------------------------
36 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
5. Forward Foreign Currency Contracts
At October 31, 2000, 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 Settement Unrealized
Foreign Currency Currency Value Date Loss
================================================================================
MFS Total Return Portfolio
To Buy:
British Pound 113,738 $114,035 11/7/00 $(296)
================================================================================
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 (plus accrued
interest) 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, 2000, MFSTR had no open futures contracts.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, the Portfolios had no securities on loan.
9. Options Contracts
Premiums paid when put or call options are purchased by the Portfolios represent
investments, which are marked-to-market daily and are included in the schedule
of investments. When a purchased option expires, the Portfolios will realize a
loss in the amount of the premium paid. When the Portfolios enter into a closing
sales transaction, the Portfolios will realize a gain or loss depending on
whether the proceeds from the closing sales transaction are greater or less than
the premium paid for the option. When the Portfolios exercise a put option, they
will realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When
the Portfolios exercise a call option, the cost of the security which the
Porfolios purchase upon exercise will be increased by the premium originally
paid.
At October 31, 2000, the Portfolios held no purchased call or put option
contracts.
When the Porfolios write a covered call or put option, an amount equal to the
premium received by the Portfolios is recorded as a liability, the value of
which is marked-to-market daily. When a written option expires,the Portfolios
realize a gain. When the Portfolios enter into a closing purchase transaction,
the Portfolios realize a gain or loss depending upon whether the cost of the
closing transaction is greater or less than the premium originally received
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised, the cost of the security sold will be decreased by the premium
originally received. When a put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Portfolios
purchased upon exercise. When the written index options are exercised,
settlement is made in cash.
--------------------------------------------------------------------------------
38 2000 Annual Report to Shareholders
<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 a loss if the market price of the underlying security
declines.
During the year ended October 31, 2000, the Portfolios did not enter into any
written covered call or put option contracts.
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, 2000, the Portfolios had no TBA securities.
11. Capital Loss Carryforward
At October 31, 2000, TMI had, for Federal income tax purposes, a capital loss
carryforward of approximately $4,383,000, available to offset future capital
gains, if any. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
The amounts and expiration of the carryforward losses are indicated below.
Expiration occurs on October 31 of the year indicated.
Portfolio 2007 2008
================================================================================
TMI $ 2,717,000 $ 1,666,000
================================================================================
12. Capital Shares
At October 31, 2000, 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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Year Ended Year Ended
October 31, 2000 October 31, 1999
================================================================================
MFS Total Return Portfolio
Shares sold 3,058,479 7,783,928
Shares issued on reinvestment 2,496,456 2,600,689
Shares reacquired (3,292,914) (514,619)
--------------------------------------------------------------------------------
Net Increase 2,262,021 9,869,998
================================================================================
Travelers Managed Income Portfolio
Shares sold 3,320,803 5,013,814
Shares issued on reinvestment 426,772 269,439
Shares reacquired (555,065) (386,700)
--------------------------------------------------------------------------------
Net Increase 3,192,510 4,896,553
================================================================================
Smith Barney Money Market Portfolio
Shares sold 1,419,611,349 1,748,940,316
Shares issued on reinvestment 17,398,620 9,720,254
Shares reacquired (1,395,108,815) (1,646,638,975)
--------------------------------------------------------------------------------
Net Increase 41,901,154 112,021,595
================================================================================
--------------------------------------------------------------------------------
40 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
MFS Total Return Portfolio 2000 1999(/1/) 1998 1997 1996
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.22 $ 16.23 $ 15.31 $ 13.13 $ 11.53
-------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.54 0.52 0.32 0.38 0.33
Net realized and unrealized gain 1.43 0.72 1.36 2.27 1.62
-------------------------------------------------------------------------------------------------------
Total Income From Operations 1.97 1.24 1.68 2.65 1.95
-------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.46) (0.37) (0.28) (0.29) (0.27)
Net realized gains (0.57) (0.88) (0.48) (0.18) (0.08)
-------------------------------------------------------------------------------------------------------
Total Distributions (1.03) (1.25) (0.76) (0.47) (0.35)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 17.16 $ 16.22 $ 16.23 $ 15.31 $ 13.13
-------------------------------------------------------------------------------------------------------
Total Return 12.77% 7.62% 10.94% 20.64% 17.16%
-------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 697,010 $ 621,828 $ 462,274 $ 263,585 $ 134,529
-------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.83% 0.84% 0.84% 0.86% 0.91%
Net investment income 3.42 3.11 3.32 3.54 3.82
-------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 108% 97% 118% 99% 139%
=======================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average share
method.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Travelers Managed
Income Portfolio 2000/(1)/ 1999/(1)/ 1998/(1)/ 1997/(1)/ 1996/(1)/
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 11.49 $ 11.65 $ 11.55 $ 11.06 $ 11.16
-------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.76 0.65 0.72 0.63 0.65
Net realized and
unrealized gain (loss) (0.24) (0.45) (0.06) 0.35 (0.14)
-------------------------------------------------------------------------------------------------------
Total Income From Operations 0.52 0.20 0.66 0.98 0.51
-------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.43) (0.29) (0.54) (0.49) (0.46)
Net realized gains -- (0.07) (0.02) -- (0.15)
-------------------------------------------------------------------------------------------------------
Total Distributions (0.43) (0.36) (0.56) (0.49) (0.61)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.58 $ 11.49 $ 11.65 $ 11.55 $ 11.06
-------------------------------------------------------------------------------------------------------
Total Return 4.55% 1.75% 5.71% 9.19% 4.61%
-------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 150,835 $ 113,041 $ 57,556 $ 31,779 $ 23,532
Ratios to Average Net Assets:
Expenses 0.69% 0.76% 0.84% 0.87% 0.92%
Net investment income 6.56 5.57 6.11 6.48 6.19
-------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 181% 411% 327% 259% 255%
=======================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
--------------------------------------------------------------------------------
42 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney
Money Market Portfolio 2000 1999 1998 1997 1996
=======================================================================================================
<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) 0.057 0.046 0.050 0.049 0.049
Distributions from net
investment income (0.057) (0.046) (0.050) (0.049) (0.049)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------------------------------
Total Return 5.88% 4.66% 5.11% 5.05% 5.05%
-------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 318,600$ 276,699 $ 164,677 $ 111,168 $ 99,150
-------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.53% 0.54% 0.64% 0.65% 0.65%
Net investment income 5.75 4.58 4.99 4.94 4.86
=======================================================================================================
</TABLE>
(1) The Manager waived all or part of its fees for the years ended October 31,
1997 and October 31, 1996. If such fees were not waived, the per share
effect on net investment income and the expense ratios would have been as
follows:
Net Investment Income Expense Ratios
Per Share Decreases Without Fee Waivers
--------------------- -------------------
1997 $0.000* 0.67%
1996 0.001 0.74
* Amount represents less than $0.001.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<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, 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, 2000, 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 accounting principles generally accepted in the United States of
America.
/s/ KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
44 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes the Portfolios hereby designate for the fiscal year
ended October 31, 2000:
. Percentage of ordinary dividends paid as qualifying for the dividends
received deduction:
MFSTR 29.30%
. Total long-term capital gain distributions paid:
MFSTR $18,951,183
The following percentages of ordinary dividends paid by the Portfolios from net
investment income are derived from Federal obligations and may be exempt from
taxation at the state level:
MFSTR 8.60%
TMI 17.25%
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<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
PFPC Trust Company
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
IN0253 12/00
<PAGE>
Travelers Series Fund Inc.
Smith Barney Large Cap
Value Portfolio
Alliance Growth Portfolio
Van Kampen
Enterprise Portfolio
ANNUAL REPORT
October 31, 2000
[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 Large Cap Value Portfolio, Alliance Growth Portfolio and Van
Kampen Enterprise Portfolio ("Portfolio(s)") for the year ended October 31,
2000.1 In this report we have summarized the period's prevailing economic and
market conditions and outlined our investment strategy. A detailed summary of
the Portfolios' performances can be found in the appropriate sections that
follow. We hope you find this report to be useful and informative.
Portfolio Highlights
Smith Barney Large Cap Value Porfolio
For the year ended October 31, 2000, the Smith Barney Large Cap Value Portfolio
("Portfolio") returned 8.62%. In comparison, the Lipper Inc. ("Lipper")2 peer
group average returned 7.51% for the same period.
After four consecutive years of gains greater than 20%, the Standard & Poor's
500 Index ("S&P 500")3 and the Nasdaq Composite Index4 entered the final quarter
of 2000 with a reasonable chance of registering among the weakest annual returns
for each index since 1991. Many investors have gained comfort that monetary
policymakers may have finished tightening interest rates for
---------------
1 The Portfolios are underlying investment options of various variable annuity
products. A variable annuity product is a contract issued by an insurance
company where the annuity premium (a set amount of dollars) is immediately
turned into units of a portfolio of securities. Upon retirement, the policy
holder is paid according to accumulated units whose dollar value varies
according to the performance of the securities within the subaccounts. Its
objective is to preserve, through investment, the purchasing value of the
annuity which otherwise is subject to erosion through inflation .The
performance returns for these Portfolios do not reflect expenses imposed in
connection with investing in variable annuity contracts such as
administrative fees,account charges and surrender charges, which if
reflected, would reduce the performance of the Portfolios. Past performance
is not indicative of future results.
2 Lipper is an independent mutual fund-tracking organization.
3 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stock. Please note an investor cannot invest directly in an index.
4 The Nasdaq Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market. Please note an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
awhile, however, the managers believe interest rate fears have been displaced by
uncertainty about future global and domestic growth, a potential reduction in
corporate profitability and concerns regarding higher energy prices.
As a result, earnings sustainability in the face of a cooling economy has become
an issue after several companies pre-announced their earnings ahead of the third
quarter earnings season. The managers see a variety of hurdles facing the
markets including moderating global growth, negative currency effects, higher
costs of doing business related to higher energy and interest rates. Such
operational challenges seem unlikely to be quickly resolved and therefore have
generally colored the managers' outlook and investment strategy in the
intermediate term.
Considering estimates of growth in corporate profits for next year that may
range from 6% to 8% versus the 14% to 16% expected gains in 2000, the managers
believe identifying companies with attractive valuations and sustainable
earnings may become a harder task with respect to the Portfolio. If the recent
flood of corporate profit warnings is a sign of what lies ahead,many stocks with
high earnings visibility may be likely to gain favor while those with high
expectations and decelerating growth may be candidates for underperformance. As
cyclical challenges remain, many companies may have difficulty maintaining
earnings over the near term. As such, the managers suspect that many investors
may continue to show more discernment of stocks with extreme valuations and look
to those companies with solid earnings growth.
The managers believe the wildcard in the stock market's outlook relates to oil
prices and whether or not Middle East tensions can be resolved without supply
disruptions. Clearly, any resolution removing the threat of an "oil shock"would
be favorable for the stock market. Aside from energy prices,inflation appears to
remain benign. From these levels, the managers believe stocks can advance
against the anticipated backdrop of moderating yet solid economic growth,
slowing but respectable profits and stable to declining interest rates.
Although global growth is expected to cool over the next few months, the
managers think investing in companies with international franchises leveraged to
grow in new markets remains a sound investment strategy. As earnings growth
becomes more difficult to find, the managers expect the Portfolio's holdings
that are leveraged to the price of oil should continue to show relatively solid
earnings visibility and the potential for upward revisions.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
In anticipation of strengthening global growth, the managers increased the
Portfolio's exposure to international oil companies over a year ago. The price
increase in crude oil, during the period, led to earning gains throughout the
industry. As such, shares of most oil companies increased in value which
positively contributed to the Portfolio.
At the end of the period, communications companies were well represented in the
Portfolio and the managers remain optimistic that companies in this sector
should be able to successfully shift their revenue and earnings mix away from
traditional markets toward faster growing products that may potentially create
value over time. Moreover, accelerating demand for broadband connections, data
services, and wireless usage may ultimately drive faster earnings growth for
companies that are able to skillfully manage their evolution.
The managers' outlook for certain segments of the financial services industry
remains favorable. The managers selectively increased the Portfolio's allocation
to the financial services sector throughout the period. Domestic and
international trends driving demand for retirement products, improving domestic
pricing for property and casualty insurers and the steady evolution of more
robust capital markets abroad may drive above-average revenue and earnings
growth for well-positioned banks, insurers and securities brokerage companies.
(Of course, no guarantees can be given that the managers' expectations will be
met.)
Alliance Growth Portfolio
For the year ended October 31, 2000, the Alliance Growth Portfolio ("Portfolio")
returned 9.27%. In comparison, the Russell 1000 Index ("Russell 1000")5 returned
9.06% for the same period.
In line with the Portfolio's investment objective of long-term capital
growth,the managers seek to invest primarily in the equity securities of U.S.
companies. They concentrate on finding companies that they believe have solid
growth potential at what they deem to be reasonable prices.
The managers are proud to report the Portfolio has delivered positive
performance during the period. From October 1999 to January 2000, the Portfolio
benefited from significant gains in its telecommunications holdings. Later in
the period, however, the telecommunications sector delivered considerably weaker
performance due to a series of troubling events. In June, the U.S. Justice
Department blocked the proposed
---------------
5 The Russell 1000 measures the performance of the 1,000 largest companies in
the Russell 3000 Index,which represents approximately 92% of the total
market capitalization of the Russell 3000 Index. Please note an investor
cannot invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
acquisition of Sprint Corp. by WorldCom Inc. After this merger was blocked, both
companies reported disappointing revenue and earnings growth and as a result,
the entire telecommunications sector went down considerably.
During September and October of 2000, technology stocks also experienced a
downturn, as many investors became concerned that boom economic and market
conditions might be coming to an end. In contrast, the financial services sector
delivered positive performance during the period. The Portfolio's main areas of
emphasis included telecommunications, technology and financial services, and the
net result for the period was satisfactory in the managers' view. They reduced
their exposure to telephone stocks, but retained or added to positions in select
cellular telephone and cable stocks. At the end of the period, financial
services was the largest area of emphasis within the Portfolio.
At the beginning of 2000, many investors were concerned that rapid U.S. economic
growth would cause the Federal Reserve Board ("Fed") to continue to raise
interest rates. However, as the year progressed, evidence began to accumulate
that the economy was slowing and many investors became hopeful that rising
interest rates were over. Later in the year the perception of a slowing economy
was interpreted more ominously, perhaps threatening a recession or at least a
less favorable environment for profits.
Despite recent higher volatility in the market, the managers do not believe it's
appropriate to assume a more conservative investment approach. Instead, they
feel that in uncertain times it's better to focus on longer-term potential and
to position the Portfolio for strong participation in any eventual recovery. The
managers think the market is currently troubled by the short-term profit outlook
and political uncertainty. In addition, they believe that the current concerns
are transitory and that their stock selections should perform competitively over
time. (Of course, no guarantees can be made that this in fact will occur.)
Van Kampen Enterprise Portfolio
For the year ended October 31, 2000, the Van Kampen Enterprise Portfolio
("Portfolio") returned 13.92%. In comparison, the Standard & Poor's 500 Index
("S&P 500")6 returned 6.08% for the same period.
---------------
6 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
The Portfolio seeks to own companies with strong business fundamentals at
attractive valuations. In selecting stocks, the managers generally look for at
least one of the following fundamental characteristics:
. Consistent earnings growth;
. Accelerating earnings growth;
. Better-than-expected fundamentals; and
. An underlying change in a company, industry or regulatory environment.
During the period, the managers maintained their investment discipline of
looking for companies with positive fundamentals such as strong earnings growth,
whether in volatile or stable markets. Because the managers evaluated stocks on
a company-by-company basis, their focus was on the merits of a given company
rather than market movements or interest rate changes.
In the managers' opinion, the Portfolio's positive performance during the period
was a direct result of its capital goods and technology holdings as well as the
Portfolio's relative overweight position in the energy sector. During the
period, the Portfolio held a number of companies that posted strong earnings and
whose earnings estimates were increased by Wall Street analysts. If a company's
fundamentals remained strong by these criteria, the Portfolio generally
continued to own the stock despite volatility in its price. During the last six
months of the period, the managers increased the Portfolio's weighting in the
healthcare and energy sectors. And while their growth rates were not generally
as high as some technology companies, both sectors fit the managers' investment
criteria.
Despite the poor performance of the technology sector since the spring of 2000,
the largest contributors to the Portfolio's performance came from that sector.
During the period, one common theme among the Portfolio's technology holdings
was that they were generally leaders in their respective areas. Companies such
as data-storage company EMC Corp., database software developer Oracle Corp.,
fiber optics manufacturer Corning Inc., server provider Sun Microsystems Inc.
and contract electronics manufacturer Sanmina Corp., have all benefited from the
increased demand for technology as productivity- enhancing and cost-cutting
tools.
The healthcare sector also delivered strong performance during the period .
UnitedHealth Group Inc. and WellPoint Health Networks Inc. are both health
maintenance organizations (HMOs) that performed well during the period. These
stocks have benefited as issues surrounding a patient's right to sue subsided
somewhat and earnings have been on an upswing.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
During the period, the Portfolio's holdings in the energy sector positively
impacted its performance. Over the past six months, the managers added several
offshore drilling and oil service companies to its holdings. Oil and gas prices
rose during the period,which heightened drilling activity and benefited most oil
service companies.
Microsoft Corp. had the most negative impact on the Portfolio's performance
during the period. Although Microsoft Corp. was the largest holding in the
Portfolio at the beginning of the period,the managers reduced its position in
the first couple of months of 2000. This reduction was related to factors
associated with Microsoft Corp.'s past success -- the increasing penetration of
personal computers and desktop computer software. Spending in these two areas
slowed during the period relative to other areas of the technology sector. As a
result, Microsoft Corp. delivered disappointing earnings earlier in the period
and the stock price fell accordingly. Furthermore, investors were concerned
about a potentially negative legal ruling that would affect Microsoft Corp.'s
future operations, which further punished the stock. However, the managers did
not sell the Portfolio's entire position in Microsoft Corp., because they
believe the company has a potentially strong upcoming product cycle related to
the Windows 2000 product.
Many of the Portfolio's telecommunications stocks were also poor performers
during the period. Companies such as MCI Worldcom, XO Communications, McLeodUSA
and Sprint experienced difficult fundamental issues and as a result were
eliminated from the Portfolio. These companies had been spending to build up
their networks and service territories, but had yet to post returns on their
investments. When they failed to produce earnings,investors began turning away
from these companies.
Going forward, the managers are primarily concerned with corporate earnings and
the increased potential for earnings shortfalls relative to expectations.
Although corporate profits are expected to grow, the managers believe it may be
at a slower rate than seen earlier this year.
The managers also believe that if earnings growth is less than expected, it may
result in a number of companies reporting disappointing earnings, which would in
turn have a negative impact on stock prices. The managers' strategy is
earnings-focused, and they are seeking to identify companies that they believe
have the best chance of realizing earnings goals.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
In closing, thank you for your investment 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 22, 2000
The information provided in this letter represents the opinions of the managers
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Portfolios. Please refer to pages 13
through 24 for a list and percentage breakdown of the Portfolios' holdings.
Also, please note any discussion of the Portfolio's holdings is as of October
31, 2000 and is subject to change.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
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+
=====================================================================================
<S> <C> <C> <C> <C> <C>
10/31/00 $19.83 $20.74 $0.26 $0.47 8.62%
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 $1.12 $1.74
=====================================================================================
<CAPTION>
-------------------------------------------------------------------------------------
Alliance Growth Portfolio
-------------------------------------------------------------------------------------
Historical Performance
-------------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns+
======================================================================================
<S> <C> <C> <C> <C> <C>
10/31/00 $28.35 $28.63 $0.03 $2.40 9.27%
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 $0.35 $6.33
======================================================================================
</TABLE>
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End of Income Capital Gain Total
Year Ended of Year Year Dividends Distributions Returns+
======================================================================================
<S> <C> <C> <C> <C> <C>
10/31/00 $25.52 $25.60 $0.00** $3.73 13.92%
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 $5.72
======================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
Smith Barney Alliance Van Kampen
Large Cap Growth Enterprise
Value Portfolio Portfolio Portfolio
================================================================================
Year Ended 10/31/00 8.62% 9.27% 13.92%
Five Years Ended 10/31/00 14.71 22.93 20.25
6/16/94* through 10/31/00 14.86 23.12 20.32
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Returns+
--------------------------------------------------------------------------------
Smith Barney Alliance Van Kampen
Large Cap Growth Enterprise
Value Portfolio Portfolio Portfolio
================================================================================
6/16/94* through 10/31/00 142.10% 277.02% 225.54%
================================================================================
+ 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.
** Amount represents less than $0.01.
--------------------------------------------------------------------------------
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 2000
[GRAPH]
SMITH BARNEY LARGE S&P 500
CAP VALUE PORTFOLIO INDEX
------------------- ---------
6/16/94 10,000 10,000
10/94 10,140 10,324
10/95 12,189 13,053
10/96 15,182 16,018
10/97 18,731 21,159
10/98 20,539 25,817
10/99 22,290 32,442
10/31/2000 24,210 34,413
+ 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, 2000. 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 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited) (continued)
--------------------------------------------------------------------------------
Growth of $ 10,000 Invested in Shares of the
Alliance Growth Portfolio vs. S&P 500 Index
and Russell 1000 Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
ALLIANCE GROWTH S&P 500 RUSSELL 1000
PORTFOLIO INDEX INDEX
--------------- --------- ------------
6/16/94 10,000 10,000 10,000
10/94 10,650 10,324 10,191
10/95 13,439 13,053 12,612
10/96 17,007 16,018 15,501
10/97 22,549 21,159 20,236
10/98 25,463 25,817 24,039
10/99 34,504 32,442 30,189
10/31/2000 37,702 34,413 32,925
+ 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, 2000. 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) (continued)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Van Kampen Enterprise Portfolio vs.
S&P 500 Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
VAN KAMPEN S&P 500
ENTERPRISE PORTFOLIO INDEX
-------------------- ---------
6/16/94 10,000 10,000
10/94 10,380 10,324
10/95 12,948 13,053
10/96 15,972 16,018
10/97 20,733 21,159
10/98 22,592 25,817
10/99 28,576 32,442
10/31/2000 32,554 34,413
+ 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, 2000. 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 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 95.2%
Capital Goods -- 6.0%
125,000 Emerson Electric Co. $ 9,179,687
225,800 General Electric Co. 12,376,663
65,000 Illinois Tool Works Inc. 3,611,563
240,000 Pitney Bowes Inc. 7,125,000
100,000 Xerox Corp. 843,750
--------------------------------------------------------------------------------
33,136,663
--------------------------------------------------------------------------------
Consumer Cyclicals -- 1.8%
525,000 Masco Corp. 9,810,937
--------------------------------------------------------------------------------
Consumer Staples -- 11.5%
200,000 Avon Products, Inc. 9,700,000
350,000 The Gillette Co. 12,206,250
230,000 Kimberly-Clark Corp. 15,180,000
208,000 The McGraw-Hill Cos., Inc. 13,351,000
275,000 PepsiCo, Inc. 13,320,313
--------------------------------------------------------------------------------
63,757,563
--------------------------------------------------------------------------------
Energy -- 16.9%
200,000 BP Amoco PLC, Sponsored ADR 10,187,500
110,000 Chevron Corp. 9,033,750
31,000 Conoco Inc., Class A Shares 800,188
307,968 Conoco Inc., Class B Shares 8,372,880
225,000 El Paso Energy Corp. 14,104,688
40,000 Enron Corp. 3,282,500
265,000 Exxon Mobil Corp. 23,634,687
210,025 Halliburton Co. 7,784,052
400,000 The Williams Cos., Inc. 16,725,000
--------------------------------------------------------------------------------
93,925,245
--------------------------------------------------------------------------------
Financial Services -- 16.5%
200,000 Bank of America Corp. 9,612,500
322,500 The Chase Manhattan Corp. 14,673,750
145,000 Fannie Mae 11,165,000
125,000 Marsh & McLennan Cos., Inc. 16,343,750
400,000 Mellon Financial Corp. 19,300,000
160,000 Merrill Lynch & Co., Inc. 11,200,000
203,400 Wells Fargo & Co. 9,419,963
--------------------------------------------------------------------------------
91,714,963
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Health Care -- 7.3%
220,000 American Home Products Corp. $ 13,970,000
80,000 Baxter International Inc. 6,575,000
240,000 Bristol-Myers Squibb Co. 14,625,000
55,800 Johnson & Johnson 5,140,575
--------------------------------------------------------------------------------
40,310,575
--------------------------------------------------------------------------------
Insurance -- 5.8%
190,000 The Chubb Corp. 16,043,125
215,000 The Hartford Financial Services Group, Inc. 16,004,062
--------------------------------------------------------------------------------
32,047,187
--------------------------------------------------------------------------------
Raw & Intermediate Materials -- 5.8%
403,000 Alcoa Inc. 11,561,062
150,000 The Dow Chemical Co. 4,593,750
148,030 E.I. du Pont de Nemours & Co. 6,716,861
250,000 International Paper Co. 9,156,250
--------------------------------------------------------------------------------
32,027,923
--------------------------------------------------------------------------------
Technology -- 5.3%
120,000 First Data Corp. 6,015,000
95,000 International Business Machines Corp. 9,357,500
200,000 United Technologies Corp. 13,962,500
--------------------------------------------------------------------------------
29,335,000
--------------------------------------------------------------------------------
Telecommunications -- 10.8%
158,500 ALLTEL Corp. 10,213,344
335,000 AT&T Corp. 7,767,813
275,000 SBC Communications Inc. 15,864,062
220,000 Sprint Corp. 5,610,000
351,800 Verizon Communications 20,338,437
--------------------------------------------------------------------------------
59,793,656
--------------------------------------------------------------------------------
Transportation -- 1.5%
175,000 Union Pacific Corp. 8,203,125
--------------------------------------------------------------------------------
Utilities -- 6.0%
150,000 American Electric Power Co., Inc. 6,225,000
190,000 Duke Energy Corp. 16,423,125
175,000 Exelon Corp. 10,521,875
--------------------------------------------------------------------------------
33,170,000
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost--$448,309,573) 527,232,837
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 4.8%
$26,489,000 Goldman, Sachs & Co., 6.550% due 11/1/00;
Proceeds at maturity -- $26,493,820;
(Fully collateralized by U.S. Treasury
Bonds & Notes, 3.625% to 12.750% due
2/28/02 to 8/15/26; Market value -- $27,018,808)
(Cost -- $26,489,000) $26,489,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $474,798,573*) $553,721,837
================================================================================
* 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, 2000
--------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 93.9%
Aerospace -- 1.5%
517,000 General Motors Corp., Class H shares* $ 16,750,800
796,200 Loral Space & Communications Ltd.* 4,528,387
--------------------------------------------------------------------------------
21,279,187
--------------------------------------------------------------------------------
Airlines -- 1.0%
264,300 Continental Airlines, Inc., Class B Shares* 13,875,750
--------------------------------------------------------------------------------
Banks -- 4.6%
671,400 Bank of America Corp. 32,269,163
173,000 Bank One Corp. 6,314,500
540,812 The Chase Manhattan Corp. 24,606,946
--------------------------------------------------------------------------------
63,190,609
--------------------------------------------------------------------------------
Drugs -- 3.6%
279,000 Bristol-Myers Squibb Co. 17,001,562
203,800 Merck & Co., Inc. 18,329,263
57,000 Pharmacia Corp. 3,135,000
204,000 Schering-Plough Corp. 10,544,250
--------------------------------------------------------------------------------
49,010,075
--------------------------------------------------------------------------------
Electronics -- 11.7%
188,000 Altera Corp.* 7,696,250
172,000 Applied Materials, Inc.* 9,137,500
855,600 Flextronics International Ltd.* 32,512,800
222,000 Intel Corp. 9,990,000
359,000 Micron Technology, Inc.* 12,475,250
350,800 Sanmina Corp.* 40,100,825
806,600 SCI Systems, Inc.* 34,683,800
345,600 Solectron Corp.* 15,206,400
--------------------------------------------------------------------------------
161,802,285
--------------------------------------------------------------------------------
Energy -- 2.8%
2,852,192 BP Amoco PLC 24,207,972
210,000 Santa Fe International Corp. 7,665,000
98,000 Total Fina Elf S.A., Sponsored ADR 7,019,250
--------------------------------------------------------------------------------
38,892,222
--------------------------------------------------------------------------------
Financial Services -- 13.6%
1,462,100 Associates First Capital Corp., Class A Shares 54,280,462
2,095,188 The CIT Group, Inc., Class A Shares 36,534,841
326,100 Household International, Inc. 16,406,906
707,600 John Hancock Financial Services, Inc.* 22,377,850
250,000 Koger Equity, Inc. 3,984,375
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Financial Services -- 13.6% (continued)
1,224,762 MBNA Corp. $ 46,005,123
265,000 MetLife, Inc.* 7,320,625
--------------------------------------------------------------------------------
186,910,182
--------------------------------------------------------------------------------
Food Services/Lodging -- 0.1%
270,300 Humphrey Hospitality Trust, Inc. 1,976,569
--------------------------------------------------------------------------------
Hospital Supplies & Services -- 2.8%
346,000 Boston Scientific Corp.* 5,514,375
1,412,200 IMS Health Inc. 33,363,225
--------------------------------------------------------------------------------
38,877,600
--------------------------------------------------------------------------------
Insurance -- 6.1%
200,700 ACE Ltd. 7,877,475
177,000 AFLAC Inc. 12,932,062
639,397 American International Group, Inc. 62,660,906
--------------------------------------------------------------------------------
83,470,443
--------------------------------------------------------------------------------
Leisure -- 0.9%
117,000 Carnival Corp. 2,903,062
787,215 Cendant Corp.* 9,446,580
--------------------------------------------------------------------------------
12,349,642
--------------------------------------------------------------------------------
Miscellaneous -- 1.9%
463,796 Tyco International Ltd. 26,291,436
--------------------------------------------------------------------------------
Printing, Publishing & Broadcasting -- 9. 9%
306,400 Adelphia Communications Corp., Class A Shares* 10,168,650
2,971,156 AT&T Corp. - Liberty Media Corp., Class A Shares* 53,480,808
107,000 Cablevision Systems Corp., Class A Shares* 7,971,500
271,000 Charter Communications, Inc., Class A Shares* 5,284,500
105,000 Comcast Corp., Special Class A Shares* 4,278,750
141,000 Fox Entertainment Group, Class A Shares* 3,031,500
52,000 Gannett Co., Inc. 3,016,000
189,400 The News Corp. Ltd., Sponsored ADR 8,144,200
770,100 UnitedGlobalCom, Inc., Class A Shares* 24,498,806
300,423 Viacom Inc., Class B Shares* 17,086,558
--------------------------------------------------------------------------------
136,961,272
--------------------------------------------------------------------------------
Real Estate -- 0.8%
140,000 Entertainment Properties Trust 1,548,750
443,700 JP Realty, Inc. 7,099,200
101,900 The Macerich Co. 1,999,787
--------------------------------------------------------------------------------
10,647,737
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Retail -- 3.8%
308,550 The Home Depot, Inc. $ 13,267,650
504,000 The Kroger Co.* 11,371,500
433,700 The Limited, Inc. 10,950,925
280,000 RadioShack Corp. 16,695,000
1 Too Inc.* 23
--------------------------------------------------------------------------------
52,285,098
--------------------------------------------------------------------------------
Technology -- 6.5%
1,603,900 Ceridian Corp.* 40,097,500
250,000 Compaq Computer Corp. 7,602,500
411,865 Computer Associates International, Inc. 13,128,197
285,700 International Business Machines Corp. 28,141,450
67,410 SYNAVANT Inc.* 307,558
--------------------------------------------------------------------------------
89,277,205
--------------------------------------------------------------------------------
Telecommunications -- 20.0%
1,509,600 AT&T Wireless Group* 37,645,650
24,100 COLT Telecom Group PLC, Sponsored ADR* 3,148,063
792,000 Energis PLC* 6,750,849
174,900 FLAG Telecom Holdings Ltd.* 2,033,213
747,504 Global TeleSystems, Inc.* 2,008,917
398,500 Millicom International Cellular S.A.* 12,253,875
1,312,400 Nextel Communications, Inc., Class A Shares* 50,445,375
585,263 NTL Inc.* 25,714,993
264,419 Qwest Communications International Inc.* 12,857,374
1 Reuters Group PLC, Sponsored ADR 118
21,598,732 Vodafone AirTouch PLC 90,091,421
81,400 VoiceStream Wireless Corp.* 10,704,100
109,400 Western Wireless Corp., Class A Shares* 5,196,500
185,000 Winstar Communications, Inc.* 3,607,500
558,425 WorldCom, Inc.* 13,262,594
--------------------------------------------------------------------------------
275,720,542
--------------------------------------------------------------------------------
Utilities - Telephone -- 2.3%
631,791 AT&T Corp. 14,649,654
28,000 Cable & Wireless PLC 397,642
635,000 Sprint Corp. 16,192,500
--------------------------------------------------------------------------------
31,239,796
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $1,047,809,680) 1,294,058,190
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
CONVERTIBLE PREFERRED STOCK -- 0.1%
Printing, Publishing & Broadcasting -- 0.1%
12,100 Adelphia Communications Corp., 5.50%
Cumulative, Series D
(Cost -- $2,242,588) $ 1,340,075
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
CONVERTIBLE BONDS -- 0.2%
Telecommunications -- 0.2%
$ 11,165,000 Global TeleSystems, Inc., Sr. Sub. Debentures,
5.75% due 7/1/10
(Cost -- $9,682,288) 2,470,256
================================================================================
SHORT-TERM INVESTMENT -- 5.8%
80,500,000 Student Loan Marketing Association,
6.45% due 11/1/00
(Cost -- $80,500,000) 80,500,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $1,140,234,556**) $ 1,378,368,521
================================================================================
* 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, 2000
--------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 96.1%
Automotive -- 1.1%
77,200 Harley-Davidson, Inc. $ 3,720,075
--------------------------------------------------------------------------------
Biotechnology -- 2.6%
20,200 Abgenix, Inc.+ 1,593,275
27,300 Amgen Inc.+ 1,581,694
19,200 IDEC Pharmaceuticals Corp.+ 3,765,600
23,000 Millennium Pharmaceuticals, Inc.+ 1,668,937
--------------------------------------------------------------------------------
8,609,506
--------------------------------------------------------------------------------
Consumer Products & Services -- 0.8%
54,700 Avon Products, Inc. 2,652,950
--------------------------------------------------------------------------------
Electronic Components - Semiconductors -- 7.2%
78,900 Altera Corp.+ 3,229,969
43,600 Analog Devices, Inc.+ 2,834,000
20,000 Applied Micro Circuits Corp.+ 1,527,500
9,600 Broadcom Corp., Class A Shares+ 2,134,800
69,500 Intel Corp. 3,127,500
5,800 PMC-Sierra, Inc.+ 983,100
40,100 Sanmina Corp.+ 4,583,931
9,600 Vitesse Semiconductor Corp.+ 671,400
57,400 Xilinx, Inc.+ 4,157,912
--------------------------------------------------------------------------------
23,250,112
--------------------------------------------------------------------------------
Energy -- 4.6%
26,900 Anadarko Petroleum Corp. 1,722,945
47,000 Baker Hughes Inc. 1,615,625
18,100 Enron Corp. 1,485,331
61,400 ENSCO International Inc. 2,041,550
29,800 Global Marine Inc.+ 789,700
28,000 Nabors Industries, Inc.+ 1,425,200
73,300 Noble Drilling Corp.+ 3,046,531
21,100 Smith International, Inc.+ 1,487,550
22,100 Transocean Sedco Forex Inc. 1,171,300
--------------------------------------------------------------------------------
14,785,732
--------------------------------------------------------------------------------
Financial Services -- 6.6%
50,400 American Express Co. 3,024,000
21,000 Bank of America Corp. 1,009,312
15,400 The Bank of New York Co., Inc. 886,463
25,000 Capital One Financial Corp. 1,578,125
56,350 The Charles Schwab Corp. 1,979,294
14,550 The Chase Manhattan Corp. 662,025
23,700 Fannie Mae 1,824,900
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Financial Services -- 6.6% (continued)
46,300 FleetBoston Financial Corp. $ 1,759,400
39,400 MBNA Corp. 1,479,962
26,900 Merrill Lynch & Co., Inc. 1,883,000
12,500 Northern Trust Corp. 1,067,188
14,400 Providian Financial Corp. 1,497,600
20,200 T. Rowe Price Associates, Inc. 945,613
37,000 Wells Fargo & Co. 1,713,563
--------------------------------------------------------------------------------
21,310,445
--------------------------------------------------------------------------------
Food & Beverage -- 2.4%
31,900 Anheuser-Busch Cos., Inc. 1,459,425
67,200 The Pepsi Bottling Group, Inc. 2,326,800
84,500 PepsiCo, Inc. 4,092,969
--------------------------------------------------------------------------------
7,879,194
--------------------------------------------------------------------------------
Health Care -- 6.7%
61,700 Abbott Laboratories 3,258,531
30,100 Baxter International Inc. 2,473,844
39,200 Bristol-Myers Squibb Co. 2,388,750
36,500 Cardinal Health, Inc. 3,458,375
14,000 Forest Laboratories, Inc.+ 1,855,000
52,000 HCA-The Healthcare Co. 2,076,750
33,600 UnitedHealth Group Inc. 3,675,000
21,800 Wellpoint Health Networks Inc.+ 2,549,238
--------------------------------------------------------------------------------
21,735,488
--------------------------------------------------------------------------------
Hotel/Casino -- 1.6%
31,900 MGM Mirage Inc. 1,102,544
81,900 Park Place Entertainment Corp.+ 1,044,225
97,900 Starwood Hotels & Resorts Worldwide, Inc. 2,900,287
--------------------------------------------------------------------------------
5,047,056
--------------------------------------------------------------------------------
Instruments -- 1.6%
11,500 Jabil Circuit, Inc.+ 656,219
23,000 PE Corp. - PE Biosystems Group 2,691,000
24,700 Waters Corp.+ 1,792,294
--------------------------------------------------------------------------------
5,139,513
--------------------------------------------------------------------------------
Insurance -- 1.8%
32,600 The Allstate Corp. 1,312,150
12,500 American General Corp. 1,006,250
28,425 American International Group, Inc. 2,785,650
4,800 Marsh & McLennan Cos., Inc. 627,600
--------------------------------------------------------------------------------
5,731,650
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Manufacturing -- 5.1%
68,500 Corning Inc. $ 5,240,250
206,600 General Electric Co. 11,324,262
--------------------------------------------------------------------------------
16,564,512
--------------------------------------------------------------------------------
Media -- 1.4%
73,563 Metro-Goldwyn-Mayer Inc.+ 1,448,272
40,500 Time Warner, Inc. 3,074,355
--------------------------------------------------------------------------------
4,522,627
--------------------------------------------------------------------------------
Multi-Industry -- 3.5%
197,900 Tyco International Ltd. 11,218,456
--------------------------------------------------------------------------------
Pharmaceuticals -- 10.0%
9,800 Allergan, Inc. 3,345,687
19,200 ALZA Corp.+ 1,554,000
50,500 American Home Products Corp. 3,206,750
29,000 Celgene Corp.+ 1,866,875
53,800 Eli Lilly & Co. 4,808,375
17,300 Human Genome Sciences, Inc.+ 1,529,158
19,000 Immunex Corp.+ 808,688
34,600 IVAX Corp.+ 1,505,100
41,300 King Pharmaceuticals, Inc.+ 1,850,756
70,100 Merck & Co., Inc. 6,304,619
75,250 Pfizer Inc. 3,249,859
49,000 Schering-Plough Corp. 2,532,688
--------------------------------------------------------------------------------
32,562,555
--------------------------------------------------------------------------------
Retail -- 5.7%
48,000 Bed Bath & Beyond Inc.+ 1,239,000
19,200 CDW Computer Centers, Inc.+ 1,237,200
80,600 The Kroger Co.+ 1,818,537
68,200 The Limited, Inc. 1,722,050
47,000 RadioShack Corp. 2,802,375
164,000 Safeway Inc.+ 8,968,750
19,000 Walgreen Co. 866,875
--------------------------------------------------------------------------------
18,654,787
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Technology -- 23.1%
45,000 Adobe Systems Inc. $ 3,422,812
57,400 America Online, Inc.+ 2,894,682
25,900 Ariba, Inc.+ 3,273,112
30,700 BEA Systems, Inc.+ 2,202,725
15,400 Brocade Communications Systems, Inc.+ 3,501,575
32,600 Check Point Software Technologies Ltd.+ 5,163,025
135,400 EMC Corp. + 12,059,062
8,600 Extreme Networks, Inc.+ 713,263
19,200 i2 Technologies, Inc.+ 3,264,000
14,000 Intuit Inc.+ 860,125
21,100 Juniper Networks, Inc.+ 4,114,500
60,800 Linear Technology Corp. 3,925,400
7,000 Mercury Interactive Corp.+ 777,000
48,800 Microsoft Corp.+ 3,361,100
17,300 Network Appliance, Inc.+ 2,058,700
174,700 Oracle Corp.+ 5,765,100
47,600 Rational Software Corp.+ 2,841,125
22,100 Siebel Systems, Inc.+ 2,319,119
77,800 Sun Microsystems, Inc.+ 8,626,075
28,000 VERITAS Software Corp.+ 3,948,437
--------------------------------------------------------------------------------
75,090,937
--------------------------------------------------------------------------------
Telecommunications -- 9.9%
29,800 CIENA Corp.+ 3,132,725
252,500 Cisco Systems, Inc.+ 13,603,437
51,000 Comverse Technology, Inc.+ 5,699,250
21,600 JDS Uniphase Corp.+ 1,757,700
19,200 Nortel Networks Corp. 873,600
53,700 Qwest Communications International Inc.+ 2,611,163
57,600 SBC Communications Inc. 3,322,800
15,400 Scientific-Atlanta, Inc. 1,053,938
--------------------------------------------------------------------------------
32,054,613
--------------------------------------------------------------------------------
Utilities -- 0.4%
18,100 Calpine Corp.+ 1,428,769
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $247,562,975) $ 311,958,977
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
VAN KAMPEN ENTERPRISE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
SHORT-TERM INVESTMENTS-- 3.9%
U.S. Treasury Bills:
$ 2,800,000 5.950% due 12/21/00 $ 2,776,356
2,900,000 6.065% due 1/18/01 2,861,357
2,100,000 6.000% due 1/25/01 2,069,556
2,600,000 6.095% due 2/1/01 2,559,071
200,000 6.165% due 2/1/01 196,852
2,200,000 6.070% due 2/22/01 2,158,015
--------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $12,620,975 ) 12,621,207
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $260,183,950*) $ 324,580,184
================================================================================
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
Portfolio Portfolio Portfolio
=============================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $474,798,573, $1,140,234,556
and $260,183,950, respectively) $ 553,721,837 $ 1,378,368,521 $ 324,580,184
Cash 570 38,596 60,403
Receivable for Fund shares sold 181,999 150,199 --
Receivable for securities sold -- 2,578,198 13,199,975
Dividends and interest receivable 756,769 683,618 54,073
---------------------------------------------------------------------------------------------
Total Assets 554,661,175 1,381,819,132 337,894,635
---------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 845,828 10,896,100 6,771,083
Management fees payable 313,962 901,135 386,306
Payable for Fund shares purchased 149,332 -- 107,253
Accrued expenses 41,306 70,028 36,746
---------------------------------------------------------------------------------------------
Total Liabilities 1,350,428 11,867,263 7,301,388
---------------------------------------------------------------------------------------------
Total Net Assets $ 553,310,747 $ 1,369,951,869 $ 330,593,247
=============================================================================================
NET ASSETS:
Par value of shares of capital stock $ 267 $ 479 $ 129
Capital paid in excess of par value 447,326,477 961,274,614 213,109,294
Undistributed net investment income 7,598,914 2,621,459 --
Accumulated net realized gain
from security transactions 19,461,825 167,921,352 53,087,590
Net unrealized appreciation of
investments 78,923,264 238,133,965 64,396,234
---------------------------------------------------------------------------------------------
Total Net Assets $ 553,310,747 $ 1,369,951,869 $ 330,593,247
=============================================================================================
Shares Outstanding 26,683,826 47,851,851 12,914,106
---------------------------------------------------------------------------------------------
Net Asset Value $20.74 $28.63 $25.60
---------------------------------------------------------------------------------------------
See Notes to Financial Statements.
