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 July 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
July 1997
The net asset value of the Smith Barney Diversified Futures Fund L.P. II was
$1,149.41 at the end of July, up $58.77 or 5.4% from the close of June. July's
strong performance can best be attributed to profits captured in the financial
futures markets.
The largest profits were generated in global interest rates. Positive economic
data in key countries ignited a worldwide rally in the bond markets producing
gains for advisors' positions. Global equities soared to new highs this month
resulting in substantial gains for advisors' long positions in stock indices,
particularly the S&P 500 and the DAX. In the currency markets, advisors profited
from positions in the Deutsche mark and the Swiss franc as the U.S. dollar
continued to strengthen against these two currencies.
In the grains markets, concerns over weather and shifting inventory expectations
caused corn and soybean prices to rise, resulting in losses for advisors' short
positions. Smaller losses were experienced in the softs markets, mainly in
cotton and cocoa.
In the energy markets, losses were seen primarily in crude oil. Gains were
realized from short positions in the metals markets as gold and silver prices
continued to fall.
Important Note from the General Partner:
The following changes in the principals of the General Partner became
effective in May 1997. Shelley Ullman and Maureen O'Toole each were
appointed as Senior Vice President; Philip M. Waterman, Jr. resigned his
positions as Vice Chairman and Director.
Smith Barney Futures Management Inc.
<PAGE>
Smith Barney
Diversified Futures Fund L.P. II
Account Statement
For the Period July 1,
Through July 31, 1997
Percent
of Average
Net Assets
----------
Realized losses from trading $(3,479,000) (3.45)%
Change in unrealized gains/losses
from trading 9,516,529 9.44
----------- ----
6,037,529 5.99
Less, Brokerage commissions
and clearing fees ($10,718) 583,805 0.58
----------- ----
Net realized and unrealized gains 5,453,724 5.41
Interest Income 347,882 0.34
----------- ----
5,801,606 5.75
----------- ----
Less, Expenses:
Management fees 243,155 0.23
Incentive fees 159,599 0.16
Other expenses 28,203 0.03
----------- ----
430,957 0.42
----------- ----
Net Income 5,370,649 5.33%
====
Additions (3,756.5099 L.P. units at
June 30, 1997 net asset value
per unit of $1,090.64) 4,097,000
Additions (40.3433 G.P. units at
June 30, 1997 net asset value
per unit of $1,090.64) 44,000
Redemptions (2,628.7468 units at
July 31, 1997 net asset value
per unit of $1,149.41) (3,021,508)
-----------
Increase in net assets 6,490,141
Net Assets, June 30, 1997 95,526,828
===========
Net Assets, July 31, 1997 $102,016,969
===========
Net asset value per unit $ 1,149.41
($102,016,969/88,755.7135 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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