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[LOGO] Smith Barney
Mutual Funds
P R O S P E C T U S
Institutional
Cash
Management
Fund
Cash Portfolio
Government Portfolio
Municipal Portfolio
Class A Shares
----------------------------------------
September 28, 1999
The Securities and Exchange Commission has not approved or disapproved
these securities or determined whether this prospectus is accurate or
complete. Any statement to the contrary is a crime.
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Institutional Cash Management Fund
Contents
<TABLE>
<S> <C>
Investments, risks and performance.......................................... 2
Management.................................................................. 9
Buying shares............................................................... 10
Exchanging shares........................................................... 11
Redeeming shares............................................................ 12
Other things to know about share transactions............................... 14
Distributions, dividends and taxes.......................................... 16
Share price................................................................. 17
Financial highlights........................................................ 18
</TABLE>
You should know: An investment in a portfolio is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency. There is no
assurance that each portfolio will be able to maintain a stable net asset value
of $1.00 per share.
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Investment, risks and performance
Investment objectives
Cash Portfolio and Government Portfolio each seek maximum current income to the
extent consistent with preservation of capital and the maintenance of liquidi-
ty. Municipal Portfolio seeks maximum current income that is exempt from fed-
eral income taxes to the extent consistent with preservation of capital and the
maintenance of liquidity.
Principal investment strategies
Key investments
Government Portfolio This portfolio invests exclusively in short-term U.S. gov-
ernment obligations, including securities issued or guaranteed by the U.S. Gov-
ernment, its agencies and instrumentalities and U.S. Treasury securities and
related repurchase agreements.
Cash Portfolio This portfolio invests in high quality, U.S. dollar denominated
short-term debt securities, primarily commercial paper and obligations of
financial institutions such as certificates of deposit, bankers acceptances,
time deposits of U.S. banks with total assets greater than $1 billion (or the
equivalent in other currencies in the case of foreign banks). Either the prin-
cipal amount of each obligation is fully insured by the FDIC or the issuing
bank has more than $100 million of working capital or more than $1 billion of
total assets. These also may include obligations issued by the U.S. government,
its agencies or instrumentalities, U.S. states and municipalities and U.S. and
foreign corporate issuers. The portfolio will invest at least 25% of its assets
in obligations of domestic and foreign banks.
Cash Portfolio also may invest in money market securities including asset-
backed securities, repurchase agreements and other short term debt securities.
These securities may pay interest at fixed, floating or adjustable rates. The
portfolio limits foreign investments to U.S. dollar denominated securities of
issuers located in major industrialized countries.
Municipal Portfolio This portfolio invests primarily in high quality, short-
term investment grade municipal securities whose interest is exempt from Fed-
eral income tax. These include securities issued by any of the 50 states and
their political subdivisions, agencies and public authorities (together with
certain other governmental issuers such as Puerto Rico, the Virgin Islands and
Guam). As a result, the interest rate on these securities normally is lower
than it would be if the securities were subject to taxation. The municipal
securities in which the fund invests include general obligation
Institutional Cash Management Fund
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bonds, revenue bonds and notes, and municipal leases. These securities may pay
interest at fixed, variable or floating rates. The Municipal Portfolio can
invest up to 20% of its assets in securities whose interest is federally tax-
able.
Minimum credit quality The portfolios invest only in high quality securities,
which are those rated by a nationally recognized statistical rating organiza-
tion in one of its two highest short-term rating categories or, if unrated, of
equivalent quality.
Maximum maturity Each portfolio invests exclusively in securities having
remaining maturities of 397 days or less. Each portfolio maintains a dollar-
weighted average portfolio maturity of 90 days or less.
Structured securities Structured securities are a type of derivative instru-
ment. Municipal Portfolio may invest up to 20% of its assets in three types of
structured securities: tender option bonds, partnership interests and swap-
based securities. These securities represent participation interests in a spe-
cial purpose trust or partnership holding one or more municipal bonds and/or
municipal bond interest rate swaps. A typical swap enables the trust or part-
nership to exchange a municipal bond fixed interest rate for a floating or
variable, short-term municipal interest rate.
Selection process
In selecting investments for the portfolios, the manager looks for:
. The best relative values based on an analysis of yield, price, interest rate
sensitivity and credit quality
. Issuers offering minimal credit risk
. Maturities consistent with the manager's outlook for interest rates
Principal risks of investing in the portfolios
All investments involve some degree of risk. However, each portfolio is a
"money market fund" and, as such, seeks income by investing in short-term debt
securities that meet strict standards established by the portfolios' Board of
Directors based on special rules for money market funds adopted under federal
law.
Although each portfolio seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in a portfolio, or the
portfolios could underperform other short-term debt instruments or money market
funds if:
. Interest rates rise sharply.
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. An issuer or guarantor of a portfolio's securities defaults, or the
security's credit rating is downgraded.
. The manager's judgment about the value or credit quality of a particular
security proves to be incorrect.
Cash Portfolio invests at least 25% of its assets in obligations of domestic
and foreign banks and, as a result, is more susceptible to events affecting the
banking industry. The value of Cash Portfolio's foreign securities may decline
because of unfavorable government actions or political instability.
Some of Municipal Portfolio's income distributions may be, and distributions of
the portfolio's gains will be, subject to federal taxation. The portfolio may
realize taxable gains on the sale of its securities. Some of the portfolio's
income distributions may be subject to the federal alternative minimum tax. In
addition, distributions of Municipal Portfolio's income and gains generally
will be subject to state income taxation.
Structured securities, unlike some derivatives, are not designed to leverage
the portfolio or increase its exposure to interest rate risk. Investments in
structured securities raise certain tax, legal, regulatory and accounting
issues which may not be presented by investments in other municipal bonds.
These issues could be resolved in a manner that could hurt the performance of
the portfolios.
Who may want to invest
Cash Portfolio and Government and Municipal Portfolio may be an appropriate
investment if you:
. Are seeking current income
. Are looking for an investment with lower risk than most other types of port-
folios
In addition to the above, Municipal Portfolio may be an appropriate investment
if you:
. Are a taxpayer in a high federal tax bracket seeking current income exempt
from federal taxation
. Are willing to accept the risks of municipal securities
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Risk return bar charts
The bar charts indicate the risks of investing in the portfolios by showing
changes in the portfolios' performance from year to year. Past performance does
not necessarily indicate how a portfolio will perform in the future. The bar
charts show the performance of each of the portfolio's Class A shares for each
of the past 3 calendar years.
