Legg Mason Partners Sector Series N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-4757

Legg Mason Partners Sector Series Inc.
     (Exact name of registrant as specified in charter)

125 Broad Street, New York, NY 10004
     (Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.
Legg Mason & Co., LLC
300 First Stamford Place, 4^th Fl.
Stamford, CT 06902
     (Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 451-2010

Date of fiscal year end: October 31
Date of reporting period: April 30, 2006

ITEM 1. REPORT TO STOCKHOLDERS.

     The Semi-Annual Report to Stockholders is filed herewith.

[INSERT SHAREHOLDER REPORT]

Legg Mason Partners
Financial Services Fund

SEMI-ANNUAL

REPORT

APRIL 30, 2006

 INVESTMENT PRODUCTS: NOT FDIC INSURED•NO BANK GUARANTEE•MAY LOSE VALUE 

Legg Mason Partners

Financial Services Fund

Semi-Annual Report • April 30, 2006

What’s

Inside

Fund Objective*

The Fund seeks long-term capital appreciation by investing primarily in common stocks. The Fund invests at least 80% of its assets in securities of companies principally engaged in providing financial services to consumers and industries. These companies may include, for example, commercial banks, savings and loan associations, broker-dealers, investment banks, investment advisers, insurance companies, real estate-related companies, leasing companies, and consumer and industrial finance companies.

*  Since the Fund focuses its investments on companies involved in financial services, an investment in the Fund may involve a greater degree of risk than an investment in other mutual funds with greater diversification.

Letter from the Chairman	I
Fund at a Glance	1
Fund Expenses	2
Schedule of Investments	4
Statement of Assets and Liabilities	8
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	11
Notes to Financial Statements	14
Additional Shareholder Information	23

“Smith Barney”, “Salomon Brothers” and “Citi” are service marks of Citigroup, licensed for use by Legg Mason as the names of funds and investment managers. Legg Mason and its affiliates, as well as the Fund’s investment manager, are not affiliated with Citigroup.

Letter from the Chairman

R. JAY GERKEN, CFA

Chairman, President and Chief Executive Officer

Dear Shareholder,

The U.S. economy was mixed during the six-month reporting period. After a 4.1% advance in the third quarter of 2005, fourth quarter gross domestic product (“GDP”)ⁱ growth slipped to 1.7%. This marked the first quarter in which GDP growth did not surpass 3.0% since the first three months of 2003. However, as expected, the economy rebounded sharply in the first quarter of 2006, with GDP rising an estimated 5.3%. The economic turnaround was prompted by both strong consumer and business spending. In addition, the U.S. Labor Department reported that unemployment hit a five-year low in March.

   The Federal Reserve Board (“Fed”)ⁱⁱ continued to raise interest rates during the reporting period. Despite the “changing of the guard” from Fed Chairman Alan Greenspan to Ben Bernanke in early 2006, it was “business as usual” for the Fed, as it raised short-term interest rates four times during the reporting period. Since it began its tightening campaign in June 2004, the Fed has increased rates 15 consecutive times, bringing the federal funds rateⁱⁱⁱ from 1.00% to 4.75%. The Fed then raised rates to 5.00% on May 10th, after the end of the reporting period. Coinciding with this latest move, the Fed said that the “extent and timing” of further rate hikes would depend on future economic data.

   For the six-month period ended April 30, 2006, the U.S. stock market generated solid results, with the S&P 500 Index^iv returning 9.63%. While high oil and commodity prices, steadily rising interest rates, and geopolitical issues triggered periods of market volatility, investors generally remained focused on the positive economic environment and strong corporate profits.

   Looking at the market more closely, small-cap stocks outperformed their mid-and large-cap counterparts, with the Russell 2000,^v Russell Midcap^vi and Russell 1000^vii Indexes returning 18.91%, 14.35%, and 9.92%, respectively. From an

Legg Mason Partners Financial Services Fund      I

investment style perspective, value stocks outperformed growth stocks, with the Russell 3000 Value^viii and Russell 3000 Growth^ix Indexes returning 13.27% and 8.19%, respectively, over the reporting period.

Performance Review

For the six months ended April 30, 2006, Class A shares of the Legg Mason Partners Financial Services Fund, excluding sales charges, returned 14.21%. These shares outperformed the Fund’s unmanaged benchmarks, the Russell 3000 Index^x and the Goldman Sachs Financial Index,^xi which returned 10.70% and 13.28%, respectively, for the same period. The Lipper Financial Services Funds Category Average¹ increased 15.19% over the same time frame.

Performance Snapshot as of April 30, 2006 (excluding sales charges) (unaudited)

	6 Months
Financial Services Fund—Class A Shares	14.21%
Russell 3000 Index	10.70%
Goldman Sachs Financial Index	13.28%
Lipper Financial Services Funds Category Average	15.19%

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/InvestorServices.

Performance figures reflect reimbursements and/or fee waivers, without which the performance would have been lower.

Excluding sales charges, Class B shares returned 13.75% and Class C shares returned 13.91% over the six months ended April 30, 2006. All share class returns assume the reinvestment of all distributions, including returns of capital, if any, at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply when shares are purchased or the deduction of taxes that a shareholder would pay on Fund distributions.

Special Shareholder Notices

On December 1, 2005, Citigroup Inc. (“Citigroup”) completed the sale of substantially all of its asset management business, to Legg Mason, Inc. (“Legg Mason”). As a result, Smith Barney Fund Management LLC, the Fund’s investment manager (the “Manager”), previously an indirect wholly-owned subsidiary of Citigroup, became a wholly-owned subsidiary of Legg Mason. Completion of the sale caused the Fund’s then existing investment management contract and sub-advisory contract to terminate. The Fund’s shareholders previously approved a new investment management contract

¹ Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended April 30, 2006, including the reinvestment of distributions, including returns of capital, if any, calculated among the 121 funds in the Fund’s Lipper category, and excluding sales charges.

II     Legg Mason Partners Financial Services Fund

between the Fund and the Manager and a new sub-advisory contract, which became effective on December 1, 2005.

   Effective February 1, 2006, the Fund’s Manager assumed portfolio management responsibility for the Fund. Thomas Linkas and Charles Lovejoy, investment officers of the Manager, were named as the Fund’s portfolio managers. The sub-advisory contract with Citigroup Asset Management Limited, with respect to the Fund, was terminated.

   Mr. Linkas is Chief Investment Officer and Mr. Lovejoy is a portfolio manager of Batterymarch Financial Management, Inc., which, like the Manager, is a subsidiary of Legg Mason.

