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 November 30, 1996 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
November 1996
The net asset value of the Smith Barney Diversified Futures Fund L.P. II was
$1,134.13 per unit at the close of November, up $62.75 or 5.9% from the end of
October. This was the fourth consecutive monthly increase bringing the value up
23% since July for an overall increase of 13.4% for the year.
Gains were primarily generated through profitable trading in global financial
futures markets. Converging eco-nomics and interest rates as part of the
European Union plan provided strong trends and profitable trading for the Fund's
advisors in many European contracts. Steady Fed policy and negligible inflation
expectations continued to push U.S. fixed income markets higher, also resulting
in profitable trading for the Fund's advisors. Trading success in the interest
rate sector carried over to the respective currencies as the U.S. dollar showed
continued strength against the Japanese yen and the European continental
currencies. The British pound was the real story as it surged to its highest
level in over four years versus the U.S. and European currencies. Finally,
trading in global stock market indices was also very profitable for the Fund.
Trading in the commodity sectors was mixed, as gains were registered in the
energy and precious and base metals markets. Choppy and trendless grain and soft
markets were the only unprofitable sectors for the Fund.
As in all financial markets, trends do not go on forever. When they begin to
falter, risk control, flexibility and patience become the critical attributes
for successful money management. Managed futures can call upon these skills
better than most traditional investments.
Smith Barney Futures Management Inc.
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Smith Barney
Diversified Futures Fund L.P. II
Account Statement
For the Period November 1,
Through November 30, 1996
Percent
of Average
Net Assets
------------
Realized gains from trading $ 3,211,315 6.79%
Change in unrealized gains/losses
from trading 365,311 0.77
-------------- ------------
3,576,626 7.56
Less, Brokerage commissions
and clearing fees ($7,453) 277,231 0.59
-------------- ------------
Net realized and unrealized gains 3,299,395 6.97
Interest Income 149,336 0.32
-------------- ------------
3,448,731 7.29
-------------- ------------
Less, Expenses:
Management fees 116,400 0.25
Incentive fees 562,495 1.18
Other expenses 11,879 0.03
-------------- ------------
690,774 1.46
-------------- ------------
Net Income 2,757,957 5.83%
============
Additions (1,692.2100 L.P. units at
October 31, 1996 net asset value
per unit of $1,071.38) 1,813,000
Additions (13.0673 G.P. units at
October 31, 1996 net asset value
per unit of $1,071.38) 14,000
Redemptions (394.5164 units at
November 30, 1996 net asset value
per unit of $1,134.13) (447,433)
--------------
Increase in net assets 4,137,524
Net Assets, October 31, 1996 45,260,631
==============
Net Assets, November 30, 1996 $ 49,398,155
==============
Net asset value per unit
($49,398,155/43,555.9457 units) $ 1,134.13
==============
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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