Smith Barney Futures Management Inc.
390 Greenwich Street
New York, NY 10013
By EDGAR
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
RE: Smith Barney Diversified Futures Fund L.P. II
Supplement to Registration Statement on Form S-1
File No. 333-3538
Ladies and Gentlemen:
On Behalf of Smith Barney Diversified Futures Fund L.P. II (the "Partnership") I
am transmitting herewith for filing, pursuant to Rule 424 (b) (3) of the
Securities Act of 1933, as amended, a Supplement dated March 31, 1997 to the
Partnership's final prospectus dated May 31, 1996.
Should you have any questions, please telephone me at 723-5424.
Very truly yours,
/s/ Daniel A. Dantuono
Daniel A. Dantuono
Chief Financial Officer and
Director
Enclosures
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Smith Barney
Diversified Futures Fund L.P. II
March 1997
The net asset value of the Smith Barney Diversified Futures Fund L.P. II was
$1,162.50 at the end of March, down 2.0% from the close of February and up 3.3%
for the first quarter 1997. In March, the Fund's advisors emphasized risk
management as many of the markets that had generated profits over the past few
months entered a period of price consolidation.
In the financial futures markets, strong economic data combined with the U.S.
Federal Reserve rate hike pushed domestic bond prices lower, producing profits
for the advisors' short positions. This environment, however, unsettled
international bond markets, generating losses for the advisors' long positions
and offsetting domestic gains. The rise in the value of the U.S. dollar versus
most major currencies stalled and the currency markets entered a period of
consolidation. Trading in the global currency markets was therefore flat.
In the grain markets, decreased stockpiles and increased global demand in
conjunction with a Brazilian labor strike sent soybean prices to new highs,
producing substantial profits for the advisors' positions. Offsetting these
gains were losses generated in the energy markets, including crude oil and
unleaded gasoline, which also experienced a reversal in recent trends.
The base and precious metals markets were mixed as profits in gold were offset
by losses in silver. In the softs market, coffee continued its bullish run to
generate further profits for the advisors.
Smith Barney Futures Management Inc.
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Smith Barney
Diversified Futures Fund L.P. II
Account Statement
For the Period March 1,
Through March 31, 1997
Percent
of Average
Net Assets
-------------
Realized gains from trading 1,560,663 2.01%
Change in unrealized gains/losses
from trading (3,329,200) (4.30)
----------------- -------------
(1,768,537) (2.29)
Add, Brokerage commissions
and clearing fees ($12,292) 464,542 0.60
----------------- -------------
Net realized and unrealized losses (2,233,079) (2.89)
Interest Income 278,683 0.36
----------------- -------------
(1,954,396) (2.53)
----------------- -------------
Less, Expenses:
Management fees 190,829 0.25
Incentive fees (482,771) (0.62)
Other expenses 15,500 0.01
----------------- -------------
(276,442) (0.36)
----------------- -------------
Net Loss (1,677,954) (2.17)%
=============
Additions (8,398.8705 L.P. units at
February 28, 1997 net asset value
per unit of $1,186.35) 9,964,000
Additions (80.0775 G.P. units at
February 28, 1997 net asset value
per unit of $1,186.35) 95,000
Redemptions (156.8203 units at
March 31, 1997 net asset value
per unit of $1,162.50) (182,304)
-----------------
Increase in net assets 8,198,742
Net Assets, February 28, 1997 73,397,455
=================
Net Assets, March 31, 1997 $ 81,596,197
=================
Net asset value per unit $ 1,162.50
=================
($81,596,197/70,190.5338 units)
To the best of the knowledge and belief of the undersigned, the information
contained herein is accurate and complete.
By: /s/ Daniel A. Dantuono
Daniel A. Dantuono
Chief Financial Officer
Smith Barney
Futures Management Inc.
General Partner, Smith Barney
Diversified Futures Fund L.P. II
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