   Prior to April 7, 2006, the Fund operated under the name Smith Barney Sector Series Inc.-Smith Barney Financial Services Fund. The Fund’s investment strategy and objective have not changed.

Information About Your Fund

As you may be aware, several issues in the mutual fund industry have come under the scrutiny of federal and state regulators. The Fund’s Manager and some of its affiliates have received requests for information from various government regulators regarding market timing, late trading, fees, and other mutual fund issues in connection with various investigations. The regulators appear to be examining, among other things, the Fund’s response to market timing and shareholder exchange activity, including compliance with prospectus disclosure related to these subjects. The Fund has been informed that the Manager and its affiliates are responding to those information requests, but are not in a position to predict the outcome of these requests and investigations.

   Important information concerning the Fund and its Manager with regard to recent regulatory developments is contained in the Notes to Financial Statements included in this report.

   As always, thank you for your confidence in our stewardship of your assets. We look forward to helping you continue to meet your financial goals.

Sincerely,

R. Jay Gerken, CFA

President, Chairman and Chief Executive Officer

May 25, 2006

Legg Mason Partners Financial Services Fund      III

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

RISKS: In addition to normal risks associated with equity investing, narrowly focused investments typically exhibit higher volatility. The financial services sector may be subject to greater governmental regulation, competitive pressures and rapid technological change and obsolescence which may have a materially adverse effect on the sector. Additionally, the Fund’s performance will be influenced by political, social and economic factors affecting investments in companies in foreign countries. The securities of small-and mid-sized companies tend to be more volatile than those of larger companies. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Please see the Fund’s prospectus for more information on these and other risks.

All index performance reflects no deduction for fees, expenses or taxes. Please note an investor cannot invest directly in an index.

i	Gross domestic product is a market value of goods and services produced by labor and property in a given country.
ii	The Federal Reserve Board is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.
iii	The federal funds rate is the interest rate that banks with excess reserves at a Federal Reserve district bank charge other banks that need overnight loans.
iv	The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.
v	The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
vi	The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 25% of the total market capitalization of the Russell 1000 Index.
vii	The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.
viii	The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. (A price-to-book ratio is the price of a stock compared to the difference between a company’s assets and liabilities.)
ix	The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values.
x	The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the U.S. equity market.
xi	The Goldman Sachs Financial Index is an unmanaged market-value weighted index comprised of companies in the banking services, brokerage, asset management, insurance and real estate industries.

IV     Legg Mason Partners Financial Services Fund

Fund at a Glance (unaudited)

Investment Breakdown

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      1

Fund Expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

   This example is based on an investment of $1,000 invested on November 1, 2005 and held for the six months ended April 30, 2006.

Actual Expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Based on Actual Total Return⁽¹⁾

	Actual Total			Beginning		Ending		Annualized			Expenses
	Return Without			Account		Account		Expense			Paid During
	Sales Charges(2)			Value		Value		Ratio			the Period(3)
Class A		14.21	%	$	1,000.00	$	1,142.70		1.49	%	$	7.92
Class B		13.75			1,000.00		1,138.20		2.20			11.66
Class C		13.91			1,000.00		1,139.80		2.00			10.61

(1)	For the six months ended April 30, 2006.
(2)	Assumes reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charges (“CDSC”) with respect to Class B and C shares. Total return is not annualized, as it may not be representative of the total return for the year. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would have been lower.
(3)	Expenses (net of voluntary fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

2     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Fund Expenses (unaudited) (continued)

Hypothetical Example for Comparison Purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

   Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Based on Hypothetical Total Return⁽¹⁾

	Hypothetical
	Annualized			Beginning		Ending		Annualized			Expenses
	Total			Account		Account		Expense			Paid During
	Return			Value		Value		Ratio			the Period(2)
Class A		5.00	%	$	1,000.00	$	1,017.41		1.49	%	$	7.45
Class B		5.00			1,000.00		1,013.88		2.20			10.99
Class C		5.00			1,000.00		1,014.88		2.00			9.99

(1)	For the six months ended April 30, 2006.
(2)	Expenses (net of voluntary fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      3

Schedule of Investments (April 30, 2006) (unaudited)

 LEGG MASON PARTNERS FINANCIAL SERVICES FUND

Shares		Security	Value
COMMON STOCKS — 99.1%
Capital Markets — 14.9%
	12,200	A.G. Edwards, Inc.	$	644,648
	3,116	Bear Stearns Cos. Inc.		444,061
	900	BlackRock Inc., Class A		136,386
	8,600	Credit Suisse Group		539,730
	7,051	Deutsche Bank AG		866,229
	5,700	Franklin Resources Inc.		530,784
	8,753	Goldman Sachs Group Inc.		1,403,018
	3,100	Lehman Brothers Holdings Inc.		468,565
	11,800	Merrill Lynch & Co. Inc.		899,868
	37,897	Morgan Stanley		2,436,777
	6,500	UBS AG		769,789
		Total Capital Markets		9,139,855
Commercial Banks — 40.3%
	18,600	Alpha Bank AE		704,392
	10,800	Banca Popolare di Verona e Novara Scrl		304,161
	23,400	Banco Bilbao Vizcaya Argentaria SA		517,228
	13,850	Banco Bradesco SA, Sponsored ADR		527,270
	100,850	Banco Comercial Portugues SA		308,085
	10,000	Banco Itau Holding Financeira SA, ADR		318,000
	61,320	Banco Santander Central Hispano SA		951,336
	35,868	Bank of America Corp.		1,790,531
	4,600	Bank of Montreal		265,538
	5,100	Bank of Nova Scotia		211,775
	46,360	Barclays PLC		578,557
	1,150	BNP Paribas		105,031
	11,500	BNP Paribas SA		1,087,326
	30,350	Capitalia SpA		263,589
	12,800	Colonial BancGroup Inc.		331,904
	10,381	Comerica Inc.		590,367
	11,550	Commerzbank AG		478,958
	79,000	Gunma Bank Ltd.		610,336
	49,500	HBOS PLC		867,997
	68,600	HSBC Holdings PLC		1,184,174
	11,400	IKB Deutsche Industriebank AG		473,169
	5,650	Mercantile Bankshares Corp.		212,327
	45	Mitsubishi UFJ Financial Group Inc.		707,976
	18	Mizuho Financial Group Inc.		153,619
	3,100	Natexis Banques Populaires		840,574
	8,800	National Bank of Canada		489,683

See Notes to Financial Statements.