Total Return for Cash Portfolio
[BAR GRAPH]
Calendar years ended December 31
96 97 98
---- ---- ----
4.98% 5.12% 5.50%
Quarterly returns:
Highest: 1.39% in 4th quarter 1997; Lowest: 1.28% in 1st quarter 1997 Year to
date: 2.4% through 6/30/99
Total Return for Government Portfolio
[BAR GRAPH]
Calendar years ended December 31
96 97 98
---- ---- ----
4.98% 5.04% 5.36%
Quarterly returns:
Highest: 1.38% in 4th quarter 1997; Lowest: 1.26% in 4th quarter 1998 Year to
date: 2.31% through 6/30/99
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Total Return for Municipal Portfolio
[BAR GRAPH]
Calendar years ended December 31
96 97 98
---- ---- ----
4.86% 5.03% 3.39%
Quarterly returns:
Highest: 0.91% in 4th quarter 1997; Lowest: 0.80% in 1st quarter 1997 Year to
date: 1.48% through 6/30/99
Risk return table
This table indicates the risks of investing in the portfolios by showing the
average annual total return of Class A shares of the portfolios for the periods
indicated. This table assumes redemption of shares at the end of the period and
reinvestment of distributions and dividends.
Average Annual Total Returns
Calendar Years Ended December 31, 1998
<TABLE>
<CAPTION>
Fund 1 year Since inception Inception Date
<S> <C> <C> <C>
Cash Portfolio 5.50% 5.53% 6/16/95
Government Portfolio 5.36% 5.43% 6/16/95
Municipal Portfolio 3.39% 3.51% 6/16/95
</TABLE>
* Index comparison begins on June 30, 1995.
7 day yield as of December 31, 1998
<TABLE>
<CAPTION>
Cash Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
7 day yield 5.11% 4.75% 3.68%
</TABLE>
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Fee table
This table sets forth the fees and expenses you will pay if you invest in the
portfolios' shares.
Shareholders fees
<TABLE>
<CAPTION>
Cash Government Municipal
(fees paid directly from your investment) Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases
(as a % of offering price) None None None
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or
redemption) None None None
</TABLE>
Annual portfolio operating expenses
<TABLE>
<CAPTION>
Cash Government Municipal
(expenses deducted from fund assets) Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Management fee(/1/) 0.27% 0.27% 0.27%
Distribution and service (12b-1) fees none none none
Other expenses 0.04% 0.15% 0.12%
----- ----- -----
Total annual portfolio operating expenses(/1/) 0.31% 0.42% 0.39%
</TABLE>
(/1/)The manager has voluntarily agreed to limit total annual operating
expenses, exclusive of certain other expenses, to .80% of each portfolio's
average daily net assets. Because the manager waived a portion of the manage-
ment fees, actual expenses for the prior fiscal year were:
<TABLE>
<CAPTION>
Cash Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Management fee 0.19% 0.08% 0.11%
Total annual fund operating expenses 0.23% 0.23% 0.23%
</TABLE>
Subject to the cap on total annual operating expenses, the manager may change
or eliminate these management fee waivers at any time. The manager may termi-
nate the .80% limit on total annual operating expenses on fourteen days prior
notice to shareholders.
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Example
This example helps you compare the costs of investing in each portfolio with
the costs of investing in other mutual funds. Your actual costs may be higher
or lower. The example assumes:
. You invest $10,000 in the portfolio for the period shown
. You redeem all of your shares at the end of the period
. Your investment has a 5% return each year
. You reinvest all distributions and dividends without a sales charge
. Each portfolio's operating expenses remain the same
. Redemption of your shares at the end of the period
Number of years you own your shares
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Cash Portfolio $32 $100 $174 $393
Government Portfolio $43 $135 $235 $530
Municipal Portfolio $40 $125 $219 $493
</TABLE>
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Management
Manager The portfolios' investment manager is SSB Citi Fund Management LLC, an
affiliate of Salomon Smith Barney Inc. The manager's address is 388 Greenwich
Street, New York, New York 10013. The manager selects the portfolios' invest-
ments and oversees their operations. The manager and Salomon Smith Barney are
subsidiaries of Citigroup Inc. Citigroup businesses produce a broad range of
financial services--asset management, banking and consumer finance, credit and
charge cards, insurance, investments, investment banking and trading--and use
diverse channels to make them available to consumer and corporate customers
around the world.
Management fee For its services, the manager received a fee during each portfo-
lio's last fiscal year equal to the amount shown below:
<TABLE>
<CAPTION>
Management fee as a percentage of
Portfolio each portfolio's average daily net assets
<S> <C>
Cash Portfolio 0.19%
Government Portfolio 0.08%
Municipal Portfolio 0.11%
</TABLE>
Distributor The portfolios have entered into an agreement with CFBDS, Inc. to
distribute the portfolios' shares. A selling group consisting of Salomon Smith
Barney and other broker-dealers sells portfolio shares to the public.
Year 2000 issue Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the portfolios. The cost of addressing the Year 2000 issue,
if substantial, could adversely affect companies and governments that issue
securities held by the portfolios. The manager and Salomon Smith Barney are
addressing the Year 2000 issue for their systems. The portfolios have been
informed by other service providers that they are taking similar measures.
Although the portfolios do not expect the Year 2000 issue to adversely affect
them, the portfolios cannot guarantee that the efforts of each portfolio, which
are limited to requesting and receiving reports from its service providers, or
the efforts of its service providers to correct the problem will be successful.
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Buying shares
Through a You should contact your Salomon Smith Barney Financial Con-
Salomon Smith sultant or dealer representative to open a brokerage account
Barney and make arrangements to buy shares.
Financial
Consultant or If you do not provide the following information, your order
dealer will be rejected:
representative . Specific portfolio being bought
. The class of shares and dollar amount or number of shares
being bought
You should pay for your shares through your brokerage account
on the day you place your order. Salomon Smith Barney or your
dealer representative may charge an annual account mainte-
nance fee.
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Through the Certain investors who are clients of the selling group are
portfolios' eligible to buy shares directly from a portfolio.
transfer
agent
. Call the transfer agent at 1-800-282-3505 for more informa-
tion on establishing an account or purchasing additional
shares.
. Enclose a check to pay for the shares or arrange for
the wiring of federal funds to the transfer agent by call-
ing 1-800-282-3505. For initial purchases, complete and
send an account application.
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Investment The minimum initial investment is $1,000,000; each additional
minimums investment must be $50 or more.