---------------------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney
Large Cap Alliance Van Kampen
Value Growth Enterprise
Portfolio Portfolio Portfolio
==========================================================================================
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 355,898 $ 4,165,084 $ 367,700
Dividends 10,742,527 9,557,923 1,475,151
Less: Foreign withholding tax (21,945) (101,755) (14,252)
------------------------------------------------------------------------------------------
Total Investment Income 11,076,480 13,621,252 1,828,599
------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 3,403,839 11,011,245 2,542,509
Audit and legal 23,266 30,778 25,177
Shareholder communications 17,721 45,150 11,743
Directors' fees 9,223 27,222 8,649
Custody 8,927 85,838 21,296
Shareholder and system servicing fees 7,000 16,660 16,739
Other 5,850 10,323 6,889
------------------------------------------------------------------------------------------
Total Expenses 3,475,826 11,227,216 2,633,002
------------------------------------------------------------------------------------------
Net Investment Income (Loss) 7,600,654 2,394,036 (804,403)
------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3):
Realized Gain From Security
Transactions
(excluding short-term securities):
Proceeds from sales 146,210,613 612,787,064 433,333,077
Cost of securities sold 126,683,276 444,908,612 379,994,499
------------------------------------------------------------------------------------------
Net Realized Gain 19,527,337 167,878,452 53,338,578
------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments:
Beginning of year 63,063,920 303,989,265 72,053,654
End of year 78,923,264 238,133,965 64,396,234
------------------------------------------------------------------------------------------
Increase (Decrease) in
Net Unrealized Appreciation 15,859,344 (65,855,300) (7,657,420)
------------------------------------------------------------------------------------------
Net Gain on Investments 35,386,681 102,023,152 45,681,158
------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $42,987,335 $104,417,188 $ 44,876,755
==========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Smith Barney Large Cap Value Portfolio 2000 1999
=======================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 7,600,654 $ 6,779,539
Net realized gain 19,527,337 12,213,368
Increase in net unrealized appreciation 15,859,344 15,571,021
---------------------------------------------------------------------------------------
Increase in Net Assets From Operations 42,987,335 34,563,928
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (6,775,481) (6,005,632)
Net realized gains (12,244,351) (12,877,750)
---------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (19,019,832) (18,883,382)
---------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 34,190,253 103,656,845
Net asset value of shares issued
for reinvestment of dividends 19,019,832 18,883,382
Cost of shares reacquired (67,546,687) (18,111,176)
---------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (14,336,602) 104,429,051
---------------------------------------------------------------------------------------
Increase in Net Assets 9,630,901 120,109,597
NET ASSETS:
Beginning of year 543,679,846 423,570,249
---------------------------------------------------------------------------------------
End of year* $ 553,310,747 $ 543,679,846
=======================================================================================
* Includes undistributed net investment
income of: $ 7,598,914 $ 6,775,481
=======================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Alliance Growth Portfolio 2000 1999
========================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 2,394,036 $ 1,399,754
Net realized gain 167,878,452 104,629,375
Increase (decrease) in net unrealized
appreciation (65,855,300) 180,413,425
----------------------------------------------------------------------------------------
Increase in Net Assets From Operations 104,417,188 286,442,554
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,188,087) (5,587,187)
Net realized gains (104,363,232) (54,556,034)
----------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (105,551,319) (60,143,221)
----------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 165,192,994 134,587,353
Net asset value of shares issued
for reinvestment of dividends 105,551,319 60,143,221
Cost of shares reacquired (65,572,252) (30,058,605)
----------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 205,172,061 164,671,969
----------------------------------------------------------------------------------------
Increase in Net Assets 204,037,930 390,971,302
NET ASSETS:
Beginning of year 1,165,913,939 774,942,637
----------------------------------------------------------------------------------------
End of year* $ 1,369,951,869 $ 1,165,913,939
========================================================================================
* Includes undistributed net investment
income of: $2,621,459 $1,549,118
========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Van Kampen Enterprise Portfolio 2000 1999
=======================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (804,403) $ 15,877
Net realized gain 53,338,578 44,456,119
Increase (decrease) in net unrealized
appreciation (7,657,420) 22,046,033
---------------------------------------------------------------------------------------
Increase in Net Assets From Operations 44,876,755 66,518,029
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (15,787) (845,726)
Net realized gains (44,056,608) (4,790,402)
---------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (44,072,395) (5,636,128)
---------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 13,009,479 20,092,068
Net asset value of shares issued
for reinvestment of dividends 44,072,395 5,636,128
Cost of shares reacquired (40,702,493) (22,251,170)
---------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 16,379,381 3,477,026
---------------------------------------------------------------------------------------
Increase in Net Assets 17,183,741 64,358,927
NET ASSETS:
Beginning of year 313,409,506 249,050,579
---------------------------------------------------------------------------------------
End of year* $ 330,593,247 $ 313,409,506
=======================================================================================
* Includes undistributed net investment
income of: -- $ 15,787
=======================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Large Cap Value Portfolio, Alliance Growth Portfolio and Van
Kampen 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,
Putnam Diversified Income, Salomon Brothers Global High Yield, formerly known as
INVESCO 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, 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) gains or losses on the
sale of securities are calculated by using the specific identification method;
(i) the accounting records of the Portfolios are maintained in U.S. dollars. All
assets and liabilities denominated in foreign currencies are translated into
U.S. dollars based on the rate of exchange of such currencies against U.S.
dollars on the date of valuation. Purchases and sales of securities, and income
and expenses are translated at the rate of exchange quoted on the respective
date that such transactions are recorded. Differences between income or expense
amounts recorded and collected or paid are adjusted when reported by the
custodian bank; (j) the character of income and gains to be distributed are
determined in accordance
--------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
with income tax regulations which may differ from generally accepted accounting
principles. At October 31, 2000, reclassifications were made to the capital
accounts of the Smith Barney Large Cap Value Portfolio, Alliance Growth
Portfolio and Van Kampen Enterprise Portfolio to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. In addition, a portion of accumulated net realized gains amounting
to $236 and a portion of undistributed net investment loss amounting to $804,403
was reclassified to paid-in capital for the Van Kampen Enterprise Portfolio. 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"), 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 Portfolio ("AGP") and the
Van Kampen Enterprise Portfolio ("VKEP"). 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.
TIA has entered into a sub-administrative services agreement with SSBC. TIA pays
SSBC, as sub-administrator, a fee calculated at an annual rate of 0.10% of the
average daily net assets of AGP and VKEP.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset - based
fees that vary according to the account size and type of account. PFPC is
responsible for shareholder recordkeeping and financial processing for all
shareholder accounts and is paid by CFTC. For the year ended October 31, 2000,
the Portfolios paid transfer agent fees of $15,000 to CFTC.
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, 2000, SSB received brokerage commissions of $183,624.
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the year ended October 31, 2000, 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 $117,644,452 $ 656,955,068 $410,065,232
--------------------------------------------------------------------------------
Sales 146,210,613 612,787,064 433,333,077
================================================================================
At October 31, 2000, 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 $ 115,380,522 $ 397,798,045 $ 70,209,570
Gross unrealized depreciation (36,457,258) (159,664,080) (5,813,336)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 78,923,264 $ 238,133,965 $ 64,396,234
================================================================================
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 (plus accrued
interest) in amounts at least equal to the repurchase price.
--------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<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, 2000, AGP and VKEP held no 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, 2000, AGP and VKEP held no purchased call or put 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 loss is realized depending upon whether the cost of
the closing transaction is
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, AGP and VKEP did not enter into any
written covered call or put option contracts.
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, 2000, SBLCV and AGP did not have any securities on loan.
8. Capital Shares
At October 31, 2000, 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.
--------------------------------------------------------------------------------
34 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Year Ended Year Ended
October 31, 2000 October 31, 1999
================================================================================
Smith Barney Large Cap Value Portfolio
Shares sold 1,758,687 5,029,254
Shares issued on reinvestment 1,013,850 909,604
Shares reacquired (3,512,603) (882,294)
--------------------------------------------------------------------------------
Net Increase (Decrease) (740,066) 5,056,564
================================================================================
Alliance Growth Portfolio
Shares sold 5,326,836 5,046,095
Shares issued on reinvestment 3,570,748 2,193,407
Shares reacquired (2,172,340) (1,109,900)
--------------------------------------------------------------------------------
Net Increase 6,725,244 6,129,602
================================================================================
Van Kampen Enterprise Portfolio
Shares sold 457,422 844,070
Shares issued on reinvestment 1,602,050 232,706
Shares reacquired (1,425,020) (912,198)
--------------------------------------------------------------------------------
Net Increase 634,452 164,578
================================================================================
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney Large Cap
Value Portfolio 2000 1999 1998/(1)/ 1997 1996
====================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $19.83 $18.94 $17.90 $14.84 $12.12
------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.30 0.27 0.31 0.25 0.32
Net realized and unrealized gain 1.34 1.38 1.47 3.16 2.62
------------------------------------------------------------------------------------
Total Income From Operations 1.64 1.65 1.78 3.41 2.94
------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.26) (0.24) (0.21) (0.18) (0.17)
Net realized gains (0.47) (0.52) (0.53) (0.17) (0.05)
------------------------------------------------------------------------------------
Total Distributions (0.73) (0.76) (0.74) (0.35) (0.22)
------------------------------------------------------------------------------------
Net Asset Value, End of Year $20.74 $19.83 $18.94 $17.90 $14.84
------------------------------------------------------------------------------------
Total Return 8.62% 8.52% 9.65% 23.38% 24.55%
------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $553 $544 $424 $287 $139
------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.66% 0.67% 0.68% 0.69% 0.73%
Net investment income 1.45 1.35 1.59 2.01 2.35
------------------------------------------------------------------------------------
Portfolio Turnover Rate 23% 43% 36% 46% 32%
====================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
------------------------------------------------------------------------------------
36 2000 Annual Report to Shareholders
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
Alliance Growth Portfolio 2000 1999 1998 1997 1996
======================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $28.35 $22.14 $20.82 $16.30 $13.28
--------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.05 0.02 0.11 0.05 0.04
Net realized and unrealized gain 2.66 7.79 2.69 5.11 3.39
--------------------------------------------------------------------------------------
Total Income From Operations 2.71 7.81 2.80 5.16 3.43
--------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) (0.15) (0.04) (0.02) (0.09)
Net realized gains (2.40) (1.45) (1.44) (0.62) (0.32)
--------------------------------------------------------------------------------------
Total Distributions (2.43) (1.60) (1.48) (0.64) (0.41)
--------------------------------------------------------------------------------------
Net Asset Value, End of Year $28.63 $28.35 $22.14 $20.82 $16.30
--------------------------------------------------------------------------------------
Total Return 9.27% 35.51% 12.92% 32.59% 26.55%
--------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $1,370 $1,166 $775 $545 $295
--------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.81% 0.82% 0.82% 0.82% 0.87%
Net investment income 0.17 0.14 0.59 0.32 0.39
--------------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 54% 40% 66% 88%
======================================================================================
</TABLE>
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
Van Kampen
Enterprise Portfolio 2000 1999 1998 1997 1996
======================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $25.52 $20.56 $19.89 $15.37 $12.89
--------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.06) 0.00* 0.06 0.06 0.05
Net realized and unrealized gain 3.87 5.42 1.83 4.51 2.87
--------------------------------------------------------------------------------------
Total Income From Operations 3.81 5.42 1.89 4.57 2.92
--------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.00)* (0.07) (0.05) (0.05) (0.04)
Net realized gains (3.73) (0.39) (1.17) -- (0.40)
--------------------------------------------------------------------------------------
Total Distributions (3.73) (0.46) (1.22) (0.05) (0.44)
--------------------------------------------------------------------------------------
Net Asset Value, End of Year $25.60 $25.52 $20.56 $19.89 $15.37
--------------------------------------------------------------------------------------
Total Return 13.92% 26.48% 8.97% 29.81% 23.35%
--------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $331 $313 $249 $197 $104
--------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.72% 0.73% 0.73% 0.74% 0.83%
Net investment income (loss) (0.22) 0.01 0.35 0.41 0.53
--------------------------------------------------------------------------------------
Portfolio Turnover Rate 117% 120% 68% 75% 112%
======================================================================================
* Amount represents less than $0.01 per share.
</TABLE>
--------------------------------------------------------------------------------
38 2000 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 Large Cap Value Portfolio,
Alliance Growth Portfolio and Van Kampen Enterprise Portfolio of Travelers
Series Fund Inc. as of October 31, 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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 Large Cap Value Portfolio, Alliance Growth Portfolio and Van Kampen
Enterprise Portfolio of Travelers Series Fund Inc. as of October 31, 2000, 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 accounting principles generally accepted in the United States of
America.
/s/ KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes, the Fund hereby designates for the fiscal year ended
October 31, 2000:
. Long-term capital gain distributions paid:
Large Cap Value Portfolio $12,244,351
Alliance Growth Portfolio 90,320,588
Van Kampen Enterprise Portfolio 42,135,035
. 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 36.13
Van Kampen Enterprise Portfolio 85.32
The following percentage 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 1.15%
--------------------------------------------------------------------------------
40 2000 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
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
PFPC Trust Company
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 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 12/00
<PAGE>
Travelers Series Fund Inc.
Smith Barney International
Equity Portfolio
Smith Barney Pacific
Basin Portfolio
Salomon Brothers Global
High Yield Portfolio
------------------------
A N N U A L R E P O R T
------------------------
October 31, 2000
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series
Fund Inc.
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 Salomon
Brothers Global High Yield Portfolios ("Portfolio(s)") for the year ended
October 31, 2000./1/ In this report we have summarized the period's prevailing
economic and market conditions and outlined our investment strategy. A detailed
summary of the Portfolios' performances can be found in the appropriate sections
that follow. We hope you find this report to be useful and informative.
[PHOTO]
HEATH B. MCLENDON
Chairman
Portfolio Highlights
Smith Barney International Equity Portfolio
For the year ended October 31, 2000, the Smith Barney International Equity
Portfolio returned 10.18%. In comparison, the Lipper Inc. ("Lipper")/2/ peer
group of international funds and the Morgan Stanley Capital International
Europe, Australasia and Far East Index ("MSCI EAFE")/3/ returned 3.28% and a
negative 2.90%, respectively, for the same period.
The Portfolio seeks total return on its assets from growth of capital and income
by investing at least 65% of its assets in a diversified portfolio of stock
securities of established non-U.S. issuers.
During the period, a series of extraordinary financial market events
significantly influenced the Portfolio. The managers believe that the period was
marked by exceptional investment challenges from a combination of currency
movements,
-------------
1 The Portfolios are underlying investment options of various variable
annuity products. A variable annuity product is a contract issued by an
insurance company in which the annuity premium (a set amount of dollars) is
immediately turned into units of a portfolio of securities. Upon
retirement, the policyholder is paid according to accumulated units whose
dollar value varies according to the performance of the securities within
the subaccounts. Its objective is to preserve, through investment, the
purchasing value of the annuity which otherwise is subject to erosion
through inflation. The performance returns for these Portfolios do not
reflect expenses imposed in connection with investing in variable annuity
contracts such as administrative fees, account charges and surrender
charges which, if reflected, would reduce the performance of the
Portfolios. Past performance is not indicative of future results.
2 Lipper is an independent mutual fund-tracking organization.
3 The MSCI EAFE is an unmanaged index of common stocks of companies located
in Europe, Australasia and the Far East. Please note, an investor cannot
invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
government policy changes and significant swings in investor sentiment. The
result was sharp stock market volatility.
The period began with several months of strong appreciation, as investors seemed
to have an unquenchable appetite for telecommunications, media and technology
stocks, driving a sharp rally of global markets. Year 2000 ("Y2K") technology
apprehensions and concerns of economic disruption were quickly dispelled, and
the smooth Y2K transition appeared to be a strong testament to the foresight of
capital and human resources dedicated to fix that potential technological
nightmare.
Overlooked by many during the favorable global capital markets environment of
late 1999, however, were several trends that unnerved investors as 2000
progressed such as:
. The U.S. Federal Reserve Board ("Fed") began a series of short-term
interest rate increases, designed to break the strong growth trajectory of
the U.S. economy and cool stock market euphoria;
. The euro/4/ continued its trend of weakness established early in 1999,
cascading further versus the U.S. dollar during the period. The euro's fall
caused corporate earnings dislocations on both sides of the Atlantic Ocean;
. Energy prices rose dramatically, especially when denominated in euros,
raising inflationary expectations in Europe and dampening consumer
sentiment; and
. Subsequent interest rate increases moderated global growth expectations, in
turn causing several rounds of earnings downgrades, especially for high
profile technology companies.
The managers believe these factors ultimately proved to be an insurmountable
hurdle for international growth stocks/5/, which significantly underperformed
international value stocks/6/ during the period. After a strong surge in the
early part of the period, international growth stocks succumbed to the factors
enumerated and underperformed international value stocks during the period.
----------
4 The euro is the single currency of the European Monetary Union that was
developed by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg,
the Netherlands, Austria, Portugal and Finland on January 1, 1999.
5 Growth stocks generally provide an opportunity for more capital
appreciation than fixed income investments but are subject to greater
market fluctuations.
6 Value stocks are shares of companies whose shares are considered to be
inexpensive relative to their asset values or earning power.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
Selected industry sectors incurred new challenges during the period. The
European telecommunications operators, for example, embarked on an aggressive
competitive bidding process to secure third generation wireless communications
licenses. The victorious bids, in many nationalities, were significantly above
initial expectations, causing investor apprehension about ultimate returns on
capital invested in paying for those licenses and capital spending.
The composition of the Portfolio shifted over the past year, primarily due to
the outperformance of Canadian stocks. The managers' allocation of 55% Europe,
36% Asia, and 9% Canada, Latin America and other emerging markets at the
beginning of the period changed to 55% Europe, 26% in Asia, and 19% in Canada,
Latin America and other emerging markets by the end of the period.
The managers believe that the European stock markets performed relatively well
during much of the period when measured in local currencies. Yet the fall of the
euro dramatically lowered returns for dollar-based investors. In their view, the
decline of the euro versus the U.S. dollar appeared to be due to growth and
interest rate differentials that benefited the U.S. currency. The managers think
that global portfolio flows into the U.S. also pressured the euro, as did
inconsistent policy pronouncements from the European Central Bank ("ECB"). At
the end of the fiscal year, the ECB intervened in the currency markets in order
to stabilize the euro.
The managers think that the silver lining of the euro's decline has been the
improvement in the competitiveness of European exports. However, the potential
for imported inflation clearly exists. Recent rounds of interest rate increases
have cooled the uptick in economic activity. Nevertheless, Europe's growth is
reducing the chronically high level of unemployment.
The Asian stock markets delivered a relatively poor performance over the past
year. During the period, several factors weighed on Asian markets. First, the
monetary policy of many Asian economies is tied to the U.S. interest rate cycle
through currency links. As interest rates rose in the U.S., stock markets were
pressured in Asia. Second, many of these markets have a high representation of
technology shares, such as the Korean stock market. As global technology
earnings came under question, the Asian economies, as key manufacturers and
assemblers of components and semiconductors, were subject to forecast
downgrades. Finally, political transitions in several Asian economies such as
Taiwan caused regional investor concerns.
In contrast with the managers' optimism about Japanese restructuring at this
time a year ago, the pace of change in Japan has slowed. The managers believe
the financial system is being rationalized. Several high profile bankruptcies of
insurance and other companies are positive for the economy in the long run.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
However, in the short-term, they are a stark reminder to the Japanese consumer
and saver of the fragility of Japan's economic recovery.
Emerging markets suffered during the period. While selected commodity prices
firmed, benefiting the generally commodity dependent export economies, investor
aversion to heightened political risk in many less developed economies weighed
on these markets. During the period, the managers limited the Portfolio's
position in emerging market investments, and in the near future they do not plan
to increase the Portfolio's position in this region.
Smith Barney Pacific Basin Portfolio
For the year ended October 31, 2000, the Smith Barney Pacific Basin Portfolio
returned a negative 32.07%. In comparison, the Lipper Inc. ("Lipper")/7/ peer
group of Pacific Region funds and the Morgan Stanley Capital International All
Country Asia Pacific Index ("MSCI Asia Pacific")/8/ reported negative total
returns of 13.45% and 12.81%, respectively, for the same period.
The manager employs a "bottom-up"/9/ investment strategy, emphasizing individual
security selection, while optimally allocating the Portfolio's assets among
companies in the Asia Pacific region. The manager's 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).
Recently, a spate of high profile earnings disappointments, as well as growing
evidence of U.S. economic deceleration, led to a decline in stock prices among
international stocks as an asset class. The chasm between the performance of
international growth/10/ and value stocks/11/ continued to widen at the end of
October 2000 and for the period.
During the period, the Japanese stock market (as represented by the Topix
Index/12/) declined 9.5% in dollar terms. The reversal of fortunes for the
----------
7 Lipper is an independent mutual fund-tracking organization.
8 The MSCI 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. Please note, an investor cannot invest directly
in an index.
9 Bottom-up investing is a search for outstanding performance of individual
stocks before considering the impact of economic trends.
10 Growth stocks generally provide an opportunity for more capital
appreciation than fixed income investments but are subject to greater
market fluctuations.
11 Value stocks are shares of companies whose shares are considered to be
inexpensive relative to their asset values or earning power.
12 The Topix Index is a market capitalization-weighted measure of
approximately 1,800 Japanese stocks listed on the Tokyo Stock Exchange.
Please note, an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
technology, media and telecommunications sectors continued, while Old
Economy/13/ and domestic value stocks staged a further rally in continuation
from the first few months of the period.
The manager thinks recent indicators confirmed that economic recovery is
underway in Japan, and, more importantly, is being led not by consumers, but by
the profits and capital expenditures of corporations. The manager also believes
that a major wave of information technology investments has just begun in Japan,
and may continue to present major opportunities for Japanese companies in areas
such as mobile Internet, interactive TVs and display technologies. Moreover,
even Old Economy companies are rapidly implementing reforms.
Many major Japanese companies have begun to focus on margins and returns. In the
process, they have made choices of which businesses should be the focus of their
resources, and which businesses to spin-off, divest or merge with a competitor.
The manager believes that the enhanced efficiency of select Japanese
corporations may create surprisingly high returns over the next three to five
years. In the manager's opinion, the risks in the Japanese market include an
increasingly visible slowdown in the U.S. economy, which may hurt Japanese
exports, an eventual rise in Japanese interest rates and currency volatility.
Salomon Brothers Global High Yield Portfolio
For the year ended October 31, 2000, the Salomon Brothers Global High Yield
Portfolio returned 4.34%. In comparison, the J.P. Morgan Global Bond Index/14/
returned 20.49% for the same period.
Special Shareholder Notice
At a meeting of the shareholders of the Travelers Series Fund Inc. ("Fund") held
on September 25, 2000, the shareholders approved a new Sub-Advisory Agreement
("Agreement") with Salomon Brothers Asset Management ("SaBAM"), on behalf of the
Salomon Brothers Global High Yield Portfolio. SaBAM is an indirect wholly owned
subsidiary of Citigroup Inc. ("Citigroup"). The Portfolio's advisor, Travelers
Investment Adviser Inc. ("TIA") is also an indirect wholly owned subsidiary of
Citigroup.
Under, the Agreement the sub-adviser provides investment advisory services. The
Agreement also provides for fees to be paid by TIA to SaBAM monthly at a rate of
0.375% of the Portfolio's average daily net assets.
-----------
13 The Old Economy represents more established, "blue-chip" companies.
14 The J.P. Morgan Global Bond Index is a broad-based unmanaged index of
domestic and foreign bonds. Please note, an investor cannot invest directly
in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
U.S. High-Yield Securities
The U.S. high-yield market returned a negative 2.96% during the period, as
reported by the Salomon Smith Barney High Yield Market Index.15 For most of the
period, concerns over continued strong growth in the U.S. economy and rising
energy prices heightened inflation worries, which resulted in a string of
interest rate hikes by the Federal Reserve Board ("Fed"). From November 1999
until May 2000, the Fed lifted its target rate for overnight bank lending four
times, or 1.25%, to 6.50%.
The Fed's rate increases caused significant concern and uncertainty in the stock
and bond markets as to the ultimate end of the rate increases and the
sustainability of robust economic growth. The resulting rise in long-term
interest rates and volatility in the U.S. stock markets put pressure on the
high-yield market, both in terms of asset pricing and liquidity.
These pressures were compounded by relatively high default rates in the
high-yield market, primarily due to weak underwriting standards in 1997 and 1998
and a tightening of banks' and the market's credit standards, which limited
companies' access to new funds. As a result, liquidity in the market was limited
on the investor side, as mutual fund outflows totaled slightly more than $11
billion during the period, and by broker dealers, who held back from committing
significant funds to support the market.
Late in the period, however, the high-yield market received some relief as the
Fed held interest rates steady at its meetings in June, August and October 2000
in response to data hinting at a slowdown in the U.S. economy. However, the high
yield market was adversely impacted by a series of earnings revisions in
September and October, which renewed cyclical and corporate profitability
concerns. As the period ended, the high yield market remained focused on high
default rates, potential inflation threats and the magnitude of an economic
slowdown.
Going forward, the managers expect the high-yield market to continue to
experience volatility primarily as a result of several factors, including (i)
mutual fund flows, (ii) continued concerns over default rates, (iii) reduced
secondary market liquidity and (iv) continuing cyclical concerns. In light of
these conditions, the managers are pursuing a more conservative investment
strategy geared to overweighting BB credits and pursuing selective opportunities
in undervalued B and CCC credits.
-----------
15 The Salomon Smith Barney High Yield Market Index covers a significant
portion of the below-investment-grade U.S. corporate bond market. Please
note, an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
Emerging Market Debt
During the period, the managers believe the emerging markets debt returns were
impressive. The emerging market debt portion of the Portfolio returned 25.30%,
outperforming the JP Morgan Emerging Markets Bond Index Plus ("EMBI+")16, which
returned 20.49% during the period. The shift to floating currency exchange
regimes in a number of emerging countries reduced the direct impact of U.S.
interest rate increases on their economies during the period. Floating exchange
regimes help insulate domestic rates from moves in U.S. rates.
In a rising interest rate environment, emerging markets continued to perform
well relative to other bond asset classes. To illustrate, the Salomon Smith
Barney Broad Investment Grade Bond Index ("SSB BIG Bond Index")17 returned 7.28%
while the Salomon Smith Barney High Yield Market Index declined a negative 1.29%
for the period.
Return volatilities for emerging markets debt remained substantially lower
relative to year-earlier levels. During the Fund's fiscal year, volatility for
the EMBI+ totaled 8.27% versus 16.55% during the year-earlier period. The
managers think that decline in volatility is a function of reduced leverage in
the market coupled with expanded investor interest in the asset class.
Commodity prices in general and oil prices in particular moved higher during the
period. Oil prices closed October in excess of $32 per barrel, up 45% for the
year and peaking at $37.20 this past September 20, 2000. This trend of higher
prices has benefited oil producing emerging countries including Russia, Algeria,
Venezuela, Mexico, Ecuador and Colombia.
The managers believe that the improved outlook for world economic growth has
encouraged investors to increase commitments to emerging markets debt. The
strength of the economic recovery in Asia, an important market for Latin
American exports, has contributed to the better tone in emerging markets debt.
Evidence of cyclical recoveries in Brazil and Venezuela also improved the
outlook for investors. The success of numerous Brady bond exchanges late in 1999
was further evidence of market strength. Brazil, Mexico and the Philippines each
exchanged a portion of their Brady debt for uncollateralized global bonds,
reducing their overall debt servicing costs. In addition, they think this
positive trend is likely to continue during future periods of market stability.
----------
16 The EMBI+ is a total return index that tracks the traded market for U.S.
dollar-denominated Brady and other similar sovereign restructured bonds
traded in the emerging market. Please note, an investor cannot invest
directly in an index.
17 The SSB BIG Bond Index includes institutionally traded U.S. Treasury Bonds,
government-sponsored bonds (U.S. Agency and supranational), mortgage-backed
securities and corporate securities. Please note, an investor cannot invest
directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
Individual country performance during the quarter followed the pattern of 1999,
with strong out-performance concentrated in few countries. Individual country
performance was dominated by Russia, which returned 115.93% during the period.
Ecuador rebounded from an oversold position to out-perform and returned 60.28%.
Mexico performed more in line with the index returns posting 20.78% for the
period. The remaining thirteen countries underperformed. However, on a more
promising note, five of these underperforming countries posted double-digit
returns. Performance returns are historical for the specific periods and not
indicative of future results. Under certain market conditions, results of
particular investment opportunities may or may not continue.
The market closed the month of October with spreads at 745 basis points over
Treasuries. The forces that led to strong emerging markets performance over the
last two years remain intact. Reduced volatility levels and improving country
fundamentals will continue to drive valuations in emerging countries. In
addition, six emerging countries are on alert for credit upgrade by the rating
agencies. The managers' outlook for emerging markets debt is positive. They
believe that they are being well compensated for the risks in emerging markets
at current spread levels.
In closing, thank you for your investment 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 22, 2000
The information provided in this letter represents the opinions of the managers
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Portfolios. Please refer to pages 14
through 22 for a list and percentage breakdown of the Portfolios' holdings.
Also, please note any discussion of the Portfolios' holdings is as of October
31, 2000 and is subject to change.
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
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+
================================================================================
10/31/00 $ 16.92 $ 18.52 $ 0.13 $ 0.00 10.18%
--------------------------------------------------------------------------------
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 $ 0.20 $ 0.00
================================================================================
--------------------------------------------------------------------------------
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+
================================================================================
10/31/00 $ 11.77 $ 7.97 $ 0.03 $ 0.00 (32.07)%
--------------------------------------------------------------------------------
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 $ 0.21 $ 0.00
================================================================================
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
--------------------------------------------------------------------------------
Salomon Brothers Global High Yield Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
================================================================================
10/31/00 $ 10.22 $ 9.89 $ 0.77 $ 0.00 4.34%
--------------------------------------------------------------------------------
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 $ 3.06 $ 1.22
================================================================================
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
Smith Barney Smith Barney Salomon
International Pacific Brothers
Equity Basin Global High
Portfolio Portfolio Yield Portfolio
================================================================================
Year Ended 10/31/00 10.18% (32.07)% 4.34%
--------------------------------------------------------------------------------
Five Years Ended 10/31/00 12.33 (1.77) 5.75
--------------------------------------------------------------------------------
6/16/94* through 10/31/00 10.35 (3.09) 5.87
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Returns+
--------------------------------------------------------------------------------
Smith Barney Smith Barney Salomon
International Pacific Brothers
Equity Basin Global High
Portfolio Portfolio Yield Portfolio
================================================================================
6/16/94* through 10/31/00 87.45% (18.16)% 43.92%
================================================================================
+ 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.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the Smith Barney
International Equity Portfolio vs. MSCI EAFE Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
Smith Barney International
DATE Equity Portfolio MSCI EAFE Index
---------- -------------------------- ---------------
6/16/94 10,000 10,000
10/94 10,500 10,443
10/95 10,480 10,436
10/96 12,194 11,563
10/97 13,259 12,133
10/98 12,628 13,340
10/99 17,013 16,413
10/31/00 18,745 15,956
+ 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, 2000. The Morgan Stanley Capital
International ("MSCI") EAFE Index is a composite portfolio consisting of
equity total returns for the countries of Europe, Australia, New Zealand
and 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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Pacific Basin Portfolio vs.
MSCI Pacific Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
SMITH BARNEY
DATE PACIFIC BASIN PORTFOLIO MSCI PACIFIC INDEX
---------- ----------------------- ------------------
6/16/94 10,000 10,000
10/94 10,100 9,952
10/95 8,950 8,836
10/96 9,779 9,136
10/97 8,114 7,353
10/98 6,971 6,346
10/99 12,048 9,617
10/31/00 8,184 8,607
+ 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, 2000. 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.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Salomon Brothers Global High Yield Portfolio vs.
J.P. Morgan Global Bond Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
SALOMON BROTHERS GLOBAL J.P. MORGAN GLOBAL BOND
DATE HIGH YIELD PORTFOLIO INDEX - UNHEDGED
---- ----------------------- -----------------------
6/16/94 10,000 10,000
10/94 9,950 10,391
10/95 10,882 11,985
10/96 13,066 12,716
10/97 14,284 13,161
10/98 13,927 14,869
10/99 13,793 14,429
10/31/00 14,392 13,759
+ Hypothetical illustration of $10,000 invested in shares of the Salomon
Brothers Global High Yield Portfolio on June 16, 1994 (commencement of
operations), assuming reinvestment of dividends and capital gains, if any,
at net asset value through October 31, 2000. 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.
------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
------------------------------------------------------------------------------
Schedules of Investments October 31, 2000
------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
==============================================================================
STOCK -- 95.2%
Australia -- 0.9%
800,000 ERG Ltd. (a) $ 3,917,585
------------------------------------------------------------------------------
Canada -- 10.2%
100,000 BCE Emergis Inc. (b) 4,648,726
165,000 C-Mac Industries Inc. (b) 9,290,905
350,000 Celestica Inc. (b) 24,932,888
164,000 Patheon, Inc. (b) 1,481,830
161,000 The Toronto-Dominion Bank (a) 4,422,150
------------------------------------------------------------------------------
44,776,499
------------------------------------------------------------------------------
China -- 0.4%
800,000 China Unicom Ltd. (b) 1,605,313
------------------------------------------------------------------------------
Finland -- 4.0%
50,000 F-Secure Oyj (b) 283,946
400,000 Nokia Oyj 17,100,026
------------------------------------------------------------------------------
17,383,972
------------------------------------------------------------------------------
France -- 5.3%
54,166 Axa (a) 7,162,143
110,000 Credit Lyonnais S.A. (a) 3,758,349
50,000 Equant N.V.(b) 1,671,894
75,000 Fi System (a)(b) 1,423,970
65,000 Groupe Danone (a) 9,079,505
------------------------------------------------------------------------------
23,095,861
------------------------------------------------------------------------------
Germany -- 4.5%
30,000 Aixtron AG 4,182,912
20,000 Allianz AG 6,724,869
31,000 SAP AG Preferred 6,082,811
110,000 Stinnes AG 2,610,612
------------------------------------------------------------------------------
19,601,204
------------------------------------------------------------------------------
Hong Kong -- 6.8%
563,529 HSBC Holdings PLC (a) 7,839,737
1,006,500 Hutchison Whampoa Ltd. 12,485,912
2,808,000 Li and Fung Ltd. (a) 5,220,602
483,557 Sun Hung Kai Properties Ltd. 3,999,106
------------------------------------------------------------------------------
29,545,357
------------------------------------------------------------------------------
Ireland -- 1.7%
474,110 Bank of Ireland 3,648,856
8,372 Independent News and Media PLC 25,901
767,256 Independent Newspapers PLC 2,406,211
253,755 Irish Continental Group PLC 1,398,040
------------------------------------------------------------------------------
7,479,008
------------------------------------------------------------------------------
See Notes to Financial Statements.
------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
==============================================================================
Israel -- 1.9%
100,000 Amdocs Ltd. (a)(b) $ 6,481,250
250,000 BATM Advanced Communications Ltd. 1,851,422
------------------------------------------------------------------------------
8,332,672
------------------------------------------------------------------------------
Italy -- 1.4%
740,000 Telecom Italia Mobile S.p.A. 6,328,700
------------------------------------------------------------------------------
Japan -- 14.6%
134,000 Canon, Inc. 5,313,857
203,000 Hosiden Corp. (a) 6,469,823
50,000 Matsushita Communication Industrial Co., Ltd. 6,548,219
65,000 Murata Manufacturing Co., Ltd. 7,774,521
500,000 Nippon Sheet Glass Co., Ltd. (a) 7,601,429
680 NTT Data Corp. 5,293,525
12,000 Seven-Eleven Japan Co., Ltd. 780,291
265,000 Sharp Corp. 3,373,477
34,500 SOFTBANK CORP. 2,069,558
88,000 SONY CORP. 7,027,750
191,000 Terumo Corp. 5,405,165
240,000 Tostem Corp. (a) 3,494,826
27,000 Trend Micro Inc. (b) 2,546,937
------------------------------------------------------------------------------
63,699,378
------------------------------------------------------------------------------
Mexico -- 1.7%
3,306,000 Wal-Mart De Mexico S.A. de C.V. (b) 7,513,244
------------------------------------------------------------------------------
Netherlands -- 0.0%
12,500 VIA NET.WORKS, Inc. (b) 90,058
------------------------------------------------------------------------------
Norway -- 3.7%
135,000 Petroleum Geo Services ASA ADR (a)(b) 1,847,813
360,000 Tomra Systems ASA 14,437,933
------------------------------------------------------------------------------
16,285,746
------------------------------------------------------------------------------
Singapore -- 2.8%
262,000 DelGro Corp. Ltd. 725,332
290,000 Singapore Press Holdings, Ltd. 4,146,397
1,750,000 Singapore Technologies Engineering, Ltd. 2,821,134
450,000 Venture Manufacturing (Singapore) Ltd. 4,357,733
------------------------------------------------------------------------------
12,050,596
------------------------------------------------------------------------------
South Africa -- 0.9%
100,000 Anglo American Platinum Corp., Ltd. 3,900,142
------------------------------------------------------------------------------
Spain -- 3.0%
325,000 Amadeus Global Travel Distribution S.A. (b) 2,652,780
440,000 Indra Sistemas S.A. 4,423,123
324,005 Telefonica S.A. (b) 6,170,870
------------------------------------------------------------------------------
13,246,773
------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SHARES SECURITY VALUE
==============================================================================
Sweden -- 2.4%
120,000 Enea Data AB $ 580,838
115,800 Framtidsfabriken AB (a)(b) 303,946
250,000 Securitas AB 5,314,371
250,000 Skandia Forsakrings AB (a) 4,229,042
------------------------------------------------------------------------------
10,428,197
------------------------------------------------------------------------------
Switzerland -- 7.0%
2,500 Julius Baer Holding Ltd. 12,374,173
200,000 Mettler-Toledo International Inc. (b) 9,337,500
6,000 Novartis AG 9,099,605
------------------------------------------------------------------------------
30,811,278
------------------------------------------------------------------------------
United Kingdom -- 22.0%
1,500,000 Capita Group PLC 11,522,377
345,000 Colt Telecom Group PLC (b) 10,986,335
100,000 Dimension Data Holdings PLC (b) 877,066
437,282 Dimension Data Holdings PLC (b) 3,771,917
290,000 Energis PLC (b) 2,471,902
800,000 Granada Compass PLC (b) 6,929,399
400,000 Guardian IT PLC (c) 5,401,795
1,505,000 Hays PLC 8,304,533
200,000 Logica PLC 5,866,465
797,915 Misys PLC 8,295,921
2,154,000 Serco Group PLC 19,783,420
1,609,090 Telewest Communications PLC (b) 2,669,511
2,186,324 Vodafone AirTouch PLC 9,119,472
------------------------------------------------------------------------------
96,000,113
------------------------------------------------------------------------------
TOTAL STOCK
(Cost -- $282,439,175) 416,091,696
==============================================================================
FACE
AMOUNT SECURITY VALUE
==============================================================================
REPURCHASE AGREEMENT-- 4.8%
$20,800,000 CIBC Wood Gundy Securities Inc., 6.470% due 11/1/00;
Proceeds at maturity -- $20,803,738; (Fully
collateralized by U.S. Treasury Notes, 5.000% to
5.875% due 2/28/01 to 11/30/01;
Market value -- $21,216,247) (Cost -- $20,800,000) 20,800,000
==============================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $303,239,175*) $436,891,696
==============================================================================
(a) All or a portion of this security is on loan (See Note 9).
(b) Non-income producing security.
(c) All or a portion of this security is segregated for open forward foreign
currency contracts.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
==============================================================================
STOCK -- 100.0%
Australia -- 2.2%
73,500 Computershare Ltd. $ 318,032
------------------------------------------------------------------------------
Hong Kong -- 7.6%
25,000 China Mobile (Hong Kong) Ltd. (a) 161,076
120,000 Computer & Technologies Holdings Ltd. 82,317
20,000 HSBC Holdings PLC 278,237
30,000 Hutchison Whampoa Ltd. 372,158
850,000 PetroChina Co. Ltd. 178,739
------------------------------------------------------------------------------
1,072,527
------------------------------------------------------------------------------
Japan -- 74.8%
1,100 ADVANTEST CORP. 143,356
10,000 Canon, Inc. 396,556
38,000 DAIBIRU CORP. 290,594
23,000 DAIFUKU CO., Ltd. 189,578
2,000 Drake Beam Morin - Japan Inc. 59,163
16,000 Fujitsu Ltd. 284,861
2,000 Hirose Electric Co., Ltd. 230,790
6,000 Hosiden Corp. 191,226
7,000 Ito-Yokado Co., Ltd. 316,055
3,000 Matsushita Communication Industrial Co., Ltd. 392,893
12,000 Matsushita Electric Industrial Co., Ltd. 348,384
6,000 MEITEC CORP. 251,671
37,000 Mitsubishi Estate Co. (b) 393,076
37,000 Mitsui Fudosan Co., Ltd. 447,971
4,000 Murata Manufacturing Co., Ltd. 478,432
32,000 Nippon Sheet Glass Co., Ltd. 486,491
35 Nippon Telegraph & Telephone Corp. (NTT) 309,204
30,000 Nomura Securities Co., Ltd. 636,047
47 NTT Data Corp. (b) 365,876
25 NTT DoCoMo, Inc. 615,904
60,000 OBAYASHI CORP. 248,374
35,000 OJI PAPER CO., LTD. 203,544
11,097 Pasona Softbank, Inc. 166,674
6,000 Seven-Eleven Japan Co., Ltd. 390,146
15,000 Sharp Corp. 190,952
5,000 Shin-Etsu Chemical Co., Ltd. 205,147
2,500 SOFTBANK CORP. 149,968
4,000 SONY CORP. 319,443
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
------------------------------------------------------------------------------
SMITH BARNEY PACIFIC BASIN PORTFOLIO
SHARES SECURITY VALUE
==============================================================================
Japan -- 74.8% (continued)
6,000 Takeda Chemical Industries, Ltd. $ 395,091
14,000 Terumo Corp. 396,190
2,000 Tokyo Electron Ltd. 156,425
70,000 TOKYU CORP. (b) 361,572
20,000 Tostem Corp. (b) 291,236
3,000 Trend Micro Inc. (a) 282,993
------------------------------------------------------------------------------
10,585,883
------------------------------------------------------------------------------
Singapore -- 3.9%
74,111 Datacraft Asia Ltd. 507,660
53,500 Star Cruises PLC (a) 39,858
------------------------------------------------------------------------------
547,518
------------------------------------------------------------------------------
South Korea -- 5.1%
6,000 Korea Electric Power Corp. 133,978
4,200 Korea Telecom Corp. 247,385
1,600 Samsung Corp. 200,440
700 SK Telecom Co., Ltd. 149,231
------------------------------------------------------------------------------
731,034
------------------------------------------------------------------------------
Taiwan -- 6.4%
84,280 Cathay Life Insurance Co., Ltd. 151,053
58,160 Hon Hai Precision Industry Co., Ltd. 303,731
83,443 Taiwan Semiconductor Manufacturing Co. (a) 252,693
20,500 Via Technologies Inc. (a) 146,967
22,880 Zyxel Communications Corp. (a) 46,664
------------------------------------------------------------------------------
901,108
------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $14,256,318*) $ 14,156,102
==============================================================================
(a) Non-income producing security.