4     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Schedule of Investments (April 30, 2006) (unaudited) (continued)

Shares		Security	Value
Commercial Banks — 40.3% (continued)
	16,663	Northern Rock PLC	$	321,789
	12,841	PNC Financial Services Group Inc.		917,746
	15,300	Royal Bank of Canada		653,354
	30,070	Royal Bank of Scotland Group PLC		981,163
	90,000	Shinsei Bank Ltd.		630,455
	24,800	Skandinaviska Enskilda Banken AB		624,978
	4,200	Societe Generale		642,057
	82	Sumitomo Mitsui Financial Group Inc.		900,901
	9,240	Synovus Financial Corp.		258,720
	10,600	Toronto-Dominion Bank		590,886
	7,790	Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR		618,137
	10,300	Wachovia Corp.		616,455
	13,393	Wells Fargo & Co.		919,965
	16,600	Whitney Holding Corp.		590,296
	13,300	Wilmington Trust Corp.		589,190
		Total Commercial Banks		24,729,995
Consumer Finance — 0.9%
	1,830	Orix Corp.		550,086
Diversified Financial Services — 14.5%
	13,300	Aeon Credit Service Co., Ltd.		368,227
	59,300	African Bank Investments Ltd.		330,730
	8,400	AllianceBernstein Holding LP		541,380
	29,436	CIT Group Inc.		1,589,838
	12,300	Credit Saison Co., Ltd.		645,405
	13,400	Fortis		502,559
	147,000	Hokuhoku Financial Group Inc.		599,499
	30,100	ING Groep NV, CVA		1,225,775
	8,100	Investec PLC		460,123
	32,669	JPMorgan Chase & Co.		1,482,519
	300	Matsui Securities Co., Ltd.		4,016
	9,000	Mitsubishi UFJ Securities Co., Ltd.		141,912
	26,000	OMC Card Inc.		412,024
	11,800	Principal Financial Group Inc.		605,458
		Total Diversified Financial Services		8,909,465
Insurance — 19.2%
	4,191	Allstate Corp.		236,750
	18,300	American International Group Inc.		1,194,075
	89,100	Amlin PLC		456,950
	6,000	Assurant Inc.		289,020
	219,400	Brit Insurance Holdings PLC		383,725

See Notes to Financial Statements.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      5

Schedule of Investments (April 30, 2006) (unaudited) (continued)

Shares		Security	Value
Insurance — 19.2% (continued)
	18,320	Chubb Corp.	$	944,213
	3,400	CNP Assurances		367,824
	69,850	Compagnia Assicuratrice Unipol SpA		234,546
	9,750	Fidelity National Financial Inc.		409,305
	13,900	First American Corp.		592,140
	13,888	Hartford Financial Services Group Inc.		1,276,724
	14,700	Irish Life & Permanent PLC		375,213
	4,100	Loews Corp.		435,215
	3,746	MBIA Inc.		223,374
	16,800	MetLife Inc.		875,280
	27,146	Nationwide Financial Services Inc., Class A Shares		1,191,166
	7,300	Prudential Financial Inc.		570,349
	29,840	QBE Insurance Group Ltd.		506,975
	73,120	SCOR		185,529
	1,250	Swiss Life Holding		287,764
	3,200	Topdanmark A/ S *		419,656
	1,325	Zurich Financial Services AG		322,110
		Total Insurance		11,777,903
Real Estate Investment Trusts (REITs) — 6.2%
	12,600	Archstone-Smith Trust		615,888
	6,500	BRE Properties Inc., Class A Shares		350,220
	5,800	CB Richard Ellis Group Inc., Class A Shares *		509,762
	6,800	Host Marriott Corp.		142,936
	3,400	Jones Lang LaSalle Inc.		288,184
	18,400	Leopalace21 Corp.		718,049
	5,300	Nexity		370,651
	12,000	Rayonier Inc.		493,920
	35,000	Tokyu Land Corp.		298,088
		Total Real Estate Investment Trusts (REITs)		3,787,698
Thrifts & Mortgage Finance — 2.5%
	19,412	PMI Group Inc.		895,864
	10,300	Radian Group Inc.		646,016
		Total Thrifts & Mortgage Finance		1,541,880
Trading Companies & Distributors — 0.6%
	10,900	United Rentals Inc. *		388,803
		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT (Cost — $54,365,144)		60,825,685

See Notes to Financial Statements.

6     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Schedule of Investments (April 30, 2006) (unaudited) (continued)

Face
Amount		Security	Value
SHORT-TERM INVESTMENT — 2.1%
Repurchase Agreement — 2.1%
$	1,303,000	State Street Bank & Trust Co., dated 4/28/06, 4.250% due 5/1/06; Proceeds at maturity — $1,303,461; (Fully collateralized by U.S. Treasury Bond, 8.875% due 2/15/19; Market value — $1,332,054) (Cost — $1,303,000)	$	1,303,000
		TOTAL INVESTMENTS — 101.2% (Cost — $55,668,144#)		62,128,685
		Liabilities in Excess of Other Assets — (1.2)%		(764,167	)
		TOTAL NET ASSETS — 100.0%	$	61,364,518

*	Non-income producing security.
#	Aggregate cost for federal income tax purposes is substantially the same.
	Abbreviations used in this schedule:

ADR	— American Depositary Receipt
CVA	— Certificaaten van aandelen (Share Certificates)
GDR	— Global Depositary Receipt

Summary of Investments by Country (unaudited)*

United States	51.3	%
Japan	10.8
United Kingdom	8.4
France	5.8
Canada	3.6
Switzerland	3.1
Germany	2.9
Spain	2.4
Brazil	2.4
Netherlands	2.0
Italy	1.3
Greece	1.1
Sweden	1.0
Australia	0.8
Belgium	0.8
Denmark	0.7
Ireland	0.6
South Africa	0.5
Portugal	0.5
	100.0	%

*  As a percent of total investments. Please note that Fund holdings are as of April 30, 2006 and are subject to change.

See Notes to Financial Statements.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      7

Statement of Assets and Liabilities (April 30, 2006) (unaudited)

ASSETS:
	Investments, at value (Cost — $55,668,144)	$	62,128,685
	Foreign currency, at value (Cost — $32,984)		33,602
	Cash		927
	Receivable for securities sold		2,858,467
	Dividends and interest receivable		173,151
	Receivable for Fund shares sold		28,251
	Prepaid expenses		23,209
	Total Assets		65,246,292
LIABILITIES:
	Payable for securities purchased		3,672,601
	Payable for Fund shares repurchased		67,694
	Investment management fee payable		39,634
	Distribution fees payable		12,439
	Directors’ fees payable		2,028
	Deferred compensation payable		348
	Accrued expenses		87,030
	Total Liabilities		3,881,774
Total Net Assets		$	61,364,518
NET ASSETS:
	Par value (Note 6)	$	3,625
	Paid-in capital in excess of par value		47,985,356
	Undistributed net investment income		135,416
	Accumulated net realized gain on investments and foreign currency transactions		6,776,507
	Net unrealized appreciation on investments and foreign currencies		6,463,614
Total Net Assets		$	61,364,518
Shares Outstanding:
	Class A		1,200,237
	Class B		1,614,954
	Class C		810,428
Net Asset Value:
	Class A (and redemption price)		$17.24
	Class B*		$16.76
	Class C*		$16.78
Maximum Public Offering Price Per Share:
	Class A (based on maximum sales charge of 5.00%)		$18.15

*  Redemption price is NAV of Class B and C shares reduced by a 5.00% and 1.00% CDSC, respectively, if shares are redeemed within one year from purchase payment (See Note 2).

