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 October 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
November 1997
The net asset value for the Smith Barney Diversified Futures Fund L.P. II was
$1,064.97, essentially unchanged for the month of November. Performance of the
Fund can be attributed to increased volatility in both the financial and
commodity markets.
In the currency markets, substantial profits were generated in the Japanese Yen,
as it continued to decline against most major currencies due to a lack of
investor confidence in Asia. Additional gains were realized from positions in
the British Pound, Deutsche Mark and Australian Dollar. Gains in the currency
markets were partially offset by losses in international interest rate and stock
market indices, particularly due to increased volatility in the Japanese and
other Asian markets.
While uncertainty hit financial markets, the most obvious trend was the decline
in the price of gold. Falling below $300 an ounce for the first time in over 12
years, gold provided excellent trading conditions and profits for all of the
Fund's advisors.
In the grains and oilseeds markets, positions in soybean meal and bean oil
produced modest gains as prices rose on strong demand from buyers overseas. In
the energy markets, advisors experienced losses from positions in crude oil as
prices declined on reduced tensions in the Middle East.
Important Notes From the General Partner
Smith Barney Holdings Inc., the parent company of Smith Barney Futures
Management Inc. ("SBFMI") has merged with Salomon Brothers Holding Inc. The
parent company of SBFMI is now called Salomon Smith Barney Holdings Inc.
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 November 1,
Through November 30, 1997
Percent
of Average
Net Assets
----------
Realized gains from trading $ 922,134 0.90%
Change in unrealized gains/losses
from trading (240,198) (0.24)
------------- ---------
681,936 0.66
Less, Brokerage commissions
and clearing fees ($12,343) 553,723 0.54
------------- ---------
Net realized and unrealized gains 128,213 0.12
Interest Income 321,437 0.31
------------- ---------
449,650 0.43
------------- ---------
Less, Expenses:
Management fees 231,331 0.22
Other expenses 39,562 0.03
------------- ---------
270,893 0.25
------------- ---------
Net Income 178,757 0.18%
=========
Additions (2,902.7767 L.P. units at
October 31, 1997 net asset value
per unit of $1,063.12) 3,086,000
Additions (12.2281 G.P. units at
October 31, 1997 net asset value
per unit of $1,063.12) 13,000
Redemptions (624.6455 units at
November 30, 1997 net asset value
per unit of $1,064.97) (665,229)
-------------
Increase in net assets 2,612,528
Net Assets, October 31, 1997 99,278,573
=============
Net Assets, November 30, 1997 $ 101,891,101
=============
Net asset value per unit $ 1,064.97
=============
($101,891,101/95,674.7383 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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