(b) 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.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SALOMON BROTHERS GLOBAL HIGH YIELD PORTFOLIO
FACE
AMOUNT+ SECURITY VALUE
================================================================================
BONDS -- 73.5%
Algeria -- 0.4%
95,000 Algeria Loan Tranche 3, 7.188% due 3/4/10 $ 76,000
--------------------------------------------------------------------------------
Argentina -- 1.1%
Republic of Argentina:
60,000 11.750% due 4/7/09 52,785
70,000 11.750% due 6/15/15 59,710
70,000 11.375% due 1/30/17 59,150
70,000 12.125% due 2/25/19 60,025
--------------------------------------------------------------------------------
231,670
--------------------------------------------------------------------------------
Brazil -- 1.7%
Republic of Brazil:
100,000 14.500% due 10/15/09 107,025
140,000 12.750% due 1/15/20 129,990
135,000 11.000% due 8/17/40 103,815
--------------------------------------------------------------------------------
340,830
--------------------------------------------------------------------------------
Bulgaria -- 0.3%
100,000 Bulgaria FLIRB, Series A, 3.000% due 7/28/12 71,062
--------------------------------------------------------------------------------
Canada -- 0.5%
50,000 Pierce Leahy Command Co., 8.125% due 5/15/08 46,750
50,000 Rogers Cantel, 8.800% due 10/1/07 49,750
--------------------------------------------------------------------------------
96,500
--------------------------------------------------------------------------------
Colombia -- 0.6%
Republic of Colombia:
100,000 9.750% due 4/23/09 (a) 80,225
50,000 11.750% due 2/25/20 (a) 40,275
--------------------------------------------------------------------------------
120,500
--------------------------------------------------------------------------------
Croatia -- 0.3%
55,073 Republic of Croatia, Series B, 7.750% due 7/31/06 (a) 52,458
--------------------------------------------------------------------------------
Germany -- 1.8%
Bundesrepublik Deutscheland:
173,000EUR 6.500% due 10/14/05 155,155
200,100EUR 6.000% due 1/5/06 175,813
50,000EUR 6.500% due 7/4/27 47,106
--------------------------------------------------------------------------------
378,074
--------------------------------------------------------------------------------
Greece -- 0.1%
4,000,000GRD Hellenic Republic, 9.200% due 3/21/03 10,427
--------------------------------------------------------------------------------
Mexico -- 0.8%
140,000 United Mexican States, 11.375% due 9/15/16 158,826
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SALOMON BROTHERS GLOBAL HIGH YIELD PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ SECURITY VALUE
=========================================================================================
<S> <C> <C>
Morocco -- 0.1%
30,000 Morocco Loan Tranche A, 7.750% due 1/1/09 $ 26,287
-----------------------------------------------------------------------------------------
Panama -- 0.3%
75,000 Republic of Panama, 8.875% due 9/30/27 63,000
-----------------------------------------------------------------------------------------
Peru -- 0.3%
100,000 Republic of Peru, 4.500% due 3/7/17 60,375
-----------------------------------------------------------------------------------------
Philippines -- 0.2%
45,000 Republic of Philippines, 9.875% due 1/15/19 33,750
-----------------------------------------------------------------------------------------
Russia -- 1.7%
Russian Federation:
68,109 8.250% due 3/31/10 43,930
140,000 12.750% due 6/24/28 118,388
470,401 2.500% due 3/31/30 177,870
-----------------------------------------------------------------------------------------
340,188
-----------------------------------------------------------------------------------------
Spain -- 0.3%
90,000EUR Spanish Government, 4.000% due 1/31/10 68,196
-----------------------------------------------------------------------------------------
United States-- 61.7%
U.S. Treasury Notes:
3,780,000 5.625% due 5/15/08 (a) 3,727,496
660,000 4.75% due 11/15/08 (a) 614,354
270,000 6.375% due 8/15/27 (a) 284,845
2,000,000 6.250% due 5/15/30 (a) 2,130,920
250,000 Allied Waste North America, Series B, 10.000% due 8/1/09 (a) 215,000
221,813 Ameriquest III 2000, 8.500% due 7/30/30 215,991
25,000 Belco Oil & Gas, Series B, 8.875% due 9/15/07 23,625
100,000 Blount Inc., 13.000% due 8/1/09 (a) 85,000
250,000 Charter Communications Holdings, 10.250% due 1/15/10 (b)(c) 246,250
95,000 Chase Manhattan Corp., 6.250% due 1/15/06 90,725
50,000 Circus Circus Enterprise, 9.250% due 12/1/05 (a) 49,625
50,000 Columbia/HCA, 6.910% due 6/15/05 47,187
50,000 Comstock Resources Inc., 11.250% due 5/1/07 52,750
225,000 Continental Mortgage Home Equity Loan Trust,
8.500% due 4/25/29 157,500
50,000 CSC Holdings Inc., 9.875% due 2/15/13 (a) 51,000
100,000 Drypers Corp., 10.250% due 6/15/07 15,625
1,250,000 Federal Home Loan Mortgage Corp., 6.000% due 11/1/30 (d) 1,173,438
75,000 Federal-Mogul Corp., 7.250% due 1/15/09 18,375
330,000 General Motors Acceptance Corp., 6.625% due 10/15/05 (c) 319,275
100,000 Gentek Inc., 11.000% due 8/1/09 99,500
360,000 Green Tree Home Equity Loan Trust, 7.880% due 9/15/30 363,909
50,000 Grey Wolf Inc., 8.875% due 7/1/07 48,750
50,000 HMH Properties Inc., Series C, 8.450% due 12/1/08 47,750
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SALOMON BROTHERS GLOBAL HIGH YIELD PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ SECURITY VALUE
=======================================================================================
<S> <C> <C>
United States -- 61.7% (continued)
Hollywood Casino Corp.:
250,000 13.000% due 8/1/06 (b)(c) $ 268,750
250,000 11.250% due 5/1/07 (c) 258,125
50,000 Intermedia Communications Inc., Series B, 9.500% due 3/1/09 48,375
25,000 JL French Auto Casting, Series B, 11.500% due 6/1/09 14,875
48,000 Lamar Media Corp., 8.625% due 9/15/07 47,280
150,000 Level 3 Communications, 9.125% due 5/1/08 121,875
250,000 MGM Grand Inc., 9.750% due 6/1/07 (e) 260,625
50,000 Murrin Murrin Holdings Property, 9.375% due 8/31/07 44,250
250,000 Musicland Group Inc., 9.875% due 3/15/08 201,250
250,000 Nextlink Communications, 10.500% due 12/1/09 (b) 217,500
25,000 Nuevo Energy Co., 9.375% due 10/1/10 (b) 25,000
250,000 Pillowtex Corp., 10.000% due 11/15/06 38,750
75,000 Polaroid Corp., 11.500% due 2/15/06 (a) 58,875
50,000 Polymer Group Inc., Series B, 9.000% due 7/1/07 35,750
50,000 Price Communications Wireless, Series B, 9.125% due 12/15/06 50,250
250,000 Prison Realty Trust Inc., 12.000% due 6/1/06 163,750
150,000 R & B Falcon Corp., 12.250% due 3/15/06 176,250
200,000 Republic Technologies International, 13.750% due 7/15/09 31,250
50,000 Revlon Consumer Products, 8.125% due 2/1/06 35,250
150,000 Riddell Sports Inc., 10.500% due 7/15/07 (c) 123,750
50,000 Tenet Healthcare Corp., Series B, 7.625% due 6/1/08 47,750
50,000 Vintage Petroleum, 9.750% due 6/30/09 52,625
50,000 Western Gas Resources, 10.000% due 6/15/09 52,250
200,000 Winsloew Furniture Inc., Series B, 12.750% due 8/15/07 185,000
---------------------------------------------------------------------------------------
12,638,295
---------------------------------------------------------------------------------------
Venezuela -- 1.3%
Republic of Venezuela:
178,570 7.875% due 12/18/07 149,552
180,000 9.250% due 9/15/27 119,025
---------------------------------------------------------------------------------------
268,577
---------------------------------------------------------------------------------------
TOTAL BONDS
(Cost -- $16,303,079) 15,035,015
=======================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SALOMON BROTHERS GLOBAL HIGH YIELD PORTFOLIO
SHARES SECURITY VALUE
================================================================================
WARRANTS (f) -- 0.0%
200 Republic Technologies International, Expire 7/15/09 $ 20
200 Winsloew Furniture Inc., Expire 8/15/07 3,000
--------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $1,521) 3,020
================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $16,304,600) 15,038,035
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 26.5%
$ 5,430,000 CIBC Wood Gundy Securities Inc., 6.470% due 11/1/00;
Proceeds at maturity -- $5,430,976; (Fully
collateralized by U.S. Treasury Notes, 5.000%
due 2/28/01;
Market value -- $5,539,244) (Cost -- $5,430,000) 5,430,000
================================================================================
TOTAL INVESTMENTS-- 100%
(Cost -- $21,734,600*) $ 20,468,035
================================================================================
+ 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) This security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be sold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(c) All or a portion of this security is segregated for "to-be-announced"
trades.
(d) Security is issued on a to-be-announced basis (See Note 11).
(e) All or a portion of this security is segregated for open forward foreign
currency contracts.
(f) Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
Currency abbreviations used in this schedule:
--------------------------------------------
EUR -- Euro
GRD -- Greek Drachma
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Smith Barney Salomon
International Pacific Brothers Global
Equity Basin High Yield
Portfolio Portfolio Portfolio
=================================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost -- $ 282,439,175, $14,256,318
and $ 16,304,600, respectively) $ 416,091,696 $ 14,156,102 $ 15,038,035
Repurchase agreements, at value
(Cost -- $20,800,000 and
$5,430,000, respectively) 20,800,000 -- 5,430,000
Foreign currency, at value
(Cost -- $22,344, $437,992
and $3,427, respectively) 18,136 433,691 3,213
Cash 15,534 -- --
Collateral for securities on loan (Note 9) 42,139,400 1,251,264 1,383,222
Receivable for Fund shares sold 26,060,099 369,477 --
Dividends and interest receivable 313,791 20,479 394,183
Receivable for securities sold -- 704,564 --
-------------------------------------------------------------------------------------------------
Total Assets 505,438,656 16,935,577 22,248,653
-------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 9) 42,139,400 1,251,264 1,383,222
Payable for securities purchased 679,081 -- 1,168,389
Management fees payable 345,603 12,252 16,671
Payable for Fund shares purchased 44,473 130 10,008
Payable for open forward foreign
currency contracts (Note 5) 1,180 -- 3,762
Payable to bank -- 1,237,857 132,446
Accrued expenses 131,065 51,542 30,574
-------------------------------------------------------------------------------------------------
Total Liabilities 43,340,802 2,553,045 2,745,072
-------------------------------------------------------------------------------------------------
Total Net Assets $ 462,097,854 $ 14,382,532 $ 19,503,581
=================================================================================================
NET ASSETS:
Par value of capital shares $ 249 $ 18 $ 20
Capital paid in excess of par value 340,456,081 17,224,473 22,664,633
Undistributed net investment income -- -- 1,144,638
Accumulated net realized loss from security
transactions and foreign currencies (11,995,556) (2,737,159) (3,034,333)
Net unrealized appreciation (depreciation)
of investments and foreign currencies 133,637,080 (104,800) (1,271,377)
-------------------------------------------------------------------------------------------------
Total Net Assets $ 462,097,854 $ 14,382,532 $ 19,503,581
=================================================================================================
Shares Outstanding 24,948,274 1,804,104 1,972,050
-------------------------------------------------------------------------------------------------
Net Asset Value $ 18.52 $ 7.97 $ 9.89
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
-------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Smith Barney Salomon
International Pacific Brothers Global
Equity Basin High Yield
Portfolio Portfolio Portfolio
=========================================================================================
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 2,536,067 $ 23,209 $ 1,933,935
Dividends 2,497,650 101,693 1,570
Less: Foreign withholding tax (187,812) (15,708) (5,776)
-----------------------------------------------------------------------------------------
Total Investment Income 4,845,905 109,194 1,929,729
-----------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 4,006,024 224,052 174,410
Custody 240,252 44,367 1,743
Shareholder communications 33,836 4,969 3,274
Shareholder and system servicing fees 32,117 14,506 16,173
Audit and legal 23,109 18,725 8,143
Directors' fees 11,388 2,963 3,490
Pricing service fees 5,944 4,432 2,373
Other 3,819 1,967 2,379
-----------------------------------------------------------------------------------------
Total Expenses 4,356,489 315,981 211,985
-----------------------------------------------------------------------------------------
Net Investment Income (Loss) 489,416 (206,787) 1,717,744
-----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 3 AND 5):
Realized Gain (Loss) From:
Security transactions (excluding
short-term securities) 5,880,900 2,017,473 (1,557,248)
Foreign currency transactions 158,320 (38,797) 51,441
-----------------------------------------------------------------------------------------
Net Realized Gain (Loss) 6,039,220 1,978,676 (1,505,807)
-----------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currencies:
Beginning of year 115,389,356 9,162,242 (2,004,122)
End of year 133,637,080 (104,800) (1,271,377)
-----------------------------------------------------------------------------------------
Change in Net Unrealized
Appreciation (Depreciation) 18,247,724 (9,267,042) 732,745
-----------------------------------------------------------------------------------------
Net Gain (Loss) on Investments
and Foreign Currencies 24,286,944 (7,288,366) (773,062)
-----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations $ 24,776,360 $ (7,495,153) $ 944,682
=========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Smith Barney International Equity Portfolio 2000 1999
=======================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 489,416 $ 425,796
Net realized gain (loss) 6,039,220 (4,842,818)
Increase in net unrealized appreciation 18,247,724 87,298,498
---------------------------------------------------------------------------------------
Increase in Net Assets From Operations 24,776,360 82,881,476
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (3,082,414) (882,111)
---------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (3,082,414) (882,111)
---------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 842,150,836 535,212,306
Net asset value of shares issued
for reinvestment of dividends 3,082,414 882,111
Cost of shares reacquired (713,704,251) (533,425,869)
---------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share
Transactions 131,528,999 2,668,548
---------------------------------------------------------------------------------------
Increase in Net Assets 153,222,945 84,667,913
NET ASSETS:
Beginning of year 308,874,909 224,206,996
---------------------------------------------------------------------------------------
End of year* $ 462,097,854 $ 308,874,909
=======================================================================================
* Includes undistributed net investment income of: -- $ 1,862,808
=======================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Smith Barney Pacific Basin Portfolio 2000 1999
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment loss $ (206,787) $ (48,140)
Net realized gain 1,978,676 1,613,727
(Increase) decrease in net unrealized depreciation (9,267,042) 7,974,805
-----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (7,495,153) 9,540,392
-----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (73,666) --
-----------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (73,666) --
-----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 8,265,343 19,098,468
Net asset value of shares issued
for reinvestment of dividends 73,666 --
Cost of shares reacquired (11,816,180) (15,938,642)
-----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (3,477,171) 3,159,826
-----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (11,045,990) 12,700,218
NET ASSETS:
Beginning of year 25,428,522 12,728,304
-----------------------------------------------------------------------------------
End of year* $ 14,382,532 $ 25,428,522
===================================================================================
*Includes accumulated net investment loss of: -- $ (383,437)
===================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Salomon Brothers Global High Yield Portfolio 2000 1999
===========================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 1,717,744 $ 1,672,918
Net realized loss (1,505,807) (1,261,434)
(Increase) decrease in net unrealized
depreciation 732,745 (594,822)
-------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Operations 944,682 (183,338)
-------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,545,128) (1,482,668)
-------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,545,128) (1,482,668)
-------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 695,141 1,447,542
Net asset value of shares issued
for reinvestment of dividends 1,545,128 1,482,668
Cost of shares reacquired (5,426,995) (6,103,981)
-------------------------------------------------------------------------------------------
Decrease in Net Assets From
Fund Share Transactions (3,186,726) (3,173,771)
-------------------------------------------------------------------------------------------
Decrease in Net Assets (3,787,172) (4,839,777)
NET ASSETS:
Beginning of year 23,290,753 28,130,530
-------------------------------------------------------------------------------------------
End of year* $ 19,503,581 $ 23,290,753
===========================================================================================
* Includes undistributed net investment income of: $ 1,144,638 $ 1,545,396
===========================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney International Equity Portfolio, Smith Barney Pacific Basin
Portfolio and Salomon Brothers Global High Yield Portfolio (formerly known as
INVESCO Global Strategic Income 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 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, Van
Kampen Enterprise, 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. 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
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, 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
overdistributed net investment income amounting to $579,721 was reclassified to
paid-in capital. In addition, for the Smith Barney Pacific Basin Portfolio, a
portion of overdistributed net investment income amounting to $622,716 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"), 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 Salomon Brothers Global High Yield Portfolio ("SBGHY"). SBGHY 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.
Effective July 7, 2000, TIA entered into a sub-advisory agreement with Salomon
Brothers Asset Management Inc. ("SaBAM") replacing the prior agreement with
INVESCO, Inc. Pursuant to the sub-advisory agreement, SaBAM is responsible
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
for the day-to-day portfolio operations and investment decisions for SBGHY and
is compensated for such services. TIA pays SaBAM a monthly fee calculated at an
annual rate of 0.375% of the average daily net assets of SBGHY.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset-based
fees that vary according to the size and type of account. PFPC is responsible
for shareholder recordkeeping and financial processing for all shareholder
accounts and is paid by CFTC. For the year ended October 31, 2000, each of the
Portfolios paid transfer agent fees of $5,000 to CFTC.
Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, acts as the
primary broker for portfolio agency transactions. During the year ended October
31, 2000, SSB received brokerage commissions in the amounts of $19,682 and
$4,681 from SBIE and SBPB, respectively.
All officers and one Director of the Fund are employees of SSB.
3. Investments
For the year ended October 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SBIE SBPB SBGHY
================================================================================
Purchases $ 152,456,124 $ 17,045,240 $ 10,455,959
--------------------------------------------------------------------------------
Sales 59,665,505 20,028,707 16,646,997
================================================================================
At October 31, 2000, the gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
<TABLE>
<CAPTION>
SBIE SBPB SBGHY
===========================================================================================
<S> <C> <C> <C>
Gross unrealized appreciation $ 159,485,837 $ 2,994,274 $ 99,771
Gross unrealized depreciation (25,833,316) (3,094,490) (1,366,336)
-------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 133,652,521 $ (100,216) $ (1,266,565)
===========================================================================================
</TABLE>
4. Capital Loss Carryforward
At October 31, 2000, the Fund had capital loss carryforwards available to offset
future realized capital gains, if any, for Federal income tax purposes of
approximately $11,997,000, $2,728,000 and $2,944,000 for SBIE, SBPB and SBGHY,
respectively. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
--------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
The amounts and expiration of the carryforward losses are indicated below.
Expiration occurs on October 31 of the year indicated.
Portfolio 2006 2007 2008
================================================================================
SBIE $5,750,000 $6,247,000 --
--------------------------------------------------------------------------------
SBPB 2,728,000 -- --
--------------------------------------------------------------------------------
SBGHY 852,000 1,153,000 $939,000
================================================================================
5. Forward Foreign Currency Contracts
At October 31, 2000, 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 loss on the contracts is
reflected as follows:
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Loss
================================================================================
Smith Barney International Equity Portfolio
To Buy:
British Pound 467,656 $677,085 11/7/00 $(1,180)
================================================================================
Salomon Brothers Global High Yield Portfolio
To Sell:
Euro 170,455 $145,069 1/31/01 $(3,762)
================================================================================
6. Futures Contracts
Initial margin deposits are made upon entering into futures contracts and are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities are
also segregated up to the current market value of the futures contracts. During
the period the futures contract is open, changes in the value of the contract
are recognized as unrealized gains or losses by "marking to market" on a daily
basis to reflect the market value of the contract at the end of each day's
trading. Variation margin payments are received or made and recognized as assets
due from or liabilities due to broker, depending upon whether unrealized gains
or losses are incurred. When the contract is closed, the Portfolios record a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transactions and the Portfolios' basis in the contract.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
The Portfolios enter into such contracts to hedge a portion of their portfolios.
The Portfolios bear the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At October 31, 2000, 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, 2000, the Portfolios held no purchased call or put 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 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.
--------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<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, 2000, the Portfolios did not enter into any
written covered call or put option contracts.
8. Reverse Repurchase Agreements
SBGHY may enter into reverse repurchase agreement transactions for leveraging
purposes. A reverse repurchase agreement involves a sale by SBGHY of securities
that it holds with an agreement by SBGHY 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 SBGHY may decline below the
repurchase price of the securities. SBGHY will establish a segregated account
with its custodian, in which SBGHY 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.
During the year ended October 31, 2000, SBGHY did not enter into any reverse
repurchase agreement transactions.
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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
The Portfolios maintain exposure for the risk of any loss in the investment of
amounts received as collateral.
At October 31, 2000, 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 $40,570,665
--------------------------------------------------------------------------------
SBPB 1,192,720
--------------------------------------------------------------------------------
SBGHY 5,531,755
================================================================================
At October 31, 2000, the cash collateral received for these securities on loan
was invested as follows:
Smith Barney International Equity Portfolio
Security Description Value
================================================================================
Time Deposits:
Banco Santander CH S.A.-- London, 6.66% due 11/1/00 $ 2,081,851
Bank of Austria, 6.66% due 11/1/00 2,081,851
Bank of Ireland, 6.69% due 11/1/00 2,081,851
Banque Bruxelles Lambert, 6.66% due 11/1/00 2,081,851
Barclays Bank PLC, 6.66% due 11/1/00 2,081,851
Caisse Des Depots Et Consignations, 6.66% due 11/1/00 2,081,851
FirstStar Bank, G.C., 6.66% due 11/1/00 2,087,833
Nordiutsche Landesbank Singapore, 6.66% due 11/1/00 2,081,851
Toronto Dominion-- London, 6.66% due 11/1/00 2,081,851
Wells Fargo Bank Minnesota N.A., G.C., 6.66% due 11/1/00 2,087,833
Commercial Paper:
Associates Corp. of North America, 6.65% due 11/1/00 2,081,466
GE Capital International, 6.66% due 11/1/00 2,087,447
UBS Finance (Delaware) Inc., 6.65% due 11/1/00 2,081,466
Repurchase Agreements:
Bear Stearns, 6.68% due 11/1/00 4,003,201
CS First Boston Corp., 6.68% due 11/1/00 4,486,748
J.P. Morgan Securities, 6.70% due 11/1/00 2,081,851
Morgan Stanley Dean Witter, 6.61% due 11/1/00 4,486,747
--------------------------------------------------------------------------------
Total $42,139,400
================================================================================
--------------------------------------------------------------------------------
34 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Smith Barney Pacific Basin Portfolio
<TABLE>
<CAPTION>
Security Description Value
======================================================================================
<S> <C>
Time Deposits:
Banco Santander CH S.A.-- London, 6.66% due 11/1/00 $ 61,818
Bank of Austria, 6.66% due 11/1/00 61,817
Bank of Ireland, 6.69% due 11/1/00 61,818
Banque Bruxelles Lambert, 6.66% due 11/1/00 61,817
Barclays Bank PLC, 6.66% due 11/1/00 61,817
Caisse Des Depots Et Consignations, 6.66% due 11/1/00 61,817
FirstStar Bank, G.C., 6.66% due 11/1/00 61,995
Nordiutsche Landesbank Singapore, 6.66% due 11/1/00 61,817
Toronto Dominion-- London, 6.66% due 11/1/00 61,817
Wells Fargo Bank Minnesota N.A., G.C., 6.66% due 11/1/00 61,995
Commercial Paper:
Associates Corp. of North America, 6.65% due 11/1/00 61,806
GE Capital International, 6.66% due 11/1/00 61,984
UBS Finance (Delaware) Inc., 6.65% due 11/1/00 61,806
Repurchase Agreements:
Bear Stearns, 6.68% due 11/1/00 118,869
CS First Boston Corp., 6.68% due 11/1/00 133,227
J.P. Morgan Securities, 6.70% due 11/1/00 61,817
Morgan Stanley Dean Witter, 6.61% due 11/1/00 133,227
--------------------------------------------------------------------------------------
Total $ 1,251,264
======================================================================================
Salomon Brothers Global High Yield Portfolio
Security Description Value
======================================================================================
Time Deposits:
Banco Santander CH S.A. -- London, 6.66% due 11/1/00 $ 68,337
Bank of Austria, 6.66% due 11/1/00 68,337
Bank of Ireland, 6.69% due 11/1/00 68,337
Banque Bruxelles Lambert, 6.66% due 11/1/00 68,336
Barclays Bank PLC, 6.66% due 11/1/00 68,337
Caisse Des Depots Et Consignations, 6.66% due 11/1/00 68,336
FirstStar Bank, G.C., 6.66% due 11/1/00 68,533
Nordiutsche Landesbank Singapore, 6.66% due 11/1/00 68,336
Toronto Dominion -- London, 6.66% due 11/1/00 68,336
Wells Fargo Bank Minnesota N.A., G.C., 6.66% due 11/1/00 68,533
Commercial Paper:
Associates Corp. of North America, 6.65% due 11/1/00 68,324
GE Capital International, 6.66% due 11/1/00 68,520
UBS Finance (Delaware) Inc., 6.65% due 11/1/00 68,324
Repurchase Agreements:
Bear Stearns, 6.68% due 11/1/00 131,405
CS First Boston Corp., 6.68% due 11/1/00 147,277
J.P. Morgan Securities, 6.70% due 11/1/00 68,337
Morgan Stanley Dean Witter, 6.61% due 11/1/00 147,277
--------------------------------------------------------------------------------------
Total $ 1,383,222
======================================================================================
</TABLE>
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
In addition to the above noted cash collateral, the Portfolios held securities
collateral with a market value of $365,177 and $4,300,949 for SBIE and SBGHY,
respectively, as of October 31, 2000.
Interest income earned by the Portfolios from securities loaned for the year
ended October 31, 2000, was as follows:
================================================================================
SBIE $ 151,612
--------------------------------------------------------------------------------
SBPB 10,918
--------------------------------------------------------------------------------
SBGHY 13,540
================================================================================
10. Portfolio Concentration
The Portfolios' investments in foreign securities may involve risks not present
in domestic investments. Since securities may be denominated in a foreign
currency and may require settlement in foreign currencies and pay interest or
dividends in foreign currencies, changes in the relationship of these foreign
currencies to the U.S. dollar can significantly affect the value of the
investments and earnings of the Portfolios. Foreign investments may also subject
the Portfolios to foreign government exchange restrictions, expropriation,
taxation or other political, social or economic developments, all of which could
affect the market and/or credit risk of the investments. As of October 31, 2000,
74.8% 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 SBGHY 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, 2000, SBGHY held one TBA security with a total cost of
$1,165,900.
--------------------------------------------------------------------------------
36 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
12. Capital Shares
At October 31, 2000, the Fund had six billion shares of capital stock authorized
with a par value of $0.00001 per share. Each share of a Portfolio represents an
equal proportionate interest in that Portfolio with each share of the same
Portfolio and has an equal entitlement to any dividends and distributions made
by the Portfolio.
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 2000 October 31, 1999
=======================================================================================
<S> <C> <C>
Smith Barney International Equity Portfolio
Shares sold 41,061,216 37,523,494
Shares issued on reinvestment 157,830 59,764
Shares reacquired (34,522,435) (37,128,444)
---------------------------------------------------------------------------------------
Net Increase 6,696,611 454,814
=======================================================================================
Smith Barney Pacific Basin Portfolio
Shares sold 775,886 2,264,030
Shares issued on reinvestment 6,758 --
Shares reacquired (1,138,397) (1,971,974)
---------------------------------------------------------------------------------------
Net Increase (Decrease) (355,753) 292,056
=======================================================================================
Salomon Brothers Global High Yield Portfolio
Shares sold 67,894 132,083
Shares issued on reinvestment 157,185 144,792
Shares reacquired (532,283) (562,926)
---------------------------------------------------------------------------------------
Net Decrease (307,204) (286,051)
=======================================================================================
</TABLE>
------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney International
Equity Portfolio 2000(1) 1999 1998 1997 1996
==================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.92 $ 12.60 $ 13.23 $ 12.18 $ 10.48
--------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.02 0.02 0.05 0.01 0.02
Net realized and unrealized
gain (loss) 1.71 4.35 (0.68) 1.05 1.69
--------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.73 4.37 (0.63) 1.06 1.71
--------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.13) (0.05) -- (0.01) (0.01)
--------------------------------------------------------------------------------------------------
Total Distributions (0.13) (0.05) -- (0.01) (0.01)
--------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 18.52 $ 16.92 $ 12.60 $ 13.23 $ 12.18
--------------------------------------------------------------------------------------------------
Total Return 10.18% 34.73% (4.76)% 8.73% 16.36%
--------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 462 $ 309 $ 224 $ 219 $ 143
--------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.98% 1.00% 1.00% 1.01% 1.10%
Net investment income 0.11 0.16 0.37 0.09 0.23
--------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 15% 36% 34% 38% 41%
==================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the montly average shares
method.
(2) During the year ended October 31, 1996, the Portfolio had earned credits
from the custodian which reduced service fees incurred. When the credits are
taken into consideration the expense ratio is 1.05%.
--------------------------------------------------------------------------------
38 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
<TABLE>
<CAPTION>
Smith Barney Pacific
Basin Portfolio 2000(1) 1999 1998(1) 1997 1996
=============================================================================================
Net Asset Value, Beginning of Year $ 11.77 $ 6.81 $ 8.04 $ 9.75 $ 8.95
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income (Loss) From Operations:
Net investment income (loss)(2) (0.10) (0.14) (0.00)* (0.01) 0.08
Net realized and unrealized
gain (loss) (3.67) 5.10 (1.14) (1.64) 0.75
---------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (3.77) 4.96 (1.14) (1.65) 0.83
---------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) -- (0.09) (0.06) (0.03)
---------------------------------------------------------------------------------------------
Total Distributions (0.03) -- (0.09) (0.06) (0.03)
---------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 7.97 $ 11.77 $ 6.81 $ 8.04 $ 9.75
---------------------------------------------------------------------------------------------
Total Return (32.07)% 72.83% (14.09)% (17.02)% 9.26%
---------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 14 $ 25 $ 13 $ 18 $ 17
---------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 1 .28 1. 30% 1.56% 1 .38 1.34%
Net investment income (loss) (0.84) (0.29) (0.03) (0.08) 0.47
---------------------------------------------------------------------------------------------
Portfolio Turnover Rate 70% 99% 136% 156% 59%
=============================================================================================
</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,
1996. If such fees were not waived, the effect on the net investment income
and the expense ratio would have been as follows:
Per Share Expense Ratio
Decrease to Net Without Fee Waiver
Investment Income and Custody Credits
------------------- ---------------------
1996 $0.02 1.58%
In addition, during the year ended October 31, 1996, the Portfolio had
earned credits from the custodian which reduced service fees incurred. If
the credits are taken into consideration the expense ratio is 1.17%.
* Amount represents less than $0.01.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For a share of capital stock outstanding throughout each year ended October 31,
except where noted:
Salomon Brothers Global
High Yield Portfolio 2000(1) 1999 1998 1997(1) 1996
===================================================================================================
Net Asset Value, Beginning of Year $ 10.22 $ 10.97 $ 12.52 $ 12.45 $ 10.77
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income (Loss) From Operations:
Net investment income(2) 0.81 0.75 0.84 0.75 0.74
Net realized and unrealized
gain (loss) (0.37) (0.85) (1.09) 0.36 1.36
---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.44 (0.10) (0.25) 1.11 2.10
---------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.77) (0.65) (0.66) (0.46) (0.42)
Net realized gains -- -- (0.64) (0.58) --
---------------------------------------------------------------------------------------------------
Total Distributions (0.77) (0.65) (1.30) (1.04) (0.42)
---------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 9.89 $ 10.22 $ 10.97 $ 12.52 $ 12.45
---------------------------------------------------------------------------------------------------
Total Return 4.34% (0.96)% (2.50)% 9.32% 20.07%
---------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 20 $ 23 $ 28 $ 29 $ 19
---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.98% 1.13% 1.03% 1.07% 1.23%
Net investment income 7.93 6.43 7.31 6.05 6.87
---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 54% 135% 280% 161% 192%
===================================================================================================
</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,
1996. If such fees were not waived, the per share effect on net investment
income and expense ratio 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%
In addition, during the year ended October 31, 1996, the Portfolio had earned
credits from the custodian which reduced service fees incurred. If the credits
are taken into consideration the expense ratio is 1.11%.
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
A total of 20.83% of the ordinary dividends paid by SBGHY from net investment
income are derived from Federal obligations and may be exempt from taxation at
the state level.
--------------------------------------------------------------------------------
40 2000 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 International Equity, Smith
Barney Pacific Basin and Salomon Brothers Global High Yield Portfolios of
Travelers Series Fund Inc. as of October 31, 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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 Salomon Brothers
Global High Yield Portfolios of Travelers Series Fund Inc. as of October 31,
2000, 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 accounting principles generally accepted in the United States
of America.
/s/ KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<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
David S. Ishibashi
Vice President
Peter Wilby
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 Salomon Brothers Global High Yield 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 12/00
<PAGE>
Travelers Series Fund Inc.
Smith Barney High Income Portfolio
Putnam Diversified Income Portfolio
-------------
ANNUAL REPORT
-------------
October 31, 2000
[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 Portfolio and Putnam Diversified Income Portfolio
("Portfolio(s)") for the year ended October 31, 2000./1/ In this report we have
summarized the period's prevailing economic and market conditions and outlined
our investment strategy. A detailed summary of the Portfolios' performances can
be found in the appropriate sections that follow. We hope you find this report
to be useful and informative.
Portfolio Highlights
Smith Barney High Income Portfolio
For the year ended October 31, 2000, the Smith Barney High Income Portfolio
returned a negative 3.54%. In comparison, the Salomon Smith Barney Intermediate
High Yield Market Index/2/ and the Portfolio's Lipper Inc. ("Lipper")/3/ peer
group both had negative total returns of 1.99% and 4.83%, respectively, for the
same period.
The Portfolio's investment objective is high current income. The Portfolio
generally invests in intermediate and long-term debt obligations. In seeking to
achieve the Portfolio's objective, the manager looks to maintain broad
diversification across a number of investment sectors searching for debt
securities that have the potential to offer a high yield as well as relative
price stability.
--------------
1 The Portfolios are underlying investment options of various variable
annuity products. A variable annuity product is a contract issued by an
insurance company in which the annuity premium (a set amount of dollars) is
immediately turned into units of a portfolio of securities. Upon
retirement, the policy holder is paid according to accumulated units whose
dollar value varies according to the performance of the securities within
the subaccounts. Its objective is to preserve, through investment, the
purchasing value of the annuity which otherwise is subject to erosion
through inflation. The performance returns for these Portfolios do not
reflect expenses imposed in connection with investing in variable annuity
contracts such as administrative fees, account charges and surrender
charges, which, if reflected, would reduce the performance of the
Portfolios. Past performance is not indicative of future results.
2 The Salomon Smith Barney Intermediate High Yield Market Index comprises
both cash-pay and deferred-interest bonds with a remaining maturity of at
least seven years, but less than ten years. Please note that an investor
cannot invest directly in an index.
3 Lipper is an independent mutual fund-tracking organization.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
The high-yield bond market continued to deteriorate during the period as
investors tried to sort out the muddled economic outlook. With median spread
levels of over 850 basis points/4/ above U.S. Treasuries as of October 2000, the
high-yield bond market appeared as though it may be anticipating an economic
recession in the U.S.
The manager believes the market's sell-off may be an overreaction caused by
year-end tax loss selling combined with market illiquidity. The manager also
believes that the Federal Reserve Board ("Fed") may lower short-term interest
rates enough to prevent a recession from taking hold, and that the high-yield
bond market may react positively to an easing of monetary policy. Despite the
fact that investor sentiment is negative at this time, the manager maintains a
positive outlook. In the view of the manager, most of the bad news on slowing
economic growth and corporate profits has already been discounted by the
high-yield bond market.
During the period, the high-yield bond market generated a negative return of
roughly 7.50% compared to positive returns in the 5.00% to 12.00% range in the
U.S. Treasury market and in the 4.50% to 7.00% range in the investment-grade/5/
corporate bond market. The best performing segment of the U.S. bond market
during 2000 has been long-term U.S. Treasuries. The manager believes that the
government buyback of long-term U.S. Treasuries has largely contributed to their
performance in 2000.
In the manager's view, there are several factors driving high-yield bond
valuations down to undervalued levels such as:
. The Fed's recent tightening bias that has withdrawn liquidity from the
bond markets;
. Various Wall Street dealers reducing their exposure to high-yield
bonds and investment-grade corporate bonds to protect their own
balance sheets; and
. Redemptions out of open-end bond mutual funds, especially high-yield
bond mutual funds, exerting even more downward pressure on high-yield
bond prices as mutual funds are forced to liquidate their bond
positions to meet those redemptions.
--------------
4 A basis point is 0.01% or one one-hundredth of a percent.
5 Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc. or AAA, AA, A and BBB by Standard and Poor's
Ratings Service, or that have an equivalent rating by any nationally
recognized statistical rating organization, or are determined by the
portfolio manager to be of equivalent quality. Source of the statistics
quoted in the paragraph is SSB Citi Fund Management LLC.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
Due to a combination of increased defaults among the lesser-quality credits as
well as new issue supply pressures in B/B rated issues earlier in the year, the
manager thinks that the lower to middle-quality segments (Caa/CCC and B/B rated
issues), of the high-yield bond market, did not perform well through October 31,
2000. During the period, most industry sectors did not perform well, especially
the more economically sensitive sectors such as basic materials, capital goods
manufacturing and transportation. The economic slowdown has caused downward
earnings revisions among the more economically sensitive companies.
In addition, the once popular telecommunications sector has significantly
underperformed the overall market given the heavy capital needs of the industry
and the current difficulty in the bond market for many companies to obtain
additional capital to complete their business plans. The manager believes this
is a short-term problem that may eventually be resolved as the markets
stabilize.
The only industry sectors that posted positive returns from January through
October of 2000 were energy, health care, media and operating utilities. These
sectors have continued to experience considerable positive momentum, and the
manager feels that they may be less vulnerable to any potential economic
slowdown. The Portfolio's overweighting in B/B rated telecommunications issues
held back its performance during the period. Despite this weak performance, the
manager continues to believe that these issues may outperform when and if the
high-yield bond market stabilizes.
Going forward, the manager plans to emphasize less economically sensitive growth
sectors and maintain a reasonable balance in overall credit quality while
looking for opportunities in a volatile market. The manager remains positive on
the long-term prospects for the high-yield bond market and believes the worst of
the correction has taken place. However, the manager also thinks that a
meaningful improvement in high-yield bond prices may not be seen until the Fed
begins to reverse the interest rate increases instituted over the past year and
a half. (Of course, no guarantees can be given that the manager's expectations
will be met.)
Putnam Diversified Income Portfolio
For the year ended October 31, 2000, the Putnam Diversified Income Portfolio
returned 0.21%. In comparison, the Lehman Brothers Aggregate Bond Index/6/
returned 7.30% and the Salomon Smith Barney Non-U.S. World Government Bond Index
- Unhedged/7/ returned a negative 9.70% for the same period.
--------------
6 The Lehman Brothers Aggregate Bond Index is an unmanaged index composed of
the Lehman Brothers Intermediate Government/Bond Index and the
Mortgage-Backed Securities Index, and includes U.S. Treasury issues, agency
issues, corporate bond issues and mortgage-backed securities. Please note
that an investor cannot invest directly in an index.
7 The Salomon Smith Barney Non-U.S. World Government Bond Index - Unhedged is
an unmanaged index composed of foreign government bonds. Please note that
an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
The Portfolio's investment objective is high current income as is consistent
with preservation of capital. The Portfolio invests primarily in debt securities
of U.S. and foreign governments and corporations. The Portfolio may invest in
securities with a wide range of credit qualities depending on the particular
sector of the bond market in which the manager invests.
The manager combines "top down"/8/ and "bottom up"/9/ investment styles,
allocating the Portfolio's investments among various sectors of the bond market.
The Portfolio has holdings in the following three bond market areas: U.S.
Government bonds, high-yield bonds and international bonds.
In the manager's view, the Portfolio delivered competitive performance in
changing markets. Anticipating an uneventful Y2K transition, investors focused
their attention on the riskier sectors of the market in the fourth quarter of
1999, which contributed to strong performance for these sectors into 2000. Once
the Y2K transition passed, worries over inflation and fallout from the Federal
Reserve Board's ("Fed") decisions to increase interest rates in February, March
and April greatly impacted both stock and bond markets. By the middle of 2000,
the markets stabilized somewhat, inflation remained benign, the U.S. economy
began to show signs of slowing, and the risk of further Fed interest rate
increases subsided. The manager believes that these economic factors, combined
with an investment strategy focused on diversification, positively contributed
to the Portfolio's performance during the period.
The performance of investment-grade bonds/10/ reflected the changing economic
environment and the U.S. Treasury yield curve./11/ An ambitious buyback of
long-term U.S. Treasury bonds pushed prices sharply higher, which benefited the
Portfolio's position in this area. At the opposite end of the yield spectrum,
increases in short-term interest rates from June 1999 through May 2000 depressed
the prices of short-term U.S. Treasury investments, causing an inverted yield
curve/12/ for most of the year. In the manager's opinion, the performance of
other sectors of the bond market were also impacted by the prices of U.S.
Treasuries because Treasury securities are often used as benchmarks in measuring
the performance of the bond market.
--------------
8 Top down investing is a method of looking at the trend in the general
economy, then selecting companies in industries most likely to benefit from
those trends.
9 Bottom up investing is a search for outstanding performance of individual
stocks before considering the impact of economic trends.
10 Investment-grade bonds are those bonds rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc. or AAA, AA, A and BBB by Standard and Poor's
Ratings Service, or that have an equivalent rating by any nationally
recognized statistical rating organization, or are determined by the
manager to be of equivalent quality.
11 The yield curve is the graphical depiction of the relationship between the
yield on bonds of the same credit quality but different maturities.