See Notes to Financial Statements.

8     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Statement of Operations (For the six months ended April 30, 2006) (unaudited)

INVESTMENT INCOME:
	Dividends		$	785,469
	Interest			19,097
	Less: Foreign taxes withheld			(10,868	)
	Total Investment Income			793,698
EXPENSES:
	Investment management fee (Note 2)			234,770
	Distribution fees (Notes 2 and 4)			222,777
	Transfer agent fees (Notes 2 and 4)			51,055
	Shareholder reports (Note 4)			22,504
	Registration fees			15,075
	Audit and tax			9,224
	Legal fees			6,506
	Custody fees			5,544
	Directors’ fees (Note 2)			937
	Insurance			668
	Miscellaneous expenses			619
	Total Expenses			569,679
	Less: Fee waivers and/or expense reimbursements (Notes 2 and 7)			(4,292	)
	Net Expenses			565,387
Net Investment Income				228,311
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS (NOTES 1 AND 3):
	Net Realized Gain (Loss) From:
		Investment transactions		6,911,996
		Foreign currency transactions		(14,331	)
	Net Realized Gain			6,897,665
	Change in Net Unrealized Appreciation/ Depreciation From:
		Investments		592,914
		Foreign currencies		3,073
	Change in Net Unrealized Appreciation/ Depreciation			595,987
Net Gain on Investments and Foreign Currency Transactions				7,493,652
Increase in Net Assets From Operations			$	7,721,963

See Notes to Financial Statements.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      9

Statements of Changes in Net Assets

For the six months ended April 30, 2006 (unaudited)

and the year ended October 31, 2005

		2006		2005
OPERATIONS:
	Net investment income	$	228,311	$	389,330
	Net realized gain		6,897,665		4,446,251
	Change in net unrealized appreciation/depreciation		595,987		1,301,517
	Increase in Net Assets From Operations		7,721,963		6,137,098
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
	Net investment income		(299,998)		(359,803)
	Net realized gains		(4,238,454)		(5,934,141)
	Decrease in Net Assets From Distributions to Shareholders		(4,538,452)		(6,293,944)
FUND SHARE TRANSACTIONS (NOTE 6):
	Net proceeds from sale of shares		4,222,786		6,025,489
	Reinvestment of distributions		4,324,331		5,982,782
	Cost of shares repurchased		(7,581,096)		(16,458,218)
	Increase (Decrease) in Net Assets From Fund Share Transactions		966,021		(4,449,947)
Increase (Decrease) in Net Assets			4,149,532		(4,606,793)
NET ASSETS:
	Beginning of period		57,214,986		61,821,779
	End of period*	$	61,364,518	$	57,214,986
* Includes undistributed net investment income of:			$135,416		$207,103

See Notes to Financial Statements.

10     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Financial Highlights

For a share of each class of capital stock outstanding throughout each year ended October 31, unless otherwise noted:

Class A Shares		2006(1)(2)			2005(1)			2004(1)			2003(1)			2002(1)			2001
Net Asset Value, Beginning of Period			$16.40			$16.37			$14.81			$12.46			$13.87			$15.89
Income (Loss) From Operations:
	Net investment income		0.10			0.18			0.16			0.11			0.05			0.06
	Net realized and unrealized gain (loss)		2.11			1.59			1.53			2.49			(0.70	)		(1.55	)
Total Income (Loss) From Operations			2.21			1.77			1.69			2.60			(0.65	)		(1.49	)
Less Distributions From:
	Net investment income		(0.16	)		(0.18	)		(0.13	)		—			—			(0.06	)
	Net realized gains		(1.21	)		(1.56	)		—			(0.25	)		(0.76	)		(0.47	)
Total Distributions			(1.37	)		(1.74	)		(0.13	)		(0.25	)		(0.76	)		(0.53	)
Net Asset Value, End of Period			$17.24			$16.40			$16.37			$14.81			$12.46			$13.87
Total Return(3)			14.21	%		11.34	%		11.49	%		21.33	%		(5.35	)%		(9.83	)%
Net Assets, End of Period (000s)			$20,695			$17,350			$16,367			$16,524			$15,105			$16,050
Ratios to Average Net Assets:
	Gross expenses		1.49	%(4)		1.58	%		1.45	%		1.31	%		1.49	%		1.53	%
	Net expenses(5)		1.49	(4)(6)		1.50	(6)		1.41	(6)		1.31			1.49			1.50	(6)
	Net investment income		1.22	(4)		1.18			1.02			0.86			0.35			0.39
Portfolio Turnover Rate			99	%		29	%		49	%		22	%		20	%		42	%

⁽¹⁾ Per share amounts have been calculated using the average shares method.

⁽²⁾ For the six months ended April 30, 2006 (unaudited).

⁽³⁾ Performance figures may reflect voluntary fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.

(4)	Annualized.
(5)	As a result of a voluntary expense limitation, the ratio of expenses to average net assets of Class A shares will not exceed 1.50%.
(6)	The investment manager voluntarily waived a portion of its fees and/or reimbursed expenses.