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Effectiveness
of purchase When purchase orders are paid for in federal funds, or are
orders placed by an investor with a sufficient balance in the
investor's brokerage account with Salomon Smith Barney or the
dealer representative, the order becomes effective on the day
of receipt if the order is received prior to 12 noon (Eastern
time) which is the close of business for the Municipal Port-
folio and 2:00 pm (Eastern time) which is the close of busi-
ness with respect to the Cash and Government Portfolios on
any day on
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which a portfolio calculates its net asset value. Purchase
orders received after the close of business or with respect
to which federal funds are not available, or when the orders
for the purchase of shares are paid for in other than federal
funds, will not be accepted and a new purchase order will
need to be submitted the next day a portfolio calculates its
net asset value.
Exchanging shares
You should contact your Salomon Smith Barney Financial Con-
sultant or dealer representative to exchange into another
portfolio. An exchange is a taxable transaction.
. To qualify for the exchange privilege, you must exchange
shares with a current value of at least $1,000
. If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with
signed stock powers (documents transferring ownership of
certificates) before the exchange is effective.
- --------------------------------------------------------------------------------
By telephone
If you do not have a brokerage account, you may be eligible
to exchange shares through the transfer agent. You must com-
plete an authorization form to authorize telephone transfers.
If eligible, you may make telephone exchanges on any day the
New York Stock Exchange is open. Call the transfer agent at
1-800-282-3505 between 9:00 a.m. and 2:00 p.m. Eastern time
(between 9 a.m. and 12 noon for Municipal Portfolio).
You can make telephone exchanges only between accounts that
have identical registrations.
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By mail If you do not have a Salomon Smith Barney brokerage account,
contact your dealer representative or write to the transfer
agent at the address on page 13.
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Redeeming shares
Generally
Redemption requests received in proper form prior to 2 p.m.
Eastern time (12 noon for Municipal Portfolio) are priced at
the net asset value next determined. Redemption requests
received after 2 p.m. Eastern time (12 noon for Municipal
Portfolio) will not be accepted and a new redemption request
should be submitted on the next day that the portfolio calcu-
lates its net asset value. If you hold share certificates,
the transfer agent must receive the certificates endorsed for
transfer or with signed stock powers before the redemption is
effective.
In a You may redeem shares by contacting your Salomon Smith Barney
Brokerage Financial Consultant or dealer representative. If you have a
Account Salomon Smith Barney brokerage account, your redemption pro-
ceeds will be placed in your account in the form of federal
funds on the same day that the redemption order was accepted
and not reinvested without your specific instruction. You may
have the proceeds sent in the form of federal funds wired on
the same day to a bank account previously designated on your
application form. If you change the bank account designated
to receive the proceeds you must submit in proper form a new
account application with a signature guarantee. Alternative-
ly, your redemption proceeds can be sent by check to your
address of record normally within one, but in no event more
than three, business days after your request is received in
proper form.
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By telephone
If you have an account application on file with the transfer
agent with the telephone privilege section properly completed
you may request redemptions by telephone on any day the New
York Stock Exchange is open. Call the transfer agent at 1-
800-282-3505 between 9:00 a.m. and 2:00 p.m. Eastern time
(between 9 a.m. and 12 noon for Municipal Portfolio). If,
however, you are unable to contact the transfer agent by tel-
ephone you may contact your Salomon Smith Barney Financial
Consultant to effect such redemption.
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By mail For accounts held directly at the portfolios, send written
requests to the transfer agent at the following address:
Smith Barney Institutional Cash Management Fund, Inc.
(Specify portfolio)
c/o First Data Investor Services Group, Inc.
P.O. Box 9699
Providence, RI 02940-9699
Your written request must provide the following:
. Your account number
. The class of shares and dollar amount or number of shares
to be redeemed
. Signatures of each owner exactly as the account is
registered
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Other things to know about share transactions
When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed:
. Name of the portfolio
. Account number
. The class of shares and dollar amount or number of shares being bought,
exchanged or redeemed
. Signature of each owner exactly as the account is registered
A request to purchase shares becomes effective only when Salomon Smith Barney,
a selling group member or the transfer agent receives, or converts the purchase
amount into, federal funds.
The transfer agent will try to confirm that any telephone exchange or redemp-
tion request is genuine by recording calls, asking the caller to provide a per-
sonal identification number for the account, sending you a written confirmation
or requiring other confirmation procedures from time to time.
Signature guarantees To be in good order, your redemption request must include
a signature guarantee if you:
. Are sending signed share certificates or stock powers to the transfer agent
. Instruct the transfer agent to mail the check to an address different from
the one on your account
. Changed your account registration
. Want the check paid to someone other than the account owner(s)
. Are transferring the redemption proceeds to an account with a different reg-
istration
You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.
Each portfolio has the right to:
. Suspend the offering of shares
. Waive or change minimum and additional investment amounts
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. Reject any purchase or exchange order
. Change, revoke or suspend the exchange privilege
. Suspend telephone transactions
. Suspend or postpone redemptions of shares on any day when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the Securi-
ties and Exchange Commission
. Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities
Small account balances If your account falls below $100,000 because of a
redemption of portfolio shares, a portfolio may ask you to bring your account
up to $100,000. If your account is still below $100,000 after 60 days, the
portfolio may close your account and send you the redemption proceeds.
Share certificates The portfolios do not issue share certificates unless a
written request signed by all registered owners is made to the transfer agent.
If you hold share certificates, it will take longer to exchange or redeem
shares.
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Distributions, dividends and taxes
Dividends Each portfolio intends to declare a dividend of substantially all of
its net investment income on each day the New York Stock Exchange is open.
Income dividends are paid monthly. Each portfolio generally makes capital gain
distributions, if any, once a year, typically in December. Each portfolio may
pay additional distributions and dividends at other times if necessary for the
portfolio to avoid a federal tax. Each portfolio expects distributions to be
primarily from income. Dividends and capital gain distributions are reinvested
in additional portfolio shares of the same class you hold. Alternatively, you
can instruct your Salomon Smith Barney Financial Consultant, dealer representa-
tive or the transfer agent to have your distributions and/or dividends paid in
cash. You can change your choice at any time to be effective as of the next
distribution or dividend, except that any change given to the transfer agent
less than five days before the payment date will not be effective until the
next distribution or dividend is paid.
Taxes In general, receiving distributions (whether in cash or additional
shares) is a taxable event.
<TABLE>
<CAPTION>
Transaction Federal tax status
<S> <C>
Redemption or exchange of shares Usually no gain or loss
Long-term capital gain distributions Long-term capital gain
Short-term capital gain distributions Ordinary income
Dividends Ordinary income (except for
Municipal Portfolio's
distributions
of tax-exempt interest,
which are excludable from
gross income
for Federal income tax
purposes)
</TABLE>
Each portfolio anticipates that it will normally not earn or distribute any
long-term capital gains.