12 An inverted yield curve is an unusual situation in which short-term
interest rates are higher than long-term rates.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
The Portfolio's other major investment-grade holdings include mortgage-backed
securities. Rising mortgage rates held down refinancing, and thus reduced
certain risks inherent in these investments. During the period, the manager
concentrated on securities that benefited most from the slowing pace of
prepayments./13/
The manager believes that many factors contributed to the underperformance of
high-yield bonds during the period, including the declining performance of the
stock market and negative industry and mutual fund cash flows. Although the
high-yield bond market rallied in the fourth quarter of 1999, market volatility
that stemmed from stock market corrections negatively impacted high-yield bonds
during the period. The technology and telecommunications sectors experienced
some of the roughest waters, and despite the manager's decision to trim back the
Portfolio's holding in these areas, it did not completely escape the effects.
Moreover, high default rates in the high-yield bond sector also concerned many
investors.
The international markets delivered mixed results during the period. Although
many emerging markets performed well, the Portfolio's positions in Mexico and
Russia proved to be particularly beneficial. Within the developed markets, the
Portfolio's manager maintained an underweighted position in Japan. The manager
took advantage of opportunities for further European integration over the year,
while also taking advantage of the government bond investment opportunities in
other countries, including Canada and Australia.
During the period, currency exposure did not contribute to the Portfolio's
performance. The value of the euro/14/ slowly declined, while the strength of
the U.S. economy attracted higher capital flows from Europe. Despite this
situation, the Portfolio's manager believes the euro may recover, since he
thinks its fundamental value remains supportive.
In the next few months, the manager anticipates that U.S. Treasury yields may
become more stable and that the economy may likely experience a soft landing.
Such an eventuality has already been priced into expectations of no further Fed
tightening and the possibility of some easing in the upcoming months. Because a
stable environment generally favors mortgage-backed securities, the manager
continues to view these securities positively over the long term.
--------------
13 Prepayment is paying a loan before maturity. Some loans (particularly
mortgages) have a prepayment clause that allows prepayment at any time
without penalty, while others charge a fee if a loan is paid off before
due.
14 The euro is the single currency of the European Monetary Union that was
adopted by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland on January 1, 1999.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
The manager also believes that several factors point to a positive long- term
outlook for high-yield bonds in 2001. The manager thinks defaults may peak soon
and eventually decline, yields may be attractive on a historical basis and many
of the uncertainties that have caused the high-yield market to struggle may show
signs of subsiding.
Although some volatility and uncertainty may be seen in the months ahead, the
manager believes the Portfolio is well positioned to meet any further
challenges. (Of course, no guarantees can be made that the manager's investment
approach will continue to be successful.)
In closing, thank you for your investment 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 22, 2000
The information provided in this letter represents the opinion of the managers
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Portfolios. Please refer to pages 11
through 52 for a list and percentage breakdown of the Portfolios' holdings.
Also, please note any discussion of the Portfolios' holdings is as of October
31, 2000 and is subject to change.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
Smith Barney High Income Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Capital Gain Total
Year Ended of Year of Year Dividends Distributions Returns+
================================================================================
10/31/00 $11.72 $10.29 $1.07 $0.00 (3.54)%
--------------------------------------------------------------------------------
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 $4.08 $0.23
================================================================================
It is the Portfolio's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/00 (3.54)%
--------------------------------------------------------------------------------
Five Years Ended 10/31/00 5.05
--------------------------------------------------------------------------------
6/16/94* through 10/31/00 6.25
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Return+
--------------------------------------------------------------------------------
================================================================================
6/16/94* through 10/31/00 47.25%
================================================================================
+ Assumes the reinvestment of all dividends and capital gains distributions.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
* Commencement of operations.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney High Income Portfolio vs.
Salomon Smith Barney Intermediate High Yield Market Index+
--------------------------------------------------------------------------------
June 1994 -- October 2000
[GRAPH]
Salomon Smith Barney
Smith Barney Intermediate High Yield
DATE High Income Market 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
10/99 15,265 15,093
10/31/00 14,726 14,817
+ 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, 2000. 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 as 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 2000 Annual Report to Shareholders
<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+
================================================================================
10/31/00 $11.24 $10.31 $0.98 $0.00 0.21%
--------------------------------------------------------------------------------
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 $3.11 $0.36
================================================================================
It is the Portfolio's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/00 0.21%
--------------------------------------------------------------------------------
Five Years Ended 10/31/00 3.76
--------------------------------------------------------------------------------
6/16/94* through 10/31/00 5.30
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Return+
--------------------------------------------------------------------------------
================================================================================
6/16/94* through 10/31/00 39.02%
================================================================================
+ Assumes the reinvestment of all dividends and capital gains distributions.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
* Commencement of operations.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<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 2000
[GRAPH]
Salomon Brothers
Putnam Non-U.S. World Lehman Brothers
Diversified Government Bond Aggregate
DATE Income Index - Unhedged Bond Index
6/16/94 10,000 10,000 10,000
10/94 10,180 10,554 10,052
10/95 11,560 12,155 11,626
10/96 12,650 12,818 12,305
10/97 13,717 14,410 13,399
10/98 13,628 16,254 13,651
10/99 13,873 15,772 14,730
10/31/00 13,902 13,265 16,029
+ 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, 2000. 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 as 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.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
==========================================================================================
<S> <C>
CORPORATE BONDS AND NOTES -- 89.1%
Aerospace & Defense -- 1.5%
BE Aerospace Inc., Sr. Sub. Notes:
375,000 B 9.500% due 11/1/08 $ 369,375
Series B:
300,000 B 9.875% due 2/1/06 295,500
1,785,000 B 8.000% due 3/1/08 1,660,050
375,000 B- Dunlop Standard Aerospace Holdings, Sr. Notes,
11.875% due 5/15/09 375,000
------------------------------------------------------------------------------------------
2,699,925
------------------------------------------------------------------------------------------
Airlines -- 0.6%
1,402,534 BB Airplanes Pass-Thru Trust, Corporate Asset-Backed
Securities, Series 1, Class D, 10.875% due 3/15/19 1,058,114
------------------------------------------------------------------------------------------
Alternative Power Generation -- 4.0%
AES Corp.:
Sr. Notes:
2,635,000 Ba1* 9.500% due 6/1/09 2,694,287
1,140,000 Ba1* 9.375% due 9/15/10 1,162,800
1,595,000 Ba3* Sr. Sub. Notes, 10.250% due 7/15/06 1,630,888
825,000 Ba2* AES Drax Energy Ltd., Secured Notes,
11.500% due 8/30/10 (b) 870,375
1,000,000 BB+ Calpine Corp., Sr. Notes, 10.500% due 5/15/06 1,030,000
------------------------------------------------------------------------------------------
7,388,350
------------------------------------------------------------------------------------------
Aluminum -- 1.0%
Kaiser Aluminum & Chemical Corp.:
Sr. Notes:
95,000 B1* Series B, 10.875% due 10/15/06 80,275
180,000 B1* Series D, 10.875% due 10/15/06 152,100
2,285,000 B3* Sr. Sub. Notes, 12.750% due 2/1/03 1,725,175
------------------------------------------------------------------------------------------
1,957,550
------------------------------------------------------------------------------------------
Apparel/Footwear -- 1.1%
400,000 BB- Levi Strauss & Co., Notes, 7.000% due 11/1/06 294,000
Tommy Hilfiger USA Inc., Guaranteed Notes:
240,000 BBB- 6.500% due 6/1/03 182,700
755,000 BBB- 6.850% due 6/1/08 483,200
1,340,000 B- Tropical Sportswear International Corp., Guaranteed
Sr. Sub. Notes, Series A, 11.000% due 6/15/08 1,179,200
------------------------------------------------------------------------------------------
2,139,100
------------------------------------------------------------------------------------------
Apparel/Footwear Retail -- 0.4%
745,000 CCC+ J. Crew Operating Corp., Sr. Sub. Notes,
10.375% due 10/15/07 651,875
------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C> <C>
Auto Parts -- 0.4%
150,000 B Collins & Aikman Products Co., Guaranteed Sr. Sub. Notes,
11.500% due 4/15/06 $ 130,125
765,000 B Hayes Lemmerz International Inc., Guaranteed Sr. Sub. Notes,
Series B, 8.250% due 12/15/08 573,750
-------------------------------------------------------------------------------------------------
703,875
-------------------------------------------------------------------------------------------------
Beverages: Non-Alcoholic -- 0.6%
1,060,000 B- Triarc Consumer Beverage, Guaranteed Notes,
10.250% due 2/15/09 1,192,500
-------------------------------------------------------------------------------------------------
Broadcasting -- 0.8%
508,500 NR AMFM Operating Inc., Debentures, 12.625% due 10/31/06 572,063
Young Broadcasting Corp., Sr. Sub. Notes:
330,000 B 11.750% due 11/15/04 338,250
560,000 B 10.125% due 2/15/05 557,200
-------------------------------------------------------------------------------------------------
1,467,513
-------------------------------------------------------------------------------------------------
Building Products -- 0.3%
240,000 B Amatek Industries Property Ltd., Sr. Sub. Notes,
12.000% due 2/15/08 163,200
485,000 B- Atrium Cos., Inc., Guaranteed Sr. Sub. Notes, Series B,
10.500% due 5/1/09 414,675
-------------------------------------------------------------------------------------------------
577,875
-------------------------------------------------------------------------------------------------
Cable/Satellite TV -- 10.8%
Adelphia Communications Corp.:
3,440,000 B+ Sr. Discount Notes, Series B, zero coupon due 1/15/08 1,341,600
Sr. Notes:
170,000 B+ 9.750% due 2/15/02 168,725
490,000 B+ 8.750% due 10/1/07 420,175
525,000 B+ 10.875% due 10/1/10 493,500
870,000 B+ Series B, 8.375% due 2/1/08 717,750
250,000 CCC+ Cable Satisfaction International, Inc., Sr. Notes,
12.750% due 3/1/10 (c) 201,250
Charter Communications Holdings:
2,345,000 B+ Sr. Discount Notes, step bond to yield 11.711% due 1/15/10 1,360,100
1,110,000 B+ Sr. Notes, 8.625% due 4/1/09 1,004,550
1,300,000 BB- CSC Holdings, Inc., Sr. Sub. Debentures, 10.500% due 5/15/16 1,404,000
2,025,000GBP B- Diamond Holdings PLC, Guaranteed Notes,
10.000% due 2/1/08 2,519,515
EchoStar Communications, Sr. Notes:
1,315,000 B 10.375% due 10/1/07 (b) 1,324,862
410,000 B+ 9.375% due 2/1/09 404,875
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Cable/Satellite TV -- 10.8% (continued)
NTL Communications Corp., Sr. Notes:
400,000 B 11.875% due 10/1/10 (b) $ 372,000
1,825,000 B Series B, 11.500% due 10/1/08 1,679,000
1,680,000 Ba2* Rogers Cablesystems, Ltd., Guaranteed Sr. Sub. Debentures,
11.000% due 12/1/15 1,877,400
790,000GBP B+ Telewest Communications PLC, Sr. Discount Notes,
step bond to yield 17.319% due 4/15/09 496,202
3,005,000 B- United International Holdings, Inc., Sr. Discount Notes,
Series B, step bond to yield 11.701% due 2/15/08 1,848,075
5,890,000 B United Pan-Europe Communications N.V., Sr. Discount Notes,
Series B, step bond to yield 12.500% due 8/1/09 2,326,550
-------------------------------------------------------------------------------------------------
19,960,129
-------------------------------------------------------------------------------------------------
Casinos/Gaming -- 3.8%
1,450,000 B Hollywood Casino Corp., Guaranteed Notes,
11.250% due 5/1/07 1,497,125
635,000 B+ Horseshoe Gaming Holding Corp., Guaranteed Sr. Sub. Notes,
Series B, 8.625% due 5/15/09 615,950
14,668 NR Jazz Casino Co. LLC, Sr. Sub. Notes, 6.046% due 11/15/09 2,567
Mandalay Resort Group:
160,000 BB- Sr. Sub. Debentures, 7.625% due 7/15/13 132,800
310,000 BB- Sr. Sub. Notes, Series B, 10.250% due 8/1/07 318,525
470,000 BB+ Park Place Entertainment Corp., Sr. Sub. Notes,
8.875% due 9/15/08 462,950
515,000 B+ Station Casinos, Inc., Sr. Sub. Notes, 9.875% due 7/1/10 (b) 518,863
Sun International Hotels Ltd., Guaranteed Sr. Sub. Notes:
920,000 B+ 9.000% due 3/15/07 859,050
1,200,000 B+ 8.625% due 12/15/07 1,107,000
1,445,000 B- Venetian Casino Resort LLC, Guaranteed Notes,
12.250% due 11/15/04 1,470,288
-------------------------------------------------------------------------------------------------
6,985,118
-------------------------------------------------------------------------------------------------
Chemicals - Major Diversified -- 1.0%
Huntsman Corp.:
285,000 B+ Guaranteed Sr. Sub. Notes, 10.125% due 7/1/09 272,175
5,000,000 B+ Sr. Discount Notes, zero coupon due 12/31/09 1,500,000
-------------------------------------------------------------------------------------------------
1,772,175
-------------------------------------------------------------------------------------------------
Chemicals - Specialty -- 0.3%
485,000 B Avecia Group PLC, Guaranteed Sr. Notes, 11.000% due 7/1/09 468,025
-------------------------------------------------------------------------------------------------
Coal-- 0.0%
895,000 Ca* AEI Resources Inc., Guaranteed Notes,
10.500% due 12/15/05 (b) 76,075
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Construction Materials -- 0.8%
Nortek Inc.:
1,245,000 B+ Sr. Notes, Series B, 9.125% due 9/1/07 $1,120,500
470,000 B- Sr. Sub. Notes, 9.875% due 3/1/04 425,350
-------------------------------------------------------------------------------------------------
1,545,850
-------------------------------------------------------------------------------------------------
Consumer Specialties -- 0.4%
670,000 B Jostens, Inc., Sr. Sub. Notes, 12.750% due 5/1/10 (b) 649,900
-------------------------------------------------------------------------------------------------
Containers/Packaging -- 2.6%
310,000 BBB- Crown Cork & Seal Co., Sr. Notes, 7.125% due 9/1/02 242,188
515,000 B- SF Holdings Group Inc., Sr. Discount Notes, Series B,
step bond to yield 18.075% due 3/15/08 267,800
Stone Container Corp.:
1,635,000 B Guaranteed Sr. Notes, 11.500% due 8/15/06 (b) 1,675,875
1,075,000 Ba3* Term Loan, 10.282% due 12/31/06 1,072,313
955,000 B- Sweetheart Cup Co., Inc., Sr. Sub. Notes, 10.500% due 9/1/03 873,825
765,000 NR Tekni-Plex Inc., Sr. Sub. Notes, 12.750% due 6/15/10 699,975
-------------------------------------------------------------------------------------------------
4,831,976
-------------------------------------------------------------------------------------------------
Contract Drilling -- 2.3%
1,340,000 B+ Parker Drilling Co., Guaranteed Sr. Notes, Series D,
9.750% due 11/15/06 1,319,900
1,060,000 BB Pride International Inc., Sr. Notes, 10.000% due 6/1/09 1,102,400
RBF Finance Corp.:
725,000 BB- Guaranteed Sr. Secured Notes, 11.375% due 3/15/09 830,125
785,000 B+ Sr. Notes, 12.250% due 3/15/06 922,375
-------------------------------------------------------------------------------------------------
4,174,800
-------------------------------------------------------------------------------------------------
Discount Chains -- 0.4%
675,000 Baa3* Kmart Corp., Debentures, 12.500% due 3/1/05 687,656
-------------------------------------------------------------------------------------------------
Electric Utilities -- 0.6%
540,000 BB CMS Energy Corp., Sr. Notes, 9.875% due 10/15/07 545,400
550,000 Ba3* Orion Power Holdings Inc., Sr. Notes, 12.000% due 5/1/10 (b) 585,750
-------------------------------------------------------------------------------------------------
1,131,150
-------------------------------------------------------------------------------------------------
Electronic Components -- 0.8%
407,000 BB- Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 420,228
1,020,000 Ba3* Flextronics International Ltd., Sr. Sub. Notes,
9.875% due 7/1/10 (b) 1,035,300
-------------------------------------------------------------------------------------------------
1,455,528
-------------------------------------------------------------------------------------------------
Electronic Production Equipment -- 0.2%
470,000 B1* Amkor Technologies Inc., Sr. Sub. Notes, 10.500% due 5/1/09 462,950
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Electronics/Appliances -- 0.3%
705,000 BB- Polaroid Corp., Sr. Notes, 11.500% due 2/15/06 $ 553,425
-------------------------------------------------------------------------------------------------
Engineering & Construction -- 1.2%
630,000 BB- Integrated Electrical Services Inc., Guaranteed Sr. Sub. Notes,
Series B, 9.375% due 2/1/09 554,400
1,205,000 B+ Metromedia Fiber Network, Sr. Notes, Series B,
10.000% due 11/15/08 1,072,450
600,000 B- Orius Capital Corp., Guaranteed Sr. Sub. Notes, Series B,
12.750% due 2/1/10 567,000
-------------------------------------------------------------------------------------------------
2,193,850
-------------------------------------------------------------------------------------------------
Environmental Services -- 3.7%
Allied Waste North America, Inc.:
Series B:
650,000 BB- Guaranteed Sr. Notes, 7.875% due 1/1/09 563,875
5,595,000 B+ Guaranteed Sr. Sub. Notes, 10.000% due 8/1/09 4,811,700
240,000 BB Term Loan, 9.438% due 7/21/06 227,700
288,000 BB Term Loan, 9.704% due 7/21/07 273,240
905,000 B+ URS Corp., Sr. Sub. Notes, Series B, 12.250% due 5/1/09 932,150
-------------------------------------------------------------------------------------------------
6,808,665
-------------------------------------------------------------------------------------------------
Finance/Rental/Leasing -- 0.2%
165,000 BB- Avis Group Holdings Inc., Guaranteed Sr. Sub. Notes,
11.000% due 5/1/09 176,550
370,000 B Nationsrent, Inc., Guaranteed Sr. Sub. Notes,
10.375% due 12/15/08 205,350
-------------------------------------------------------------------------------------------------
381,900
-------------------------------------------------------------------------------------------------
Financial Conglomerates -- 0.4%
AMRESCO Inc., Sr. Sub. Notes:
500,000 CCC- Series 97-A, 10.000% due 3/15/04 272,500
885,000 CCC- Series 98-A, 9.875% due 3/15/05 482,325
-------------------------------------------------------------------------------------------------
754,825
-------------------------------------------------------------------------------------------------
Food Distributors -- 1.5%
645,000 B- Agrilink Foods Inc., Guaranteed Sr. Notes, 11.875% due 11/1/08 464,400
Aurora Foods Inc., Sr. Sub. Notes:
Series B:
1,110,000 CCC+ 9.875% due 2/15/07 860,250
160,000 CCC+ 8.750% due 7/1/08 122,400
365,000 CCC+ Series D, 9.875% due 2/15/07 282,875
985,000 B2* Carrols Corp., Guaranteed Sr. Sub. Notes, 9.500% due 12/1/08 783,075
310,000 B SC International Services Inc., Guaranteed Sr. Sub. Notes,
Series B, 9.250% due 9/1/07 303,025
-------------------------------------------------------------------------------------------------
2,816,025
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Foods - Specialty/Candy -- 0.1%
175,000 B- B&G Foods Inc., Guaranteed Sr. Sub. Notes,
9.625% due 8/1/07 $ 123,813
-------------------------------------------------------------------------------------------------
Forest Products -- 0.3%
720,000 B Ainsworth Lumber Co. Ltd., Sr. Notes, 12.500% due 7/15/07 608,400
-------------------------------------------------------------------------------------------------
Home Furnishings -- 0.2%
475,000 B Falcon Products Inc., Guaranteed Sr. Sub. Notes, Series B,
11.375% due 6/15/09 439,375
-------------------------------------------------------------------------------------------------
Homebuilding -- 0.8%
515,000 Ba1* D.R. Horton Inc., Guaranteed Sr. Notes, 8.000% due 2/1/09 460,925
1,095,000 BB+ Lennar Corp., Guaranteed Sr. Notes, Series B,
9.950% due 5/1/10 1,100,475
-------------------------------------------------------------------------------------------------
1,561,400
-------------------------------------------------------------------------------------------------
Hospital/Nursing Management -- 0.6%
1,060,000 Ba3* Fresenius Medical Care Capital Trust I, Guaranteed Trust
Preferred Securities, 9.000% due 12/1/06 1,041,450
-------------------------------------------------------------------------------------------------
Hotels/Resorts/Cruiselines -- 2.0%
200,000 B- Courtyard by Marriott II LP/Courtyard Finance Co.,
Sr. Secured Notes, Series B, 10.750% due 2/1/08 200,500
1,710,000 BB HMH Properties, Inc., Sr. Notes, Series C, 8.450% due 12/1/08 1,633,050
Intrawest Corp., Sr. Notes:
865,000 B+ 9.750% due 8/15/08 847,700
960,000 B+ 10.500% due 2/1/10 969,600
-------------------------------------------------------------------------------------------------
3,650,850
-------------------------------------------------------------------------------------------------
Industrial Machinery -- 0.3%
525,000 B Flowserve Corp., Guaranteed Sr. Sub. Notes,
12.250% due 8/15/10 (b) 534,188
-------------------------------------------------------------------------------------------------
Internet Software/Services -- 3.4%
255,000 NR Colo.com, 13.875% due 3/15/10 (b)(c) 192,525
430,000 Caa3* Cybernet Internet Services International, Inc., Sr. Notes,
14.000% due 7/1/09 178,450
Exodus Communications Inc., Sr. Notes:
305,000 B 10.750% due 12/15/09 277,550
3,555,000 B 11.625% due 7/15/10 (b) 3,306,150
PSINet Inc., Sr. Notes:
585,000 B- 10.500% due 12/1/06 282,263
960,000 B- 11.500% due 11/1/08 477,600
2,065,000 B- 11.000% due 8/1/09 1,006,688
1,720,000 B3* Rhythms NetConnections Inc., Sr. Discount Notes, Series B,
step bond to yield 24.012% due 5/15/08 490,200
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Internet Software/Services -- 3.4% (continued)
185,000 CCC+ WAM!NET Inc., Guaranteed Sr. Discount Notes, Series B,
step bond to yield 13.862% due 3/1/05 $ 84,175
-------------------------------------------------------------------------------------------------
6,295,601
-------------------------------------------------------------------------------------------------
Major Telecommunications -- 1.0%
McLeod USA Inc.:
850,000 B+ Sr. Discount Notes, step bond to yield 11.223% due 3/1/07 714,000
830,000 B+ Sr. Notes, 8.125% due 2/15/09 722,100
565,000 B- USA Mobile Communications, Sr. Notes, 9.500% due 2/1/04 403,975
-------------------------------------------------------------------------------------------------
1,840,075
-------------------------------------------------------------------------------------------------
Marine Shipping -- 0.2%
395,000 B- Oglebay Norton Co., Sr. Sub. Notes, 10.000% due 2/1/09 353,525
-------------------------------------------------------------------------------------------------
Medical Specialties -- 0.3%
780,000 B- Hangar Orthopedic Group Inc., Sr. Sub. Notes,
11.250% due 6/15/09 546,000
-------------------------------------------------------------------------------------------------
Medical/Nursing Services -- 1.0%
HEALTHSOUTH Corp.:
1,070,000 BBB- Sr. Notes, 6.875% due 6/15/05 949,625
1,005,000 BB+ Sr. Sub. Notes, 10.750% due 10/1/08 (b) 1,013,794
-------------------------------------------------------------------------------------------------
1,963,419
-------------------------------------------------------------------------------------------------
Miscellaneous Commercial Services -- 0.9%
1,100,000 B2* Intertek Finance PLC, Guaranteed Sr. Notes, Series B,
10.250% due 11/1/06 500,500
1,350,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes, Series B,
11.000% due 11/1/06 1,127,250
-------------------------------------------------------------------------------------------------
1,627,750
-------------------------------------------------------------------------------------------------
Miscellaneous Manufacturing -- 0.4%
550,000 B+ Park-Ohio Industries Inc., Sr. Sub. Notes, 9.250% due 12/1/07 448,250
480,000 B Polymer Group Inc., Guaranteed Sr. Sub. Notes, Series B,
9.000% due 7/1/07 343,200
-------------------------------------------------------------------------------------------------
791,450
-------------------------------------------------------------------------------------------------
Movies/Entertainment -- 0.8%
1,960,000 B- Premier Parks Inc., Sr. Discount Notes, step bond to yield
11.522% due 4/1/08 1,298,500
150,000 BB+ SFX Entertainment, Inc., Guaranteed Sr. Sub. Notes, Series B,
9.125% due 2/1/08 165,000
-------------------------------------------------------------------------------------------------
1,463,500
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Oil/Gas Pipelines -- 0.3%
585,000 BB- Leviathan Gas Pipeline Partners L.P., Guaranteed Sr. Sub.
Notes, Series B, 10.375% due 6/1/09 $ 617,175
-------------------------------------------------------------------------------------------------
Oil/Gas Production -- 4.7%
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 9/15/07 477,225
675,000 CCC- Belden & Blake Corp., Guaranteed Sr. Sub. Notes, Series B,
9.875% due 6/15/07 570,375
1,050,000 B Chesapeake Energy Corp., Guaranteed Sr. Notes, Series B,
9.625% due 5/1/05 1,059,187
1,280,000 B Forest Oil Corp., Guaranteed Sr. Sub. Notes,
10.500% due 1/15/06 1,305,600
355,000 B Houston Exploration Co., Sr. Sub. Notes, Series B,
8.625% due 1/1/08 340,800
210,000 B Magnum Hunter Resources, Inc., Guaranteed Sr. Notes,
10.000% due 6/1/07 205,800
1,940,000 B+ Nuevo Energy Co., Sr. Sub. Notes, Series B,
9.500% due 6/1/08 1,947,275
Plains Resources Inc., Guaranteed Sr. Sub. Notes:
175,000 B2* Series B, 10.250% due 3/15/06 176,750
345,000 B2* Series E, 10.250% due 3/15/06 (b) 348,450
265,000 B- Range Resources Corp., Guaranteed Sr. Sub. Notes,
8.750% due 1/15/07 253,075
675,000 B Stone Energy Corp., Guaranteed Sr. Sub. Notes,
8.750% due 9/15/07 668,250
755,000 BB- Vintage Petroleum Inc., Sr. Sub. Notes, 9.750% due 6/30/09 794,638
-------------------------------------------------------------------------------------------------
8,659,925
-------------------------------------------------------------------------------------------------
Oil Refining/Marketing -- 0.6%
Clark USA Inc., Sr. Notes:
610,000 BB- 9.500% due 9/15/04 552,050
105,000 BB- 8.375% due 11/15/07 87,150
745,000 B Series B, 10.875% due 12/1/05 491,700
-------------------------------------------------------------------------------------------------
1,130,900
-------------------------------------------------------------------------------------------------
Pharmaceuticals: Generic -- 1.4%
2,695,000 BB ICN Pharmaceuticals Inc., Sr. Notes, Series B,
9.250% due 8/15/05 2,627,625
-------------------------------------------------------------------------------------------------
Pharmaceuticals: Other -- 0.6%
975,000 B King Pharmaceuticals Inc., Guaranteed Sr. Sub. Notes,
10.750% due 2/15/09 1,033,500
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Publishing: Newspapers -- 1.0%
2,000,000 B+ Garden State Newspapers, Inc., Sr. Sub. Notes,
-------------------------------------------------------------------------------------------------
8.625% due 7/1/11 $1,850,000
Pulp & Paper -- 1.7%
1,090,000 CCC+ Repap New Brunswick Inc., Sr. Secured Notes,
10.625% due 4/15/05 1,125,425
Riverwood International Corp.:
490,000 B- Guaranteed Sr. Notes, 10.625% due 8/1/07 482,650
1,235,000 CCC+ Guaranteed Sr. Sub. Notes, 10.875% due 4/1/08 1,120,763
465,000 NR SD Warren Co., Debentures, 14.000% due 12/15/06 510,338
-------------------------------------------------------------------------------------------------
3,239,176
-------------------------------------------------------------------------------------------------
Real Estate Investment Trusts (REITS) -- 0.3%
700,000 NR Ocwen Asset Investment Corp., Sr. Notes, 11.500% due 7/1/05 528,500
-------------------------------------------------------------------------------------------------
Savings Banks -- 1.4%
1,075,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 618,125
1,000,000 B+ Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 920,000
1,205,000 B+ Ocwen Financial Corp., Notes, 11.875% due 10/1/03 1,042,325
-------------------------------------------------------------------------------------------------
2,580,450
-------------------------------------------------------------------------------------------------
Semiconductors -- 0.8%
985,000 B Fairchild Semiconductor Inc., Sr. Sub. Notes,
10.125% due 3/15/07 960,375
535,000 B SCG Holding & Semiconductor Co., Guaranteed Notes,
12.000% due 8/1/09 533,663
-------------------------------------------------------------------------------------------------
1,494,038
-------------------------------------------------------------------------------------------------
Specialty Stores -- 0.0%
115,000 B- Advance Stores Co., Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.250% due 4/15/08 81,363
-------------------------------------------------------------------------------------------------
Specialty Telecommunications -- 9.4%
640,000 B+ Call-Net Enterprises Inc., Sr. Notes, 9.375% due 5/15/09 278,400
425,000EUR A ESAT Telecom Group PLC, Sr. Notes, 11.875% due 11/1/09 435,860
Esprit Telecom Group PLC, Sr. Notes:
300,000DEM B- 11.500% due 12/15/07 27,952
575,000 B- 11.500% due 12/15/07 117,875
400,000 B- 10.875% due 6/15/08 82,000
2,010,000EUR B Flag Telecom Holdings Ltd., Sr. Notes, 11.625% due 3/30/10 1,414,053
1,200,000 B Focal Communications Corp., Sr. Discount Notes, Series B,
step bond to yield 13.373% due 2/15/08 606,000
1,145,000 BB Global Crossing Holdings Ltd., Guaranteed Sr. Notes,
9.500% due 11/15/09 1,099,200
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Specialty Telecommunications -- 9.4% (continued)
850,000EUR B Global TeleSystems, Sr. Bonds, 11.000% due 12/1/09 (b) $ 353,025
695,000 B- GT Group Telecom Inc., Sr. Discount Notes,
step bond to yield 15.758% due 2/1/10 257,150
Hermes Europe Railtel B.V., Sr. Notes:
210,000 B 11.500% due 8/15/07 95,550
2,440,000 B 10.375% due 1/15/09 1,110,200
Jazztel PLC, Sr. Notes:
1,000,000EUR CCC+ 13.250% due 12/15/09 (b) 606,034
165,000EUR CCC+ 14.000% due 7/15/10 (b)(c) 107,687
1,110,000 CCC+ KMC Telecom Holdings Inc., Sr. Discount Notes,
step bond to yield 15.889% due 2/15/08 116,550
Level 3 Communications Inc.:
5,120,000 B Sr. Discount Notes, step bond to yield 12.857% due 3/15/10 2,547,200
1,875,000EUR B Sr. Notes, 11.250% due 3/15/10 (b) 1,334,972
500,000 CCC+ Madison River Capital, Sr. Notes, 13.250% due 3/1/10 362,500
1,450,000 B- MGC Communications Inc., Sr. Notes, 13.000% due 4/1/10 819,250
1,375,000CAD B- Microcell Telecommunications Inc., Sr. Discount Notes,
Series B, step bond to yield 16.890% due 10/15/07 672,960
NEXTLINK Communications, LLC/Nextlink Capital, Inc.:
Sr. Discount Notes:
1,605,000 B Step bond to yield 12.037% due 6/1/09 846,637
2,030,000 B Step bond to yield 12.578% due 12/1/09 989,625
215,000 B Sr. Notes, 12.500% due 4/15/06 203,175
1,175,000 B- Primus Telecommunications Group Inc., Sr. Notes,
11.750% due 8/1/04 581,625
770,000 B- Tele 1 Europe B.V., Sr. Notes, 13.000% due 5/15/09 650,650
VersaTel Telecom International B.V., Sr. Notes:
285,000 B- 13.250% due 5/15/08 218,025
780,000EUR B- 11.250% due 3/30/10 (b) 479,318
1,295,000 B- Viatel Inc., Sr. Discount Notes, step bond to yield
29.423% due 4/15/08 388,500
790,000 B+ Williams Communications Group Inc., Sr. Notes,
11.875% due 8/1/10 (b) 705,075
-------------------------------------------------------------------------------------------------
17,507,048
-------------------------------------------------------------------------------------------------
Steel -- 1.1%
830,000 BB- LTV Corp., Guaranteed Sr. Sub. Notes, 11.750% due 11/15/09 336,150
1,725,000 B+ WCI Steel Inc., Sr. Notes, Series B, 10.000% due 12/1/04 1,414,500
355,000 B- WHX Corp., Sr. Notes, 10.500% due 4/15/05 221,875
-------------------------------------------------------------------------------------------------
1,972,525
-------------------------------------------------------------------------------------------------
Telecommunications Equipment -- 0.5%
1,375,000 B- World Access Inc., Sr. Notes, 13.250% due 1/15/08 969,375
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Textiles -- 0.4%
-------------------------------------------------------------------------------------------------
910,000 BB WestPoint Stevens Inc., Sr. Notes, 7.875% due 6/15/05 $ 677,950
Tobacco -- 0.2%
415,000 BB Standard Commercial Tobacco, Guaranteed Sr. Notes,
8.875% due 8/1/05 334,075
-------------------------------------------------------------------------------------------------
Trucks/Construction/Farm Machinery -- 0.1%
260,000 B Columbus McKinnon Corp., Guaranteed Sr. Sub. Notes,
8.500% due 4/1/08 219,700
-------------------------------------------------------------------------------------------------
Wholesale Distributors -- 0.2%
440,000 B2* Buhrmann U.S. Inc., Guaranteed Sr. Sub. Notes,
12.250% due 11/1/09 451,000
-------------------------------------------------------------------------------------------------
Wireless Telecommunications -- 10.1%
865,000 CCC AirGate PCS Inc., Sr. Sub. Discount Notes, step bond to yield
16.845% due 10/1/09 499,537
2,210,000 CCC+ Alamosa PCS Holdings Inc., Guaranteed Sr. Discount Notes,
step bond to yield 13.343% due 2/15/10 1,071,850
735,000 B- Centennial Cellular Corp., Sr. Sub. Notes,
10.750% due 12/15/08 694,575
1,000,000CAD B Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 13.794% due 5/15/08 517,252
Crown Castle International Corp.:
2,255,000 B Sr. Discount Notes, step bond to yield 11.201% due 5/15/11 1,448,837
205,000 B Sr. Notes, 10.750% due 8/1/11 211,150
1,000,000 B1* DLJ Secured Loan Trust (Clearnet Communications Inc.),
Class A-1, 10.125% due 7/7/07 (b) 1,036,425
325,000 B Dobson Communications Corp., Sr. Notes, 10.875% due 7/1/10 313,625
965,000 B3* Dobson/Sygnet Communications Inc., Sr. Notes,
12.250% due 12/15/08 945,700
350,000 CCC Horizon PCS Inc., Sr. Discount Notes, step bond to yield
14.001% due 10/1/10 (b)(c) 168,000
1,755,000 B- Millicom International Cellular S.A., Sr. Discount Notes,
step bond to yield 13.801% due 6/1/06 1,430,325
Nextel Communications, Inc.:
Sr. Discount Notes:
1,625,000 B1* Step bond to yield 10.888% due 9/15/07 1,312,187
3,775,000 B1* Step bond to yield 11.024% due 2/15/08 2,821,812
645,000 B1* Sr. Notes, 9.375% due 11/15/09 624,038
630,000 B- Spectrasite Holdings Inc., Sr. Discount Notes, step bond to
yield 11.250% due 4/15/09 328,387
715,000 B3* Telecorp PCS Inc., Guaranteed Sr. Sub. Notes,
10.625% due 7/15/10 716,788
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT+ RATING(a) SECURITY VALUE
===================================================================================================
<S> <C>
Wireless Telecommunications -- 10.1% (continued)
TeleSystems International Wireless Inc., Sr. Discount Notes:
1,700,000 CCC+ Series B, step bond to yield 12.583% due 6/30/07 $ 1,011,500
1,250,000 CCC+ Series C, step bond to yield 12.073% due 11/1/07 643,750
755,000 CCC+ US Unwired Inc., Guaranteed Sr. Sub. Discount Notes,
Series B, step bond to yield 13.486% due 11/1/09 371,837
VoiceStream Wireless Corp.:
320,000 B2* Sr. Discount Notes, step bond to yield
11.876% due 11/15/09 232,800
235,000 B2* Sr. Notes, 11.500% due 9/15/09 261,438
462,074 B2* Sr. Notes, 10.375% due 11/15/09 496,729
1,056,000 B+ Term Loan, 9.620% due 2/25/09 1,046,760
1,775,000 B- Winstar Communications Inc., Sr. Discount Notes,
step bond to yield 17.023% due 4/15/10 (b) 559,125
---------------------------------------------------------------------------------------------------
18,764,427
---------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $187,392,037) 165,126,247
===================================================================================================
CONVERTIBLE CORPORATE BONDS AND NOTES -- 0.7%
Contract Drilling -- 0.1%
145,000 B- Parker Drilling Co., 5.500% due 8/1/04 125,062
---------------------------------------------------------------------------------------------------
Medical Specialties -- 0.4%
875,000 B- DaVita Inc., 7.000% due 5/15/09 652,969
---------------------------------------------------------------------------------------------------
Telecommunications Equipment -- 0.2%
705,000 B- At Home Corp., 4.750% due 12/15/06 439,744
---------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE CORPORATE BONDS AND NOTES
(Cost -- $1,229,925) 1,217,775
===================================================================================================
SHARES SECURITY VALUE
===================================================================================================
COMMON STOCK (d) -- 0.1%
Containers/Packaging -- 0.0%
103 SF Holdings Group, Class C Shares (b) 3
---------------------------------------------------------------------------------------------------
Specialty Telecommunications -- 0.1%
14,121 Tele1 Europe Holdings AB 111,203
---------------------------------------------------------------------------------------------------
Telecommunications Equipment -- 0.0%
4,320 World Access Inc. 21,060
---------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $130,357) 132,266
===================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
===================================================================================================
<S> <C>
PREFERRED STOCK -- 0.0%
Wireless Telecommunications -- 0.0%
230 Dobson Communications Corp., 13.000% Exchangeable
(Cost -- $23,031) $ 20,988
===================================================================================================
WARRANTS (d) -- 0.3%
Broadcasting -- 0.0%
1,075 Australis Holdings Ltd., Expire 10/30/01 (b) --
1,950 UIH Australia/Pacific Inc., Expire 5/15/06 9,750
---------------------------------------------------------------------------------------------------
9,750
---------------------------------------------------------------------------------------------------
Cable/Satellite TV -- 0.0%
250 Cable Satisfaction International, Expire 3/1/05 5,156
---------------------------------------------------------------------------------------------------
Commercial Printing/Forms -- 0.0%
435 Merrill Corp., Expire 5/1/09 44
---------------------------------------------------------------------------------------------------
Consumer Specialties -- 0.0%
670 Jostens, Inc., Expire 5/1/10 13,484
---------------------------------------------------------------------------------------------------
Internet Software/Services -- 0.2%
1,625 Splitrock Services, Inc., Expire 7/15/08 287,219
2,100 WAM!NET Inc., Expire 3/1/05 (b) 24,413
430 Znet Internet Services, Expire 7/1/09 (b) 3,225
---------------------------------------------------------------------------------------------------
314,857
---------------------------------------------------------------------------------------------------
Specialty Telecommunications -- 0.1%
695 GT Group Telecom Inc., Expire 2/1/10 (b) 35,098
700 RSL Communications Ltd., Expire 11/15/06 3,413
285 VersaTel Telecom International B.V., Expire 5/15/08 77,235
---------------------------------------------------------------------------------------------------
115,746
---------------------------------------------------------------------------------------------------
Wireless Telecommunications -- 0.0%
870 AirGate PCS Inc., Expire 10/1/09 65,250
925 Iridium World Communications Ltd., Expire 7/15/05 (b) 9
---------------------------------------------------------------------------------------------------
65,259
---------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $377,497) 524,296
===================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY HIGH INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
===================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 9.8%
$18,162,000 Goldman Sachs & Co., 6.550% due 11/1/00;
Proceeds at maturity -- $18,165,304; (Fully
collateralized by U.S. Treasury Notes & Bonds,
3.625% to 12.750% due 2/28/02 to 8/15/26;
Market value -- $18,525,260) (Cost -- $18,162,000) $ 18,162,000
===================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $207,314,847**) $185,183,572
===================================================================================================
</TABLE>
+ Face amount denominated in U.S. dollars unless otherwise indicated.
(a) All ratings are by Standard & Poor's Ratings Service, except for those
which are identified by an asterisk (*), are rated by Moody's Investors
Service, Inc.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(c) Security has been issued with attached warrants.
(d) Non-income producing security.
