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 May 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
May 1997
The net asset value of the Smith Barney Diversified Futures Fund L.P. II was
$1,109.52 at the end of May, down 0.3% from the close of April. Continued
volatility and difficult trading conditions in financial futures markets led to
overall negative results for the month.
Losses incurred in the financial futures markets were mainly due to volatile
trading conditions in global currencies. Advisors' positions in the Japanese
yen produced the largest losses as sentiment for the currency shifted sharply
during the month. Global interest rate markets were equally unsettled,
reflecting U.S. interest rate concerns and doubts about monetary union in
Europe. Small gains in stock indices, generated from advisors' positions in the
Japanese nikkei, failed to offset losses in the global bond markets.
In the energy markets, positions in crude oil resulted in losses. In the metals
markets, increased industrial demand for copper pressured prices upward,
resulting in gains for the advisors' long positions.
In the softs markets, coffee prices continued an upward trend, exceeding $3 a
pound by month end as labor unrest and heavy rains in major producing countries
threatened to reduce already tight inventories. Advisors continued to gain from
these positions.
The powerful trends across several market sectors that gave the advisors such
strong performance in the last quarter of 1996 and early 1997 appear to have
ended. The recently volatile but non-trending markets are a normal part of a
concluding market cycle and often set the stage for impending new trends.
Smith Barney Futures Management Inc.
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Smith Barney
Diversified Futures Fund L.P. II
Account Statement
For the Period May 1,
Through May 31, 1997
Percent
of Average
Net Assets
-------------
Realized losses from trading $ (2,260,974) (2.42)%
Change in unrealized gains/losses
from trading 2,542,192 2.72
----------------- -------------
281,218 0.30
Less, Brokerage commissions
and clearing fees ($14,316) 529,442 0.57
----------------- -------------
Net realized and unrealized losses (248,224) (0.27)
Interest Income 312,573 0.33
----------------- -------------
64,349 0.06
----------------- -------------
Less, Expenses:
Management fees 217,151 0.23
Other expenses 134,149 0.14
----------------- -------------
351,300 0.37
----------------- -------------
Net Loss (286,951) (0.31)%
=============
Additions (6,836.0709 L.P. units at
April 30, 1997 net asset value
per unit of $1,112.92) 7,608,000
Additions (67.3903 G.P. units at
April 30, 1997 net asset value
per unit of $1,112.92) 75,000
Redemptions (541.1832 units at
May 31, 1997 net asset value
per unit of $1,109.52) (600,454)
-----------------
Increase in net assets 6,795,595
Net Assets, April 30, 1997 86,363,735
=================
Net Assets, May 31, 1997 $ 93,159,330
=================
Net asset value per unit $ 1,109.52
($93,159,330/83,963.5257 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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