After the end of each year, each portfolio will provide you with information
about the distributions and dividends you received during the previous year. If
you do not provide the portfolios with your correct taxpayer identification
number and any required certifications, you may be subject to back-up withhold-
ing of 31% of your distributions and dividends (other than tax-exempt divi-
dends). Because each shareholder's circumstances are different and special tax
rules may apply, you should consult your tax adviser about your investment in
the portfolios.
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Share price
You may buy, exchange or redeem shares at their net asset value next determined
after receipt of your request in good order. Each portfolio's net asset value
is the value of its assets minus its liabilities. Municipal Portfolio calcu-
lates its net asset value at noon, Eastern time, every day the New York Stock
Exchange is open. Cash Portfolio and Government Portfolio each calculate their
respective net asset values at 2 p.m., Eastern time, every day the New York
Stock Exchange is open. The Exchange is closed on certain holidays listed in
the Statement of Additional Information.
Each portfolio uses the amortized cost method to value portfolio securities.
Using this method, a portfolio constantly amortizes over the remaining life of
a security the difference between the principal amount due at maturity and the
cost of the security to the portfolio.
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Financial highlights
The financial highlights tables are intended to help you understand the perfor-
mance of Class A shares of each portfolio for the past 5 years (or since incep-
tion if less than 5 years). Certain information reflects financial results for
a single share. Total return represents the rate that a shareholder would have
earned (or lost) on a portfolio share assuming reinvestment of all dividends
and distributions. The information in the following tables was audited by KPMG
LLP, independent accountants, whose report, along with the portfolios' finan-
cial statements, is included in the annual report (available upon request).
Cash Portfolio
For a Class A share of capital stock outstanding throughout each year ended
May 31:
<TABLE>
<CAPTION>
1999 1998 1997 1996(/1/)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------
Net investment income(/2/) 0.051 0.055 0.052 0.053
Distributions from net investment
income (0.051) (0.055) (0.052) (0.053)
Distributions from net realized
gains (0.000)* (0.000)* -- --
- ---------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------
Total Return 5.23% 5.58% 5.35% 5.44%++
- ---------------------------------------------------------------------------------
Net Assets, End of Year (000s) $1,056,505 $848,383 $216,055 $277,572
- ---------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(/2/)(/3/) 0.23% 0.23% 0.23% 0.15%+
Net investment income 5.07 5.43 5.23 5.43+
- ---------------------------------------------------------------------------------
</TABLE>
(/1/) For the period from June 16, 1995 (inception date) to May 31, 1996.
(/2/) The manager has waived a portion of its fees for the portfolio for the
years ended May 31, 1999, 1998, 1997 and for the period ended May 31,
1996. If the manager had not agreed to the fee waiver, the per share
effect on net investment income and the ratio of expenses to average net
assets for the Class A shares would have been:
<TABLE>
<CAPTION>
Per Share
Decrease to Net Expense Ratio
Investment Income Without Fee Waiver
1999 1998 1997 1996 1999 1998 1997 1996
- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.001 $0.001 $0.001 $0.001 0.31% 0.35% 0.36% 0.39%+
- ---------------------------------------------------------------
</TABLE>
(/3/) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the Portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
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Government Portfolio
For a Class A share of capital stock outstanding throughout each year ended
May 31:
<TABLE>
<CAPTION>
1999 1998 1997 1996(/1/)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income(/2/) 0.049 0.053 0.052 0.052
Distributions from net investment
income (0.049) (0.053) (0.052) (0.052)
Distributions from net realized
gains -- -- (0.000)* (0.000)*
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.05% 5.46% 5.29% 5.36%++
- ------------------------------------------------------------------------------
Net Assets, End of Year (000s) $146,103 $88,484 $151,840 $57,698
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(/2/)(/3/) 0.23% 0.23% 0.21% 0.16%+
Net investment income 4.86 5.33 5.18 5.28+
- ------------------------------------------------------------------------------
</TABLE>
(/1/) For the period from June 16, 1995 (commencement of operations) to May 31,
1996.
(/2/) The manager has waived a portion of its fees for the portfolio for the
years ended May 31, 1999, 1998, 1997 and the period ended May 31, 1996.
If the manager had not agreed to the fee waiver, the per share effect on
net investment income and the ratio of expenses to average net assets
would have been:
<TABLE>
<CAPTION>
Per Share
Decrease to Net Expense Ratio
Investment Income Without Fee Waiver
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1999 1998 1997 1996
- ---------------------------------------------------------------------------
$0.002 $0.002 $0.001 $0.002 0.42% 0.39% 0.43% 0.55%+
- ---------------------------------------------------------------------------
</TABLE>
(/3/) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
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Municipal Portfolio
For a Class A share of capital stock outstanding throughout each year ended
May 31:
<TABLE>
<CAPTION>
1999 1998 1997 1996(/1/)
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------
Net investment income(/2/) 0.031 0.035 0.034 0.035
Distributions from net investment
income (0.031) (0.035) (0.034) (0.035)
Distributions from net realized
gains -- (0.000)* -- --
- -----------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------
Total Return 3.18% 3.56% 3.40% 3.55%++
- -----------------------------------------------------------------------------
Net Assets, End of Year (000s) $311,543 $85,671 $23,666 $59,308
- -----------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(/2/)(/3/) 0.23% 0.23% 0.21% 0.15%+
Net investment income 3.09 3.50 3.34 3.46+
- -----------------------------------------------------------------------------
</TABLE>
(/1/) For the period from June 16, 1995 (commencement of operations) to May 31,
1996.
(/2/) The manager has waived all or a part of its fees for the portfolio for
the years ended May 31, 1999, 1998, 1997 and the period ended May 31,
1996. In addition, the manager agreed to reimburse the portfolio for
$63,835 in expenses for the period ended May 31, 1996. If the manager had
not agreed to the fee waiver and the expense reimbursement, the per share
effect on net investment income and the ratio of expenses to average net
assets would have been:
<TABLE>
<CAPTION>
Per Share Expense Ratio
Decrease to Net Without Fee Waiver
Investment Income and Reimbursement
1999 1998 1997 1996 1999 1998 1997 1996
- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.002 $0.001 $0.004 $0.003 0.39% 0.41% 0.41% 0.69%+
- ---------------------------------------------------------------
</TABLE>
(/3/) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the Portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
Institutional Cash Management Fund
20
<PAGE>
SalomonSmithBarney
------------------
A member of citigroup [LOGO]
Institutional Cash Management Fund
Shareholder reports Annual and semiannual reports to shareholders provide addi-
tional information about each portfolio's investments. These reports discuss
the market conditions and investment strategies that affected the portfolios'
performance.