** 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 pages 53 and 54 for definitions of ratings.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
========================================================================================
<S> <C>
U.S. GOVERNMENT SECTOR -- 29.1%
========================================================================================
U.S. Treasury Obligations -- 17.5%
U.S. Treasury Bonds:
$ 9,785,000 5.250% due 5/15/04 $ 9,592,627
4,295,000 6.750% due 5/15/05 4,454,044
745,000 6.125% due 8/15/07+ 755,802
3,960,000 6.500% due 2/15/10 4,146,556
230,000 10.625% due 8/15/15 333,415
4,970,000 6.125% due 11/15/27 5,082,421
----------------------------------------------------------------------------------------
24,364,865
----------------------------------------------------------------------------------------
U.S. Government Agencies -- 11.6%
Federal National Mortgage Association (FNMA):
4,639,975 7.500% due 3/1/15-7/1/30 4,671,114
598,160 8.000% due 11/1/29-7/1/30 605,823
Government National Mortgage Association (GNMA):
1,507,306 6.500% due 8/15/27-7/15/29 1,456,435
4,963,019 7.000% due 11/15/25-5/15/28 4,897,855
700,582 7.500% due 6/15/23-10/15/23 703,644
3,661,709 8.000% due 12/15/22-11/15/27 3,723,676
----------------------------------------------------------------------------------------
16,058,547
----------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECTOR
(Cost -- $40,512,988) 40,423,412
========================================================================================
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
========================================================================================
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.3%
781,000 BBB- Amresco Commercial Mortgage Funding I,
Series 1997-C1, Class F, 7.640% due 6/17/29 745,001
340,000 BBB Commercial Mortgage Acceptance Corp., Series 1997-ML1,
Class D, 7.053% due 12/15/10 324,530
380,000 Aaa* Countrywide Home Loans, Series 1998-3, Class A5,
6.750% due 4/25/28 358,981
405,000 BBB GGP Ala Moana, Series 1999-C1, Class E,
8.870% due 9/10/04 405,253
85,000 BBB GGP Homart, Series 1999-C1, Class G,
9.120% due 6/10/03 (b) 85,398
GGP Ivanhoe Series 1999-C1:
176,000 BBB Class F, 9.120% due 10/10/04 (b) 176,000
105,000 BBB- Class G, 9.870% due 10/10/04 (b) 105,000
Merrill Lynch Mortgage Investors Inc.:
225,000 BBB- Series 1996-C2, Class E, 6.960% due 11/21/28 200,356
14,000 BBB Series 1998-C2, Class D, 7.100% due 2/15/30 13,230
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.3% (continued)
$ 168,462 AAA PNC Mortgage Securities Corp., Series 1997-6, Class A2,
6.600% due 7/25/27 $ 168,041
98,088 AAA Rural Housing Trust, Series 1987-1, Class D,
6.330% due 4/1/26 97,025
520,000 BBB++ Starwood Asset Receivables Trust, Series 2000-1, Class E,
9.370% due 1/25/05 (b) 518,011
-------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost -- $3,187,141) 3,196,826
=================================================================================================
ASSET-BACKED SECURITIES -- 1.4%
400,000 BB Airplanes Pass-Thru Trust, Series 1, Class D,
9.625% due 9/1/03 388,500
1,485,000 AAA Conseco Finance Securitizations Corp., Series 2000-4,
Class A6, 8.310% due 5/1/32 1,513,765
70,649 Caa3* ContiMortgage Home Equity Loan Trust, Series 1997-1,
Class M2, 7.670% due 3/15/28 34,861
-------------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost -- $1,995,242) 1,937,126
=================================================================================================
HIGH-YIELD SECTOR-- 47.9%
=================================================================================================
CORPORATE BONDS AND NOTES -- 44.9%
Advertising -- 0.5%
230,000 B- AOA Holding LLC/AOA Capital Corp., Sr. Notes,
10.375% due 6/1/06 220,800
118,294 NR Big Flower Holdings, Inc., Term Loans, 9.625% due 3/1/10 (b) 117,999
300,000 B1* Lamar Media Corp., Sr. Sub. Notes,
9.250% due 8/15/07 295,500
-------------------------------------------------------------------------------------------------
634,299
-------------------------------------------------------------------------------------------------
Aerospace/Defense -- 0.8%
280,000 B- Argo-Tech Corp., Guaranteed Sr. Sub. Notes,
8.625% due 10/1/07 228,200
260,000 B BE Aerospace Inc., Sr. Sub. Notes, 8.000% due 3/1/08 241,800
290,000 B- Decrane Aircraft Holdings Inc., Sr. Sub. Notes,
12.000% due 9/30/08 (b) 265,350
L-3 Communications Corp.:
100,000 B Guaranteed Sr. Sub. Notes, Series B, 8.000% due 8/1/08 91,000
Sr. Sub. Notes:
80,000 B 8.500% due 5/15/08 74,800
95,000 B Series B, 10.375% due 5/1/07 97,613
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
Schedules of Investments (continued) October 31, 2000
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Aerospace/Defense -- 0.8% (continued)
Sequa Corp.:
$ 10,000 BB Medium-Term Notes, Series A, 10.000% due 5/14/01 $ 10,088
80,000 BB Sr. Notes, 9.000% due 8/1/09 78,000
-------------------------------------------------------------------------------------------------
1,086,851
-------------------------------------------------------------------------------------------------
Agriculture -- 0.0%
28,464 NR Premium Standard Farms Inc., Sr. Secured Notes,
11.000% due 9/17/03 25,760
-------------------------------------------------------------------------------------------------
Airlines -- 0.7%
700,000 Ba2* Calair LLC/Calair Capital Corp., Guaranteed Sr. Notes,
8.125% due 4/1/08 648,375
280,000 CCC Cathay International Ltd., Sr. Notes, 13.000% due 4/15/08 (b) 58,100
40,000 BB- Continental Airlines, Inc., Sr. Notes, 8.000% due 12/15/05 37,900
Northwest Airlines, Inc., Guaranteed Notes:
60,000 BB 8.520% due 4/7/04 58,125
100,000 BB 7.625% due 3/15/05 91,250
40,000 BB- US Airways, Inc., Pass-Through Certificates, Series 93-A3,
10.375% due 3/1/13 36,250
-------------------------------------------------------------------------------------------------
930,000
-------------------------------------------------------------------------------------------------
Automotive -- 2.6%
40,000 B Collins & Aikman Products Co., Guaranteed Sr. Sub. Notes,
11.500% due 4/15/06 34,700
60,000/DEM/ Caa1* Derby Cycle Corp./Lyon Investments B.V., Sr. Notes,
9.375% due 5/15/08 8,458
180,000 B Dura Operating Corp., Sr. Sub. Notes, 9.000% due 5/1/09 (b) 146,700
100,000 B1* Exide Corp., Sr. Exchange Notes, 10.000% due 4/15/05 72,500
Federal-Mogul Corp., Notes:
30,000 Ba3* 7.375% due 1/15/06 8,250
450,000 B+ 7.750% due 7/1/06 119,250
Hayes Lemmerz International, Inc., Guaranteed Sr. Sub. Notes:
20,000 B 11.000% due 7/15/06 17,900
220,000 B Series B, 9.125% due 7/15/07 178,200
Lear Corp.:
Guaranteed Sr. Notes, Series B:
90,000 BB+ 7.960% due 5/15/05 83,925
10,000 BB+ 8.110% due 5/15/09 8,988
220,000 BB- Sub. Notes, 9.500% due 7/15/06 217,800
190,000 B Motor Coach Industries International, Inc., Guaranteed Sr.
Sub. Notes, 11.250% due 5/1/09 88,350
230,000 B Motors and Gears, Inc., Sr. Notes, Series D,
10.750% due 11/15/06 224,250
300,000 BB+ Navistar International Inc., Sr. Sub. Notes, 8.000% due 2/1/08 276,000
237,000 B Oxford Automotive, Inc., Guaranteed Sr. Sub. Notes,
Series D, 10.125% due 6/15/07 188,415
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Automotive -- 2.6% (continued)
$ 60,000 Ca* Safety Components International Inc., Sr. Sub. Notes,
10.125% due 7/15/07 (d) $ 13,350
1,990,000 NR Transportation Technologies Industries, Inc., Term Loans,
10.410% due 3/1/07 (b) 1,975,075
-------------------------------------------------------------------------------------------------
3,662,111
-------------------------------------------------------------------------------------------------
Broadcasting -- 1.6%
195,000 B- ACME Television, LLC/ACME Finance Corp., Sr. Discount
Notes, 10.875% due 9/30/04 184,275
110,000 B Affinity Group Holding Inc., Sr. Notes, 11.000% due 4/1/07 91,850
75,800 NR AM/FM Operating Inc., Sr. Sub. Exchange Debentures,
12.625% due 10/31/06 85,275
40,000 NR Central European Media Enterprises Ltd., Sr. Notes,
9.375% due 8/15/04 12,200
155,000 B- Citadel Broadcasting Co., Sr. Sub. Notes, 10.250% due 7/1/07 151,125
Fox Kids Worldwide, Inc.:
120,000 B1* Sr. Discount Notes, step bond to yield 12.215% due 11/1/07 87,000
75,000 B1* Sr. Notes, 9.250% due 11/1/07 71,438
30,000 BBB- Fox Sports Networks, LLC, Sr. Notes, 8.875% due 8/15/07 30,300
Granite Broadcasting Corp., Sr. Sub. Notes:
100,000 B3* 9.375% due 12/1/05 70,000
30,000 B3* 8.875% due 5/15/08 19,650
340,000 B- LIN Holdings Corp., Sr. Discount Notes, step bond to yield
11.879% due 3/1/08 241,400
95,000 B2* LIN Television Corp., Guaranteed Sr. Sub. Notes,
8.375% due 3/1/08 89,775
110,000 B- Paxon Communications, Sr. Sub. Notes,
11.625% due 10/1/02 (b) 113,025
Pegasus Communications Corp., Sr. Notes:
50,000 B3* 9.750% due 12/1/06 (b) 49,000
60,000 B3* Series B, 9.625% due 10/15/05 58,800
195,000 NR PHI Holdings Inc., Notes, 16.000% due 5/15/01 185,016
180,000 B- Radio One, Inc., Guaranteed Sr. Sub. Notes, Series B,
7.000% due 5/15/04 187,200
70,000 CCC+ Sirius Satellite Radio Inc., Sr. Secured Notes,
14.500% due 5/15/09 57,400
110,000 B- Spanish Broadcasting Systems Inc., Sr. Notes,
9.625% due 11/1/09 106,975
240,000 B+ TV Azteca S.A., Guaranteed Sr. Notes, 10.500% due 2/15/07 219,000
100,000 CCC+ XM Satellite Radio Holdings Inc., Sr. Secured Notes,
14.000% due 3/15/10 (b) 69,500
-------------------------------------------------------------------------------------------------
2,180,204
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Building/Construction -- 0.8%
$ 120,000 B- Albecca Inc., Sr. Sub. Notes, 10.750% due 8/15/08 $ 107,400
210,000 BB+ American Standard Inc., Guaranteed Sr. Notes,
7.625% due 2/15/10 200,550
50,000 B- Atrium Cos. Inc., Guaranteed Sr. Sub. Notes, Series B,
10.500% due 5/1/09 42,750
140,000 BB Building Materials Corp., Sr. Notes, 8.000% due 12/1/08 (b) 42,700
110,000 Ba1* D.R. Horton, Inc., Guaranteed Sr. Notes, 8.000% due 2/1/09 98,450
190,000 B- Dayton Superior Corp., Guaranteed Sr. Sub. Notes,
13.000% due 6/15/09 181,450
90,000 B2* Del Webb Corp., Sr. Sub. Debentures, 9.375% due 5/1/09 80,550
80,000 BB+ Lennar Corp., Sr. Notes, 9.950% due 5/1/10 80,400
100,000 B NCI Building Systems Inc., Series B, Sr. Sub. Notes,
9.250% due 5/1/09 94,500
50,000 B Republic Group Inc., Sr. Sub. Notes, 9.500% due 7/15/08 50,313
200,000 Ba2* Washington Group International, Inc., Guaranteed Notes,
11.000% due 7/1/10 (b) 188,000
-------------------------------------------------------------------------------------------------
1,167,063
-------------------------------------------------------------------------------------------------
Business Services -- 0.3%
Iron Mountain Inc.:
425,000 B Guaranteed Sr. Sub. Notes, 8.750% due 9/30/09 406,937
40,000 B Sr. Sub. Notes, 8.250% due 7/1/11 36,800
30,000 B- Outsourcing Solutions Inc., Sr. Sub. Notes,
11.000% due 11/1/06 25,050
-------------------------------------------------------------------------------------------------
468,787
-------------------------------------------------------------------------------------------------
Cable -- 2.1%
Adelphia Communications Corp., Sr. Notes:
190,000 B+ 7.875% due 5/1/09 150,100
230,000 B+ Series B, 9.875% due 3/1/07 208,150
100,000 B- Allbritton Communications Co., Sr. Sub. Notes,
8.875% due 2/1/08 93,000
Charter Communications Holdings LLC/Charter
Communications Holdings Capital Corp:
20,000 B+ Sr. Discount Notes, step bond to yield
11.913% due 1/15/10 11,600
480,000 B+ Sr. Notes, 8.625% due 4/1/09 434,400
CSC Holdings Inc., Sr. Sub. Debentures:
25,000 BB- 9.875% due 2/15/13 25,500
250,000 BB- 10.500% due 5/15/16 270,000
235,000 B Diamond Cable Communications PLC, Sr. Discount Notes,
step bond to yield 9.644% due 2/15/07 170,375
150,000 BB- FLAG Ltd., Sr. Notes, 8.250% due 1/30/08 126,000
165,000 B3* Golden Sky Systems Inc., Sr. Sub. Notes, 12.375% due 8/1/06 179,025
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Cable -- 2.1% (continued)
$ 245,000 NR KNOLOGY Holdings, Inc., Sr. Discount Notes,
step bond to yield 12.169% due 10/15/07 (b) $ 118,825
NTL Communications Corp., Sr. Notes:
370,000 B 11.875% due 10/1/10 (b) 344,100
270,000 B Series B, 11.500% due 10/1/08 248,400
90,000 B3* Pegasus Media & Communications Inc., Notes,
12.500% due 7/1/05 94,950
50,000 BB+ Rogers Cablesystems Ltd., Debentures, 10.125% due 9/1/12 52,375
110,000 Caa3* Supercanal Holdings S.A., Sr. Notes,
11.500% due 5/15/05 (d) 44,688
Telewest Communications PLC:
40,000 B+ Debentures, 9.625% due 10/1/06 33,200
30,000 B+ Sr. Discount Debentures, 11.000% due 10/1/07 26,250
Sr. Discount Notes:
290,000 B+ Step bond to yield 15.111% due 4/15/09 131,225
230,000 B+ Step bond to yield 11.451% due 2/1/10 101,200
70,000 B+ Telewest Finance (Jersey) Ltd., Convertible Sr. Notes,
6.000% due 7/7/05 (b) 47,950
-------------------------------------------------------------------------------------------------
2,911,313
-------------------------------------------------------------------------------------------------
Chemicals -- 1.5%
90,000 B- GEO Specialty Chemicals, Inc., Sr. Sub. Notes,
10.125% due 8/1/08 (b) 69,750
Huntsman Corp., Sr. Sub. Notes:
210,000 B2* 9.500% due 7/1/07 (b) 122,850
100,000 B2* 10.263% due 7/1/07 (b)(e) 58,500
240,000 B+ Huntsman ICI Chemicals LLC, Guaranteed Sr. Sub. Notes,
10.125% due 7/1/09 229,200
210,000 BB- ISP Holdings Inc., Sr. Notes, 9.750% due 2/15/02 189,000
Lyondell Chemical Co.:
340,000 BB Debentures, 9.800% due 2/1/20 332,350
406,000 BB Sr. Notes, Series A, 9.625% due 5/1/07 394,835
450,000 CCC+ PCI Chemicals, Sr. Secured Notes, 9.250% due 10/15/07 173,250
Polymer Group Inc., Sr. Sub. Notes:
80,000 B 9.000% due 7/1/07 57,200
70,000 B 8.750% due 3/1/08 49,350
Sterling Chemicals Holdings, Inc.:
105,000 B Sr. Discount Notes, step bond to yield 12.591% due 8/15/08 28,087
160,000 BB- Sr. Secured Notes, Series B, 12.375% due 7/15/06 154,400
215,000 B Sr. Sub. Notes, Series A, 11.250% due 4/1/07 119,325
190,000 B+ Trikem S.A., Sub. Notes, 10.625% due 7/24/07 (b) 143,925
-------------------------------------------------------------------------------------------------
2,122,022
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Consumer Products & Services -- 0.7%
$ 230,000 B Coinmach Corp., Sr. Notes, 11.750% due 11/15/05 $ 228,850
French Fragrances, Inc.:
40,000 B+ Guaranteed Sr. Notes, Series D, 10.375% due 5/15/07 38,650
30,000 B+ Sr. Notes, Series B, 10.375% due 5/15/07 29,138
160,000 Caa2* Home Interiors and Gifts Inc., Sr. Sub. Notes,
10.125% due 6/1/08 53,600
230,000 B Jostens, Inc., Sr. Sub. Notes, 12.750% due 5/1/10 (b) 223,100
40,000 B Playtex Products, Inc., Sr. Sub. Notes, 9.000% due 12/15/03 38,800
Revlon Consumer Products Corp.:
20,000 CCC+ Sr. Exchange Notes, 8.125% due 2/1/06 14,100
130,000 CCC+ Sr. Notes, 9.000% due 11/1/06 95,550
180,000 B+ Royster-Clark, Inc., First Mortgage Notes, 10.250% due 4/1/09 137,700
45,000 B- Sealy Mattress Co., Sr. Sub. Notes, 9.875% due 12/15/07 43,200
Service Corp. International:
30,000 BB- Debentures, 7.875% due 2/1/13 16,050
Notes:
140,000 BB- 6.000% due 12/15/05 77,700
20,000 BB- 7.700% due 4/15/09 10,700
-------------------------------------------------------------------------------------------------
1,007,138
-------------------------------------------------------------------------------------------------
Electronics -- 0.1%
70,000 BB- Amkor Technology Inc., Sr. Notes, 9.250% due 5/1/06 68,600
70,000 B- ChipPAC International Co. Ltd., Guaranteed Sr. Sub. Notes,
Series B, 12.750% due 8/1/09 70,700
20,000 B1* Moog Inc., Sr. Sub. Notes, 10.000% due 5/1/06 20,100
-------------------------------------------------------------------------------------------------
159,400
-------------------------------------------------------------------------------------------------
Energy -- 2.9%
170,000 BB- AES China Generating Co., Ltd., Notes, 10.125% due 12/15/06 116,450
Belco Oil & Gas Corp.:
280,000 B1* Guaranteed Sr. Sub. Notes, Series B, 10.500% due 4/1/06 287,000
80,000 B1* Sr. Sub. Notes, Series B, 8.875% due 9/15/07 75,600
655,000 BB CMS Energy Corp., Sr. Notes, 8.125% due 5/15/02 641,081
90,000 B+ Giant Industries, Inc., Guaranteed Sr. Sub. Notes,
9.000% due 9/1/07 82,800
50,000 BB+ Gulf Canada Resources Ltd., Sr. Sub. Debentures,
9.625% due 7/1/05 51,750
160,000 B+ HS Resources, Inc., Guaranteed Sr. Sub. Notes,
9.250% due 11/15/06 160,400
110,000 BB- Leviathan Gas Pipe Line Partners, L.P./Leviathan Finance Corp.,
Guaranteed Sr. Sub. Notes, Series B, 10.375% due 6/1/09 116,050
220,000 B+ Nuevo Energy Co., Sr. Sub. Notes, Series B,
9.500% due 6/1/08 220,825
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Energy -- 2.9% (continued)
Ocean Energy, Inc., Series B:
$ 160,000 BB- Guaranteed Sr. Sub. Notes, 8.875% due 7/15/07 $ 163,000
160,000 BB- Sr. Notes, 8.375% due 7/1/08 161,200
220,000 B+ Parker Drilling Co., Guaranteed Sr. Sub. Notes, Series D,
9.750% due 11/15/06 216,700
70,000 BB+ Pioneer Natural Resources Co., Guaranteed Sr. Notes,
9.625% due 4/1/10 73,675
20,000 BB Port Arthur Finance Corp., Guaranteed Sr. Secured Notes,
12.500% due 1/15/09 20,500
500,000 Ba3* R&B Falcon Corp., Guaranteed Sr. Notes,
9.500% due 12/15/08 536,250
RBF Finance Co.:
80,000 BB- Guaranteed Sr. Secured Notes, 11.375% due 3/15/09 91,600
380,000 BB- Sr. Secured Notes, 11.000% due 3/15/06 434,150
90,000 BB+ Sante Fe Synder Corp., Notes, 8.750% due 6/15/07 92,700
70,000 Caa1* Seven Seas Petroleum Inc., Sr. Notes, 12.500% due 5/15/05 21,350
50,000 B Stone Energy Corp., Guaranteed Sr. Sub. Notes,
8.750% due 9/15/07 49,500
150,000 BB- Triton Energy Ltd., Sr. Notes, 8.875% due 10/1/07 (b) 150,938
260,000 BB- Vintage Petroleum Inc., Sr. Sub. Notes, 9.750% due 6/30/09 273,650
80,000 NR XCL Ltd., Sr. Secured Discount Notes,
13.500% due 5/1/04 (b)(c)(d) 14,400
-------------------------------------------------------------------------------------------------
4,051,569
-------------------------------------------------------------------------------------------------
Entertainment-- 0.5%
160,000 B- AMC Entertainment Inc., Sr. Sub. Notes,
9.500% due 2/1/11 (b) 76,000
125,000 B- Cinemark USA Inc., Sr. Sub. Notes, 9.625% due 8/1/08 53,125
110,000 B Hollywood Park Inc., Sr. Sub. Notes, 9.250% due 2/15/07 (b) 118,800
Regal Cinemas, Inc., Sr. Sub. Notes:
350,000 CC 9.500% due 6/1/08 29,750
140,000 CC 8.875% due 12/15/10 11,900
SFX Entertainment, Inc., Guaranteed Sr. Sub. Notes:
240,000 BB+ 9.125% due 12/1/08 (b) 267,600
110,000 BB+ Series B, 9.125% due 2/1/08 121,000
293,000 C* United Artists Theatre Co., Sr. Sub. Notes, Series B,
9.750% due 4/15/08 (d) 7,325
-------------------------------------------------------------------------------------------------
685,500
-------------------------------------------------------------------------------------------------
Environmental Services -- 0.8%
350,000 BB- Allied Waste Industries, Inc., Debentures,
7.400% due 9/15/35 241,500
390,000 B+ Allied Waste North America, Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.000% due 8/1/09 335,400
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Environmental Services -- 0.8% (continued)
$ 80,000 BB Azurix Corp., Sr. Dollar Notes, 10.375% due 2/15/07 $ 74,000
500,000 BBB Waste Management Inc., Guaranteed Sr. Notes,
6.875% due 5/15/09 455,625
-------------------------------------------------------------------------------------------------
1,106,525
-------------------------------------------------------------------------------------------------
Financial Services -- 2.1%
135,000 CCC- Aames Financial Corp., Sr. Notes, 9.125% due 11/1/037 1,213
Advanta Corp., Notes:
80,000 B 7.000% due 5/1/01 76,800
270,000 B 6.920% due 1/28/02 244,687
Amresco Inc., Sr. Sub. Notes:
150,000 CCC- Series 97-A, 10.000% due 3/15/04 81,750
20,000 CCC- Series 98-A, 9.875% due 3/15/05 10,900
75,000 BB+ Bangko Sentral ng Pilipinas, Yankee Bonds,
8.600% due 6/15/27 44,906
40,000 BB+ Bank United Corp., Sub. Notes, 8.875% due 5/1/07 38,950
200,000 B+ Chevy Chase Savings Bank, Sub. Debentures,
9.250% due 12/1/05 189,500
110,000 BB Colonial Capital II, Guaranteed Capital Securities, Series A,
8.920% due 1/15/27 92,538
170,000 B- Conseco Financing Trust III, Guaranteed Capital Securities,
8.796% due 4/1/27 60,350
ContiFinancial Corp., Sr. Notes:
250,000 D 7.500% due 3/15/02 (d) 36,250
600,000 D 8.375% due 8/15/03 (d) 87,000
70,000 D 8.125% due 4/1/08 (d) 10,150
190,000 B- Delta Financial Corp., Sr. Notes, 9.500% due 8/1/04 86,450
30,000 BB FINOVA Capital Corp., Notes, 7.625% due 9/21/09 17,100
750,000 BB+ Golden State Holdings Inc., Sr. Notes, 7.000% due 8/1/03 719,062
1,000 Caa1* Greate Bay Property Funding, First Mortgage Notes,
10.875% due 1/15/04 (d) 625
330,000 Ba3* Hanvit Bank, Sub. Notes, 11.750% due 3/1/10 (b) 317,212
145,000 CCC+ Imperial Credit Capital Trust I, Guaranteed Notes, Series B,
10.250% due 6/15/32 112,919
70,000 CCC+ Imperial Credit Industries Inc., Sr. Notes, Series B,
9.875% due 1/15/07 30,538
250,000 B- Nationwide Credit Inc., Sr. Notes, 10.250% due 1/15/08 63,750
280,000 B2* Ocwen Capital Trust I, Guaranteed Capital Securities,
10.875% due 8/1/27 161,000
45,000 B+ Ocwen Federal Bank FSB, Sub. Debentures,
12.000% due 6/15/05 41,400
25,000 B+ Ocwen Financial Corp., Notes, 11.875% due 10/1/03 21,625
30,000 CCC+ Pioneer Americas Acquisition Corp., Sr. Secured Notes,
9.250% due 6/15/07 13,650
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 33
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Financial Services -- 2.1% (continued)
$ 114,314 D Polytama International Finance B.V., Guaranteed Notes,
Payment-in-kind, 11.250% due 6/15/07 $ 9,431
314,000 D Reliance Group Holdings, Inc., Sr. Notes,
9.000% due 11/15/00 62,800
155,000 B- Resource America Inc., Sr. Notes, 12.000% due 8/1/04 142,600
30,000 Ba2* Riggs Capital, Trust Preferred Securities,
8.625% due 12/31/26 (b) 20,925
40,000 BB Webster Capital Trust I, Capital Securities,
9.360% due 1/29/27 (b) 35,550
-------------------------------------------------------------------------------------------------
2,901,631
-------------------------------------------------------------------------------------------------
Food & Beverage -- 0.6%
40,000 B- Archibald Candy Corp., Guaranteed Sr. Secured Notes,
10.250% due 7/1/04 22,450
Aurora Foods Inc., Sr. Sub. Notes:
160,000 CCC+ Series B, 9.875% due 2/15/07 124,000
40,000 CCC+ Series D, 9.875% due 2/15/07 31,000
10,000 B3* Eagle Family Foods, Inc., Guaranteed Sr. Sub. Notes,
Series B, 8.750% due 1/15/08 5,150
250,000 B FRD Acquisition Co., Sr. Notes, 12.500% due 7/15/04 91,250
50,000 B- Premier International Foods PLC, Sr. Notes,
12.000% due 9/1/09 39,000
170,000 CCC+ Rab Enterprises Inc., Sr. Notes, 10.500% due 5/1/05 127,500
260,000 B- Triarc Consumer Products Group LLC/Triarc Beverage
Holdings Corp., Guaranteed Sr. Sub. Notes,
10.250% due 2/15/09 292,500
180,000 C Vlasic Foods International Inc., Sr. Sub. Notes, Series B,
10.250% due 7/1/09 89,100
-------------------------------------------------------------------------------------------------
821,950
-------------------------------------------------------------------------------------------------
Health Care -- 2.0%
80,000 CCC+ Alaris Medical Systems Inc., Sr. Sub. Notes,
9.750% due 12/1/06 40,400
70,000 B Bio-Rad Laboratories, Inc., Sr. Sub. Notes,
11.625% due 2/15/07 72,275
125,000 B3* Extendicare Health Services, Inc., Guaranteed Sr. Sub. Notes,
9.350% due 12/15/07 66,875
150,000 Ba3* Fresenius Medical Care Capital Trust II, Guaranteed Trust
Preferred Securities, 7.875% due 2/1/08 139,875
120,000 B- Hanger Orthopedic Group, Inc., Sr. Sub. Notes,
11.250% due 6/15/09 84,000
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
34 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Health Care -- 2.0% (continued)
HCA-The Healthcare Co.:
$ 50,000 BB+ Debentures, 8.360% due 4/15/24 $ 46,375
Notes:
120,000 BB+ 6.910% due 6/15/05 113,250
120,000 BB+ 7.000% due 7/1/07 111,000
60,000 BB+ 7.250% due 5/20/08 55,950
50,000 BB+ 7.690% due 6/15/25 41,250
230,000 Ba2* 6.630% due 7/15/45 224,250
190,000 BB+ Healthsouth Corp., Convertible Sub. Debentures,
3.250% due 4/1/03 161,262
ICN Pharmaceuticals, Inc., Sr. Notes:
180,000 BB 9.250% due 8/15/05 175,500
180,000 BB 8.750% due 11/15/08 (b) 179,550
20,000 BB 9.750% due 11/15/08 (b) 19,950
260,000 NR Integrated Health Services, Inc., Sr. Sub. Notes,
9.500% due 9/15/07 (d) 3,900
305,000 B3* Kinetic Concepts Inc., Sr. Sub. Notes, 9.625% due 11/1/07 256,200
100,000 B- Leiner Health Products Inc., Sr. Sub. Notes,
9.625% due 7/1/07 46,500
100,000 B- Lifepoint Hospitals Holdings, Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.750% due 5/15/09 106,750
200,000 B- Magellan Health Services, Inc., Sr. Sub. Notes, Series A,
9.000% due 2/15/08 132,000
Mariner Post-Acute Network Inc., Sr. Sub. Notes:
140,000 C* 9.500% due 11/1/07 (d) 3,500
310,000 C* Step bond to yield 9.525% due 11/1/07 4,650
110,000 C* Mediq Inc., Sr. Discount Debentures, step bond to yield
15.152% due 6/1/09 4,400
140,000 C* Mediq/PRN Life Support Services, Inc., Guaranteed Sr. Sub.
Notes, 11.000% due 6/1/08 (b)(d) 4,900
20,000 B Medpartners Inc., Sr. Sub. Notes, 7.375% due 10/1/06 18,100
330,000 C* Multicare Cos. Inc., Sr. Sub. Notes, 9.000% due 8/1/07 (d) 14,850
170,000 Ca* Paracelsus Healthcare Corp., Sr. Sub. Notes,
10.000% due 8/15/06 (d) 70,550
Sun Healthcare Group Inc., Sr. Sub. Notes:
165,000 NR 9.500% due 7/1/07 (b)(d) 5,775
190,000 NR 9.375% due 5/1/08 (d) 6,650
Tenet Healthcare Corp.:
15,000 BB+ Sr. Notes, 8.000% due 1/15/05 14,831
Sr. Sub. Notes:
245,000 BB- 8.625% due 1/15/07 245,000
150,000 BB- 8.125% due 12/1/08 (b) 145,312
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 35
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Health Care -- 2.0% (continued)
$ 150,000 B- Triad Hospitals Holdings, Inc., Guaranteed Sr. Sub. Notes,
11.000% due 5/15/09 $ 156,750
-------------------------------------------------------------------------------------------------
2,772,380
-------------------------------------------------------------------------------------------------
Hotel/Casino -- 3.5%
60,000 B- Ameristar Casinos, Inc., Guaranteed Sr. Sub. Notes,
Series B, 10.500% due 8/1/04 60,900
130,000 B1* Anchor Gaming, Sr. Sub. Notes, 9.875% due 10/15/08 (b) 132,113
190,000 B- Autotote Corp., Guaranteed Sr. Sub. Notes,
12.500% due 8/15/10 (b) 188,100
100,000 B- Epic Resorts Inc., Sr. Secured Notes, 13.000% due 6/15/05 38,000
110,000 BB FelCor Lodging L.P., Sr. Notes, 9.500% due 9/15/08 (b) 109,725
300,000 Caa3* Fitzgeralds Gaming Corp., Sr. Secured Notes,
12.250% due 12/15/04 (d) 160,500
400,000 BBB- Harrah's Operating Co., Inc., Guaranteed Sr. Notes,
7.500% due 1/15/09 374,500
HMH Properties, Inc.:
500,000 BB Guaranteed Sr. Notes, Series B, 7.875% due 8/1/08 462,500
50,000 BB Sr. Notes, 8.450% due 12/1/08 47,750
280,000 B Hollywood Casino Corp., Guaranteed Sr. Secured Notes,
11.250% due 5/1/07 289,100
20,000 BB+ International Game Technology, Sr. Exchange Notes,
8.375% due 5/15/09 19,600
350,000 B Isle of Capri Black Hawk LLC/Isle of Capri Black Hawk
Capital Corp., First Mortgage Notes, Series B,
13.000% due 8/31/04 382,375
90,000 B Isle of Capri Casinos Corp., Guaranteed Sr. Sub. Notes,
Series B, 8.750% due 4/15/09 82,125
180,000 BB- Mandalay Resort Group, Sr. Sub. Notes, Series B,
10.250% due 8/1/07 184,950
170,000 BB+ MGM Mirage Inc., Guaranteed Sr. Sub. Notes,
9.750% due 6/1/07 177,225
Mohegan Tribal Gaming Authority:
60,000 BB Sr. Exchange Notes, 8.125% due 1/1/06 58,275
170,000 BB- Sr. Sub. Notes, 8.750% due 1/1/09 166,600
Park Place Entertainment Corp., Sr. Sub. Notes:
80,000 BB+ 9.375% due 2/15/07 81,000
130,000 BB+ 8.875% due 9/15/08 128,050
Starwood Hotels & Resorts Worldwide Inc., Notes:
250,000 BB+ 6.250% due 11/15/00 250,000
300,000 BB+ 6.750% due 11/15/03 289,125
670,000 B- Trump Atlantic City Associates/Trump Atlantic City
Funding, Inc., First Mortgage Notes, 11.250% due 5/1/06 462,300
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
36 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Hotel/Casino -- 3.5% (continued)
Trump's Castle Funding, Inc.:
$ 340,000 Caa1* Mortgage Notes, 11.750% due 11/15/03 $ 281,350
230,000 NR Notes, 10.250% due 4/30/03 (b) 230,000
170,000 B- Venetian Casino Resort LLC/Las Vegas Sands, Inc.,
Guaranteed Mortgage Notes, 12.250% due 11/15/04 172,975
-------------------------------------------------------------------------------------------------
4,829,138
-------------------------------------------------------------------------------------------------
Industrial Goods & Services -- 1.0%
260,000 B- Better Minerals & Aggregates Co., Guaranteed Sr. Sub. Notes,
13.000% due 9/15/09 243,100
Flextronics International Ltd., Sr. Sub. Notes:
150,000 B+ 8.750% due 10/15/07 145,500
250,000 Ba3* 9.875% due 7/1/10 (b) 253,750
190,000 B Flowserve Corp., Guaranteed Sr. Sub. Notes,
12.250% due 8/15/10 (b) 193,325
40,000 B Hexcel Corp., Convertible Sub. Notes, 7.000% due 8/1/03 36,150
375,000 B North Atlantic Trading Co., Inc., Sr. Notes, Series B,
11.000% due 6/15/04 305,625
340,000 BB Owens-Illinois Inc., Sr. Notes, 8.100% due 5/15/07 243,100
-------------------------------------------------------------------------------------------------
1,420,550
-------------------------------------------------------------------------------------------------
Manufacturing -- 0.8%
290,000 B- Blount Inc., Sr. Sub. Notes, 13.000% due 8/1/09 246,500
200,000 B- Roller Bearing Co., Inc., Sr. Sub. Notes, 9.625% due 6/15/07 179,000
410,000 CCC+ Samsonite Corp., Sr. Sub. Notes, 10.750% due 6/15/08 315,700
280,000 B- Tekni-Plex, Inc., Sr. Sub. Notes, Series B,
12.750% due 6/15/10 256,200
140,000 B+ Tenneco Automotive Inc., Guaranteed Sr. Sub. Notes,
Series B, 11.625% due 10/15/09 81,900
-------------------------------------------------------------------------------------------------
1,079,300
-------------------------------------------------------------------------------------------------
Metals -- 0.7%
160,000 BB AK Steel Corp., Sr. Notes, 7.875% due 2/15/09 145,600
128,550 CCC Anker Coal Group Inc., Sr. Secured Notes,
14.250% due 9/1/07 57,205
60,000 CCC Continental Global Group Inc., Sr. Notes, 11.000% due 4/1/07 21,300
Kaiser Aluminum & Chemical Corp.:
20,000 B1* Guaranteed Sr. Notes, 9.875% due 2/15/02 16,900
20,000 B1* Sr. Notes, Series B, 10.875% due 10/15/06 16,900
190,000 B3* Sr. Sub. Notes, 12.750% due 2/1/03 143,450
200,000 NR Lodestar Holdings Inc., Sr. Notes, 11.500% due 5/15/05 33,000
250,000 BB- The LTV Corp., Guaranteed Sr. Exchange Notes,
11.750% due 11/15/09 101,250
300,000 B2* National Steel Corp., First Mortgage Bonds, Series D,
9.875% due 3/1/09 130,500
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 37
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Metals -- 0.7% (continued)
$ 70,000 B+ Oregon Steel Mills, Inc., Guaranteed First Mortgage Notes,
11.000% due 6/15/03 $ 51,450
110,000 B+ WCI Steel Inc., Sr. Secured Notes, Series B,
10.000% due 12/1/04 90,200
20,000 B Weirton Steel Corp., Sr. Notes, 10.750% due 6/1/05 14,300
70,000 D Wheeling-Pittsburg Corp., Guaranteed Sr. Notes,
9.250% due 11/15/07 (d) 21,350
170,000 B- WHX Corp., Sr. Notes, 10.500% due 4/15/05 106,250
-------------------------------------------------------------------------------------------------
949,655
-------------------------------------------------------------------------------------------------
Packaging/Containers -- 0.7%
230,000 B AEP Industries Inc., Sr. Sub. Notes, 9.875% due 11/15/07 189,750
60,000 CCC Four M Corp., Sr. Secured Notes, Series B,
12.000% due 6/1/06 55,500
90,000 B Huntsman Packaging Corp., Guaranteed Sr. Sub. Notes,
13.000% due 6/1/10 (c) 67,950
300,000 BB Norampac Inc., Sr. Notes, 9.500% due 2/1/08 303,000
100,000 B+ Packaging Corp., Sr. Sub. Notes, 9.625% due 4/1/09 (b) 102,500
210,000 BB- Radnor Holdings Corp., Sr. Notes, 10.000% due 12/1/03 186,900
Stone Container Corp:
30,000 B Rating Adjustable Sr. Notes, 12.580% due 8/1/16 30,675
90,000 BB- Sr. Sub. Debentures, 12.250% due 4/1/02 90,450
-------------------------------------------------------------------------------------------------
1,026,725
-------------------------------------------------------------------------------------------------
Paper/Forestry Products -- 1.8%
235,000 B3* APP China Group Ltd., Sr. Discount Notes,
14.000% due 3/15/10 (b) 99,287
300,000 Caa* APP Finance II Mauritius Ltd., Perpetual Notes, 12.000% 99,750
Doman Industries Ltd.:
170,000 B+ Guaranteed Sr. Notes, 12.000% due 7/1/04 165,750
205,000 B Sr. Notes, 8.750% due 3/15/04 121,462
Gaylord Container Corp.:
130,000 B- Sr. Notes, Series B, 9.375% due 6/15/07 82,550
80,000 CCC+ Sr. Sub. Notes, Series B, 9.875% due 2/15/08 24,400
195,000 B3* Indah Kiat Finance Mauritius Ltd., Sr. Notes,
10.000% due 7/1/07 80,437
190,000 B+ Pacifica Paper, Inc., Sr. Notes, 10.000% due 3/15/09 190,475
395,000 B3* Pindo Deli Finance Mauritius Ltd., Sr. Notes,
10.750% due 10/1/07 158,987
399,000 CCC+ Repap New Brunswick Inc., Sr. Notes, 10.625% due 4/15/05 411,967
805,000 CCC+ Riverwood International Corp., Sr. Sub. Notes,
10.875% due 4/1/08 730,537
150,000 BB+ Tembec Industries Inc., Guaranteed Sr. Notes,
8.625% due 6/30/09 147,375
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
38 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Paper/Forestry Products -- 1.8% (continued)
$ 220,000 B3* Tjiwi Kimia Finance Mauritius Ltd., Guaranteed Sr. Notes,
10.000% due 8/1/04 $ 110,550
-------------------------------------------------------------------------------------------------
2,423,527
-------------------------------------------------------------------------------------------------
Publishing -- 0.4%
Garden State Newspapers, Inc., Sr. Sub. Notes:
115,000 B+ 8.750% due 10/1/09 105,225
110,000 B+ 8.625% due 7/1/11 (b) 101,750
200,000 B- Perry-Judd Inc., Sr. Sub. Notes, 10.625% due 12/15/07 179,000
PRIMEDIA Inc., Guaranteed Sr. Notes:
10,000 BB- 7.625% due 4/1/08 9,050
50,000 BB- Series B, 8.500% due 2/1/06 48,000
Von Hoffman Press Inc., Sr. Sub. Notes:
30,000 B- 10.375% due 5/15/07 (b) 27,150
27,755 NR 13.500% due 5/15/09 (b) 24,008
-------------------------------------------------------------------------------------------------
494,183
-------------------------------------------------------------------------------------------------
Retail -- 1.6%
350,000 BBB- 7-Eleven, Inc., Sr. Sub. Second Priority Notes,
4.500% due 6/15/04 288,750
300,000 B Amazon.com, Inc., Sr. Discount Notes, step bond to yield
13.685% due 5/1/08 152,250
215,000 B+ Grupo Elektra S.A. de C.V., Sr. Notes, 12.000% due 4/1/08 (b) 195,650
370,000 Baa3* Kmart Corp., Sr. Notes, 8.375% due 12/1/04 320,513
150,000 B Mothers Work Inc., Sr. Notes, 12.625% due 8/1/05 142,875
280,000 B+ NBTY, Inc., Sr. Sub. Notes, Series B, 8.625% due 9/15/07 235,200
370,000 Baa3* Saks Inc., Guaranteed Sr. Notes, 8.250% due 11/15/08 212,750
480,000 BB- Sbarro Inc., Guaranteed Sr. Notes, 11.000% due 9/15/09 487,200
Tricon Global Restaurants, Inc., Sr. Notes:
90,000 Ba1* 7.450% due 5/15/05 85,500
90,000 Ba1* 7.650% due 5/15/08 83,475
-------------------------------------------------------------------------------------------------
2,204,163
-------------------------------------------------------------------------------------------------
Technology -- 1.2%
Covad Communications Group, Inc.:
70,000 B- Sr. Discount Notes, Series B, step bond to yield
14.502% due 3/15/08 19,950
Sr. Notes:
100,000 B- 12.500% due 2/15/09 48,000
6,000 B- Series B, 12.000% due 2/15/10 2,790
440,000 NR Cybernet Internet Services International, Inc., Convertible
Sub. Notes, step bond to yield 12.491% due 8/15/09 (b) 178,200
625,000 NR DIVA Systems Corp., Sr. Discount Notes, step bond to yield
18.291% due 3/1/08 279,687
150,000 NR Equinix Inc., Sr. Notes, 13.000% due 12/1/07 120,000
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 39
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Technology -- 1.2% (continued)
Exodus Communications, Inc., Sr. Notes:
$ 40,000 B 11.250% due 7/1/08 $ 37,400
80,000 B 10.750% due 12/15/09 72,800
320,000 B 11.625% due 7/15/10 (b) 297,600
Fairchild Semiconductor Corp.:
30,000 B Guaranteed Sr. Sub. Notes, 10.375% due 10/1/07 29,550
180,000 B Sr. Sub. Notes, 10.125% due 3/15/07 175,500
110,000 B- Globix Corp., Sr. Notes, 12.500% due 2/1/10 61,050
62,969 NR InterAct Operating Co., Notes, 14.000% due 8/1/03 3,148
140,000 NR Intira Corp., Sr. Notes, 13.000% due 2/1/10 (b) 58,800
110,000 Caa1* NorthPoint Communications Group, Inc., Sr. Notes,
12.875% due 2/15/10 102,850
PSINet Inc., Sr. Notes:
110,000 CCC 11.500% due 11/1/08 54,725
110,000 CCC 11.000% due 8/1/09 53,625
-------------------------------------------------------------------------------------------------
1,595,675
-------------------------------------------------------------------------------------------------
Telecommunications -- 8.7%
120,000 B 360networks Inc., Sr. Notes, 13.000% due 5/1/08 96,600
70,000 Caa1* AirGate PCS, Inc., Sr. Sub. Notes, step bond to yield
12.430% due 10/1/09 40,425
180,000 CCC+ Alamosa PCS Holdings Inc., Guaranteed Sr. Discount Notes,
step bond to yield 12.315% due 2/15/10 87,300
140,000 B+ Alaska Communications Systems Holdings, Inc., Guaranteed
Sr. Sub. Notes, 9.375% due 5/15/09 121,100
Allegiance Telecom, Inc.:
10,000 B Sr. Discount Notes, Series B, step bond to yield
11.357% due 2/15/08 6,950
60,000 B Sr. Notes, 12.875% due 5/15/08 59,700
American Cellular Corp., Term Loans:
560,000 NR Series B, 9.640% due 3/1/08 (b) 560,000
640,000 NR Series C, 9.890% due 3/1/08 (b) 640,000
90,000 CCC+ Arch Communications Group, Inc., Sr. Discount Notes,
step bond to yield 16.036% due 3/15/08 36,450
110,000 B3* Barak I.T.C., Sr. Discount Notes, Series B, step bond to yield
12.031% due 11/15/07 56,925
260,000 B3* Benedek Communications Corp., Sr. Discount Notes,
step bond to yield 11.314% due 5/15/06 222,300
90,000 NR Birch Telecom Inc., Sr. Notes, 14.000% due 6/15/08 54,675
400,000 NR Celcaribe S.A., Sr. Notes, 14.500% due 3/15/04 322,000
23,000 BB- Celestica International Inc., Sr. Sub. Notes,
10.500% due 12/31/06 23,748
700,000 NR CellNet Data Systems, Inc., Sr. Discount Notes,
step bond to yield 14.990% due 10/1/07 4,375
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
40 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Telecommunications -- 8.7% (continued)
$ 20,000 Ba1* Clearnet Communications Inc., Sr. Discount Notes,
step bond to yield 11.294% due 12/15/05 $ 21,300
220,000 NR Colo.com, Sr. Notes, 13.875% due 3/15/10 (b)(c) 166,100
100,000 B Crown Castle International Corp., Sr. Notes,
10.750% due 8/1/11 103,000
50,000 B Dobson Communications Corp., Sr. Notes,
10.875% due 7/1/10 48,250
200,000 B3* Dobson/Sygnet Communications Co., Sr. Notes,
12.250% due 12/15/08 196,000
760,000 B EchoStar Broadband Corp., Sr. Notes,
10.375% due 10/1/07 (b) 765,700
60,000 B- Esprit Telecom Group Inc., Sr. Notes, 11.500% due 12/15/07 12,300
270,000 NR FirstWorld Communications, Inc., Sr. Discount Notes,
step bond to yield 13.891% due 4/15/08 54,000
Focal Communications Corp.:
210,000 B- Sr. Discount Notes, Series B, step bond to yield
11.093% due 2/15/08 106,050
75,000 B- Sr. Notes, Series B, 11.875% due 1/15/10 58,125
Global Crossing Holdings Ltd., Guaranteed Sr. Notes:
135,000 BB 9.125% due 11/15/06 129,431
410,000 BB 9.625% due 5/15/08 393,600
50,000 Caa1* Golden Sky DBS Inc., Sr. Discount Notes, Series B,
step bond to yield 11.683% due 3/1/07 35,250
125,000 B+ Grupo Iusacell S.A. de C.V., Sr. Notes, 14.250% due 12/1/06 126,250
230,000 Caa1* Horizon PCS, Inc., Guaranteed Sr. Discount Notes,
step bond to yield 13.569% due 10/1/10 (b)(c) 110,400
230,000 D ICG Holdings, Inc., Guaranteed Sr. Secured Discount Notes,
step bond to yield 13.118% due 5/1/06 39,100
440,000 B- ICG Services, Inc., Sr. Discount Notes, step bond to yield
9.350% due 2/15/08 50,600
160,000 B- Innova S. de R.L., Sr. Notes, 12.875% due 4/1/07 145,000
500,000 B- KMC Telecom Holdings, Inc., Sr. Discount Notes,
step bond to yield 13.273% due 2/15/08 52,500
Level 3 Communications, Inc., Sr. Notes:
210,000 B 11.000% due 3/15/08 190,050
30,000 B 9.125% due 5/1/08 24,375
140,000 B+ McLeodUSA Inc., Sr. Notes, 8.125% due 2/15/09 121,800
Metrocall, Inc., Sr. Sub. Notes:
40,000 B3* 10.375% due 10/1/07 16,600
30,000 B3* 9.750% due 11/1/07 13,050
50,000 B3* 11.000% due 9/15/08 22,250
90,000 B- MGC Communications, Inc./Mpower Holdings Corp.,
Sr. Notes, 13.000% due 4/1/10 50,850
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 41
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Telecommunications -- 8.7% (continued)
$ 230,000 B3* Microcell Communications, Sr. Discount Notes,
step bond to yield 11.922% due 6/1/06 $222,525
180,000 B- Millicom International Cellular S.A., Sr. Discount Notes,
step bond to yield 11.376% due 6/1/06 146,700
150,000 NR Motient Corp., Guaranteed Sr. Notes, Series B,
12.250% due 4/1/08 108,000
Nextel Communications, Inc.:
310,000 B1* Convertible Sr. Notes, 5.250% due 1/15/10 261,950
Sr. Serial Redeemable Notes:
260,000 B1* 12.000% due 11/1/08 278,850
610,000 B1* 9.375% due 11/15/09 590,175
Nextel International, Inc.:
170,000 B- Sr. Discount Notes, step bond to yield
11.801% due 4/15/08 104,125
210,000 B- Sr. Notes, 12.750% due 8/1/10 (b) 195,825
410,000 B3* Nextel Partners, Inc., Sr. Notes, 11.000% due 3/15/10 (b) 408,975
130,000 NR NorthEast Optic Network Inc., Sr. Notes,
12.750% due 8/15/08 95,550
50,000 NR OnePoint Communications Corp., Guaranteed Sr. Notes,
Series B, 14.500% due 6/1/08 50,250
Orbital Imaging Corp., Sr. Notes:
110,000 CCC Series B, 11.625% due 3/1/05 25,850
20,000 CCC Series D, 11.625% due 3/1/05 (b) 4,700
Paging Network, Inc.:
40,000 NR Sr. Notes, 13.500% due 6/6/05 (d) 2,700
Sr. Sub. Notes:
20,000 NR 8.875% due 2/1/06 (d) 4,600
70,000 NR 10.000% due 10/15/08 (d) 16,100
Pinnacle Holdings Inc.:
80,000 NR Convertible Notes, 5.500% due 9/15/07 (b) 45,300
320,000 B Sr. Discount Notes, step bond to yield
11.355% due 3/15/08 184,000
170,000 Ba2* Price Communications Wireless Inc., Sr. Secured Notes,
9.125% due 12/15/06 170,850
200,000 B- Primus Telecom Group, Inc., Sr. Notes, 9.875% due 5/15/08 97,000
120,000 B- RCN Corp., Sr. Notes, 10.125% due 1/15/10 82,200
250,000 Ba2* Rogers Cantel, Inc., Sr. Sub. Notes, 8.800% due 10/1/07 248,750
RSL Communications PLC, Guaranteed Sr. Notes:
70,000 Caa3* 9.125% due 3/1/08 10,938
100,000 Caa3* 10.500% due 11/15/08 18,250
400,000 Caa3* 12.875% due 3/1/10 (b) 82,000
SpectraSite Holdings, Inc., Sr. Discount Notes:
100,000 B- Series B, step bond to yield 13.384% due 3/15/10 49,000
70,000 B- Step bond to yield 12.149% due 4/15/09 (b) 36,487
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
42 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Telecommunications -- 8.7% (continued)
$ 70,000 B- Tele1 Europe B.V., Sr. Notes, 13.000% due 5/15/09 $ 59,150
200,000 B- Telecommunications Techniques Co., LLC, Guaranteed
Sr. Sub. Notes, 9.750% due 5/15/08 189,000
280,000 B3* TeleCorp PCS, Inc., Guaranteed Sr. Sub. Notes,
10.625% due 7/15/10 280,700
80,000 NR TeleHub Communications Corp., Sr. Discount Notes,
step bond to yield 13.334% due 7/31/05 14,000
300,000 B- Time Warner Telecom LLC Inc., Sr. Notes,
9.750% due 7/15/08 267,000
45,000 B Transtel Pass Through Trust, Trust Certificates,
12.500% due 11/1/07 (b)(d) 16,313
30,000 B3* Triton PCS, Inc., Guaranteed Sr. Sub. Discount Notes,
step bond to yield 10.495% due 5/1/08 22,875
310,000 Caa1* UbiquiTel Operating Co., Guaranteed Sr. Sub. Discount Notes,
step bond to yield 15.238% due 4/15/10 141,050
United Pan-Europe Communications NV:
Sr. Discount Notes, Series B, step bond to yield:
210,000 B 14.098% due 8/1/09 82,950
370,000 B 13.181% due 2/1/10 138,750
130,000 B Sr. Notes, Series B, 10.875% due 8/1/09 96,850
275,000 CCC+ US Unwired Inc., Guaranteed Sr. Discount Notes, Series B,
step bond to yield 13.365% due 11/1/09 135,437
10,000 B- USA Mobile Communications Holdings, Inc., Sr. Notes,
9.500% due 2/1/04 7,150
140,000 B- VersaTel Telecom International NV, Sr. Notes,
13.250% due 5/15/08 107,100
Viasystems, Inc., Sr. Sub. Notes:
200,000 B 9.750% due 6/1/07 179,000
140,000 B Series B, 9.750% due 6/1/07 125,300
Viatel, Inc.:
990,000 B- Sr. Discount Notes, step bond to yield
11.716% due 4/15/08 297,000
78,000 B- Sr. Dollar Notes, 11.500% due 3/15/09 39,390
340,000 B2* VoiceStream Wireless Corp./VoiceStream Wireless Holdings,
Sr. Notes, 10.375% due 11/15/09 365,500
200,000 Caa2* WebLink Wireless, Inc., Sr. Discount Notes,
step bond to yield 16.256% due 2/1/08 78,000
Williams Communications Group, Inc.:
70,000 B+ Sr. Notes, 11.700% due 8/1/08 (b) 62,825
130,000 B+ Sr. Redeemable Notes, 10.875% due 10/1/09 110,175
Winstar Communications Inc.:
43,000 B- Sr. Discount Notes, step bond to yield
18.113% due 4/15/10 (b) 13,545
310,000 B- Sr. Exchange Notes, 12.750% due 4/15/10 220,100
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 43
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Telecommunications -- 8.7% (continued)
$ 190,000 B- World Access, Inc., Sr. Notes, Series B,
13.250% due 1/15/08 $ 133,950
-------------------------------------------------------------------------------------------------
12,109,239
-------------------------------------------------------------------------------------------------
Telephone -- 1.1%
90,000 NR Bestel S.A., Sr. Discount Notes, step bond to yield
13.231% due 5/15/05 53,325
245,000 B BTI Telecom Corp., Sr. Notes, 10.500% due 9/15/07 123,725
110,000 B+ Call-Net Enterprises, Inc., Sr. Notes, 8.000% due 8/15/08 44,550
190,000 B- CFW Communications Co., Sr. Notes,
13.000% due 8/15/10 (b)(c) 158,650
Hermes Europe Railtel B.V., Sr. Notes:
10,000 B 11.500% due 8/15/07 4,550
20,000 B 10.375% due 1/15/09 9,100
110,000 B3* Intermedia Communications Inc., Sr. Sub. Discount Notes,
Series B, step bond to yield 12.724% due 3/1/09 70,950
190,000 CCC+ iPCS, Inc., Sr. Discount Notes, step bond to yield
13.181% due 7/15/10 (b)(c) 89,300
300,000 CCC+ Madison River Capital, LLC/Madison River Finance Corp.,
Sr. Notes, Series B, 13.250% due 3/1/10 217,500
215,000 NR Maxcom Telecomunicaciones S.A. de C.V., Guaranteed Sr.