See Notes to Financial Statements.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      11

Financial Highlights (continued)

For a share of each class of capital stock outstanding throughout each year ended October 31, unless otherwise noted:

Class B Shares		2006(1)(2)			2005(1)			2004(1)			2003(1)			2002(1)			2001
Net Asset Value, Beginning of Period			$15.93			$15.94			$14.43			$12.24			$13.73			$15.81
Income (Loss) From Operations:
	Net investment income (loss)		0.04			0.07			0.04			0.01			(0.06	)		(0.05	)
	Net realized and unrealized gain (loss)		2.04			1.54			1.50			2.43			(0.67	)		(1.55	)
Total Income (Loss) From Operations			2.08			1.61			1.54			2.44			(0.73	)		(1.60	)
Less Distributions From:
	Net investment income		(0.04	)		(0.06	)		(0.03	)		—			—			(0.01	)
	Net realized gains		(1.21	)		(1.56	)		—			(0.25	)		(0.76	)		(0.47	)
Total Distributions			(1.25	)		(1.62	)		(0.03	)		(0.25	)		(0.76	)		(0.48	)
Net Asset Value, End of Period			$16.76			$15.93			$15.94			$14.43			$12.24			$13.73
Total Return(3)			13.75	%		10.56	%		10.70	%		20.39	%		(6.02	)%		(10.54	)%
Net Assets, End of Period (000s)			$27,069			$26,057			$29,111			$31,602			$28,933			$33,649
Ratios to Average Net Assets:
	Gross expenses		2.21	%(4)		2.28	%		2.19	%		2.06	%		2.24	%		2.28	%
	Net expenses(5)		2.20	(4)(6)		2.25	(6)		2.16	(6)		2.06			2.24			2.25	(6)
	Net investment income (loss)		0.50	(4)		0.43			0.26			0.11			(0.40	)		(0.36	)
Portfolio Turnover Rate			99	%		29	%		49	%		22	%		20	%		42	%

(1)	Per share amounts have been calculated using the average shares method.
(2)	For the six months ended April 30, 2006 (unaudited).
(3)	Performance figures may reflect voluntary fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.

(4)	Annualized.
(5)	As a result of a voluntary expense limitation, the ratio of expenses to average net assets of Class B shares will not exceed 2.25%.
(6)	The investment manager voluntarily waived a portion of its fees and/or reimbursed expenses.

See Notes to Financial Statements.

12     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Financial Highlights (continued)

For a share of each class of capital stock outstanding throughout each year ended October 31, unless otherwise noted:

Class C Shares		2006(1)(2)			2005(1)			2004(1)			2003(1)			2002(1)			2001
Net Asset Value, Beginning of Period			$15.93			$15.94			$14.44			$12.24			$13.73			$15.81
Income (Loss) From Operations:
	Net investment income (loss)		0.06			0.07			0.04			0.01			(0.06	)		(0.05	)
	Net realized and unrealized gain (loss)		2.05			1.54			1.49			2.44			(0.67	)		(1.55	)
Total Income (Loss) From Operations			2.11			1.61			1.53			2.45			(0.73	)		(1.60	)
Less Distributions From:
	Net investment income		(0.05	)		(0.06	)		(0.03	)		—			—			(0.01	)
	Net realized gains		(1.21	)		(1.56	)		—			(0.25	)		(0.76	)		(0.47	)
Total Distributions			(1.26	)		(1.62	)		(0.03	)		(0.25	)		(0.76	)		(0.48	)
Net Asset Value, End of Period			$16.78			$15.93			$15.94			$14.44			$12.24			$13.73
Total Return(3)			13.91	%		10.57	%		10.61	%		20.48	%		(6.02	)%		(10.55	)%
Net Assets, End of Period (000s)			$13,601			$13,808			$16,344			$20,595			$21,158			$29,187
Ratios to Average Net Assets:
	Gross expenses		2.05	%(4)		2.22	%		2.19	%		2.07	%		2.24	%		2.29	%
	Net expenses(5)		2.00	(4)(6)		2.22	(6)		2.16	(6)		2.07			2.24			2.25	(6)
	Net investment income (loss)		0.70	(4)		0.47			0.25			0.11			(0.41	)		(0.36	)
Portfolio Turnover Rate			99	%		29	%		49	%		22	%		20	%		42	%

(1)	Per share amounts have been calculated using the average shares method.
(2)	For the six months ended April 30, 2006 (unaudited).
(3)	Performance figures may reflect voluntary fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.

(4)	Annualized.
(5)	As a result of a voluntary expense limitation, the ratio of expenses to average net assets of Class C shares will not exceed 2.25%.
(6)	The investment manager voluntarily waived a portion of its fees and/or reimbursed expenses.

See Notes to Financial Statements.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      13

Notes to Financial Statements (unaudited)

1.  Organization and Significant Accounting Policies

Legg Mason Partners Financial Services Fund (formerly known as Smith Barney Financial Services Fund) (the “Fund”) is a separate non-diversified investment fund of Legg Mason Partners Sector Series, Inc. (formerly known as Smith Barney Sector Series Inc.) (the “Company”). The Company, a Maryland corporation, is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company.

   The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.

   (a) Investment Valuation. Equity securities for which market quotations are available are valued at the last sale price or official closing price on the primary market or exchange on which they trade. Debt securities are valued at the mean between the bid and asked prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund may value these investments at fair value as determined in accordance with the procedures approved by the Fund’s Board of Directors. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.

   (b) Repurchase Agreements. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian take possession of the underlying collateral securities, the market value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults, and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

   (c) Concentration Risk. The Fund normally invests at least 80% of its assets in financial services related investments. As a result of this concentration policy, the Fund’s investments may be subject to greater risk and market fluctuation than a fund that invests in securities representing a broader range of investment alternatives.

   (d) Foreign Currency Translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.

14     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

   The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

   Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities, at the date of valuation, resulting from changes in exchange rates.

   Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

   (e) Security Transactions and Investment Income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practical after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults on an expected interest payment, the Fund’s policy is to generally halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default.

   (f) REIT Distributions. The character of distributions received from Real Estate Investment Trusts (“REITs”) held by the Fund is generally comprised of net investment income, capital gains, and return of capital. It is the policy of the Fund to estimate the character of distributions received from underlying REITs based on historical data provided by the REITs. After each calendar year end, REITs report the true tax character of these distributions. Differences between the estimated and actual amounts reported by the REITs are reflected in the Fund’s records in the year in which they are reported by the REITs.

   (g) Distributions to Shareholders. Distributions from net investment income and distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

   (h) Class Accounting. Investment income, common expenses and realized/unrealized gain (loss) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that class.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      15

Notes to Financial Statements (unaudited) (continued)

   (i) Federal and Other Taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute substantially all of its income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Fund’s financial statements. Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

   (j) Reclassification. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.

2.  Investment Management Agreement and Other Transactions with Affiliates

On December 1, 2005, Citigroup Inc. (“Citigroup”) completed the sale of substantially all of its asset management business to Legg Mason, Inc. (“Legg Mason”). As a result, the Fund’s investment manager, Smith Barney Fund Management LLC (“SBFM” or the “Manager”) and the Fund’s then sub-adviser, Legg Mason International Equities Ltd. (“LMIE”) (formerly “Citigroup Asset Management Ltd”) (“CAM Ltd”) previously indirect wholly-owned subsidiaries of Citigroup, became wholly-owned subsidiaries of Legg Mason. Completion of the sale caused the Fund’s then existing investment management contract and sub-advisory agreement to terminate. The Fund’s shareholders approved a new investment management contract between the Fund and the Manager and a new sub-advisory contract between the Manager and LMIE which became effective on December 1, 2005. Effective February 1, 2006, the sub-advisory agreement with LMIE was terminated.