The portfolios send only one report to a household if more than one account has
the same address. Contact your Salomon Smith Barney Financial Consultant,
dealer representative or the transfer agent if you do not want this policy to
apply to you.
Statement of additional information The statement of additional information
provides more detailed information about the portfolios and is incorporated by
reference into (is legally part of) this prospectus.
You can make inquiries about the portfolios or obtain shareholder reports or
the statement of additional information (without charge) by contacting your
Salomon Smith Barney Financial Consultant or dealer representative, by calling
the portfolios at 1-800-282-3505, or by writing to the portfolios at Smith
Barney Mutual Funds, 388 Greenwich Street, MF2, New York, New York 10013.
Visit our web site. Our web site is located at www.smithbarney.com
You can also review and copy the portfolios' shareholder reports, prospectus
and statement of additional information at the Securities and Exchange Commis-
sion's Public Reference Room in Washington, D.C. You can get copies of these
materials for a duplicating fee by writing to the Public Reference Section of
the Commission, Washington, D.C. 20549-6009. Information about the public ref-
erence room may be obtained by calling 1-800-SEC-0330. You can get the same
information free from the Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the portfolios that is not in this prospec-
tus, you should not rely upon that information. Neither the portfolios nor the
distributor is offering to sell shares of the portfolios to any person to whom
the portfolios may not lawfully sell their shares.
SM Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
(Investment Company Act file
no. 811-9012)
[FD0958 9/99]
<PAGE>
[LOGO] Smith Barney
Mutual Funds
P R O S P E C T U S
Institutional
Cash
Management
Fund
Cash Portfolio
Government Portfolio
Municipal Portfolio
Class B Shares
----------------------------------------
September 28, 1999
The Securities and Exchange Commission has not approved or disapproved
these securities or determined whether this prospectus is accurate or
complete. Any statement to the contrary is a crime.
<PAGE>
Institutional Cash Management Fund
Contents
<TABLE>
<S> <C>
Investments, risks and performance.......................................... 2
Management.................................................................. 7
Buying shares............................................................... 8
Exchanging shares........................................................... 9
Redeeming shares............................................................ 10
Other things to know about share transactions............................... 12
Distributions, dividends and taxes.......................................... 14
Share price................................................................. 15
Financial Highlights........................................................ 16
</TABLE>
You should know: An investment in a portfolio is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency. There is no
assurance that each portfolio will be able to maintain a stable net asset value
of $1.00 per share.
Smith Barney Mutual Funds
1
<PAGE>
Investment, risks and performance
Investment objectives
Cash Portfolio and Government Portfolio each seek maximum current income to the
extent consistent with preservation of capital and the maintenance of liquidi-
ty. Municipal Portfolio seeks maximum current income that is exempt from fed-
eral income taxes to the extent consistent with preservation of capital and the
maintenance of liquidity.
Principal investment strategies
Key investments
Government Portfolio This portfolio invests exclusively in short-term U.S. gov-
ernment obligations, including securities issued or guaranteed by the U.S. Gov-
ernment, its agencies and instrumentalities and U.S. Treasury securities and
related repurchase agreements.
Cash Portfolio This portfolio invests in high quality, U.S. dollar denominated
short-term debt securities, primarily commercial paper and obligations of
financial institutions such as certificates of deposit, bankers acceptances,
time deposits of U.S. banks with total assets greater than $1 billion (or the
equivalent in other currencies in the case of foreign banks). Either the prin-
cipal amount of each obligation is fully insured by the FDIC or the issuing
bank has more than $100 million of working capital or more than $1 billion of
total assets. These also may include obligations issued by the U.S. government,
its agencies or instrumentalities, U.S. states and municipalities and U.S. and
foreign corporate issuers. The portfolio will invest at least 25% of its assets
in obligations of domestic and foreign banks.
Cash Portfolio also may invest in money market securities including asset-
backed securities, repurchase agreements and other short term debt securities.
These securities may pay interest at fixed, floating or adjustable rates. The
portfolio limits foreign investments to U.S. dollar denominated securities of
issuers located in major industrialized countries.
Municipal Portfolio This portfolio invests primarily in high quality, short-
term investment grade municipal securities whose interest is exempt from Fed-
eral income tax. These include securities issued by any of the 50 states and
their political subdivisions, agencies and public authorities (together with
certain other governmental issuers such as Puerto Rico, the Virgin Islands and
Guam). As a result, the interest rate on these securities normally is lower
than it would be if the securities were subject to taxation. The municipal
securities in which the fund invests include general obligation bonds, revenue
bonds and notes, and municipal leases. These securities
Institutional Cash Management Fund
2
<PAGE>
may pay interest at fixed, variable or floating rates. The Municipal Portfolio
can invest up to 20% of its assets in securities whose interest is federally
taxable.
Minimum credit quality The portfolios invest only in high quality securities,
which are those rated by a nationally recognized statistical rating organiza-
tion in one of its two highest short-term rating categories or, if unrated, of
equivalent quality.
Maximum maturity Each portfolio invests exclusively in securities having
remaining maturities of 397 days or less. Each portfolio maintains a dollar-
weighted average portfolio maturity of 90 days or less.
Structured securities Structured securities are a type of derivative instru-
ment. Municipal Portfolio may invest up to 20% of its assets in three types of
structured securities: tender option bonds, partnership interests and swap-
based securities. These securities represent participation interests in a spe-
cial purpose trust or partnership holding one or more municipal bonds and/or
municipal bond interest rate swaps. A typical swap enables the trust or part-
nership to exchange a municipal bond fixed interest rate for a floating or
variable, short-term municipal interest rate.
Selection process
In selecting investments for the portfolios, the manager looks for:
. The best relative values based on an analysis of yield, price, interest rate
sensitivity and credit quality
. Issuers offering minimal credit risk
. Maturities consistent with the manager's outlook for interest rates
Principal risks of investing in the portfolios
All investments involve some degree of risk. However, each portfolio is a
"money market fund" and, as such, seeks income by investing in short-term debt
securities that meet strict standards established by the portfolios' Board of
Directors based on special rules for money market funds adopted under federal
law.
Although each portfolio seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in a portfolio, or the
portfolios could underperform other short-term debt instruments or money market
funds if:
. Interest rates rise sharply.
Smith Barney Mutual Funds
3
<PAGE>
. An issuer or guarantor of the portfolios' securities defaults, or the
security's credit rating is downgraded.