Notes, 13.750% due 4/1/07 (c) 99,975
Netia Holdings B.V.:
130,000 B+ Guaranteed Sr. Discount Notes, step bond to yield
13.787% due 11/1/07 81,250
40,000 B+ Guaranteed Sr. Notes, 10.250% due 11/1/07 29,800
190,000 B NEXTLINK Communications, Inc., Sr. Notes,
10.500% due 12/1/09 165,300
170,000 NR Startec Global Communications Corp., Sr. Notes,
12.000% due 5/15/08 111,350
235,000 A+ Telefonica Europe B.V., Guaranteed Notes,
7.750% due 9/15/10 236,469
-------------------------------------------------------------------------------------------------
1,495,794
-------------------------------------------------------------------------------------------------
Textiles/Apparel -- 0.6%
280,000 BB- Guess Jeans Inc., Sr. Sub. Notes, 9.500% due 8/15/03 275,800
85,000 NR Kasper ASL Ltd., Sr. Notes, 13.000% due 3/31/04 48,875
Levi Strauss & Co., Notes:
170,000 BB- 6.800% due 11/1/03 139,825
40,000 BB- 7.000% due 11/1/06 29,400
WestPoint Stevens Inc., Sr. Notes:
380,000 BB 7.875% due 6/15/05 283,100
60,000 BB 7.875% due 6/15/08 40,800
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
44 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Textiles/Apparel -- 0.6% (continued)
William Carter Co., Sr. Sub. Notes:
$ 15,000 B- 10.375% due 12/1/06 $ 14,325
50,000 NR 12.000% due 10/1/08 45,500
-------------------------------------------------------------------------------------------------
877,625
-------------------------------------------------------------------------------------------------
Transportation -- 0.7%
100,000 BB- Eletson Holdings Inc., Notes, 9.250% due 11/15/03 96,250
Guangzhou-Shenzhen Superhighway (Holdings) Ltd.,
Sr. Notes:
190,000 BB- 9.875% due 8/15/04 (b) 129,675
75,000 BB- 10.250% due 8/15/07 48,938
40,000 BB International Shipholding Corp., Sr. Notes,
7.750% due 10/15/07 35,600
150,000 Ba2* Kansas City Southern Railway Co., Sr. Notes,
9.500% due 10/1/08 (b) 153,000
40,000 Ca* Kitty Hawk Inc., Sr. Secured Notes, 9.950% due 11/15/04 (d) 23,200
180,000 B+ Pegasus Shipping (Hellas) Ltd., Sr. Notes,
14.500% due 6/20/08 (d) 8,100
350,000 B- RailAmerica Transportation Corp., Sr. Sub. Notes,
12.875% due 8/15/10 (b)(c) 330,750
245,000 B+ TFM S.A. de C.V., Guaranteed Sr. Discount Notes,
step bond to yield 11.799% due 6/15/09 179,462
25,000 B+ Transportacion Maritima Mexicana S.A. de C.V., Sr. Notes,
9.250% due 5/15/03 19,813
-------------------------------------------------------------------------------------------------
1,024,788
-------------------------------------------------------------------------------------------------
Utilities -- 1.5%
350,000 Ba1* The AES Corp., Sr. Notes, 9.375% due 9/15/10 357,000
Calpine Corp., Sr. Notes:
30,000 BB+ 9.250% due 2/1/04 30,000
80,000 BB+ 10.500% due 5/15/06 82,400
100,000 BB+ 8.750% due 7/15/07 98,125
50,000 BB+ 7.875% due 4/1/08 47,625
10,000 BB+ 7.750% due 4/15/09 9,413
Midland Funding, Sr. Secured Lease Obligations:
240,000 BB+ Series A, 11.750% due 7/23/05 266,100
575,000 BB+ Series B, 13.250% due 7/23/06 667,719
101,636 BBB- Series C-94, 10.330% due 7/23/02 103,415
Northeast Utilities, Notes:
97,066 BB+ 8.380% due 3/1/05 95,732
14,939 BB+ 8.580% due 12/1/06 14,697
250,000 CC Panda Global Energy Co., Sr. Secured Notes,
12.500% due 4/15/04 113,750
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 45
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
=================================================================================================
<S> <C>
Utilities -- 1.5% (continued)
$ 240,000 BB- York Power Funding, Guaranteed Notes,
12.000% due 10/30/07 (b) $ 240,000
-------------------------------------------------------------------------------------------------
2,125,976
-------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost -- $76,536,743) 62,350,841
=================================================================================================
SHARES SECURITY VALUE
=================================================================================================
PURCHASED OPTION -- 0.6%
3,000,000 Japanese 10-year Government Bonds, Call @ $105,
Expire 12/1/00 (Cost -- $783,171) 778,713
=================================================================================================
COMMON STOCK -- 0.0%
Agriculture -- 0.0%
22 PSF Holdings LLC, Class A Shares (f) 28,632
-------------------------------------------------------------------------------------------------
Broadcasting -- 0.0%
1,600 Spanish Broadcasting System, Inc., Class A Shares (f) 14,400
-------------------------------------------------------------------------------------------------
Consumer Products -- 0.0%
44 Mothers Work, Inc. (f) 418
-------------------------------------------------------------------------------------------------
Food & Beverage -- 0.0%
25 AmeriKing, Inc. (f) 25
2,833 Aurora Foods, Inc. (f) 7,970
-------------------------------------------------------------------------------------------------
7,995
-------------------------------------------------------------------------------------------------
Telecommunications -- 0.0%
33,576 Celcaribe S.A. 4,197
282 Mpower Communications Corp. (f) 1,833
168 RSL Communications, Ltd., Class A Shares (f) 210
-------------------------------------------------------------------------------------------------
6,240
-------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $118,337) 57,685
=================================================================================================
PREFERRED STOCK -- 2.3%
Banking -- 0.4%
5,400 California Federal Preferred Capital Corp.,
9.125% Noncumulative Exchangeable, Series A 124,200
3,500 Chevy Chase Preferred Capital Corp.,
10.375% Noncumulative Exchangeable, Series A 178,500
2,500 First Republic Preferred Capital Corp.,
10.500% Noncumulative Exchangeable, Series A 215,625
-------------------------------------------------------------------------------------------------
518,325
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
46 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Broadcasting -- 0.5%
2,195 Citadel Broadcasting Co., 13.250% Exchangeable, Series B $ 234,341
Paxson Communications Corp.:
12 9.750% Convertible 115,195
28 13.250% Cumulative Junior Exchangeable 274,960
-------------------------------------------------------------------------------------------------
624,496
-------------------------------------------------------------------------------------------------
Cable -- 0.3%
4,411 CSC Holdings Inc., 11.750% Redeemable Exchangeable,
Series H 470,876
-------------------------------------------------------------------------------------------------
Energy -- 0.1%
1,311 R&B Falcon Corp., 13.875% Sr. Cumulative Redeemable 170,486
-------------------------------------------------------------------------------------------------
Food -- 0.0%
1,605 AmeriKing Inc., 13.000% Sr. Exchangeable 1,605
-------------------------------------------------------------------------------------------------
Health Care -- 0.0%
100 Fresenius Medical Capital Trust I, 9.000% Guaranteed Trust
Preferred Securities 9,825
-------------------------------------------------------------------------------------------------
Metals -- 0.1%
7,000 LTV Corp., 8.250% Cumulative Convertible (b) 147,875
-------------------------------------------------------------------------------------------------
Pet Products -- 0.1%
3,000 Doane Pet Care Co., 14.250% Junior Sub. Exchangeable 96,000
-------------------------------------------------------------------------------------------------
Technology -- 0.0%
1,700 PSINet Inc., 7.000% Cumulative Convertible (b) 25,500
-------------------------------------------------------------------------------------------------
Telecommunications -- 0.8%
1 Broadwing Communications Inc.,
12.500% Junior Exchangeable, Series B 1,000
Dobson Communications Corp.:
175 12.250% Sr. Redeemable Exchangeable 169,750
2,060 13.000% Sr. Exchangeable 187,975
5,760 Global Telesystems Inc., 7.250% Cumulative Convertible (b) 38,880
204 ICG Holdings, Inc., 14.250% Exchangeable 4,590
110 InterAct Electronic Marketing Inc.,
14.000% Cumulative Convertible 1
276 Intermedia Communications Inc., 13.500% Redeemable
Exchangeable, Series B 236,136
Nextel Communications, Inc.:
20 11.125% Exchangeable, Series E 1,875
1,060 13.000% Exchangeable, Series D 106,265
2,000 Rural Cellular Corp., 12.250% Exchangeable 158,250
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 47
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Telecommunications -- 0.8% (continued)
XO Communications, Inc.:
927 13.500% Sr. Exchangeable Redeemable, Series B $ 69,792
3,191 14.000% Sr. Exchangeable Redeemable 130,072
-------------------------------------------------------------------------------------------------
1,104,586
-------------------------------------------------------------------------------------------------
Utilities -- 0.0%
601 Public Service Co. of New Hampshire,
10.600% Cumulative, Series A 14,724
-------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost -- $4,071,469) 3,184,298
=================================================================================================
WARRANTS (f) -- 0.1%
Broadcasting -- 0.0%
100 XM Satellite Radio Holdings Inc., Expire 3/15/10 12,013
-------------------------------------------------------------------------------------------------
Building/Construction -- 0.0%
190 Dayton Superior Corp., Expire 6/15/09 (b) 3,800
-------------------------------------------------------------------------------------------------
Cable -- 0.0%
275 UIH Australia Pacific Inc., Expire 5/15/06 1,375
-------------------------------------------------------------------------------------------------
Chemicals -- 0.0%
40 Sterling Chemicals Holdings Inc., Expire 8/15/08 180
-------------------------------------------------------------------------------------------------
Consumer Products & Services -- 0.0%
230 Jostens, Inc., Expire 5/1/10 4,629
-------------------------------------------------------------------------------------------------
Health Care -- 0.0%
110 Mediq, Inc., Expire 6/1/09 (b) 1
-------------------------------------------------------------------------------------------------
Hotel/Casino -- 0.0%
100 Epic Resorts LLC, Expire 6/15/05 (b) 1
-------------------------------------------------------------------------------------------------
Packaging/Containers -- 0.0%
90 Huntsman Packaging Corp., Expire 6/1/10 (b) 900
-------------------------------------------------------------------------------------------------
Paper/Forestry Products -- 0.0%
235 Asia Pulp & Paper Co., Expire 3/15/05 (b) 2
-------------------------------------------------------------------------------------------------
Technology -- 0.0%
1,697 DIVA Systems Corp., Expire 3/1/08 (b) 23,758
110 InterAct Electronic Marketing Inc., Expire 12/15/09 1
110 InterAct Systems Inc., Expire 8/1/03 1
1,080 Rhythms Netconnections, Expire 5/15/08 (b) 8,896
-------------------------------------------------------------------------------------------------
32,656
-------------------------------------------------------------------------------------------------
Telecommunications -- 0.1%
90 Birch Telecom Inc., Expire 6/15/08 (b) 4,995
51 CellNet Data Systems, Inc., Expire 10/1/07 (b) 32
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
48 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY VALUE
=================================================================================================
<S> <C> <C>
Telecommunications -- 0.1% (continued)
140 FirstWorld Communications, Inc., Expire 4/15/08 (b) $ 2,100
40 Globalstar Telecommunications, Ltd., Expire 2/15/04 (b) 5
495 ICG Communications Inc., Expire 10/15/05 495
250 KMC Telecom Holdings, Inc., Expire 4/15/08 (b) 500
215 KNOLOGY Holdings, Inc., Expire 10/22/07 (b) 968
110 Loral Space & Communications Ltd., Expire 1/15/07 468
125 McCaw International Ltd., Expire 4/15/07 2,953
570 Motient Corp., Expire 4/1/08 (b) 10,830
50 OnePoint Communications Corp., Expire 6/1/08 4,250
110 Orbital Imaging Corp., Expire 3/1/05 (b) 564
80 TeleHub Communications Corp., Expire 7/31/05 (b) 40
310 UbiquiTel Inc., Expire 4/15/10 (b) 9,339
-------------------------------------------------------------------------------------------------
37,539
-------------------------------------------------------------------------------------------------
Telephone -- 0.0%
90 Bestel S.A., Expire 5/15/05 1,080
215 Maxcom Telecomunicaciones S.A. de C.V., Expire 4/1/07 (b) 2
170 Startec Global Communications Corp., Expire 5/15/08 425
-------------------------------------------------------------------------------------------------
1,507
-------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(Cost -- $155,096) 94,603
=================================================================================================
TOTAL HIGH-YIELD SECTOR
(Cost -- $81,664,816) 66,466,140
=================================================================================================
<CAPTION>
FACE
AMOUNT# RATING(a) SECURITY VALUE
=================================================================================================
INTERNATIONAL SECTOR -- 15.5%
=================================================================================================
<S> <C> <C>
BONDS -- 15.5%
Argentina -- 0.8%
Republic of Argentina:
118,800USD BB- Debentures, 7.625% due 3/31/05 (e) 104,024
Global Bonds:
402,000USD BB- 11.750% due 4/7/09 353,760
335,000USD BB- 11.750% due 6/15/15 285,755
320,000USD BB- Notes, Series XW, 11.000% due 12/4/05 283,200
-------------------------------------------------------------------------------------------------
1,026,739
-------------------------------------------------------------------------------------------------
Brazil-- 0.9%
Federal Republic of Brazil:
634,176USD B+ Capitalization Bonds, 8.000% due 4/15/14 474,443
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 49
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT# RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C>
Brazil -- 0.9% (continued)
Global Bonds:
258,000USD B+ 14.500% due 10/15/09 $ 276,125
540,000USD B+ 12.250% due 3/6/30 471,825
-------------------------------------------------------------------------------------------------
1,222,393
-------------------------------------------------------------------------------------------------
Bulgaria -- 0.5%
Republic of Bulgaria:
255,000USD B2* Discount Bonds, Series A, 7.750% due 7/28/24+(e) 191,569
615,000USD B2* Interest Reduction Bonds, Series A,
3.000% due 7/28/12 (e) 437,034
75,000USD B2* Past Due Interest Bonds, 7.750% due 7/28/11 (e) 56,250
-------------------------------------------------------------------------------------------------
684,853
-------------------------------------------------------------------------------------------------
Canada -- 1.3%
Government of Canada, Bonds:
1,820,000 AAA 5.500% due 9/1/02 1,187,058
120,000 AAA Series WB60, 7.250% due 6/1/07 84,431
875,000 Aa1* Series WL43, 5.750% due 6/1/29+ 580,354
-------------------------------------------------------------------------------------------------
1,851,843
-------------------------------------------------------------------------------------------------
Colombia -- 0.1%
200,000USD BB Republic of Colombia, Global Bonds, 11.750% due 2/25/20 161,100
-------------------------------------------------------------------------------------------------
Denmark -- 2.1%
Kingdom of Denmark, Bonds:
20,000,000 Aaa* 6.000% due 11/15/09 2,351,186
4,425,000 AAA 7.000% due 11/10/24 578,201
-------------------------------------------------------------------------------------------------
2,929,387
-------------------------------------------------------------------------------------------------
Germany -- 1.2%
Federal Republic of Germany, Bonds:
900,000EUR AAA Series 98, 5.625% due 1/4/28 760,019
1,130,000EUR Aaa* Series 132, 4.125% due 8/27/04+ 925,511
-------------------------------------------------------------------------------------------------
1,685,530
-------------------------------------------------------------------------------------------------
Greece -- 1.2%
648,000,000 A- Hellenic Republic, Government Bonds, 6.500% due 1/11/14 1,665,843
-------------------------------------------------------------------------------------------------
Italy -- 0.8%
Republic of Italy:
720,000EUR AA Bonds, 4.746% due 11/1/26 (e) 608,230
515,000EUR AA Treasury Bonds, 7.250% due 11/1/26 507,972
-------------------------------------------------------------------------------------------------
1,116,202
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
50 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT# RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C>
Mexico -- 1.3%
United Mexican States:
650,000USD Baa3* Global Bonds, 11.375% due 9/15/16 $ 737,750
470,000USD Baa3* Global Bonds, Series XW, 10.375% due 2/17/09 501,138
630,000USD Baa3* Par Bonds, Series W-B, 6.250% due 12/31/19 (g) 554,794
-------------------------------------------------------------------------------------------------
1,793,682
-------------------------------------------------------------------------------------------------
Morocco -- 0.1%
212,500USD NR Kingdom of Morocco, Loan Participations Notes,
Tranche A, zero coupon bond to yield 1.333% due
1/1/09 184,875
-------------------------------------------------------------------------------------------------
New Zealand -- 0.6%
1,990,000 AAA Government of New Zealand, Bonds, Series 709,
7.000% due 7/15/09 807,241
-------------------------------------------------------------------------------------------------
Philippines -- 0.4%
Republic of the Philippines:
240,000USD BB+ Global Bonds, 9.875% due 1/15/19 180,000
560,000USD BB+ Global Notes, 10.625% due 3/16/25 428,400
-------------------------------------------------------------------------------------------------
608,400
-------------------------------------------------------------------------------------------------
Russia -- 1.2%
Russian Federation, Euro Dollar Bonds:
440,000USD B3* 10.000% due 6/26/07 (b) 330,550
505,000USD B3* 12.750% due 6/24/28+(b) 427,040
2,257,500USD B- 2.500% due 3/31/30 (b) 853,617
-------------------------------------------------------------------------------------------------
1,611,207
-------------------------------------------------------------------------------------------------
South Korea -- 0.2%
190,000USD BBB Republic of South Korea, Global Bonds, 8.875% due 4/15/08 198,835
-------------------------------------------------------------------------------------------------
United Kingdom -- 2.3%
200,000 A Residential Mortgage Securities, Collateralized Mortgage
Obligations, Series 8, Class M, 7.311% due 5/12/38 (b) 286,673
United Kingdom Gilt Bonds:
760,000 AAA 8.000% due 12/7/00+ 1,105,800
310,000 AAA 10.000% due 9/8/03 500,116
860,000 AAA Series 85, 9.750% due 8/27/02+ 1,331,722
-------------------------------------------------------------------------------------------------
3,224,311
-------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 51
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
PUTNAM DIVERSIFIED INCOME PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT# RATING(a) SECURITY VALUE
=================================================================================================
<S> <C> <C>
Venezuela -- 0.5%
Republic of Venezuela:
357,140USD B Debt Conversion Bonds, Series DL,
7.875% due 12/18/07 (e) $ 299,105
295,000USD B Global Bonds, 9.250% due 9/15/27 195,069
340,000USD B Par Bonds, Series W-A, 6.750% due 3/31/20+ 253,087
-------------------------------------------------------------------------------------------------
747,261
-------------------------------------------------------------------------------------------------
TOTAL BONDS
(Cost -- $23,303,739) 21,519,702
=================================================================================================
TOTAL INTERNATIONAL SECTOR
(Cost -- $23,303,739) 21,519,702
=================================================================================================
<CAPTION>
FACE
AMOUNT SECURITY VALUE
=================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 3.8%
$ 5,337,000 J.P. Morgan Securities, Inc., 6.600% due 11/1/00;
Proceeds at maturity -- $5,337,978; (Fully collateralized
by Federal Home Loan Bank Notes, 6.750% due 2/1/02;
Market value -- $5,443,740) (Cost -- $5,337,000) 5,337,000
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $156,000,926**) $138,880,206
=================================================================================================
</TABLE>
+ Security has been segregated by the custodian for open futures contracts
commitments and/or open forward foreign currency contracts.
# Face amount denominated in local currency unless otherwise indicated.
(a) All ratings are by Standard & Poor's Ratings Service, except for those
which are identified by an asterisk (*), are rated by Moody's Investors
Service, Inc., or those which are identified by a double dagger (++), are
rated by Fitch IBCA, Inc.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(c) Security has been issued with attached warrants.
(d) Security is in default.
(e) Variable rate security.
(f) Non-income producing security.
(g) Security has been issued with attached rights.
** Aggregate cost for Federal income tax purposes is substantially the same.
Currency abbreviations used in this schedule:
---------------------------------------------
DEM -- German Mark
EUR -- Euro
USD -- United States Dollar
See pages 53 and 54 for definitions of ratings.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
52 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Bond Ratings (unaudited)
--------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"C" 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", "CC", and "C" are regarded, on
CCC, CC balance, as predominantly speculative with respect to capacity to
and C pay interest and repay principal in accordance with the terms of
the obligation. "BB" represents the lowest degree of speculation
and "C" 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.
D -- Bonds rated "D" are in default, and payment of interest and/or
repayment of principal is in arrears.
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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 53
<PAGE>
--------------------------------------------------------------------------------
Bond Ratings (unaudited) (continued)
--------------------------------------------------------------------------------
Fitch IBCA, Inc. ("Fitch") -- Rating may be modified by the addition of a plus
(+) or minus (-) sign to show relative standings with the major rating
categories.
AAA -- Bonds rated AAA by Fitch have the lowest expectation of credit
risk. The obligor has an exceptionally strong capacity for timely
payment of financial commitments which is highly unlikely to be
adversely affected by foreseeable events.
BBB -- Bonds rated BBB by Fitch currently have a low expectation of
credit risk. The capacity for timely payment of financial
commitments is considered to be adequate. Adverse changes in
economic conditions and circumstances, however, are more likely
to impair this capacity. This is the lowest investment grade
category assigned by Fitch.
BB -- Bonds rated BB by Fitch carry the possibility of credit risk
developing, particularly as the result of adverse economic change
over time. Business or financial alternatives may, however, be
available to allow financial commitments to be met. Securities
rated in this category are not considered by Fitch to be
investment grade.
NR -- Indicates that the bond is not rated by Standard & Poor's,
Moody's or Fitch.
--------------------------------------------------------------------------------
54 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
=====================================================================================================
<S> <C> <C>
ASSETS:
Investments, at value (Cost -- $207,314,847
and $156,000,926, respectively) $ 185,183,572 $ 138,880,206
Foreign currency, at value (Cost -- $178,479) -- 83,919
Cash 815 12,260
Dividends and interest receivable 4,719,035 3,334,775
Receivable for securities sold 1,277,021 3,661,694
Receivable for open forward foreign currency
contracts (Note 5) 671,185 1,323,215
Receivable for Fund shares sold 31,017 2,309
-----------------------------------------------------------------------------------------------------
Total Assets 191,882,645 147,298,378
-----------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 821,369 4,622,657
Management fees payable 257,667 91,844
Payable for open forward foreign currency
contracts (Note 5) 50,842 1,651,268
Payable for Fund shares purchased 34,352 16,310
Payable to broker -- variation margin -- 7,699
Payable for open interest rate swap contract (Note 8) -- 600
Accrued expenses 51,120 63,583
-----------------------------------------------------------------------------------------------------
Total Liabilities 1,215,350 6,453,961
-----------------------------------------------------------------------------------------------------
Total Net Assets $ 190,667,295 $ 140,844,417
=====================================================================================================
NET ASSETS:
Par value of capital shares $ 185 $ 137
Capital paid in excess of par value 224,316,555 158,251,116
Undistributed net investment income 21,600,913 10,860,854
Accumulated net realized loss from security
transactions and options (33,731,311) (10,737,031)
Net unrealized depreciation of investments, options,
foreign currencies, futures contracts and swaps (21,519,047) (17,530,659)
-----------------------------------------------------------------------------------------------------
Total Net Assets $ 190,667,295 $ 140,844,417
=====================================================================================================
Shares Outstanding 18,521,886 13,659,122
-----------------------------------------------------------------------------------------------------
Net Asset Value $10.29 $10.31
-----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 55
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam
Smith Barney Diversified
High Income Income
Portfolio Portfolio
=====================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 22,339,369 $ 14,029,349
Dividends 106,479 439,057
-----------------------------------------------------------------------------------------------------
Total Investment Income 22,445,848 14,468,406
-----------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,211,048 1,144,869
Shareholder communications 42,844 32,386
Audit and legal 18,911 25,458
Pricing service fees 18,289 51,684
Shareholder and system servicing fees 17,164 16,760
Custody 14,309 44,903
Directors' fees 3,798 4,762
Other 8,286 2,784
-----------------------------------------------------------------------------------------------------
Total Expenses 1,334,649 1,323,606
-----------------------------------------------------------------------------------------------------
Net Investment Income 21,111,199 13,144,800
-----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND SWAPS (NOTES 3, 4, 5, 7 AND 8):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) (18,925,781) (4,075,010)
Options purchased -- (45,177)
Foreign currency transactions 1,099,715 (1,275,486)
Futures contracts -- (49,487)
-----------------------------------------------------------------------------------------------------
Net Realized Loss (17,826,066) (5,445,160)
-----------------------------------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments,
Options, Foreign Currencies, Futures Contracts and Swaps:
Beginning of year (11,237,193) (10,545,958)
End of year (21,519,047) (17,530,659)
-----------------------------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (10,281,854) (6,984,701)
-----------------------------------------------------------------------------------------------------
Net Loss on Investments, Options, Foreign
Currencies, Futures Contracts and Swaps (28,107,920) (12,429,861)
-----------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations $ (6,996,721) $ 714,939
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
56 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Smith Barney High Income Portfolio 2000 1999
==============================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 21,111,199 $ 17,905,450
Net realized loss (17,826,066) (12,233,359)
(Increase) decrease in net unrealized depreciation (10,281,854) 2,768,731
----------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (6,996,721) 8,440,822
----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (18,161,848) (13,646,737)
----------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (18,161,848) (13,646,737)
----------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 26,784,116 42,775,495
Net asset value of shares issued
for reinvestment of dividends 18,161,848 13,646,737
Cost of shares reacquired (28,124,491) (12,470,554)
----------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 16,821,473 43,951,678
----------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (8,337,096) 38,745,763
NET ASSETS:
Beginning of year 199,004,391 160,258,628
----------------------------------------------------------------------------------------------
End of year* $ 190,667,295 $ 199,004,391
==============================================================================================
* Includes undistributed net investment income of: $21,600,913 $18,142,914
==============================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 57
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended October 31,
Putnam Diversified Income Portfolio 2000 1999
=============================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 13,144,800 $ 12,588,253
Net realized loss (5,445,160) (5,339,115)
Increase in net unrealized depreciation (6,984,701) (4,393,324)
---------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 714,939 2,855,814
---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (12,792,088) (8,971,238)
---------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (12,792,088) (8,971,238)
---------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 12):
Net proceeds from sale of shares 7,254,286 15,890,169
Net asset value of shares issued
for reinvestment of dividends 12,792,088 8,971,238
Cost of shares reacquired (23,231,489) (19,533,917)
---------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (3,185,115) 5,327,490
---------------------------------------------------------------------------------------------
Decrease in Net Assets (15,262,264) (787,934)
NET ASSETS:
Beginning of year 156,106,681 156,894,615
---------------------------------------------------------------------------------------------
End of year* $ 140,844,417 $ 156,106,681
=============================================================================================
* Includes undistributed net investment income of: $10,860,854 $12,807,689
=============================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
58 2000 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, Smith Barney Large Cap Value, Smith Barney International
Equity, Smith Barney Pacific Basin, Travelers Managed Income, Salomon Brothers
Global High Yield, formerly known as INVESCO 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 accounting principles. At October 31, 2000,
reclassifications were made to the Portfolios' capital accounts to reflect
permanent book/tax differences and income
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 59
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
and gains available for distribution under income tax regulations. Accordingly,
for the Smith Barney High Income Portfolio a portion of accumulated net
investment income amounting to $302 was 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 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"), 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.
--------------------------------------------------------------------------------
60 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset-based
fees that vary according to the size and type of account. PFPC is responsible
for shareholder recordkeeping and financial processing for all shareholder
accounts and is paid by CFTC. For the year ended October 31, 2000, the
Portfolios paid transfer agent fees of $10,000 to CFTC.
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, 2000, 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, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
SBHI PDIP
================================================================================
Purchases $133,527,468 $148,998,096
--------------------------------------------------------------------------------
Sales 127,217,275 151,885,989
================================================================================
At October 31, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
SBHI PDIP
================================================================================
Gross unrealized appreciation $ 2,707,670 $ 1,466,787
Gross unrealized depreciation (24,838,945) (18,587,507)
--------------------------------------------------------------------------------
Net unrealized depreciation $(22,131,275) $(17,120,720)
================================================================================
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 transactions, 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, 2000, PDIP had purchased call options with a total cost of
$783,171.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 61
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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 written put option is exercised, the amount of the
premium originally received will reduce the cost of the security which the
Portfolios purchased upon exercise. When written index options are exercised,
settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Portfolios enter into options for hedging purposes. The risk in
writing a covered call option is that the Portfolios give up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Portfolios are
exposed to the risk of loss if the market price of the underlying security
declines.
During the year ended October 31, 2000, the Portfolios did not enter into any
written covered call or put option contracts.