   Legg Mason, whose principal executive offices are in Baltimore, Maryland, is a financial services holding company.

   Prior to the Legg Mason transaction and continuing under the new investment management contract, the Fund pays the Manager an investment management fee calculated at an annual rate of 0.80% of the Fund’s average daily net assets. This fee is calculated daily and paid monthly.

   During the six months ended April 30, 2006, the Fund’s Class A, B and C shares had voluntary expense limitations in place of 1.50%, 2.25% and 2.25%, respectively. For the six months ended April 30, 2006, the Manager waived a portion of its investment management fee and/or reimbursed expenses amounting to $4,292. Such waivers and/or expense reimbursements are voluntary and may be reduced or terminated at any time.

   The Fund’s Board has approved PFPC Inc. (“PFPC”) to serve as transfer agent for the Fund, effective January 1, 2006. The principal business office of PFPC is located at 4400 Computer Drive, Westborough, MA 01581. Prior to January 1, 2006, Citicorp Trust Bank, fsb. (“CTB”), a subsidiary of Citigroup, acted as the Fund’s transfer agent. Also, prior to January 1, 2006, PFPC and Primerica Shareholder Services (“PSS”), another subsidiary of Citigroup, acted as the Fund’s sub-transfer agents. CTB received account fees and asset-based fees that varied according to the size and type of account. PFPC and PSS

16     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

were responsible for shareholder recordkeeping and financial processing for all shareholder accounts and were paid by CTB. For the period ended April 30, 2006, the Fund paid transfer agent fees of $48,968 to CTB. In addition, for the period ended April 30, 2006, the Fund also paid $4,194 to other Citigroup affiliates for shareholder recordkeeping services.

   The Fund’s Board has appointed the Fund’s current distributor, Citigroup Global Markets Inc. (“CGM”), PFS Investments Inc. (“PFS”), both subsidiaries of Citigroup, and Legg Mason Investor Services, LLC (“LMIS”), a wholly-owned broker-dealer subsidiary of Legg Mason, as co-distributors of the Fund. The Fund’s Board has also approved an amended and restated Rule 12b-1 Plan. CGM and other broker-dealers, financial intermediaries and financial institutions (each called a “Service Agent”) that currently offer Fund shares will continue to make the Fund’s shares available to their clients. Additional Service Agents may offer Fund shares in the future.

   There is a maximum initial sales charge of 5.00% for Class A shares. There is a contingent deferred sales charge (“CDSC”) of 5.00% on Class B shares, which applies if redemption occurs within one year from purchase payment. This CDSC declines thereafter by 1.00% per year until no CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of Class A shares, equal or exceed $1,000,000 in the aggregate. These purchases do not incur an initial sales charge.

   For the period ended April 30, 2006, LMIS, PFS, and CGM and its affiliates received sales charges of approximately $5,000 on sales of the Fund’s Class A shares. In addition, for the period ended April 30, 2006, CDSCs paid to LMIS, PFS, and CGM and its affiliates were approximately:

	Class B		Class C
CDSCs	$	2,000	$	0	*

* Amount represents less than $1,000.

   The Fund has adopted an unfunded, non-qualified deferred compensation plan (the “Plan”) which allows non-interested directors (“Directors”) to defer the receipt of all or a portion of the directors’ fees earned until a later date specified by the Directors. The deferred fees earn a return based on notional investments selected by the Directors. The balance of the deferred fees payable may change depending upon the investment performance. Any gains or losses incurred in the deferred balances are reported in the Statement of Operations under Directors’ fees. Under the Plan, deferred fees are considered a general obligation of the Fund and any payments made pursuant to the Plan will be made from the Fund’s general assets. Effective January 1, 2006, the Board of Directors voted to discontinue offering the Plan to its members. This change will have no effect on fees previously deferred.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      17

Notes to Financial Statements (unaudited) (continued)

   As of April 30, 2006, the Fund had accrued $348 as deferred compensation payable under the Plan.

   Certain officers and one Director of the Company are employees of Legg Mason or its affiliates and do not receive compensation from the Company.

3.  Investments

During the six months ended April 30, 2006, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:

Purchases	$	58,145,261
Sales		62,049,844

   At April 30, 2006, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation	$	6,910,165
Gross unrealized depreciation		(449,624	)
Net unrealized appreciation	$	6,460,541

4.  Class Specific Expenses

The Fund has adopted a Rule 12b-1 distribution plan and under that Plan the Fund pays a service fee with respect to its Class A, B and C shares calculated at the annual rate of 0.25% of the average daily net assets of each respective class. The Fund also pays a distribution fee with respect to its Class B and C shares calculated at the annual rate of 0.75% of the average daily net assets of each class, respectively. Distribution fees are accrued daily and paid monthly.

   For the six months ended April 30, 2006, class specific expenses were as follows:

					Shareholder
	Distribution		Transfer		Reports
	Fees		Agent Fees		Expenses
Class A	$	23,562	$	21,649	$	7,595
Class B		131,008		23,927		12,318
Class C		68,207		5,479		2,591
Total	$	222,777	$	51,055	$	22,504

18     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

5.  Distributions to Shareholders by Class

		Six Months Ended		Year Ended
		April 30, 2006		October 31, 2005
Net Investment Income
	Class A	$	185,207	$	181,726
	Class B		72,347		113,737
	Class C		42,444		64,340
	Total	$	299,998	$	359,803
Net Realized Gains
	Class A	$	1,297,791	$	1,580,917
	Class B		1,918,868		2,803,910
	Class C		1,021,795		1,549,314
	Total	$	4,238,454	$	5,934,141

6.  Capital Shares

At April 30, 2006, the Fund had 400 million shares of capital stock authorized with a par value of $0.001 per share. The Fund has the ability to issue multiple classes of shares. Each share of a class represents an identical interest in the Fund and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.