. The manager's judgment about the value or credit quality of a particular
security proves to be incorrect.
Cash Portfolio invests at least 25% of its assets in obligations of domestic
and foreign banks and, as a result, is more susceptible to events affecting the
banking industry. The value of Cash Portfolio's foreign securities may decline
because of unfavorable government actions or political instability.
Some of Municipal Portfolio's income distributions may be, and distributions of
the portfolio's gains will be, subject to federal taxation. The portfolio may
realize taxable gains on the sale of its securities. Some of the portfolio's
income distributions may be subject to the federal alternative minimum tax. In
addition, distributions of Municipal Portfolio's income and gains generally
will be subject to state income taxation.
Structured securities, unlike some derivatives, are not designed to leverage
the portfolio or increase its exposure to interest rate risk. Investments in
structured securities raise certain tax, legal, regulatory and accounting
issues which may not be presented by investments in other municipal bonds.
These issues could be resolved in a manner that could hurt the performance of
the portfolios.
Who may want to invest
Cash Portfolio and Government and Municipal Portfolio may be an appropriate
investment if you:
. Are seeking current income
. Are looking for an investment with lower risk than most other types of port-
folios
In addition to the above, Municipal Portfolio may be an appropriate investment
if you:
. Are a taxpayer in a high federal tax bracket seeking current income exempt
from federal taxation
. Are willing to accept the risks of municipal securities
No performance information is presented for Class B shares of Government Port-
folio and Municipal Portfolio since there were no Class B shares outstanding
for the years ended May 31, 1998 and 1999. No performance is presented for
Class B shares of Cash Portfolio since there were no Class B shares for a full
calendar year since inception.
Institutional Cash Management Fund
4
<PAGE>
Fee table
This table sets forth the fees and expenses you will pay if you invest in the
portfolios' shares. Since no Class B shares of the portfolios were outstanding
for the fiscal year ended May 31, 1999, management fees and other expenses are
estimated for the fiscal year ending May 31, 2000.
Shareholder fees
<TABLE>
<CAPTION>
Cash Government Municipal
(fees paid directly from your investment) Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases (as a % of offering price) None None None
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or
redemption) None None None
</TABLE>
Annual portfolio operating expenses
<TABLE>
<CAPTION>
Cash Government Municipal
(expenses deducted from fund assets) Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Management fee/1/ 0.27% 0.27% 0.27%
Distribution and service (12b-1) fees 0.25% 0.25% 0.25%
Other expenses 0.04% 0.15% 0.12%
----- ----- -----
Total annual portfolio operating expenses/1/ 0.56% 0.67% 0.64%
</TABLE>
/1/The manager has voluntarily agreed to limit total annual operating expenses,
exclusive of certain other expenses, to .80% of each portfolio's average daily
net assets. Because the manager waived a portion of the management fees, esti-
mated expenses for the fiscal year ending May 31, 2000 are:
<TABLE>
<CAPTION>
Cash Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Management fee 0.19% 0.08% 0.11%
Total annual portfolio operating expenses 0.48% 0.48% 0.48%
</TABLE>
Subject to the cap on total annual operating expenses, the manager may change
or eliminate these management fee waivers at any time. The manager may termi-
nate the .80% limit on total annual operating expenses on fourteen days prior
notice to shareholders.
Smith Barney Mutual Funds
5
<PAGE>
Example
This example helps you compare the costs of investing in each portfolio with
the costs of investing in other mutual funds. Your actual costs may be higher
or lower. The example assumes:
. You invest $10,000 in the portfolios for the period shown
. You redeem all of your shares at the end of the period
. Your investment has a 5% return each year
. You reinvest all distributions and dividends without a sales charge
. Each portfolio's operating expenses remain the same
. Redemption of your shares at the end of the period
Number of years you own your shares
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Cash Portfolio $57 $179 $313 $737
Government Portfolio $68 $214 $373 $836
Municipal Portfolio $65 $205 $357 $810
</TABLE>
Institutional Cash Management Fund
6
<PAGE>
Management
Manager The portfolios' investment manager is SSB Citi Fund Management LLC, an
affiliate of Salomon Smith Barney Inc. The manager's address is 388 Greenwich
Street, New York, New York 10013. The manager selects the portfolios' invest-
ments and oversees their operations. The manager and Salomon Smith Barney are
subsidiaries of Citigroup Inc. Citigroup businesses produce a broad range of
financial services--asset management, banking and consumer finance, credit and
charge cards, insurance, investments, investment banking and trading--and use
diverse channels to make them available to consumer and corporate customers
around the world.
Distributor The portfolios have entered into an agreement with CFBDS, Inc. to
distribute the portfolios' shares. A selling group consisting of Salomon Smith
Barney and other broker-dealers sells portfolio shares to the public.
Distribution plans Each portfolio has adopted a Rule 12b-1 distribution plan
for its Class B shares. Under each plan, the portfolio pays distribution and
service fees. These fees are an ongoing expense and, over time, may cost you
more than other types of sales charges.
Year 2000 issue Information technology experts are concerned about computer
systems' ability to process date-related information on and after January 1,
2000. This situation, commonly known as the "Year 2000" issue, could have an
adverse impact on the portfolios. The cost of addressing the Year 2000 issue,
if substantial, could adversely affect companies and governments that issue
securities held by the portfolios. The manager and Salomon Smith Barney are
addressing the Year 2000 issue for their systems. The portfolios have been
informed by other service providers that they are taking similar measures.
Although the portfolios do not expect the Year 2000 issue to adversely affect
them, the portfolios cannot guarantee that the efforts of each portfolio, which
are limited to requesting and receiving reports from its service providers, or
the efforts of its service providers to correct the problem will be successful.
Smith Barney Mutual Funds
7
<PAGE>
Buying shares
Through a You should contact your Salomon Smith Barney Financial Con-
Salomon Smith sultant or dealer representative to open a brokerage account
Barney and make arrangements to buy shares.
Financial
Consultant or
dealer
representative
If you do not provide the following information, your order
will be rejected
. Specific portfolio being bought
. The class of shares and dollar amount or number of shares
being bought
You should pay for your shares through your brokerage account
on the day you place your order. Salomon Smith Barney or your
dealer representative may charge an annual account mainte-
nance fee.
- --------------------------------------------------------------------------------
Through the
funds' Certain investors who are clients of the selling group are
transfer eligible to buy shares directly from a portfolio.
agent
. Call the transfer agent at 1-800-282-3505 for more informa-
tion on establishing an account or purchasing additional
shares.