5. Foreign Currency Exchange Contracts
At October 31, 2000, the Portfolios had open foreign currency exchange contracts
as described below. The Portfolios record realized gains or losses at the time
the forward contract is offset by entry into a closing transaction or settlement
of the contract. The Portfolios bear the market risk that arises from changes in
foreign currency exchange rates. The unrealized gain (loss) on the open
contracts is reflected in the accompanying financial statements as follows:
Smith Barney High Income Portfolio
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
To Sell:
British Pound 1,991,875 $2,895,586 12/22/00 $99,596
British Pound 286,125 415,940 12/22/00 13,277
British Pound 142,438 207,061 12/22/00 7,749
Canadian Dollar 630,000 412,859 12/8/00 15,436
Canadian Dollar 273,500 179,233 12/8/00 6,568
Canadian Dollar 256,875 168,338 12/8/00 5,602
Canadian Dollar 189,375 124,103 12/8/00 3,902
Canadian Dollar 170,000 111,406 12/8/00 3,743
Canadian Dollar 69,750 45,709 12/8/00 1,500
Euro 371,978 315,289 11/1/00 (2,976)
Euro 257,987 218,670 11/1/00 (2,064)
--------------------------------------------------------------------------------
62 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Smith Barney High Income Portfolio (continued)
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
Euro 453,000 $ 383,963 11/2/00 $ (2,900)
Euro 3,084,879 2,620,295 12/15/00 376,974
Euro 553,875 470,461 12/15/00 53,726
Euro 250,000 212,350 12/15/00 25,550
Euro 238,125 202,263 12/15/00 26,670
Euro 140,250 119,128 12/15/00 1,907
Euro 133,000 112,970 12/15/00 13,034
Euro 121,225 102,968 12/15/00 6,619
Euro 119,277 101,314 12/15/00 3,400
--------------------------------------------------------------------------------
657,313
--------------------------------------------------------------------------------
To Buy:
British Pound 53,350 77,555 12/22/00 (304)
British Pound 67,900 98,706 12/22/00 1,100
Euro 119,514 101,516 12/15/00 (11,701)
Euro 143,417 121,819 12/15/00 (13,424)
Euro 155,369 131,970 12/15/00 (6,533)
Euro 156,000 132,506 12/15/00 (10,940)
Euro 167,500 142,274 12/15/00 1,348
Euro 205,000 174,127 12/15/00 1,650
Euro 285,750 242,716 12/15/00 1,834
--------------------------------------------------------------------------------
(36,970)
--------------------------------------------------------------------------------
Net Unrealized Gain on Open Forward
Foreign Currency Contracts $620,343
================================================================================
Putnam Diversified Income Portfolio
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
To Sell:
Australian Dollar 1,315,000 $ 681,810 12/20/00 $ 42,518
Australian Dollar 1,315,000 681,810 12/20/00 42,361
Australian Dollar 2,630,000 1,363,620 12/20/00 83,085
Australian Dollar 2,705,000 1,402,506 12/20/00 29,169
Australian Dollar 1,324,000 686,476 12/20/00 (9,317)
British Pound 1,283,900 1,866,311 12/20/00 (791)
British Pound 448,300 651,661 12/20/00 (1,222)
British Pound 499,000 725,360 12/20/00 12,896
Canadian Dollar 3,724,300 2,441,489 12/20/00 88,520
Canadian Dollar 1,110,000 727,668 12/20/00 26,695
Canadian Dollar 1,404,000 920,401 12/20/00 29,210
Canadian Dollar 408,300 267,664 12/20/00 9,150
Canadian Dollar 1,081,000 708,656 12/20/00 2,060
Danish Krone 28,849,547 2,835,164 12/20/00 151,561
Euro 4,452,150 3,782,545 12/20/00 188,328
Euro 2,581,000 2,192,817 12/20/00 107,887
Euro 1,650,000 1,401,840 12/20/00 40,013
Euro 1,650,000 1,401,840 12/20/00 56,101
Euro 856,000 727,257 12/20/00 36,483
Euro 826,000 701,769 12/20/00 32,435
Euro 616,400 523,693 12/20/00 13,703
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 63
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Putnam Diversified Income Portfolio (continued)
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
================================================================================
Euro 856,000 $ 727,257 12/20/00 $ (821)
Euro 856,000 727,257 12/20/00 (17,034)
Japanese Yen 2,096,220 19,198 11/20/00 5
Japanese Yen 221,194,328 2,044,149 12/20/00 99,622
Japanese Yen 23,951,400 221,345 12/20/00 10,325
Japanese Yen 8,903,800 82,283 12/20/00 4,021
Japanese Yen 4,985,497 46,073 12/20/00 2,211
Japanese Yen 88,365,850 816,626 12/20/00 38,100
Japanese Yen 167,494,485 1,547,887 12/20/00 75,122
Japanese Yen 78,577,000 726,163 12/20/00 4,718
Japanese Yen 78,577,000 726,163 12/20/00 3,239
Japanese Yen 66,976,000 618,953 12/20/00 8,562
Japanese Yen 76,956,000 711,183 12/20/00 5,487
New Zealand Dollar 2,043,200 811,201 12/20/00 63,288
Swedish Krona 7,021,000 703,595 12/20/00 7,404
--------------------------------------------------------------------------------
1,285,094
--------------------------------------------------------------------------------
To Buy:
Australian Dollar 4,504,350 2,335,445 12/20/00 (260,592)
Australian Dollar 3,770,869 1,955,145 12/20/00 (216,951)
Australian Dollar 1,761,800 913,470 12/20/00 (84,238)
Australian Dollar 1,756,400 910,670 12/20/00 (67,153)
Australian Dollar 352,000 182,507 12/20/00 (6,112)
Australian Dollar 662,000 343,238 12/20/00 (2,306)
British Pound 499,000 725,360 12/20/00 300
British Pound 499,000 725,360 12/20/00 (4,418)
British Pound 499,000 725,360 12/20/00 8,636
Canadian Dollar 353,100 231,477 12/20/00 (8,401)
Canadian Dollar 1,110,000 727,668 12/20/00 (21,993)
Canadian Dollar 1,081,000 708,657 12/20/00 (15,219)
Canadian Dollar 794,100 520,577 12/20/00 (10,416)
Euro 4,680,850 3,976,848 12/20/00 (192,385)
Euro 3,723,200 3,163,229 12/20/00 (157,958)
Euro 1,547,500 1,314,756 12/20/00 (65,661)
Euro 4,121,790 3,501,871 12/20/00 (173,941)
Euro 825,000 700,920 12/20/00 (19,759)
Euro 834,700 709,161 12/20/00 (31,003)
Euro 815,000 692,424 12/20/00 (17,335)
Euro 856,000 727,257 12/20/00 (1,712)
Japanese Yen 5,052,565 46,693 12/20/00 (2,266)
Japanese Yen 381,769,000 3,528,087 12/20/00 (165,177)
Japanese Yen 47,000,000 434,347 12/20/00 (16,406)
Japanese Yen 82,000,000 757,796 12/20/00 (12,157)
Japanese Yen 81,000,000 748,555 12/20/00 (12,008)
Swedish Krona 1,404,400 140,739 12/20/00 (10,272)
Swedish Krona 7,021,000 703,595 12/20/00 (32,143)
Swiss Franc 614,500 343,374 12/20/00 (14,101)
--------------------------------------------------------------------------------
(1,613,147)
--------------------------------------------------------------------------------
Net Unrealized Loss on Open Forward
Foreign Currency Contracts $ (328,053)
================================================================================
--------------------------------------------------------------------------------
64 2000 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 (plus accrued interest) of the
collateral in amounts at least equal to the repurchase price.
7. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized 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, 2000, 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>
Sold Contracts:
3-Month Euro Index 1 3/02 $ 234,015 $ 233,913 $ 102
3-Month Euro Yen 9 9/01 2,046,373 2,048,471 (2,098)
3-Month Gilt Bond 3 12/00 489,679 494,961 (5,282)
U.S. Treasury Long Bond 23 12/00 2,313,918 2,296,406 17,512
-----------------------------------------------------------------------------------------
10,234
-----------------------------------------------------------------------------------------
Purchased Contracts:
3-Month Euro Index 1 3/01 233,825 233,708 (117)
U.S. 10-Year Treasury Note 46 12/00 4,602,352 4,632,344 29,992
U.S. Treasury Long Bond 2 12/00 199,774 199,687 (87)
-----------------------------------------------------------------------------------------
29,788
-----------------------------------------------------------------------------------------
Net Unrealized Gain $40,022
=========================================================================================
</TABLE>
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 65
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
8. Interest Rate Swaps
As of October 31, 2000, PDIP entered into the following interest rate swap
agreement:
Swap Counterparty: Merrill Lynch, Pierce, Fenner & Smith Inc.
Effective Date: 10/31/00
Notional Amount: $3,000,000
Payments Made by PDIP: Floating Rate (Three-Month LIBOR)
Payments Received by PDIP: Fixed Rate, 6.74%
Termination Date: 10/31/05
Unrealized Depreciation
as of 10/31/00 $600
9. Lending of Portfolio Securities
The Portfolios have an agreement with their custodian whereby the custodian may
lend securities owned by the Portfolios to brokers, dealers and other financial
organizations. Fees earned by the Portfolios on securities lending are recorded
as interest income. Loans of securities by the Portfolios are collateralized by
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin which may vary 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, 2000, the Portfolios did not have any securities on loan.
10. 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
--------------------------------------------------------------------------------
66 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, the Portfolios did not hold any TBA securities.
11. Capital Loss Carryforwards
At October 31, 2000, the Smith Barney High Income Portfolio and the Putnam
Diversified Income Portfolio had, for Federal income tax purposes, approximately
$33,645,000 and $10,484,000, 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:
<TABLE>
<CAPTION>
Total 2006 2007 2008
==========================================================================================
<S> <C> <C> <C> <C>
Smith Barney High Income Portfolio $33,645,000 $3,001,000 $12,316,000 $18,328,000
------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 10,484,000 2,321,000 5,086,000 3,077,000
==========================================================================================
</TABLE>
12. Capital Shares
At October 31, 2000, 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, 2000 October 31, 1999
================================================================================
Smith Barney High Income Portfolio
Shares sold 2,326,420 3,430,771
Shares issued on reinvestment 1,667,755 1,159,451
Shares reacquired (2,444,991) (1,009,907)
--------------------------------------------------------------------------------
Net Increase 1,549,184 3,580,315
================================================================================
Putnam Diversified Income Portfolio
Shares sold 647,934 1,352,553
Shares issued on reinvestment 1,209,082 798,153
--------------------------------------------------------------------------------
Shares reacquired (2,092,927) (1,668,397)
--------------------------------------------------------------------------------
Net Increase (Decrease) (235,911) 482,309
================================================================================
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 67
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Smith Barney
High Income Portfolio 2000 1999 1998(1) 1997 1996
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.72 $11.97 $13.25 $12.09 $11.26
-------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 1.20 0.92 1.21 0.88 1.14
Net realized and unrealized gain (loss) (1.56) (0.28) (1.58) 1.00 0.19
-------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.36) 0.64 (0.37) 1.88 1.33
-------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (1.07) (0.89) (0.74) (0.66) (0.50)
Net realized gains -- -- (0.17) (0.06) --
-------------------------------------------------------------------------------------------------------
Total Distributions (1.07) (0.89) (0.91) (0.72) (0.50)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $10.29 $11.72 $11.97 $13.25 $12.09
-------------------------------------------------------------------------------------------------------
Total Return (3.54)% 5.28% (3.38)% 16.24% 12.17%
-------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $191 $199 $160 $124 $66
-------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.66% 0.66% 0.67% 0.70% 0.84%
Net investment income 10.46 9.44 9.12 9.36 9.79
-------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 70% 73% 82% 89% 104%
=======================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
--------------------------------------------------------------------------------
68 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
Putnam Diversified
Income Portfolio 2000 1999 1998 1997 1996(1)
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.24 $11.70 $12.31 $11.99 $11.46
-------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.93 0.91 0.57 0.67 0.78
Net realized and unrealized gain (loss) (0.88) (0.70) (0.62) 0.30 0.27
-------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.05 0.21 (0.05) 0.97 1.05
-------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.98) (0.67) (0.42) (0.56) (0.39)
Net realized gains -- -- (0.14) (0.09) (0.13)
-------------------------------------------------------------------------------------------------------
Total Distributions (0.98) (0.67) (0.56) (0.65) (0.52)
-------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $10.31 $11.24 $11.70 $12.31 $11.99
-------------------------------------------------------------------------------------------------------
Total Return 0.21% 1.80% (0.65)% 8.44% 9.43%
-------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $141 $156 $157 $122 $81
-------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.87% 0.83% 0.87% 0.88% 0.96%
Net investment income 7.78 7.85 7.48 6.99 7.57
-------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 105% 118% 191% 253% 255%
=======================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 69
<PAGE>
--------------------------------------------------------------------------------
Independent Auditors' Report
--------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedules of investments, of Smith Barney High Income Portfolio and Putnam
Diversified Income Portfolio of Travelers Series Fund Inc. as of October 31,
2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, 2000, 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 accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
70 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes the Putnam Diversified Income Portfolio hereby
designates for the fiscal year ended October 31, 2000:
. A corporate dividends received deduction of 2.97%.
A total of 11.03% of the ordinary dividends paid by the Portfolio from net
investment income are derived from Federal obligations and may be exempt from
taxation at the state level.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 71
<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 PFPC Trust Company
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 This report is submitted for the general
Senior Vice President information of the shareholders of
and Treasurer Travelers Series Fund Inc. -- Smith
Barney High Income and Putnam
John C. Bianchi Diversified Income Portfolios. It is not
Vice President authorized for distribution to
prospective investors unless accompanied
Paul A. Brook or preceded by a current Prospectus for
Controller the Portfolios, which contains
information concerning the Portfolios'
Christina T. Sydor investment policies and expenses as well
Secretary 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
IN0254 12/00
<PAGE>
Travelers Series Fund Inc.
AIM Capital
Appreciation Portfolio
Smith Barney Large
Capitalization Growth
Portfolio
ANNUAL REPORT
October 31, 2000
[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.
-- AIM Capital Appreciation Portfolio and Smith Barney Large Cap Growth
Portfolio ("Portfolio(s)") for the year ended October 31, 2000./1/ In this
report we have summarized the period's prevailing economic and market conditions
and outlined our investment strategy. A detailed summary of the Portfolios'
performances can be found in the appropriate sections that follow. We hope you
find this report to be useful and informative.
Portfolio Highlights
AIM Capital Appreciation Portfolio
For the year ended October 31, 2000, the AIM Capital Appreciation Portfolio
("Portfolio") returned 36.53%. In comparison, the Standard & Poor's 500 Index
("S&P 500")/2/ and the Lipper Inc. ("Lipper")/3/ peer group of mid-
capitalization funds returned 6.08% and 33.07%, respectively, for the same
period.
Despite difficult market conditions during the second half of the period, the
Portfolio performed favorably. The managers believe the Portfolio's performance
was a direct result of careful stock selection, which was based on corporate
momentum.
A strong stock market rally in the first few months of the period was followed
by a choppy, downward-trending market in the second half of the period. In late
1999
---------------
1 The Portfolios are underlying investment options of various variable annuity
products. A variable annuity product is a contract issued by an insurance
company in which the annuity premium (a set amount of dollars) is immediately
turned into units of a portfolio of securities. Upon retirement, the policy
holder is paid according to accumulated units whose dollar value varies
according to the performance of the securities within the subaccounts. Its
objective is to preserve, through investment, the purchasing value of the
annuity which otherwise is subject to erosion through inflation. The
performance returns for these Portfolios do not reflect expenses imposed in
connection with investing in variable annuity contracts such as administrative
fees, account charges and surrender charges, which if reflected, would reduce
the performance of the Portfolios. Past performance is not indicative of
future results.
2 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note an investor cannot invest directly in an index.
3 Lipper is an independent mutual fund-tracking organization.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
and early 2000, technology stocks were the undisputed market leaders. The
technology-laden Nasdaq Composite Index4 continued to soar to record heights
well into March 2000. Towards the end of March, however, the managers believed
that many investors became concerned that technology stocks might be overvalued,
sparking a sharp sell-off in the technology sector. The stocks of Internet
companies with no earnings were most negatively impacted.
During the period, investors were also concerned that the Federal Reserve Board
("Fed") may continue to raise interest rates to slow torrid economic growth and
help moderate inflation. The managers believe interest rate concerns prompted a
sell-off that affected nearly every stock market sector in April 2000 and caused
markets to become extremely volatile. After the Fed raised interest rates in May
2000, it ceased its monetary tightening policy for the remainder of the period.
The stock market rallied in late May and into June 2000 amid mounting evidence
that U.S. economic growth was slowing, reducing the prospects of additional
interest rate hikes by the Fed. However, in the last few months of the period, a
new set of circumstances produced a significant market decline. The managers
believe that investors became skittish about rising oil prices, unrest in the
Middle East and perhaps most importantly, the sustainability of corporate
earnings. A number of major corporations reported earnings disappointments in
September and October 2000, causing extreme market volatility, as rising oil
prices and a weak euro5 had a negative impact on profit margins.
Because of strong performance during the first half of the period, most major
stock market indices recorded gains for the period. After technology stocks
faded, stocks in several other sectors, such as healthcare, financial services,
energy and utilities posted healthy gains. Mid-cap stocks outperformed large-and
small-cap stocks. During the first half of the year, growth stocks6 outperformed
value stocks7 by a wide margin. But in the second half of the year, the
situation was reversed, with value stocks emerging as the clear-cut market
leaders.
----------------
4 The Nasdaq Composite Index is a market value-weighted index that measures all
domestic and non-U.S. based securities listed on the NASDAQ stock market.
Please note an investor cannot invest directly in an index.
5 The euro is the single currency of the European Monetary Union that was
adopted by Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland on January 1, 1999.
6 Growth stocks are shares of companies with the potential for
faster-than-average growth within their industries. Growth stocks generally
provide an opportunity for more capital appreciation than fixed-income
investments but are subject to greater market fluctuations.
7 Value stocks are shares of companies that are considered to be inexpensive
relative to their asset values or earning power.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
Relative to the S&P 500, the Portfolio was overweighted in the technology and
consumer cyclical sectors. While both of these sectors struggled during the
period, the managers believe they found a number of companies with solid
earnings-growth prospects. The Portfolio's technology holdings boosted
performance, especially because the managers avoided volatile "dot-com" stocks.
The Portfolio also benefited from its healthcare holdings, particularly
pharmaceutical stocks and energy holdings. The managers believe the demand for
healthcare services tends to remain constant, regardless of economic trends,
while energy stocks benefited from rising oil prices. Large- and mid-cap stocks
made up most of the Portfolio's holdings. In addition, the Portfolio had
relatively modest exposure to small-cap stocks.
During the period, the Portfolio's top holdings remained relatively unchanged.
VERITAS Software Corp., the Portfolio's largest holding, is the world's leading
maker of storage-management software, which protects networks against data loss
from crashes and errors, expedites data recovery and manages corporate storage.
Other holdings that remained in the Portfolio during the period were Corning
Inc., the inventor and one of the world's top manufacturers of fiber optic
cable; Check Point Software Technologies, supplier of software that protects
corporate networks from unauthorized access; JDS Uniphase Corp., maker of laser
equipment that increase the carrying capacity of optical fibers; Comverse
Technology Inc., the leading maker of voice-mail messaging systems; and Cisco
Systems Inc., the leading provider of products that link networks and power the
Internet.
At the close of the period, the economic climate appeared favorable for stocks,
despite often extreme market volatility. The nation's unemployment rate was at
its lowest level in three decades. After being down for a few months, consumer
spending again picked up in September 2000. Except for higher oil prices,
inflation was moderate. Interest rates had stabilized as the Fed had taken a
respite from its monetary-tightening policy, which had periodically stirred-up
both stock and bond markets since June 1999. Perhaps most importantly, corporate
profit growth, while declining, was still in the managers' opinion, impressive
for many companies. However, because of a degree of uncertainty surrounding
near-term economic, political and foreign trends, the managers believe the stock
market may continue to be volatile in the immediate future. (Please note, no
guarantees can be given that the managers' expectations will be realized.)
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
Smith Barney Large Capitalization Growth Portfolio
For the year ended October 31, 2000, the Smith Barney Large Capitalization
Growth Portfolio ("Portfolio") returned 10.77%. In comparison, the Standard and
Poor's 500 Index ("S&P 500")8 returned 6.08% over the same period.
The Portfolio seeks long-term growth of capital by normally investing 65% of its
assets in the stocks of companies with market capitalizations of $5 billion or
more.
After four consecutive years of gains greater than 20%, the S&P 500 and the
Nasdaq Composite Index9 entered the final quarter of 2000 with a reasonable
chance of registering among the weakest annual returns for each index since
1991. Largely the result of the technology sector's performance and unusual
levels of speculative investing, the manager believes the performance of large
capitalization growth stocks may reflect a natural breather for the asset class.
These difficult conditions, in turn, demonstrate to the manager the necessity of
favorable stock selection.
While many investors have gained comfort from the belief that monetary
policymakers may have finished tightening interest rates for a while, the
manager believes interest rate fears have been displaced by uncertainty about
global and domestic growth next year, profits becoming scarcer and energy prices
remaining at high levels far longer than previously assumed.
As a result, earnings sustainability in the face of a cooling economy has become
an issue after several companies pre-announced their earnings ahead of the third
quarter earnings season. The variety of hurdles include moderating global
growth, negative currency effects and the higher costs of doing business related
to energy, wages and interest rates. Such operational challenges seem unlikely
to be quickly resolved and therefore have generally colored the manager's
outlook and the Portfolio's investment strategy in the intermediate term.
Considering estimates of annual growth in corporate profits for next year that
may range from 6% to 8% (versus the 14% to 16% expected gains in 2000), the
manager believes identifying companies with attractive valuations and
sustainable earnings may become a harder task. If the recent flood of profit
warnings is a sign of what lies ahead, many stocks with high earnings visibility
are likely to gain favor, while those with high expectations and decelerating
growth may be candidates for underperformance. As cyclical challenges continue
frustrating earnings beyond the industrial sector, the manager suspects
-------------
8 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note an investor cannot invest directly in an index.
9 The Nasdaq Composite Index is a market value-weighted index that measures all
domestic and non-U.S. based securities listed on the NASDAQ stock market.
Please note an investor cannot invest directly in an index.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
many investors may continue showing more discernment between stocks with extreme
valuations and the appeal of companies with solid earnings growth.
The manager believes the wildcard in the outlook relates to oil prices and
whether Middle East tensions can be resolved without supply disruptions.
Clearly, any resolution removing the threat of an "oil shock" would be favorable
for the stock market. Aside from energy, inflation remains benign. From these
levels the manager believes stocks may be able to advance against the
anticipated backdrop of moderate yet solid economic growth, slow but respectable
profits, and stable to declining interest rates.
Overall, the manager thinks the corporate earnings outlook may be the single
most important factor in determining the behavior of large capitalization growth
stocks; consequently, the manager tends to view short-term political and
economic events as background noise, and remains more firmly committed than ever
to the Portfolio's long-term focus of seeking to invest in companies with strong
balance sheets, excellent products and experienced management.
The manager looks to invest in companies that he believes may, over time,
deliver above-average unit growth in a low inflation environment. The manager's
focus remains constant: to seek to invest in promising companies with the
financial strength to raise dividends where applicable, buy back shares and make
strategic acquisitions.
In closing, thank you for your investment 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 22, 2000
The information provided in this letter represents the opinions of the
manager(s) and is not intended to be a forecast of future events, a guarantee of
future results nor investment advice. Further, there is no assurance that
certain securities will remain in or out of the Portfolios. Please refer to
pages 10 through 16 for a list and percentage breakdown of the Portfolios'
holdings. Also, please note any discussion of the Portfolios' holdings is as of
October 31, 2000 and is subject to change.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
--------------------------------------------------------------------------------
AIM Capital Appreciation 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>
10/31/00 $ 16.30 $ 21.73 $ 0.00 $ 0.53 36.53%
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 $ 0.53
======================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/00 36.53%
10/10/95* through 10/31/00 17.19
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Return+
--------------------------------------------------------------------------------
================================================================================
10/10/95* through 10/31/00 123.29%
================================================================================
+ 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.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
AIM Capital Appreciation Portfolio vs. Lipper Midcap Index+
--------------------------------------------------------------------------------
October 1995 -- October 2000
[GRAPH]
AIM Capital Lipper Midcap
Appreciation Index
10/10/95 10,000 10,000
Oct-95 10,000 10,190
Oct-96 10,771 11,962
Oct-97 12,706 14,450
Oct-98 12,351 14,029
Oct-99 16,355 18,224
10/31/00 22,329 24,585
+ 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, 2000. 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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 7
<PAGE>
--------------------------------------------------------------------------------
Smith Barney Large Capitalization Growth Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns+
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/31/00 $ 14.53 $ 16.04 $ 0.01 $ 0.02 $ 0.02 10.77%
10/31/99 9.90 14.53 0.01 0.00 0.00 46.88
5/1/98* - 10/31/98 10.00 9.90 0.00 0.00 0.00 (1.00)++
----------------------------------------------------------------------------------------
Total $ 0.02 $ 0.02 $ 0.02
========================================================================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
================================================================================
Year Ended 10/31/00 10.77%
5/1/98* through 10/31/00 20.97
================================================================================
--------------------------------------------------------------------------------
Cumulative Total Return+
--------------------------------------------------------------------------------
================================================================================
5/1/98* through 10/31/00 61.06%
================================================================================
+ 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.
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Large Capitalization Growth Portfolio
vs. S&P 500 Index+
--------------------------------------------------------------------------------
May 1998 -- October 2000
[GRAPH]
S/B Large Cap Standard & Poor's 500 Index
5/1/98 10,000 10,000
Oct-98 9,900 9,959
Apr-99 13,878 12,181
Oct-99 14,541 12,514
Apr-00 16,939 13,413
10/31/00 16,106 13,274
+ 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, 2000. The Standard & Poor's 500 Index ("S&P
500 Index") is an index composed of widely held common stocks listed on the
New York Stock Exchange, American Stock Exchange and over-the-counter
market. Figures for the S&P 500 Index include reinvestment of dividends.
The S&P 500 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, 2000
--------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 91.4%
Advertising -- 2.1%
92,500 Lamar Advertising Co., Class A Shares+ $ 4,440,000
52,000 Omnicom Group Inc. 4,797,000
--------------------------------------------------------------------------------
9,237,000
--------------------------------------------------------------------------------
Banking -- 1.5%
45,000 Northern Trust Corp. 3,841,875
23,500 State Street Corp. 2,931,390
--------------------------------------------------------------------------------
6,773,265
--------------------------------------------------------------------------------
Broadcasting -- 2.4%
50,000 Comcast Corp.+ 2,037,500
22,500 Gemstar-TV Guide International, Inc.+ 1,542,656
117,500 Hispanic Broadcasting Corp.+ 3,671,875
67,400 Univision Communications Inc., Class A
Shares+ 2,578,050
35,500 Westwood One Inc.+ 672,283
--------------------------------------------------------------------------------
10,502,364
--------------------------------------------------------------------------------
Communications - Equipment & Software -- 3.5%
190,000 General Motors Corp., Class H Shares 6,156,000
115,000 JDS Uniphase Corp.+ 9,358,125
--------------------------------------------------------------------------------
15,514,125
--------------------------------------------------------------------------------
Computer Hardware -- 5.5%
29,500 Broacade Communications Systems, Inc.+ 6,707,562
61,900 EMC Corp.+ 5,512,969
92,500 Palm, Inc.+ 4,954,531
61,400 Sun Microsystems, Inc.+ 6,807,725
--------------------------------------------------------------------------------
23,982,787
--------------------------------------------------------------------------------
Computer Software -- 14.8%
45,000 Ariba Inc.+ 5,686,875
45,700 BEA Systems, Inc.+ 3,278,975
20,000 Business Objects S.A. ADR+ 1,575,937
31,200 CDW Computer Centers, Inc.+ 2,010,450
19,800 Ceridian Corp.+ 495,000
73,800 Check Point Software+ 11,688,075
28,000 i2 Technologies, Inc.+ 4,760,000
40,200 Intuit Inc.+ 2,469,788
107,800 Oracle Corp.+ 3,557,400
50,000 Portal Software+ 1,759,375
46,700 Rational Software Corp.+ 2,787,408
42,600 Siebel Systems, Inc.+ 4,470,338
60,000 Sungard Data Systems, Inc.+ 3,067,500
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
--------------------------------------------------------------------------------
Computer Software -- 14.8% (continued)
20,000 VeriSign Inc.+ $ 2,640,000
105,000 VERITAS Software Corp.+ 14,806,640
--------------------------------------------------------------------------------
65,053,761
--------------------------------------------------------------------------------
Consumer/Commercial Services -- 1.7%
102,300 Fiserv Inc.+ 5,364,356
35,030 Paychex Inc. 1,985,763
--------------------------------------------------------------------------------
7,350,119
--------------------------------------------------------------------------------
Electronic Instruments & Controls -- 3.0%
83,200 American Power Conversion Corp.+ 1,076,400
63,500 PE Corp. - PE Biosystems Group 7,429,500
41,300 Sanmina Corp.+ 4,721,106
--------------------------------------------------------------------------------
13,227,006
--------------------------------------------------------------------------------
Electronics - Semiconductors & Components -- 9.8%
60,000 Altera Corp.+ 2,456,250
106,800 Analog Devices, Inc.+ 6,942,000
77,200 Celestica Inc.+ 5,548,750
28,300 Integrated Device Technology, Inc.+ 1,593,644
47,500 KLA-Tencor Corp.+ 1,606,094
40,800 Linear Technology Corp. 2,634,150
40,700 Maxim Integrated Products, Inc.+ 2,698,919
61,462 Microchip Technology Inc.+ 1,943,736
25,700 Millipore Corp. 1,349,250
41,100 PMC-Sierra Inc.+ 6,966,450
75,000 Vitesse Semiconductor Corp.+ 5,245,313
51,700 Xilinx, Inc.+ 3,745,019
--------------------------------------------------------------------------------
42,729,575
--------------------------------------------------------------------------------
Financial Services -- 10.6%
52,500 American Express Co. 3,150,000
40,700 Captial One Financial Corp. 2,569,187
135,000 Charles Schwab Corp. 4,741,875
60,000 Chase Manhattan Corp. 2,730,000
11,250 Federated Investors, Inc., Class B Shares 327,657
20,200 Freddie Mac 1,212,000
70,000 The Goldman Sachs Group Inc. 6,986,875
45,000 J.P. Morgan & Co. 7,447,500
45,000 Merrill Lynch & Co., Inc. 3,150,000
80,000 Morgan Stanley Dean Witter & Co. 6,425,000
37,950 Providian Financial Corp. 3,946,800
80,000 Stilwell Financial, Inc. 3,585,000
--------------------------------------------------------------------------------
46,271,894
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Insurance -- 2.0%
63,400 ACE Ltd. $ 2,488,450
64,500 AFLAC Inc. 4,712,531
41,900 Aon Corp. 1,736,231
--------------------------------------------------------------------------------
8,937,212
--------------------------------------------------------------------------------
Internet -- 1.2%
82,500 InfoSpace, Inc.+ 1,660,313
37,500 Phone.com, Inc.+ 3,471,094
--------------------------------------------------------------------------------
5,131,407
--------------------------------------------------------------------------------
Manufacturing -- 4.8%
170,400 Corning Inc. 13,035,600
41,600 Danaher Corp. 2,626,000
110,000 Harley-Davidson, Inc. 5,300,625
--------------------------------------------------------------------------------
20,962,225
--------------------------------------------------------------------------------
Medical Equipment & Information Systems -- 0.5%
61,500 Biomet, Inc. 2,225,531
--------------------------------------------------------------------------------
Medical Products & Supplies -- 0.8%
63,700 Medtronic Inc. 3,459,706
--------------------------------------------------------------------------------
Medical Services -- 1.7%
62,300 HCA-The Healthcare Co. 2,488,106
169,300 Health Management Associates Inc., Class A Shares+ 3,354,256
40,000 Tenet Healthcare Corp.+ 1,572,500
--------------------------------------------------------------------------------
7,414,862
--------------------------------------------------------------------------------
Oil & Gas -- 3.6%
26,000 Anadarko Petroleum Corp. 1,665,300
21,500 BJ Services Co.+ 1,127,406
46,400 Cooper Cameron Corp.+ 2,528,800
30,000 Enron Corp. 2,461,875
83,500 Grant Prideco, Inc.+ 1,549,969
73,800 Rowan Cos., Inc.+ 1,858,838
43,000 Smith International, Inc.+ 3,031,500
44,000 Weatherford International, Inc.+ 1,606,000
--------------------------------------------------------------------------------
15,829,688
--------------------------------------------------------------------------------
Oil & Gas Drilling -- 3.1%
74,400 ENSCO International Inc. 2,473,800
22,600 Kerr-McGee Corp. 1,476,062
87,400 Nabors Industries, Inc.+ 4,448,660
54,700 R&B Falcon Corp.+ 1,367,500
70,900 Transocean Sedco Forex, Inc. 3,757,700
--------------------------------------------------------------------------------
13,523,722
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Pharmaceuticals -- 2.5%
23,100 Amgen Inc.+ $ 1,338,356
21,000 Forest Laboratories, Inc.+ 2,782,500
34,200 Medicis Pharmaceutical Corp., Class A Shares+ 2,517,976
102,500 Pfizer Inc. 4,426,719
--------------------------------------------------------------------------------
11,065,551
--------------------------------------------------------------------------------
Restaurants -- 0.5%
54,200 Brinker International, Inc.+ 2,127,350
--------------------------------------------------------------------------------
Retail -- 6.1%
207,800 Bed Bath & Beyond Inc.+ 5,363,837
31,800 Best Buy Co., Inc.+ 1,595,963
56,462 Dollar Tree Stores, Inc.+ 2,209,095
62,300 Intimate Brands, Inc. 1,487,413
83,100 Kohl's Corp.+ 4,502,981
80,000 Lowe's Cos., Inc. 3,655,000
50,175 The Men Wearhouse, Inc.+ 1,467,619
46,400 Radioshack Corp. 2,766,600
26,800 The Talbots, Inc. 2,118,875
41,600 Tiffany & Co. 1,775,800
--------------------------------------------------------------------------------
26,943,183
--------------------------------------------------------------------------------
Telecommunications -- 1.9%
71,300 Crown Castle International Corp.+ 2,161,281
25,600 Juniper Networks, Inc.+ 4,992,000
21,700 Qwest Communications International, Inc.+ 1,055,162
--------------------------------------------------------------------------------
8,208,443
--------------------------------------------------------------------------------
Telecommunications Equipment -- 7.8%
273,000 ADC Telecommunications, Inc.+ 5,835,375
108,900 Alcatel S.A., Sponsored ADR 6,792,637
23,400 CIENA Corp.+ 2,459,925
142,500 Cisco Systems, Inc.+ 7,677,188
82,500 Comverse Technology, Inc.+ 9,219,375
6,500 Newport Corp. 742,320
25,000 Scientific-Atlanta, Inc. 1,710,938
--------------------------------------------------------------------------------
34,437,758
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $273,828,445) 400,908,534
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
AIM CAPITAL APPRECIATION PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
CONVERTIBLE BOND -- 0.6%
$ 5,300,000 BB Celestica Inc., zero coupon bond due 8/1/20
(Cost -- $2,599,333) $ 2,716,250
================================================================================
SHORT-TERM INVESTMENTS -- 8.0%
34,792,000 Federal Home Loan Bank, 6.45% due 11/1/00
(Cost -- $34,792,000) 34,792,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $311,219,778*) $ 438,416,784
================================================================================
(a) All ratings are by Standard & Poor's Ratings Service.
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See page 17 for definition of ratings.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 99.0%
Capital Goods -- 2.5%
149,320 General Electric Co. $ 8,184,603
--------------------------------------------------------------------------------
Computer Software -- 7.2%
245,120 America Online, Inc.+ 12,361,402
160,900 Microsoft Corp.+ 11,081,987
--------------------------------------------------------------------------------
23,443,389
--------------------------------------------------------------------------------
Consumer Cyclicals -- 8.1%
229,900 Amazon.com, Inc.+ 8,420,087
153,150 The Home Depot, Inc. 6,585,450
314,215 The Walt Disney Co. 11,252,825
--------------------------------------------------------------------------------
26,258,362
--------------------------------------------------------------------------------
Consumer Staples -- 13.9%
222,190 The Coca-Cola Co. 13,414,721
314,395 The Gillette Co. 10,964,526
153,190 PepsiCo, Inc. 7,420,141
78,480 The Procter & Gamble Co. 5,606,415
95,970 Wm. Wrigley Jr. Co. 7,599,624
--------------------------------------------------------------------------------
45,005,427
--------------------------------------------------------------------------------
Financial Services -- 27.2%
94,256 American International Group, Inc. 9,237,088
191,500 Bank One Corp. 6,989,750
191 Berkshire Hathaway Inc., Class A Shares+ 12,166,700
9 Berkshire Hathaway Inc ., Class B Shares+ 18,927
113,465 Fannie Mae 8,736,805
229,725 Household International, Inc. 11,558,039
241,830 Merrill Lynch & Co., Inc. 16,928,100
137,970 Morgan Stanley Dean Witter & Co. 11,080,716
245,275 Wells Fargo & Co. 11,359,298
--------------------------------------------------------------------------------
88,075,423
--------------------------------------------------------------------------------
Health Care -- 15.5%
186,980 Amgen Inc.+ 10,833,154
99,750 Eli Lilly & Co. 8,915,156
68,985 Johnson & Johnson 6,355,243
61,240 Merck & Co., Inc. 5,507,772
432,370 Pfizer Inc. 18,672,979
--------------------------------------------------------------------------------
50,284,304
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Multi-Industry -- 1.5 %
84,400 Tyco International Ltd. $ 4,784,425
--------------------------------------------------------------------------------
Technology -- 23.1%
107,408 Cisco Systems, Inc.+ 5,786,606
268,000 Dell Computer Corp.+ 7,906,000
383,300 Intel Corp. 17,248,500
249,040 Lucent Technologies Inc. 5,805,745
287,380 Motorola, Inc. 7,166,539
451,930 Novell, Inc.+ 4,067,370
306,360 Texas Instruments Inc. 15,030,788
161,180 Xilinx, Inc.+ 11,675,476
--------------------------------------------------------------------------------
74,687,024
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost-- $277,137,313) 320,722,957
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 1.0%
$ 3,244,000 Chase Securities Inc., 6.400% due 11/1/00;
Proceeds at maturity -- $3,244,577;
(Fully collateralized by U.S. Treasury Notes,
6.750% due 8/15/26; Market value -- $3,309,681)
(Cost -- $3,244,000) 3,244,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $280,381,313*) $ 323,966,957
================================================================================
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Bond Ratings (unaudited)
--------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"B" 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 to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for
bonds in higher rated categories.
BB and B -- Bonds rated "BB" and "B" are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal in accordance with the terms of
the obligation. "BB" indicates the lowest degree of speculation and
"B" 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.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
================================================================================
ASSETS:
Investments, at value (Cost -- $311,219,778
and $280,381,313, respectively) $ 438,416,784 $ 323,966,957
Cash 4,348 189
Receivable for securities sold 4,054,832 --
Receivable for Fund shares sold 141,625 53,738
Dividends and interest receivable 33,577 155,425
--------------------------------------------------------------------------------
Total Assets 442,651,166 324,176,309
--------------------------------------------------------------------------------
LIABILITIES:
Payable for Fund shares purchased 5,616,260 --
Payable for securities purchased 1,895,874 --
Management fees payable 318,254 420,658
Accrued expenses 61,146 47,377
--------------------------------------------------------------------------------
Total Liabilities 7,891,534 468,035
--------------------------------------------------------------------------------
Total Net Assets $ 434,759,632 $ 323,708,274
================================================================================
NET ASSETS:
Par value of capital shares $ 200 $ 202
Capital paid in excess of par value 233,909,805 283,115,164
Accumulated net realized gain (loss) from
security transactions and options 73,652,621 (2,992,736)
Net unrealized appreciation of investments 127,197,006 43,585,644
--------------------------------------------------------------------------------
Total Net Assets $ 434,759,632 $ 323,708,274
================================================================================
Shares Outstanding 20,003,725 20,176,547
--------------------------------------------------------------------------------
Net Asset Value $21.73 $16.04
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
Smith Barney
AIM Capital Large
Appreciation Capitalization
Portfolio Growth Portfolio
================================================================================
INVESTMENT INCOME:
Interest $ 1,347,248 $ 232,176
Dividends 692,959 1,947,514
Less: Foreign withholding tax (11,338) --
--------------------------------------------------------------------------------
Total Investment Income 2,028,869 2,179,690
--------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 3,363,224 1,969,101
Custody 57,778 16,373
Audit and legal 17,425 15,340
Shareholder and system servicing fees 17,403 5,000
Shareholder communications 16,581 6,198
Directors' fees 10,977 6,866
Registration fees 8,816 --
Other 4,591 2,218
--------------------------------------------------------------------------------
Total Expenses 3,496,795 2,021,096
--------------------------------------------------------------------------------
Net Investment Income (Loss) (1,467,926) 158,594
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND OPTIONS (NOTES 3 AND 7):
Realized Gain (Loss) From:
Security transactions (excluding short-term
securities) 72,047,481 (2,716,492)
Options written 1,782,795 --
Options purchased 18,173 --
--------------------------------------------------------------------------------
Net Realized Gain (Loss) 73,848,449 (2,716,492)
--------------------------------------------------------------------------------
Changes in Net Unrealized Appreciation
of Investments:
Beginning of year 87,714,157 24,602,858
End of year 127,197,006 43,585,644
--------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 39,482,849 18,982,786
--------------------------------------------------------------------------------
Net Gain on Investments and Options 113,331,298 16,266,294
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 111,863,372 $ 16,424,888
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Years Ended October 31,
AIM Capital Appreciation Portfolio 2000 1999
================================================================================
OPERATIONS:
Net investment loss $ (1,467,926) $ (468,961)
Net realized gain 73,848,449 19,826,015
Increase in net unrealized appreciation 39,482,849 53,711,210
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 111,863,372 73,068,264
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains (10,253,325) --
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (10,253,325) --
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares 216,851,322 127,822,307
Net asset value of shares issued
for reinvestment of dividends 10,253,325 --
Cost of shares reacquired (193,474,668) (127,233,116)
--------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 33,629,979 589,191
--------------------------------------------------------------------------------
Increase in Net Assets 135,240,026 73,657,455
NET ASSETS:
Beginning of year 299,519,606 225,862,151
--------------------------------------------------------------------------------
End of year* $ 434,759,632 $ 299,519,606
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
For the Years Ended October 31,
Smith Barney Large Capitalization Growth Portfolio 2000 1999
================================================================================
OPERATIONS:
Net investment income $ 158,594 $ 67,528
Net realized gain (loss) (2,716,492) 60,716
Increase in net unrealized appreciation 18,982,786 23,699,765
--------------------------------------------------------------------------------
Increase in Net Assets From Operations 16,424,888 23,828,009
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (198,318) (45,401)
Net realized gains (317,322) --
Capital (289,581) --
--------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (805,221) (45,401)
--------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares 143,463,425 126,123,445
Net asset value of shares issued
for reinvestment of dividends 805,221 45,401
Cost of shares reacquired (4,460,350) (2,458,066)
--------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 139,808,296 123,710,780
--------------------------------------------------------------------------------
Increase in Net Assets 155,427,963 147,493,388
NET ASSETS:
Beginning of year 168,280,311 20,786,923
--------------------------------------------------------------------------------
End of year* $ 323,708,274 $ 168,280,311
================================================================================
* Includes undistributed net investment income -- $ 39,724
of:
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<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, Smith Barney International Equity, Smith Barney
Pacific Basin, Travelers Managed Income, Putnam Diversified Income, Salomon
Brothers Global High Yield, formerly known as INVESCO Global Strategic Income,
Smith Barney High Income, MFS Total Return, Smith Barney Money Market, 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 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,
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) 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, 2000, reclassifications were made to the capital
accounts of the AIM Capital
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Appreciation Portfolio and Smith Barney Large Capitalization Growth Portfolio to
reflect permanent book/tax differences and income and gains available for
distributions under income tax regulations. Accordingly, a portion of
overdistributed net investment income and accumulated net realized gain
amounting to $1,467,926 and $642, respectively, was reclassified to paid-in
capital, for the AIM Capital Appreciation Portfolio. 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"), 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 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
each Portfolio's average daily net assets.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset-
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
based fees that vary according to the size and type of account. PFPC is
responsible for shareholder recordkeeping and financial processing for all
shareholder accounts and is paid by CFTC. For the year ended October 31, 2000,
the Portfolios paid transfer agent fees of $10,000 to CFTC.
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, 2000, SSB received brokerage commissions in the amounts of $30,026
and $10,103 for AIMCAP and SBLCG, respectively.
All officers and one Director of the Fund are employees of SSB.
3. Investments
For the year ended October 31, 2000, 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 $365,273,832 $153,727,159
--------------------------------------------------------------------------------
Sales 356,372,821 16,986,133
================================================================================
At October 31, 2000, 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 $135,821,803 $ 59,057,247
Gross unrealized depreciation (8,624,797) (15,471,603)
--------------------------------------------------------------------------------
Net unrealized appreciation $127,197,006 $ 43,585,644
================================================================================
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
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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, 2000, the Portfolios had no securities on loan.
5. 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 (plus accrued
interest) in amounts at least equal to the repurchase price.
6. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contract. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolios record a realized gain or
loss equal to the difference between the proceeds from (or cost of) the closing
transactions and the Portfolios basis in the contract.
The Portfolios enter into such contracts to hedge a portion of their portfolio.
The Portfolios bear the market risk that arise from changes in the value of the
financial instruments and securities indices (futures contracts).
At October 31, 2000, the Portfolios had no open futures contracts.
7. Options Contracts
When the Portfolios write a covered call option, an amount equal to the premium
received by the Portfolios are recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Portfolios realize a
gain equal to the amount of the premium received. When the Portfolios enter into
a closing purchase transaction, the Portfolios realize a gain or loss depending
upon whether the cost of the closing transaction is greater or less than the
premium originally
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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.
The following covered call option transactions occurred during the year ended
October 31, 2000, for AIMCAP:
Number of
Contracts Premium
================================================================================
Options written, outstanding at October 31, 1999 -- $ --
Options written 7,824 3,473,249
Options cancelled in closing purchase transactions (6,679) (2,989,483)
Options expired (30) (5,747)
Options exercised (1,115) (478,019)
--------------------------------------------------------------------------------
Options written, outstanding at October 31, 2000 -- $ --
================================================================================
8. Capital Loss Carryforward
At October 31, 2000, SBLCG had, for Federal income tax purposes, approximately
$2,019,000 of capital loss carryforwards, expiring October 31, 2008, available
to offset future capital gains. To the extent that these carryforward losses can
be used to offset net realized capital gains, such gains, if any, will not be
distributed.