   Transactions in shares of each class were as follows:

	Six Months Ended						Year Ended
	April 30, 2006						October 31, 2005
	Shares			Amount			Shares			Amount
Class A
Shares sold		185,832		$	3,072,866			235,715		$	3,671,305
Shares issued on reinvestment		90,559			1,444,980			111,952			1,725,174
Shares repurchased		(133,876	)		(2,197,339	)		(290,064	)		(4,500,791	)
Net Increase		142,515		$	2,320,507			57,603		$	895,688
Class B
Shares sold		66,985		$	1,075,412			112,422		$	1,713,821
Shares issued on reinvestment		120,815			1,865,726			181,083			2,727,121
Shares repurchased		(209,001	)		(3,362,289	)		(484,066	)		(7,336,920	)
Net Decrease		(21,201	)	$	(421,151	)		(190,561	)	$	(2,895,978	)
Class C
Shares sold		4,728		$	74,508			43,839		$	640,363
Shares issued on reinvestment		65,593			1,013,625			101,559			1,530,487
Shares repurchased		(126,575	)		(2,021,468	)		(304,104	)		(4,620,507	)
Net Decrease		(56,254	)	$	(933,335	)		(158,706	)	$	(2,449,657	)

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      19

Notes to Financial Statements (unaudited) (continued)

7.  Regulatory Matters

On May 31, 2005, the U.S. Securities and Exchange Commission (“SEC”) issued an order in connection with the settlement of an administrative proceeding against SBFM and CGM relating to the appointment of an affiliated transfer agent for the Smith Barney family of mutual funds (the “Funds”).

   The SEC order finds that SBFM and CGM willfully violated Section 206(1) of the Investment Advisers Act of 1940 (“Advisers Act”). Specifically, the order finds that SBFM and CGM knowingly or recklessly failed to disclose to the boards of the Funds in 1999 when proposing a new transfer agent arrangement with an affiliated transfer agent that: First Data Investors Services Group (“First Data”), the Funds’ then-existing transfer agent, had offered to continue as transfer agent and do the same work for substantially less money than before; and that Citigroup Asset Management (“CAM”), the Citigroup business unit that, at the time, included the Fund’s investment manager and other investment advisory companies, had entered into a side letter with First Data under which CAM agreed to recommend the appointment of First Data as sub-transfer agent to the affiliated transfer agent in exchange for, among other things, a guarantee by First Data of specified amounts of asset management and investment banking fees to CAM and CGM. The order also finds that SBFM and CGM willfully violated Section 206(2) of the Advisers Act by virtue of the omissions discussed above and other misrepresentations and omissions in the materials provided to the Funds’ boards, including the failure to make clear that the affiliated transfer agent would earn a high profit for performing limited functions while First Data continued to perform almost all of the transfer agent functions, and the suggestion that the proposed arrangement was in the Funds’ best interests and that no viable alternatives existed. SBFM and CGM do not admit or deny any wrongdoing or liability. The settlement does not establish wrongdoing or liability for purposes of any other proceeding.

   The SEC censured SBFM and CGM and ordered them to cease and desist from violations of Sections 206(1) and 206(2) of the Advisers Act. The order requires Citigroup to pay $208.1 million, including $109 million in disgorgement of profits, $19.1 million in interest, and a civil money penalty of $80 million. Approximately $24.4 million has already been paid to the Funds, primarily through fee waivers. The remaining $183.7 million, including the penalty, has been paid to the U.S. Treasury and will be distributed pursuant to a plan submitted for the approval of the SEC. At this time, there is no certainty as to how the above-described proceeds of the settlement will be distributed, to whom such distributions will be made, the methodology by which such distributions will be allocated, and when such distributions will be made. The order also required that transfer agency fees received from the Funds since December 1, 2004, less certain expenses, be placed in escrow and provided that a portion of such fees might be subsequently distributed in accordance with the terms of the order. On April 3, 2006, an aggregate amount of approximately $9 million was distributed to the affected Funds.

   The order required SBFM to recommend a new transfer agent contract to the Fund boards within 180 days of the entry of the order; if a Citigroup affiliate submitted a proposal to serve as transfer agent or sub-transfer agent, SBFM and CGM would have been required, at their expense, to engage an independent monitor to oversee a competitive

20     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

bidding process. On November 21, 2005, and within the specified timeframe, the Fund’s Board selected a new transfer agent for the Fund. No Citigroup affiliate submitted a proposal to serve as transfer agent. Under the order, SBFM also must comply with an amended version of a vendor policy that Citigroup instituted in August 2004.

   Although there can be no assurance, SBFM does not believe that this matter will have a material adverse effect on the Funds.

   On December 1, 2005, Citigroup completed the sale of substantially all of its global asset management business, including SBFM, to Legg Mason.

8.  Legal Matters

Beginning in August 2005, five class action lawsuits alleging violations of federal securities laws and state law were filed against CGM and SBFM (collectively, the “Defendants”) based on the May 31, 2005 settlement order issued against the Defendants by the SEC described in Note 7. The complaints seek injunctive relief and compensatory and punitive damages, removal of SBFM as the investment manager for the Smith Barney family of funds, rescission of the Funds’ management and other contracts with SBFM, recovery of all fees paid to SBFM pursuant to such contracts, and an award of attorneys’ fees and litigation expenses.

   On October 5, 2005, a motion to consolidate the five actions and any subsequently filed, related action was filed. That motion contemplates that a consolidated amended complaint alleging substantially similar causes of action will be filed in the future.

   As of the date of this report, SBFM believes that resolution of the pending lawsuit will not have a material effect on the financial position or results of operations of the Funds or the ability of SBFM and its affiliates to continue to render services to the Funds under their respective contracts.

* * *

   Beginning in June 2004, class action lawsuits alleging violations of the federal securities laws were filed against CGM and a number of its affiliates, including SBFM and Salomon Brothers Asset Management Inc. (“SBAM”) (collectively, the “Advisers”), substantially all of the mutual funds managed by the Advisers, including the Fund (the “Funds”), and directors or trustees of the Funds (collectively, the “Defendants”). The complaints alleged, among other things, that CGM created various undisclosed incentives for its brokers to sell Smith Barney and Salomon Brothers funds. In addition, according to the complaints, the Advisers caused the Funds to pay excessive brokerage commissions to CGM for steering clients towards proprietary funds. The complaints also alleged that the Defendants breached their fiduciary duty to the Funds by improperly charging Rule 12b-1 fees and by drawing on Fund assets to make undisclosed payments of soft dollars and excessive brokerage commissions. The complaints also alleged that the Funds failed to adequately disclose certain aspects of the allegedly wrongful conduct. The complaints sought injunctive relief and compensatory and punitive damages, rescission of the Funds’ contracts with the Advisers, recovery of all fees paid to the Advisers pursuant to such contracts and an award of attorneys’ fees and litigation expenses.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      21

Notes to Financial Statements (unaudited) (continued)

   On December 15, 2004, a consolidated amended complaint (the “Complaint”) was filed alleging substantially similar causes of action. While the lawsuit is in its earliest stages, to the extent that the Complaint purports to state causes of action against the Funds, the Fund’s investment manager believes the Funds have significant defenses to such allegations, which the Funds intend to vigorously assert in responding to the Complaint.