. Enclose a check to pay for the shares, or arrange for the
wiring of federal funds to the transfer agent by calling 1-
800-282-3505. For initial purchases, complete and send an
account application.
- --------------------------------------------------------------------------------
Investment The minimum initial investment is $1,000,000; each additional
minimums investment must be $50 or more.
- --------------------------------------------------------------------------------
Effectiveness
of purchase When purchase orders are paid for in federal funds, or are
orders placed by an investor with a sufficient balance in the
investor's brokerage account with Salomon Smith Barney or the
dealer representative, the order becomes effective on the day
of receipt if the order is received prior to 12 noon (Eastern
time) which is the close of business for the Municipal Port-
folio and 2:00 pm (Eastern time) which is the close of busi-
ness with respect to the Cash and Government Portfolios on
any day on which a portfolio calculates its net asset value.
Purchase orders received after the close of business or with
respect to which federal funds are not available, or when the
orders for the purchase of shares are paid for
Institutional Cash Management Fund
8
<PAGE>
in other than federal funds, will not be accepted and a new
purchase order will need to be submitted the next day a port-
folio calculates its net asset value.
Exchanging shares
You should contact your Salomon Smith Barney Financial Con-
sultant or dealer representative to exchange into another
portfolio. An exchange is a taxable transaction.
. To qualify for the exchange privilege, you must exchange
shares with a current value of at least $1,000
. If you hold share certificates, the transfer agent must
receive the certificates endorsed for transfer or with
signed stock powers (documents transferring ownership of
certificates) before the exchange is effective.
- --------------------------------------------------------------------------------
By telephone If you do not have a brokerage account, you may be
eligible to exchange shares through the transfer agent.
You must complete an authorization form to authorize
telephone transfers. If eligible, you may make telephone
exchanges on any day the New York Stock Exchange is open.
Call the transfer agent at 1-800-282-3505 between 9:00
a.m. and 2:00 p.m. Eastern time (between 9 a.m. and 12
noon for Municipal Portfolio).
You can make telephone exchanges only between accounts that
have identical registrations.
- --------------------------------------------------------------------------------
By mail If you do not have a Salomon Smith Barney brokerage account,
contact your dealer representative or write to the transfer
agent at the address on page 11.
Smith Barney Mutual Funds
9
<PAGE>
Redeeming shares
Generally
Redemption requests received in proper form prior to 2 p.m.
Eastern time (12 noon for Municipal Portfolio) are priced at
the net asset value next determined. Redemption requests
received after 2 p.m. Eastern time (12 noon for Municipal
Portfolio) will not be accepted and a new redemption request
should be submitted on the next day that the portfolio calcu-
lates its net asset value. If you hold share certificates,
the transfer agent must receive the certificates endorsed for
transfer or with signed stock powers before the redemption is
effective.
In a You may redeem shares by contacting your Salomon Smith Barney
Brokerage Financial Consultant or dealer representative. If you have a
Account Salomon Smith Barney brokerage account, your redemption pro-
ceeds will be placed in your account in the form of federal
funds on the same day that the redemption order was accepted
and not reinvested without your specific instruction. You may
have the proceeds sent in the form of federal funds wired on
the same day to a bank account previously designated on your
application form. If you change the bank account designated
to receive the proceeds you must submit in proper form a new
account application with a signature guarantee. Alternative-
ly, your redemption proceeds can be sent by check to your
address of record normally within one, but in no event more
than three, business days after your request is received in
proper form.
Institutional Cash Management Fund
10
<PAGE>
- --------------------------------------------------------------------------------
By telephone If you have an account application on file with the
transfer agent with the telephone privilege section
properly completed you may request redemptions by
telephone on any day the New York Stock Exchange is open.
Call the transfer agent at 1-800-282-3505 between 9:00
a.m. and 2:00 p.m. Eastern time (between 9 a.m. and 12
noon for Municipal Portfolio). If, however, you are unable
to contact the transfer agent by telephone you may contact
your Salomon Smith Barney Financial Consultant to effect
such redemption.
- --------------------------------------------------------------------------------
By mail For accounts held directly at the portfolios, send written
requests to the transfer agent at the following address:
Smith Barney Institutional Cash Management Fund, Inc.
(Specify portfolio)
c/o First Data Investor Services Group, Inc.
P.O. Box 9699
Providence, RI 02940-9699
Your written request must provide the following:
. Your account number
. The class of shares and dollar amount or number of shares
to be redeemed
. Signatures of each owner exactly as the account is
registered
Smith Barney Mutual Funds
11
<PAGE>
Other things to know about share transactions
When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed:
. Name of the portfolio
. Account number
. The class of shares and dollar amount or number of shares being bought,
exchanged or redeemed
. Signature of each owner exactly as the account is registered
A request to purchase shares becomes effective only when Salomon Smith Barney,
a selling group member or the transfer agent receives, or converts the purchase
amount into, federal funds.
The transfer agent will try to confirm that any telephone exchange or redemp-
tion request is genuine by recording calls, asking the caller to provide a per-
sonal identification number for the account, sending you a written confirmation
or requiring other confirmation procedures from time to time.
Signature guarantees To be in good order, your redemption request must include
a signature guarantee if you:
. Are sending signed share certificates or stock powers to the transfer agent
. Instruct the transfer agent to mail the check to an address different from
the one on your account
. Changed your account registration
. Want the check paid to someone other than the account owner(s)
. Are transferring the redemption proceeds to an account with a different reg-
istration
You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.
Each portfolio has the right to:
. Suspend the offering of shares
. Waive or change minimum and additional investment amounts
Institutional Cash Management Fund
12
<PAGE>
. Reject any purchase or exchange order
. Change, revoke or suspend the exchange privilege
. Suspend telephone transactions
. Suspend or postpone redemptions of shares on any day when trading on the New
York Stock Exchange is restricted, or as otherwise permitted by the Securi-
ties and Exchange Commission
. Pay redemption proceeds by giving you securities. You may pay transaction
costs to dispose of the securities
Small account balances If your account falls below $100,000 because of a
redemption of portfolio shares, a portfolio may ask you to bring your account
up to $100,000. If your account is still below $100,000 after 60 days, the
portfolio may close your account and send you the redemption proceeds.
Share certificates The portfolios do not issue share certificates unless a
written request signed by all registered owners is made to the transfer agent.
If you hold share certificates, it will take longer to exchange or redeem
shares.
Smith Barney Mutual Funds
13
<PAGE>
Distributions, dividends and taxes
Dividends Each portfolio intends to declare a dividend of substantially all of
its net investment income on each day the New York Stock Exchange is open.
