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 September 30,
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
September 1997
The net asset value of the Smith Barney Diversified Futures Fund L.P. II was
$1,058.71 at the end of September, down 0.4% from the close of August. Profits
in the financial futures markets partially offset losses incurred in the
commodity markets, resulting in slightly negative performance for the month.
In the financial futures markets, advisors achieved strong gains in global
interest rates, largely reflecting positions in the British Long gilt, Japanese
Government bond and Australian 10-year bond. These gains offset losses incurred
from positions in the U.S. 30-year bond. Modest gains were achieved in
international stock market indices. Trading in the currency markets was
unprofitable, mainly due to positions in the German mark and Swiss franc.
In the softs markets, advisors incurred losses from positions in coffee and
sugar as both prices declined due to the expectation of a new supply from
Brazil. Advisors experienced smaller losses in positions in the grains markets.
In the energy markets, advisors experienced small losses from positions in crude
oil as prices fell due to an increase in inventory from summer lows. In the base
and precious metals markets, advisors positions in silver and gold were
unprofitable as prices for both metals rose during the month.
As we enter the fourth quarter, advisors remain positioned across a wide variety
of markets in anticipation of trends becoming more evident. In the interim,
volatility and reversals can be expected.
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 September 1,
Through September 30, 1997
Percent
of Average
Net Assets
----------
Realized gains from trading $ 1,042,702 1.06%
Change in unrealized gains/losses
from trading (1,004,419) (1.02)
------------ ---------
38,283 0.04
Less, Brokerage commissions
and clearing fees ($16,743) 554,066 0.56
------------ ---------
Net realized and unrealized losses (515,783) (0.52)
Interest Income 313,517 0.32
------------ ---------
(202,266) (0.20)
------------ ---------
Less, Expenses:
Management fees 220,227 0.22
Other expenses 14,198 0.02
------------ ---------
234,425 0.24
------------ ---------
Net Loss (436,691) (0.44)%
=========
Additions (3,863.0444 L.P. units at
August 31, 1997 net asset value
per unit of $1,063.41) 4,108,000
Additions (3.7615 L.P. units at
August 31, 1997 net asset value
per unit of $1,063.41) 4,000
Redemptions (951.3471 units at
September 30, 1997 net asset value
per unit of $1,058.71) (1,007,201)
-----------
Increase in net assets 2,668,108
Net Assets, August 31, 1997 94,767,242
===========
Net Assets, September 30, 1997 $ 97,435,350
===========
Net asset value per unit $ 1,058.71
===========
($97,435,350/92,032.0218 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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