   Additional lawsuits arising out of theses circumstances and presenting similar allegations and requests for relief may be filed against the Defendants in the future.

   As of the date of this report, the Fund’s investment manager and the Funds believe that the resolution of the pending lawsuit will not have a material effect on the financial position or results of operations of the Funds or the ability of the Advisers and their affiliates to continue to render services to the Funds under their respective contracts.

   The Defendants have moved to dismiss the Complaint. Those motions are pending before the court.

9.  Other Matters

On September 16, 2005, the staff of the SEC informed SBFM and SBAM that the staff is considering recommending that the SEC institute administrative proceedings against SBFM and SBAM for alleged violations of Section 19(a) and 34(b) of the Investment Company Act (and related Rule 19a-1). The notification is a result of an industry wide inspection by the SEC and is based upon alleged deficiencies in disclosures regarding dividends and distributions paid to shareholders of certain funds. Section 19(a) and related Rule 19a-1 of the Investment Company Act generally require funds that are making dividend and distribution payments to provide shareholders with a written statement disclosing the source of the dividends and distributions, and, in particular, the portion of the payments made from each of net investment income, undistributed net profits and/or paid-in capital. In connection with the contemplated proceedings, the staff may seek a cease and desist order and/or monetary damages from SBFM or SBAM.

   Although there can be no assurance, SBFM believes that this matter is not likely to have a material adverse effect on the Fund or SBFM’s ability to perform investment management services relating to the Fund.

22     Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report

Additional Shareholder Information (unaudited)

Results of a Special Meeting of Shareholders

On November 29, 2005, a Special Meeting of Shareholders was held for the following purposes: 1) to approve a new management agreement and a new sub-advisory agreement and 2) to elect Directors. The following tables provide the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each matter voted on at the Special Meeting of Shareholders.

1. Approval of New Management Agreement and Sub-Advisory Agreement

			Votes				Broker
Item Voted On	Votes For		Against		Abstentions		Non-Votes
New Management Agreement		1,732,903.236		46,389.577		95,183.117		114,398.000
New Sub-advisory Agreement		1,732,445.263		44,382.889		97,647.778		114,398.000

2. Election of Directors¹

			Authority				Broker
Nominees:	Votes For		Withheld		Abstentions		Non-Votes
Dwight B. Crane		14,103,064.939		838,567.079		85,535.619		0.000
Burt N. Dorsett		14,100,247.788		841,384.230		85,535.619		0.000
Elliot S. Jaffe		14,096,272.780		845,359.238		85,535.619		0.000
Stephen E. Kaufman		14,084,774.176		856,857.842		85,535.619		0.000
Cornelius C. Rose, Jr.		14,099,243.932		842,388.086		85,535.619		0.000
R. Jay Gerken		14,088,894.767		852,737.251		85,535.619		0.000

¹ Directors are elected by the shareholders of all of the series of the Company of which the Fund is a series.

Legg Mason Partners Financial Services Fund 2006 Semi-Annual Report      23

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Legg Mason Partners

Financial Services Fund

DIRECTORS

Dwight B. Crane
Burt N. Dorsett
R. Jay Gerken, CFA
  Chairman
Elliot S. Jaffe
Stephen E. Kaufman
Cornelius C. Rose, Jr.

OFFICERS

R. Jay Gerken, CFA
President and
Chief Executive Officer

Andrew B. Shoup
Senior Vice President and
Chief Administrative Officer

Kaprel Ozsolak
Chief Financial Officer
and Treasurer

Thomas Linkas
Vice President and Investment Officer

Charles F. Lovejoy
Vice President and Investment Officer

Ted P. Becker
Chief Compliance Officer

John Chiota
Chief Anti-Money Laundering Compliance Officer

Steven Frank
Controller

Robert I. Frenkel
Secretary and
Chief Legal Officer

INVESTMENT MANAGER

Smith Barney Fund Management LLC

DISTRIBUTORS

Citigroup Global Markets Inc.
Legg Mason Investor Services, LLC
PFS Investments Inc.

CUSTODIAN

State Street Bank and
Trust Company

TRANSFER AGENT

PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KPMG LLP
345 Park Avenue
New York, New York 10154

This report is submitted for the general information of the shareholders of Legg Mason Partners Financial Services Fund, but it may also be used as sales literature when preceded or accompanied by the current Prospectus.

This report must be preceded or accompanied by a free prospectus. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.

www.leggmason.com/InvestorServices
^©2006 Legg Mason
Investor Services, LLC
Member NASD, SIPC

FD02552 6/06   SR06-58

Legg Mason Partners
Financial Services Fund

The Fund is a separate investment fund of the Legg Mason Partners Sector Series, Inc., a Maryland corporation.

LEGG MASON PARTNERS FINANCIAL SERVICES FUND
Legg Mason Partners Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q from the Fund, shareholders can call 1-800-451-2010.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions is available (1) without charge, upon request, by calling 1-800-451-2010, (2) on the Fund’s website at www.leggmason.com/InvestorServices and (3) on the SEC’s website at www.sec.gov. Proxy voting reports for the period ending June 30, 2005 will continue to be listed under the Fund’s former Smith Barney Sector Series Inc. — Smith Barney Financial Services Fund name.

ITEM 2.	CODE OF ETHICS.
	Not Applicable.
ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT.
	Not Applicable.
ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.
	Not applicable.
ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS.
	Not applicable.
ITEM 6.	SCHEDULE OF INVESTMENTS.
	Included herein under Item 1.
ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
	Not applicable.
ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
	Not applicable.
ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
	Not applicable.
ITEM 11.	CONTROLS AND PROCEDURES.

(a)

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)	Not applicable.
(b)	Attached hereto.

Exhibit 99.CERT	Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.

Legg Mason Partners Sector Series, Inc.

By:	/s/ R. Jay Gerken
	R. Jay Gerken
	Chief Executive Officer of
	Legg Mason Partners Sector Series, Inc.
Date: July 10, 2006

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ R. Jay Gerken
	R. Jay Gerken
	Chief Executive Officer of
	Legg Mason Partners Sector Series, Inc.
Date: July 10, 2006
By:	/s/ Kaprel Ozsolak
	Kaprel Ozsolak
	Chief Financial Officer of
	Legg Mason Partners Sector Series, Inc.
Date: July 10, 2006