Income dividends are paid monthly. Each portfolio generally makes capital gain
distributions, if any, once a year, typically in December. Each portfolio may
pay additional distributions and dividends at other times if necessary for the
portfolio to avoid a federal tax. Each portfolio expects distributions to be
primarily from income. Dividends and capital gain distributions are reinvested
in additional portfolio shares. Alternatively, you can instruct your Salomon
Smith Barney Financial Consultant, dealer representative or the transfer agent
to have your distributions and/or dividends paid in cash. You can change your
choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent less than five days before
the payment date will not be effective until the next distribution or dividend
is paid.
Taxes In general, receiving distributions (whether in cash or additional
shares) is a taxable event.
<TABLE>
<CAPTION>
Transaction Federal tax status
<S> <C>
Redemption or exchange of shares Usually no gain or loss
Long-term capital gain distributions Long-term capital gain
Short-term capital gain distributions Ordinary income
Dividends Ordinary income (except for
Municipal Portfolio's distributions
of tax-exempt interest,
which are excludable
from gross income
for Federal income tax purposes)
</TABLE>
Each portfolio anticipates that it will normally not earn or distribute any
long-term capital gains.
After the end of each year, each portfolio will provide you with information
about the distributions and dividends you received during the previous year. If
you do not provide the portfolios with your correct taxpayer identification
number and any required certifications, you may be subject to back-up withhold-
ing of 31% of your distributions and dividends (other than tax-exempt divi-
dends). Because each shareholder's circumstances are different and special tax
rules may apply, you should consult your tax adviser about your investment in
the portfolios.
Institutional Cash Management Fund
14
<PAGE>
Share price
You may buy, exchange or redeem shares at their net asset value next determined
after receipt of your request in good order. Each portfolio's net asset value
is the value of its assets minus its liabilities. Municipal Portfolio calcu-
lates its net asset value at noon, Eastern time, every day the New York Stock
Exchange is open. Cash Portfolio and Government Portfolio each calculate their
respective net asset values at 2 p.m., Eastern time, every day the New York
Stock Exchange is open. The Exchange is closed on certain holidays listed in
the Statement of Additional Information.
Each portfolio uses the amortized cost method to value portfolio securities.
Using this method, a portfolio constantly amortizes over the remaining life of
a security the difference between the principal amount due at maturity and the
cost of the security to the portfolio.
Smith Barney Mutual Funds
15
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand the perfor-
mance of Class B shares of Cash portfolio for the past 5 years (or since incep-
tion if less than 5 years). Certain information reflects financial results for
a single share. Total return represents the rate that a shareholder would have
earned (or lost) on a portfolio share assuming reinvestment of all dividends
and distributions. The information in the following table was audited by KPMG
LLP, independent accountants, whose report, along with the Cash Portfolio's
financial statement, is included in the 1998 annual report.
No financial information is presented for Class B shares of Government Portfo-
lio and Municipal Portfolio since there were no Class B shares outstanding.
Cash Portfolio
For a Class B share* of capital stock outstanding throughout each year ended
May 31:
<TABLE>
<CAPTION>
1998(/1/)
- -------------------------------------------------
<S> <C>
Net asset value, beginning of year $ 1.00
- -------------------------------------------------
Income (loss) from operations:
Net investment income (loss)(/2/) 0.31
- -------------------------------------------------
Total income (loss) from operations 0.31
- -------------------------------------------------
Less distributions from:
Net investment income (0.31)
Total distributions (0.31)
- -------------------------------------------------
Net asset value, end of year $ 1.00
- -------------------------------------------------
Total return 3.13%(4)
- -------------------------------------------------
Net assets, end of year (000)'s $2,400
- -------------------------------------------------
Ratios to average net assets:
Expenses(/2/)(/3/) 0.47%(5)
Net investment income (loss) 5.21
- -------------------------------------------------
</TABLE>
Institutional Cash Management Fund
16
<PAGE>
(/1/) For the period from October 28, 1997 (commencement of operations) to May
31, 1998.
(/2/) The manager has waived a portion of its fees for the fiscal year ended
May 31, 1999 and for the period ending May 31, 1998. If the manager had
not agreed to the fee waiver, the per share decrease in net investment
income and ratio of expenses to average net assets would have been:
<TABLE>
<CAPTION>
Per Share Decrease Expense Ratio
In Net Investment Income Without Fee Waiver
1998(/1/) 1998(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Cash Portfolio $0.000(/6/) 0.48%
- --------------------------------------------------------------------------------------
</TABLE>
(/3/) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 0.48%.
(/4/) Not annualized.
(/5/) Annualized.
(/6/) Amount represents less than $0.01.
* There were no Class B shares outstanding for years prior or subsequent to the
year ended May 31, 1998.
Smith Barney Mutual Funds
17
<PAGE>
SalomonSmithBarney
------------------
A member of citigroup [LOGO]
Institutional Cash
Management Fund
Shareholder reports Annual and semiannual reports to shareholders provide addi-
tional information about each portfolio's investments. These reports discuss
the market conditions and investment strategies that affected the portfolios'
performance.
The portfolios send only one report to a household if more than one account has
the same address. Contact your Salomon Smith Barney Financial Consultant,
dealer representative or the transfer agent if you do not want this policy to
apply to you.
Statement of additional information The statement of additional information
provides more detailed information about the portfolios and is incorporated by
reference into (is legally part of) this prospectus.
You can make inquiries about the portfolios or obtain shareholder reports or
the statement of additional information (without charge) by contacting your
Salomon Smith Barney Financial Consultant or dealer representative, by calling
the portfolios at 1-800-282-3505, or by writing to the portfolios at Smith Bar-
ney Mutual Funds, 388 Greenwich Street, MF2, New York, New York 10013.
Visit our web site. Our web site is located at www.smithbarney.com
You can also review and copy the portfolios' shareholder reports, prospectus
and statement of additional information at the Securities and Exchange Commis-
sion's Public Reference Room in Washington, D.C. You can get copies of these
materials for a duplicating fee by writing to the Public Reference Section of
the Commission, Washington, D.C. 20549-6009. Information about the public ref-
erence room may be obtained by calling 1-800-SEC-0330. You can get the same
information free from the Commission's Internet web site at http:www.sec.gov
If someone makes a statement about the portfolios that is not in this prospec-
tus, you should not rely upon that information. Neither the portfolios nor the
distributor is offering to sell shares of the portfolios to any person to whom
the portfolios may not lawfully sell their shares.
SM Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
(Investment Company Act file
no. 811-09012)
FD0959 9/99