9. Capital Shares
At October 31, 2000, 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.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Year Ended Year Ended
October 31, 2000 October 31, 1999
================================================================================
AIM Capital Appreciation Portfolio
Shares sold 9,967,211 8,702,220
Shares issued on reinvestment 470,336 --
Shares reacquired (8,810,050) (8,672,298)
--------------------------------------------------------------------------------
Net Increase 1,627,497 29,922
================================================================================
Smith Barney Large Capitalization Growth
Portfolio
Shares sold 8,813,060 9,661,334
Shares issued on reinvestment 49,392 3,615
Shares reacquired (263,869) (187,705)
--------------------------------------------------------------------------------
Net Increase 8,598,583 9,477,244
================================================================================
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 27
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
<TABLE>
<CAPTION>
AIM Capital Appreciation Portfolio 2000 1999 1998 1997 1996(1)
========================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.30 $ 12.31 $ 12.68 $ 10.76 $ 10.00
----------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.07) (0.03) (0.01) 0.02 0.02
Net realized and unrealized gain 6.03 4.02 (0.34) 1.91 0.75
(loss)
----------------------------------------------------------------------------------------
Total Income (Loss) From Operations 5.96 3.99 (0.35) 1.93 0.77
----------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- (0.02) (0.01) (0.01)
Net realized gains (0.53) -- -- -- --
----------------------------------------------------------------------------------------
Total Distributions (0.53) -- (0.02) (0.01) (0.01)
----------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 21.73 $ 16.30 $ 12.31 $ 12.68 $ 10.76
----------------------------------------------------------------------------------------
Total Return 36.53% 32.41% (2.79)% 17.96% 7.71%
----------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 435 $ 300 $ 226 $ 203 $ 113
----------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.83% 0.84% 0.85% 0.85% 0.96%
Net investment income (loss) (0.35) (0.18) (0.06) 0.20 0.22
----------------------------------------------------------------------------------------
Portfolio Turnover Rate 91% 76% 75% 56% 44%
========================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended October 31:
Smith Barney Large Capitalization Growth 2000 1999 1998(1)
Portfolio
================================================================================
Net Asset Value, Beginning of Year $14.53 $9.90 $10.00
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.01 0.00* 0.01
Net realized and unrealized gain (loss) 1.55 4.64 (0.11)#
--------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.56 4.64 (0.10)
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) (0.01) --
Net realized gains (0.02) -- --
Capital (0.02) -- --
--------------------------------------------------------------------------------
Total Distributions (0.05) (0.01) --
--------------------------------------------------------------------------------
Net Asset Value, End of Year $16.04 $14.53 $9.90
--------------------------------------------------------------------------------
Total Return 10.77% 46.88% (1.00)%++
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $323,708 $168,280 $20,787
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.77% 0.86% 1.00%+
Net investment income 0.06 0.07 0.52+
--------------------------------------------------------------------------------
Portfolio Turnover Rate 7% 14% 1%
================================================================================
(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 per share.
# The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 29
<PAGE>
--------------------------------------------------------------------------------
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, 2000, 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 with respect to the AIM Capital Appreciation
Portfolio, and the financial highlights for each of the years in the two-year
period 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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.
--------------------------------------------------------------------------------
30 2000 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, 2000, 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 the periods described above, in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 31
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes, the Fund hereby designates for the fiscal year ended
October 31, 2000:
. Percentage of ordinary dividends paid as qualifying for the corporate
dividends received deduction:
Smith Barney Large Capitalization Growth Portfolio 100%
. Long term capital gain distribution paid:
AIM Capital Appreciation Portfolio $ 10,253,967
--------------------------------------------------------------------------------
32 2000 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
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Managers
SSB Citi Fund Management LLC
Travelers Investment Adviser, Inc.
Custodian
PFPC Trust Company
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 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 12/00
<PAGE>
Travelers Series Fund Inc.
Smith Barney Aggressive
Growth Portfolio
Smith Barney
Mid Cap Portfolio
--------------------------------------------------------------------------------
ANNUAL REPORT
--------------------------------------------------------------------------------
October 31, 2000
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Travelers Series Fund Inc.
Dear Shareholder:
We are pleased to provide the annual report for the Travelers Series Fund Inc.--
Smith Barney Aggressive Growth Portfolio and Smith Barney Mid Cap Portfolio
("Portfolio(s)") for the year ended October 31, 2000./1/ In this report we have
summarized the period's prevailing economic and market conditions and outlined
our investment strategy. A detailed summary of the Portfolios' performance can
be found in the appropriate sections that follow. We hope you find this report
to be useful and informative.
[PHOTO]
HEATH B.
MCLENDON
Chairman
Portfolio Highlights
Smith Barney Aggressive Growth Portfolio
For the year ended October 31, 2000, the Smith Barney Aggressive Growth
Portfolio returned 50.41%. In comparison, the Russell 2500 Growth Index
("Russell 2500 Growth")/2/ returned 28.87% for the same period.
The Portfolio seeks long-term capital appreciation by investing primarily in
common stocks of companies that the manager believes are experiencing, or will
experience, growth in earnings that exceeds the average rate of earnings growth
of the companies comprising the Russell 2500 Growth. The Portfolio may invest in
the securities of large, well-known companies that the manager thinks may have
the potential for long-term earnings growth.
During the period, the manager continued to employ a stock-specific approach,
rather than choosing stocks based on forecasts of economic strength, direction
1 The Portfolios are underlying investment options of various variable
annuity products. A variable annuity product is a contract issued by an
insurance company in which the annuity premium (a set amount of dollars) is
immediately turned into units of a portfolio of securities. Upon
retirement, the policyholder is paid according to accumulated units whose
dollar value varies according to the performance of the securities within
the subaccounts. Its objective is to preserve, through investment, the
purchasing value of the annuity which otherwise is subject to erosion
through inflation.
2 The Russell 2500 Growth measures the performance of those Russell 2500
companies with higher price-to-book ratios and higher forecasted growth
values. (A price-to-book ratio is the price of a stock compared to the
difference between a company's assets and liabilities.) The Russell 2500
Growth measures the performance of the 2,500 smallest companies in the
Russell 3000 Index. Please note that an investor cannot invest directly in
an index.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 1
<PAGE>
of interest rates and inflation. Nothing has changed his fundamental view that
if a growth portfolio is designed properly, it should be able to find companies
to buy and hold for many years.
The manager prefers to own companies where quality management works to build
dynamic, financially strong companies. He focuses on micro-, small- and mid-cap
companies with the potential to become large-cap companies./3/ Furthermore, he
seeks to identify companies having management with a significant personal stake
in the company, strong cash flows, little or no debt and superior products.
Historically, the manager tends to let the Portfolio's winners ride. A stock is
sold when the original premise for buying it has changed dramatically or a
material degradation of a company's balance sheet is noted. In his view,
acquisition cost may be one of the most important factors to consider when
making decisions about the Portfolio's holdings.
After witnessing almost unprecedented strength in many emerging growth stocks
during 1999 and early 2000, stock markets became unsettled. Price excesses,
which were built up in many growth stocks, began to unwind in early 2000. This
process accelerated through the third quarter of 2000, hitting the technology
and telecommunications sectors particularly hard. The manager feels that
interest rate increases, which were instituted by the Federal Reserve Board
("Fed") during 1999 and the first few months of 2000, dramatically impacted the
stock market and contributed to the slowdown seen in overall economic growth
during the second and third quarters of 2000.
During the last few months of the period, investors began to voice a growing
concern that the possible "soft landing" being engineered by the Fed might turn
into something more severe with negative ramifications on corporate profits. He
believes that the high cost of energy combined with the diminished wealth effect
resulting from the large decline in the NASDAQ/4/ market may have led to a
slowing in the economy and, in particular, a deceleration in the growth rate of
spending on technology capital goods.
In the manager's view, the damage recently inflicted on growth stock prices may
have been one of the most severe since the NASDAQ market was
----------
3 Please note that investments in securities of smaller, less-known companies
may be more volatile than those of larger companies.
4 NASDAQ is a computerized system that provides brokers and dealers with
price quotations for securities traded over-the-counter as well as for many
New York Stock Exchange listed securities.
--------------------------------------------------------------------------------
2 2000 Annual Report to Shareholders
<PAGE>
established in 1971. The technology sector, as measured by Nasdaq Composite
Index/5/ rapidly declined in April and May and then again in September and
October as many investors refocused their attention on companies they believed
had the ability to generate earnings. The manager thinks that the possibility of
a meaningful recovery may now exist in the market with investor expectations
reduced significantly from levels reached earlier in 2000.
During the period, biotechnology stocks performed positively in a difficult time
for the market. The manager believes that the strong fundamentals of many
industry participants may continue to make stocks in this sector attractive.
Many technology stocks, particularly in the semiconductor and telecommunications
equipment areas, may reflect overly bearish expectations and may now represent
good value. He believes that the Fed may move away from its restrictive monetary
policy now that economic growth and the stock market have become deflated. In
fact, the manager expects that the next interest rate move by the Fed may be an
interest rate reduction.
Smith Barney Mid Cap Portfolio
For the year ended October 31, 2000, the Smith Barney Mid Cap Portfolio returned
42.36%. In comparison, the Standard and Poor's MidCap 400 Index ("S&P MidCap
400")/6/ returned 31.65% for the same period.
Seeking capital appreciation, the Portfolio invests primarily in the stocks of
medium-sized companies, which are companies with market capitalizations within
the range of those companies included in the S&P MidCap 400 at the time of
investment.7
The Portfolio is made up of what the manager believes to be high-quality,
well-positioned companies at competitive prices. He seeks to take advantage of
the price differences between large- and medium-capitalization companies
without taking on a lot of undue risk.
In seeking to accomplish this goal, the manager follows an investment approach
that focuses on companies that are perceived to have significant advantages and
--------------
5 The Nasdaq Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market. Please note that an investor cannot invest directly in an index.
6 The S&P MidCap 400 is a market value-weighted index, consisting of 400
domestic stocks chosen for market size liquidity and industry group
representation. Please note that an investor cannot invest directly in an
index.
7 Because the Portfolio invests primarily in medium-capitalization companies,
an investment in the Portfolio may be more volatile and more susceptible to
loss than an investment in a portfolio which invests primarily in
large-capitalization companies. Medium-capitalization companies may have
more limited product lines, markets and financial resources than
large-capitalization companies.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 3
<PAGE>
excellent competitive positions in the marketplace. In the manager's view, many
of these companies are leaders in their respective fields and are poised to take
advantage of their leadership position. He also looks for consistent growth,
strong management, positive cash flows and a high return on equity when
determining whether to invest in a company.
The Portfolio seeks long-term growth of capital by investing primarily in the
stocks of medium-sized companies. Since the Portfolio's inception, the manager
has remained committed to this investment approach and he continues to focus on
maintaining a quality-oriented portfolio that he believes may provide higher
returns with potentially lower risk over time.
U.S. stock markets have experienced extreme levels of volatility recently.
During the period, the manager has maintained a stock selection strategy of
buying companies that he believes have exhibited strong growth characteristics,
including high historic growth rates and skilled management that is committed to
long-term growth.
The manager thinks the Portfolio's positive performance during the period may be
directly attributed to solid stock selection and a disciplined and conservative
investment style. (Of course, past performance is not indicative of future
results.)
During the period, the Dow Jones Industrial Average ("DJIA")/8/ gained 3.78%,
the Standard and Poor's 500 Index ("S&P 500")/9/ gained 6.08% and the Nasdaq
Composite Index posted 13.59%. He believes this performance is lackluster
relative to previous years due to increased competitive pressures, higher energy
prices, a strong dollar and slowing consumer spending.
During the period, the S&P 500 and the Nasdaq Composite Index benefited
immensely from a small concentrated group of companies. The list of leading U.S.
companies expecting slower revenue and earnings growth continues to lengthen. In
this slower-growth environment, investors have become more concerned about
excessive valuations. While economic growth has slowed from last winter's rapid
pace, the manager expects the U.S. economy may slow even further. This may
affect the Fed's monetary policy over the next few months, which the manager
believes could lay the groundwork for the next market upturn.
----------
8 The DJIA is a price-weighted average of 30 actively traded blue-chip
stocks. Please note that an investor cannot invest directly in an index.
9 The S&P 500 is a market capitalization-weighted measure of 500 widely held
common stocks. Please note that an investor cannot invest directly in an
index.
--------------------------------------------------------------------------------
4 2000 Annual Report to Shareholders
<PAGE>
Thank you for your investment 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 22, 2000
The information provided in this letter represents the opinion of the managers
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Portfolios. Please refer to pages 9
through 17 for a list and percentage breakdown of the Portfolios' holdings.
Also, please note any discussion of the Portfolios' holdings is as of October
31, 2000 and is subject to change.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 5
<PAGE>
--------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Return Total
Year Ended of Year of Year Dividend of Capital Return+
--------------------------------------------------------------------------------
10/31/00 $10.00 $15.03 $0.00 $0.01 50.41%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio
--------------------------------------------------------------------------------
Historical Performance
--------------------------------------------------------------------------------
Net Asset Value
-------------------
Beginning End Income Return Total
Year Ended of Year of Year Dividend of Capital Return+
--------------------------------------------------------------------------------
10/31/00 $10.00 $14.22 $0.01 $0.00 42.36%
--------------------------------------------------------------------------------
It is the Portfolios' policy to distribute dividends and capital gains, if any,
annually.
--------------------------------------------------------------------------------
Average Annual Total Returns+
--------------------------------------------------------------------------------
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
--------------------------------------------------------------------------------
11/1/99* through 10/31/00 50.41% 42.36%
--------------------------------------------------------------------------------
+ Assumes the reinvestment of all dividends and capital gain distributions.
* Commencement of operations.
--------------------------------------------------------------------------------
6 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Aggressive Growth Portfolio
vs. the Russell 2500 Growth Index+
--------------------------------------------------------------------------------
November 1999 -- October 2000
[GRAPH]
SB Aggressive Growth Portfolio Russell 2500 Growth Index
11/1/99 10,000 10,000
1/31/2000 12,520 12,130
4/30/2000 13,380 13,722
7/31/2000 14,651 12,994
10/31/2000 15,041 12,887
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Aggressive Growth Portfolio on November 1, 1999 (commencement of
operations), assuming reinvestment of dividends and capital gains, if any,
at net asset value through October 31, 2000. The Russell 2500 Growth Index
measures the performance of the 2,500 smallest companies in the Russell
3000 Index. The Index is unmanaged and is not subject to the same
management and trading expenses as 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 values 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. 7
<PAGE>
--------------------------------------------------------------------------------
Historical Performance (unaudited) (continued)
--------------------------------------------------------------------------------
Growth of $10,000 Invested in Shares of the
Smith Barney Mid Cap Portfolio
vs. the Standard & Poor's MidCap 400 Index+
--------------------------------------------------------------------------------
November 1999 -- October 2000
[GRAPH]
SB Mid Cap Portfolio Standard & Poor's Mid Cap 400 Index
11/1/99 10,000 10,000
1/31/2000 11,493 10,805
4/30/2000 12,944 12,057
7/31/2000 13,605 12,236
10/31/2000 14,236 13,165
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Mid Cap Portfolio on November 1, 1999 (commencement of operations),
assuming reinvestment of dividends and capital gains, if any, at net asset
value through October 31, 2000. The Standard & Poor's MidCap 400 Index
("S&P MidCap 400 Index") is a widely recognized index of 400
medium-capitalization stocks. Figures for the S&P MidCap 400 Index include
reinvestment of dividends. The Index is unmanaged and is not subject to the
same management and trading expenses as 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 values may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
--------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 92.7%
Biotechnology -- 19.0%
112,500 Alkermes, Inc.* $ 4,169,531
125,700 Amgen Inc.* 7,282,744
40 Antigenics Inc.* 598
164,900 Chiron Corp.* 7,142,231
21,400 COR Therapeutics, Inc.* 1,209,100
3,200 Genentech, Inc.* 264,000
Genzyme Corp.:
76,950 General Division* 5,463,450
500 Molecular Oncology Division* 6,875
106,000 ImClone Systems Inc.* 5,796,875
2,300 Nabi* 14,052
50 Sequenom Inc.* 1,619
--------------------------------------------------------------------------------
31,351,075
--------------------------------------------------------------------------------
Broadcasting/Cable -- 15.8%
306,400 AT&T Corp. - Liberty Media Corp., Class A Shares* 5,515,200
82,500 Cablevision Systems Corp., Class A Shares* 6,146,250
Comcast Corp.:
200 Class A Shares* 8,025
162,000 Class A Special Shares* 6,601,500
134,699 Viacom Inc., Class A Shares* 7,661,006
16,200 World Wrestling Federation Entertainment, Inc.* 245,025
--------------------------------------------------------------------------------
26,177,006
--------------------------------------------------------------------------------
Communications -- 4.8%
150,000 Adaptive Broadband Corp.* 2,409,375
32,250 Arch Wireless, Inc.* 96,750
140,000 AT&T Corp. 3,246,250
20 Avanex Corp.* 2,031
116,100 C-COR.net Corp.* 1,814,062
8,200 Nokia Oyj ADR 350,550
--------------------------------------------------------------------------------
7,919,018
--------------------------------------------------------------------------------
Computer Hardware -- 2.9%
Quantum Corp.:
212,000 DLT & Storage Systems* 3,180,000
137,550 Hard Disk Drive* 1,573,228
--------------------------------------------------------------------------------
4,753,228
--------------------------------------------------------------------------------
Computer Software/Internet -- 4.6%
143,350 America Online, Inc.* 7,229,141
200 Juniper Networks, Inc.* 39,000
3,700 Microsoft Corp.* 254,838
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 9
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Computer Software/Internet -- 4.6% (continued)
80 Net2000 Communications, Inc.* $ 480
30 Organic, Inc.* 97
--------------------------------------------------------------------------------
7,523,556
--------------------------------------------------------------------------------
Diversified Technology -- 1.4%
105 Advanced Switching Communications, Inc.* 1,070
100 Agilent Technologies, Inc.* 4,631
1,500 Drexler Technology Corp.* 25,875
12,400 Excel Technology, Inc.* 310,000
6,300 GenRad, Inc.* 57,488
25 Palm, Inc.* 1,339
57,965 TyCom, Ltd.* 1,941,828
--------------------------------------------------------------------------------
2,342,231
--------------------------------------------------------------------------------
Drug Delivery/Testing -- 2.6%
600 Advanced Polymer Systems, Inc.* 1,912
1,400 Albany Molecular Research, Inc.* 81,375
51,300 ALZA Corp.* 4,152,094
5,400 Cygnus, Inc.* 48,262
--------------------------------------------------------------------------------
4,283,643
--------------------------------------------------------------------------------
E-Commerce -- 0.0%
275 Pets.com, Inc.* 137
--------------------------------------------------------------------------------
Electronic - Military -- 1.4%
34,400 L-3 Communications Holdings, Inc.* 2,268,250
--------------------------------------------------------------------------------
Health Care - Miscellaneous -- 1.7%
160 Allos Therapeutics Inc.* 1,720
100 Biosite Diagnostics Inc.* 2,200
14 Diversa Corp.* 356
19,100 Genzyme Surgical Products* 142,653
173,000 Nanogen, Inc.* 2,681,500
800 Tularik Inc.* 25,400
--------------------------------------------------------------------------------
2,853,829
--------------------------------------------------------------------------------
Investment Banking and Other Financials -- 6.5%
16,500 Astoria Financial Corp. 618,750
100 The Goldman Sachs Group, Inc. 9,981
124,800 Lehman Brothers Holdings Inc. 8,049,600
4,400 Merrill Lynch & Co., Inc. 308,000
14,800 Neuberger Berman Inc. 973,100
36,600 Roslyn Bancorp, Inc. 793,763
--------------------------------------------------------------------------------
10,753,194
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Managed Health Care Providers -- 3.9%
58,750 UnitedHealth Group Inc. $ 6,425,781
--------------------------------------------------------------------------------
Multi-Industry -- 5.0%
200 The Source Information Management Co.* 1,100
144,800 Tyco International Ltd. 8,208,350
--------------------------------------------------------------------------------
8,209,450
--------------------------------------------------------------------------------
Oil Field Equipment/Services -- 3.5%
90,800 Core Laboratories N.V.* 1,957,875
38,150 Grant Prideco, Inc.* 708,159
86,450 Weatherford International, Inc.* 3,155,425
--------------------------------------------------------------------------------
5,821,459
--------------------------------------------------------------------------------
Pharmaceuticals -- 11.2%
53,450 Forest Laboratories, Inc.* 7,082,125
34,400 IDEC Pharmaceuticals Corp.* 6,746,700
224,750 Isis Pharmaceuticals, Inc.* 2,317,734
4,400 Pfizer Inc. 190,025
3,490 Pharmacia Corp. 191,950
51,200 SICOR Inc.* 656,000
14,400 Vertex Pharmaceuticals Inc.* 1,340,775
--------------------------------------------------------------------------------
18,525,309
--------------------------------------------------------------------------------
Semiconductors -- 8.4%
100 Caliper Technologies Corp.* 5,638
69,000 Cirrus Logic, Inc.* 2,975,625
144,250 Intel Corp. 6,491,250
121,800 Micron Technology, Inc. 4,232,550
9 PMC-Sierra, Inc.* 1,525
10,300 Standard Microsystems Corp.* 247,200
--------------------------------------------------------------------------------
13,953,788
--------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $147,082,253) 153,160,954
================================================================================
WARRANTS -- 0.0%
7,200 Arch Communications Group, Inc., Expire 9/1/01*
(Cost -- $14,400) 1,800
================================================================================
SUB-TOTAL INVESTMENTS
(Cost -- $147,096,653) 153,162,754
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 7.3%
$ 11,998,00 Goldman, Sachs & Co., 6.550% due 11/1/00; Proceeds
at maturity -- $12,000,183;(Fully collateralized by
U.S. Treasury Notes & Bonds,3.625% to 12.750%
due 2/28/02 to 8/15/26; Market value -- $12,237,973)
(Cost -- $11,998,000) $ 11,998,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $159,094,653**) $165,160,754
================================================================================
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MID CAP PORTFOLIO
SHARES SECURITY VALUE
================================================================================
COMMON STOCK -- 79.1%
Automobiles -- 1.2%
4,425 Harley-Davidson, Inc. $ 213,230
--------------------------------------------------------------------------------
Banking -- 3.0%
3,080 Commerce Bancorp, Inc. 186,532
2,750 Marshall & Ilsley Corp. 124,609
5,150 North Fork Bancorp., Inc. 103,966
980 State Street Corp. 122,245
--------------------------------------------------------------------------------
537,352
--------------------------------------------------------------------------------
Broadcast Media -- 3.6%
3,050 Cablevision Systems Corp., Class A Shares* 227,225
3,050 Entercom Communications Corp.* 119,522
1,700 Gemstar-TV Guide International, Inc.* 116,556
6,330 Imax Corp.* 30,859
3,600 Univision Communications, Inc., Class A Shares* 137,700
--------------------------------------------------------------------------------
631,862
--------------------------------------------------------------------------------
Communications - Equipment -- 0.8%
6,200 ADC Telecommunications, Inc.* 132,525
--------------------------------------------------------------------------------
Computer Hardware -- 1.0%
1,875 Lexmark International, Inc., Class A Shares* 76,875
2,100 Symbol Technologies, Inc. 95,419
--------------------------------------------------------------------------------
172,294
--------------------------------------------------------------------------------
Computer Software -- 8.0%
2,974 Advent Software, Inc.* 177,882
4,500 Citrix Systems, Inc.* 99,562
3,275 Covad Communications Group, Inc.* 17,296
4,760 Electronic Arts Inc.* 238,000
5,100 Fiserv, Inc.* 267,431
80 McDATA Corp., Class B Shares* 6,669
1,700 Mercury Interactive Corp.* 188,700
2,190 Siebel Systems, Inc.* 229,813
1,287 VERITAS Software Corp.* 181,487
--------------------------------------------------------------------------------
1,406,840
--------------------------------------------------------------------------------
Electronics - Instruments -- 8.6%
3,500 AES Corp. 197,750
1,750 Applied Micro Circuits Corp.* 133,656
2,800 Calpine Corp.* 221,025
4,200 Jabil Circuit, Inc.* 239,663
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MID CAP PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Electronics - Instruments -- 8.6% (continued)
5,518 Molex, Inc., Class A Shares $ 216,926
2,050 National Semiconductor Corp.* 53,300
1,900 Sanmina Corp.* 217,194
1,540 Teradyne, Inc.* 48,125
2,800 Vitesse Semiconductor Corp.* 195,825
--------------------------------------------------------------------------------
1,523,464
--------------------------------------------------------------------------------
Electronics - Semiconductors -- 3.9%
285 Avanex Corp.* 28,945
2,875 Linear Technology Corp. 185,617
2,320 Maxim Integrated Products, Inc.* 153,845
3,300 The Montana Power Co. 93,225
1,800 Novellus Systems, Inc.* 73,688
2,200 Xilinx, Inc.* 159,363
--------------------------------------------------------------------------------
694,683
--------------------------------------------------------------------------------
Financial -- 1.9%
4,240 Ambac Financial Group, Inc. 338,405
--------------------------------------------------------------------------------
Foods -- 2.2%
3,680 Keebler Foods Co. 149,040
6,950 Pepsi Bottling Group, Inc. 240,644
--------------------------------------------------------------------------------
389,684
--------------------------------------------------------------------------------
Health Care - Drugs -- 3.4%
1,680 Affymetrix, Inc.* 93,030
1,850 Forest Laboratories, Inc.* 245,125
3,726 Sepracor Inc.* 253,834
--------------------------------------------------------------------------------
591,989
--------------------------------------------------------------------------------
Household Furniture and Apparel -- 1.2%
8,500 Bed Bath & Beyond Inc.* 219,406
--------------------------------------------------------------------------------
Insurance - Brokers -- 1.4%
3,868 Arthur J. Gallagher & Co. 244,167
--------------------------------------------------------------------------------
Insurance - Life -- 2.7%
7,788 Annuity & Life ReHoldings, Ltd.+ 214,657
5,276 Nationwide FinancialServices, Inc., Class A Shares 256,546
--------------------------------------------------------------------------------
471,203
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MID CAP PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Insurance - Property -- 2.6%
5,712 ACE Ltd. $ 224,196
2,960 XL Capital, Ltd., Class A Shares+ 227,550
--------------------------------------------------------------------------------
451,746
--------------------------------------------------------------------------------
Internet Services -- 0.4%
350 Juniper Networks, Inc.* 68,250
115 webMethods, Inc.* 10,221
--------------------------------------------------------------------------------
78,471
--------------------------------------------------------------------------------
Investment Bankers - Brokers -- 3.4%
3,050 Capital One Financial Corp. 192,531
800 Lehman Brothers Holdings Inc. 51,600
1,775 Providian Financial Corp. 184,600
2,050 Stilwell Financial, Inc. 91,866
2,587 Waddell & Reed Financial, Inc., Class A Shares 82,477
--------------------------------------------------------------------------------
603,074
--------------------------------------------------------------------------------
Manufacturing -- 2.2%
3,300 Cintas Corp. 153,037
3,250 Waters Corp.* 235,828
--------------------------------------------------------------------------------
388,865
--------------------------------------------------------------------------------
Medical Products and Services -- 5.2%
2,525 Chiron Corp.* 109,364
1,650 Genentech, Inc.* 136,125
3,050 IVAX Corp. 132,675
2,205 MedImmune, Inc.* 144,152
2,825 Stryker Corp. 133,128
2,200 Wellpoint Health Networks Inc.* 257,263
--------------------------------------------------------------------------------
912,707
--------------------------------------------------------------------------------
Oil - Domestic -- 2.2%
3,000 Anadarko Petroleum Corp. 192,150
2,525 The Coastal Corp. 190,480
--------------------------------------------------------------------------------
382,630
--------------------------------------------------------------------------------
Oil and Gas Drilling - Equipment -- 2.0%
4,780 Diamond Offshore Drilling, Inc. 165,209
4,905 Newfield Exploration Co.* 185,164
--------------------------------------------------------------------------------
350,373
--------------------------------------------------------------------------------
Oil Well Equipment and Service -- 2.8%
2,765 BJ Services Co.* 144,990
2,760 Cooper Cameron Corp.* 150,420
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MID CAP PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Oil Well Equipment and Service -- 2.8% (continued)
3,350 Grant Prideco, Inc.* $ 62,184
3,700 Weatherford International, Inc.* 135,050
--------------------------------------------------------------------------------
492,644
--------------------------------------------------------------------------------
Pharmaceuticals -- 1.2%
2,800 Millennium Pharmaceuticals, Inc.* 203,175
--------------------------------------------------------------------------------
Pipelines -- 1.6%
5,950 Dynegy Inc., Class A Shares 275,559
--------------------------------------------------------------------------------
Real Estate Investment Trusts -- 0.6%
5,000 IndyMac Bancorp, Inc. 104,375
--------------------------------------------------------------------------------
Retail - Department -- 0.7%
3,375 Dollar Tree Stores, Inc.* 132,047
--------------------------------------------------------------------------------
Retail - Specialty -- 0.6%
2,170 Best Buy Co., Inc.* 108,907
--------------------------------------------------------------------------------
Savings and Loan -- 0.4%
1,900 Countrywide Credit Industries, Inc. 71,131
--------------------------------------------------------------------------------
Services - Commercial and Construction -- 3.4%
2,050 Concord EFS, Inc.* 84,691
2,300 Convergys Corp.* 100,194
4,200 Ecolab, Inc. 164,587
850 Southern Energy, Inc.* 23,163
1,770 SPX Corp. 218,816
--------------------------------------------------------------------------------
591,451
--------------------------------------------------------------------------------
Services - Computer Systems -- 2.6%
5,979 FactSet Research Systems Inc. 226,425
3,775 Intuit Inc.* 231,927
--------------------------------------------------------------------------------
458,352
--------------------------------------------------------------------------------
Telecommunications - Long Distance -- 3.5%
900 Amdocs Ltd.* 58,331
75 Avici Systems Inc.* 3,253
675 COLT Telecom Group PLC, Sponsored ADR* 88,172
950 Comverse Technology, Inc.* 106,162
170 Corvis Corp.* 11,156
35 Inrange Technologies Corp., Class B Shares* 1,282
2,650 L-3 Communications Holdings, Inc.* 174,734
85 ONI Systems Corp.* 6,890
2000 Time Warner Telecom Inc., Class A Shares* 119,250
1,535 TyCom, Ltd.* 51,422
--------------------------------------------------------------------------------
620,652
--------------------------------------------------------------------------------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Schedules of Investments (continued) October 31, 2000
--------------------------------------------------------------------------------
SMITH BARNEY MID CAP PORTFOLIO
SHARES SECURITY VALUE
================================================================================
Trucking -- 0.8%
6,500 Knightsbridge Tankers Ltd. $ 140,156
================================================================================
TOTAL COMMON STOCK
(Cost -- $11,780,053) 13,933,419
================================================================================
FACE
AMOUNT SECURITY VALUE
================================================================================
REPURCHASE AGREEMENT -- 20.9%
$3,681,000 Goldman, Sachs & Co., 6.550% due 11/1/00; Proceeds
at maturity -- $3,681,670; (Fully collateralized by
U.S. Treasury Notes & Bonds, 3.625% to 12.750%
due 2/28/02 to 8/15/26; Market value -- $3,754,624)
(Cost -- $3,681,000) 3,681,000
================================================================================
TOTAL INVESTMENTS-- 100%
(Cost -- $15,461,053**) $ 17,614,419
================================================================================
* Non-income producing security.
+ A portion of this security has been segregated by the custodian for futures
contracts commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
==============================================================================================
<S> <C> <C>
ASSETS:
Investments, at value (Cost -- $147,096,653
and $11,780,053, respectively) $ 153,162,754 $ 13,933,419
Repurchase agreements, at value (Cost -- $11,998,000
and $3,681,000, respectively) 11,998,000 3,681,000
Cash 357 475
Receivable for Fund shares sold 1,022,486 44,259
Dividends and interest receivable 15,994 10,477
Receivable from broker -- variation margin -- 48,375
----------------------------------------------------------------------------------------------
Total Assets 166,199,591 17,718,005
----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,462,186 173,276
Management fees payable 133,428 13,133
Accrued expenses 51,090 33,692
----------------------------------------------------------------------------------------------
Total Liabilities 1,646,704 220,101
----------------------------------------------------------------------------------------------
Total Net Assets $ 164,552,887 $ 17,497,904
==============================================================================================
NET ASSETS:
Par value of capital shares $ 110 $ 12
Capital paid in excess of par value 158,486,676 15,364,602
Undistributed net investment income -- 61,655
Accumulated net realized loss from security
transactions and futures contracts -- (48,793)
Net unrealized appreciation of
investments and futures contracts 6,066,101 2,120,428
----------------------------------------------------------------------------------------------
Total Net Assets $ 164,552,887 $ 17,497,904
==============================================================================================
Shares Outstanding 10,951,474 1,230,367
----------------------------------------------------------------------------------------------
Net Asset Value $15.03 $14.22
----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Operations For the Year Ended October 31, 2000 (a)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
======================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 304,741 $ 111,535
Dividends 46,502 42,735
Less: Foreign withholding tax (156) --
--------------------------------------------------------------------------------------
Total Investment Income 351,087 154,270
--------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 355,785 69,165
Shareholder communications 31,064 6,886
Audit and legal 19,597 21,014
Shareholder and system servicing fees 16,645 15,639
Custody 13,031 15,324
Directors' fees 4,577 2,321
Other 4,054 6,052
--------------------------------------------------------------------------------------
Total Expenses 444,753 136,401
Less: Management fee waiver (Note 2) -- (48,792)
--------------------------------------------------------------------------------------
Net Expenses 444,753 87,609
--------------------------------------------------------------------------------------
Net Investment Income (Loss) (93,666) 66,661
--------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 3 AND 5):
Realized Gain (Loss) From:
Security transactions (excluding short-term
securities) 35,728 (233,850)
Futures contracts -- 185,057
--------------------------------------------------------------------------------------
Net Realized Gain (Loss) 35,728 (48,793)
--------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation
of Investments and Futures Contracts:
Beginning of year -- --
End of year 6,066,101 2,120,428
--------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 6,066,101 2,120,428
--------------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 6,101,829 2,071,635
--------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 6,008,163 $ 2,138,296
======================================================================================
</TABLE>
(a) Commencement of operations for both Portfolios was November 1, 1999.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Year Ended October 31, 2000 (a)
<TABLE>
<CAPTION>
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
======================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (93,666) $ 66,661
Net realized gain (loss) 35,728 (48,793)
Increase in net unrealized appreciation 6,066,101 2,120,428
-------------------------------------------------------------------------------------
Increase in Net Assets From Operations 6,008,163 2,138,296
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (5,006)
Capital (4,004) --
-------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (4,004) (5,006)
-------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 160,121,916 16,601,167
Net asset value of shares issued
for reinvestment of dividends 4,004 5,006
Cost of shares reacquired (1,577,192) (1,241,559)
-------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 158,548,728 15,364,614
-------------------------------------------------------------------------------------
Increase in Net Assets 164,552,887 17,497,904
NET ASSETS:
Beginning of year -- --
-------------------------------------------------------------------------------------
End of year* $ 164,552,887 $ 17,497,904
======================================================================================
* Includes undistributed net investment
income of: -- $61,655
======================================================================================
</TABLE>
(a) Commencement of operations for both Portfolios was November 1, 1999.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Portfolio and Smith Barney Mid Cap 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, Smith Barney International Equity, Smith Barney Pacific Basin,
Travelers Managed Income, Putnam Diversified Income, Salomon Brothers Global
High Yield, formerly known as INVESCO Global Strategic Income, Smith Barney High
Income, MFS Total Return, Smith Barney Money Market, AIM Capital Appreciation
and Smith Barney Large Capitalization Growth 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, 2000, reclassifications
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
were made to the capital accounts of the Portfolios to reflect permanent
book/tax differences and income and gains available for distributions under
income tax regulations. Accordingly, for the Smith Barney Aggressive Growth
Portfolio a portion of overdistributed net investment income amounting to
$57,938, 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"), 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 Aggressive Growth
Portfolio ("SBAG") and Smith Barney Mid Cap Portfolio ("SBMC"). SBAG and SBMC
pay SSBC a management fee calculated at the annual rates of 0.80% and 0.75%,
respectively, of the average daily net assets of each Portfolio. For the year
ended October 31, 2000, SSBC waived a portion of its management fee in the
amount of $48,792 for SBMC.
Citi Fiduciary Trust Company ("CFTC"), another subsidiary of Citigroup, acts as
the Portfolios' transfer agent and PFPC Global Fund Services ("PFPC") acts as
the Portfolios' sub-transfer agent. CFTC receives account fees and asset-based
fees that vary according to the size and type of account. PFPC is responsible
for shareholder recordkeeping and financial processing for all shareholder
accounts and is paid by CFTC. For the year ended October 31, 2000, the
Portfolios paid transfer agent fees of $10,000 to CFTC.
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, 2000, SSB received brokerage commissions totaling $9,154.
All officers and one Director of the Fund are employees of SSB.
--------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
3. Investments
During the year ended October 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
================================================================================
Purchases $147,173,433 $16,915,895
--------------------------------------------------------------------------------
Sales 112,508 4,901,992
================================================================================
At October 31, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
Smith Barney Smith Barney
Aggressive Growth Mid Cap
Portfolio Portfolio
================================================================================
Gross unrealized appreciation $ 18,243,866 $2,677,046
Gross unrealized depreciation (12,177,765) (523,680)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 6,066,101 $2,153,366
================================================================================
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, 2000, the Portfolios had no securities on loan.
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
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
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 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, 2000, SBMC had the following open futures contracts:
<TABLE>
<CAPTION>
# of Basis Market Unrealized
Contracts Expiration Value Value Loss
====================================================================================================
<S> <C> <C> <C> <C> <C>
Purchased Contracts:
S&P MidCap 400 9 12/00 $2,378,563 $2,345,625 $(32,938)
====================================================================================================
</TABLE>
6. Option Contracts
SBMC may from time to time enter into purchased call or put option contracts as
well as write covered call option contracts.
Premiums paid when put or call options are purchased by the Portfolio represent
investments, which are marked-to-market daily and are included in the schedule
of investments. When a purchased option expires, the Portfolio will realize a
loss in the amount of the premium paid. When the Portfolio enters into a closing
sales transaction, the Portfolio 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 Portfolio exercises a put option, it
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 Portfolio exercises a call option, the cost of the security which the
Portfolio purchases upon exercise will be increased by the premium originally
paid.
At October 31, 2000, the Portfolio held no purchased call or put option
contracts.
When the Portfolio writes a covered call option, an amount equal to the premium
received by the Portfolio are recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Portfolio realizes a
gain equal to the amount of the premium received. When the Portfolio enters into
a closing purchase transaction, the Portfolio realizes a gain or loss depending
upon whether
--------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
the cost of the closing transaction is greater or less than the premium
originally received, without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is eliminated.
When a written call option is exercised, the cost of the security sold will be
decreased by the premium originally received. When written index options are
exercised, settlement is made in cash.
The risk in writing a covered call option is that the Portfolio gives up the
opportunity to participate in any increase in the price of the underlying
security beyond the exercise price.
During the year ended October 31, 2000, the Portfolio did not enter into any
written covered call option contracts.
7. Capital Loss Carryforward
At October 31, 2000, SBMC had, for Federal income tax purposes, a capital loss
carryforward of approximately $42,900, available to offset future capital gains
through October 31, 2008. 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.
8. Capital Shares
At October 31, 2000, 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
October 31, 2000
================================================================================
Smith Barney Aggressive Growth Portfolio
Shares sold 11,051,217
Shares issued on reinvestment 333
Shares reacquired (100,076)
--------------------------------------------------------------------------------
Net Increase 10,951,474
================================================================================
Smith Barney Mid Cap Portfolio
Shares sold 1,321,458
Shares issued on reinvestment 434
Shares reacquired (91,525)
--------------------------------------------------------------------------------
Net Increase 1,230,367
================================================================================
--------------------------------------------------------------------------------
Travelers Series Fund Inc. 25
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout the year ended October 31:
Smith Barney Aggressive Growth Portfolio/(1)/ 2000/(2)/
================================================================================
Net Asset Value, Beginning of Year $ 10.00
--------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.03)
Net realized and unrealized gain 5.07
--------------------------------------------------------------------------------
Total Income From Operations 5.04
--------------------------------------------------------------------------------
Less Distributions From:
Capital (0.01)
--------------------------------------------------------------------------------
Total Distributions (0.01)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.03
--------------------------------------------------------------------------------
Total Return 50.41%
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 164,553
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)/ 0.99%
Net investment loss (0.21)
--------------------------------------------------------------------------------
Portfolio Turnover Rate 0%
================================================================================
(1) The Portfolio commenced operations on November 1, 1999.
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) As a result of a voluntary expense limitation, the expense ratio will not
exceed 1.00%.
--------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout the year ended October 31:
Smith Barney Mid Cap Portfolio/(1)/ 2000
================================================================================
Net Asset Value, Beginning of Year $10.00
--------------------------------------------------------------------------------
Income From Operations:
Net investment income/(2)/ 0.06
Net realized and unrealized gain 4.17
--------------------------------------------------------------------------------
Total Income From Operations 4.23
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01)
--------------------------------------------------------------------------------
Total Distributions (0.01)
--------------------------------------------------------------------------------
Net Asset Value, End of Year $14.22
--------------------------------------------------------------------------------
Total Return 42.36%
--------------------------------------------------------------------------------
Net Assets, End of Year (000s) $17,498
--------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(2)//(3)/ 0.95%
Net investment income 0.72
--------------------------------------------------------------------------------
Portfolio Turnover Rate 61%
================================================================================
(1) The Portfolio commenced operations on November 1, 1999.
(2) The Manager waived a portion of its fees amounting to $48,792 for the year
ended October 31, 2000. If such fees were not waived, the per share decrease
to net investment income and the actual expense ratio would have been $0.04
and 1.46%, respectively.
(3) As a result of a voluntary expense limitation, the expense ratio will not
exceed 0.95%.
--------------------------------------------------------------------------------
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 Smith Barney Aggressive Growth Portfolio
and Smith Barney Mid Cap Portfolio of Travelers Series Fund Inc. as of October
31, 2000, and the related statements of operations, the statements of changes in
net assets, and the financial highlights for the year 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 auditing standards generally accepted
in the United States of America. 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, 2000, by correspondence with the custodian.
As to securities purchased but not yet received, 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 Aggressive Growth Portfolio and Smith Barney Mid Cap Portfolio of
Travelers Series Fund Inc. as of October 31, 2000, and the results of their
operations, the changes in their net assets, and the financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
KPMG LLP
New York, New York
December 11, 2000
--------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Tax Information (unaudited)
--------------------------------------------------------------------------------
For Federal tax purposes the Smith Barney Mid Cap Portfolio hereby designates
for the fiscal year ended October 31, 2000:
. A corporate dividends received deduction of 64.11%.
--------------------------------------------------------------------------------
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
Richard A. Freeman
Vice President
Lawrence B. Weissman
Vice President
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Manager
SSB Citi Fund Management LLC
Custodian
PFPC Trust Company
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. -- Smith Barney Aggressive Growth Portfolio and Smith
Barney Mid Cap Portfolio. 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
IN0903 12/00
