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 811-3275
Smith Barney Investment Funds Inc.
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Christina T. Sydor, Esq.
300 First Stamford Place
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: April 30
Date of reporting period: April 30, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
SMITH BARNEY
PREMIER SELECTIONS
ALL CAP GROWTH FUND
PREMIER SELECTIONS SERIES | ANNUAL REPORT | APRIL 30, 2003
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed./R/
Your Serious Money. Professionally Managed./R/ is a registered service mark of
Citigroup Global Markets Inc.
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
[PHOTO]
ALAN BLAKE, LARRY
WEISSMAN, TIM WOODS
PORTFOLIO MANAGERS
[GRAPHIC]
Premier Selections Series
Annual Report . April 30, 2003
SMITH BARNEY PREMIER
SELECTIONS ALL CAP GROWTH FUND
ALAN J. BLAKE
Alan Blake has more than 25 years of securities business experience and
has managed the Fund's Large Cap Growth since the Fund's inception in
2000.
Education: BS from Lehigh University, MS from the State University of New
York.
LAWRENCE B. WEISSMAN, CFA
Larry Weissman, CFA, has more than 17 years of securities business
experience.
Education: BS in Economics from Cornell University, MBA in Finance from
Columbia University.
TIMOTHY WOODS, CFA
Tim Woods, CFA, has more than 20 years of securities business experience.
Education: BS in Accounting from Florida A&M, MBA in Finance from
University of Pennsylvania's Wharton School of Business.
FUND OBJECTIVE
The Fund seeks long-term capital growth. It seeks to achieve this goal by
investing in large cap growth, mid cap growth and small cap growth equity
segments.
FUND FACTS
FUND INCEPTION
-----------------
June 30, 2000
MANAGER INVESTMENT
INDUSTRY EXPERIENCE
-----------------
25 Years (Alan Blake)
17 Years (Larry Weissman)
20 Years (Tim Woods)
What's Inside
Letter From the Chairman.............................................. 1
Manager Overview...................................................... 2
Fund Performance...................................................... 4
Historical Performance................................................ 5
Schedule of Investments............................................... 6
Statement of Assets and Liabilities................................... 10
Statement of Operations............................................... 11
Statements of Changes in Net Assets................................... 12
Notes to Financial Statements......................................... 13
Financial Highlights.................................................. 17
Independent Auditors' Report.......................................... 18
Additional Information................................................ 19
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed./R/
Investment Products: Not FDIC Insured . Not Bank Guaranteed . May Lose Value
Your Serious Money. Professionally Managed .(R) is a registered
service mark of Citigroup Global Markets Inc.
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
Chairman, President and
Chief Executive Officer
Dear Shareholder,
The philosopher Bertrand Russell famously remarked that, "Change is one thing,
progress is another." You will notice in the following pages that we have begun
to implement some changes to your shareholder report. Our aim is to make
meaningful improvements in reporting on the management of your Fund and its
performance, not just to enact change for change's sake. Please bear with us
during this transition period.
We know that you have questions about fund managers' decisions and plans, and
we want to be sure that you have easy access to the information you need.
Keeping investors informed is, and always will be, one of my top priorities as
Chairman of your Fund. To that end, we encourage you to go to our website:
www.smithbarneymutualfunds.com/1/ where you can find additional insight on your
Fund.
I invite you to read this report in full. Please take the opportunity to talk
to your financial adviser about this report or any other questions or concerns
you have about your Fund and your financial future. As always, thank you for
entrusting your assets to us. We look forward to helping you continue to meet
your financial goals. Please read on to learn more about your Fund's
performance and the Manager's strategy.
Sincerely,
/s/ R Jay Gerken
R. Jay Gerken
Chairman, President and Chief Executive
Officer
May 9, 2003
- --------
/1/Matters referenced are not incorporated by reference unless otherwise stated.
1 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
MANAGER OVERVIEW
Performance Review
For the 12 months ended April 30, 2003, Class A shares of the Smith Barney
Premier Selections All Cap Growth Fund ("Fund"), without sales charges,
returned -19.90%. The Fund performed worse than two of its unmanaged
benchmarks, the Russell 1000 Growth Index/i/ and the S&P MidCap 400 Index,/ii/
which returned -14.35% and -17.51%, respectively, for the same period. It
performed better than one of its unmanaged benchmarks, the Russell 2000 Growth
Index,/iii/ which returned -23.50% for the same period. The Fund's negative
performance for the period reflects the losses suffered by all three segments
(i.e., Large-Cap, Mid-Cap and Small-Cap) of the domestic stock market in which
the Fund invests.
Market Overview
The domestic equity market continued to struggle with a series of challenges
during the period. Geopolitical uncertainty surrounding the conflict in Iraq
served as the major impediment to economic recovery. Other significant negative
economic and financial concerns included:
. the pre-war increase of energy prices, which pressured corporate profits
and consumer spending;
. the emergence and subsequent widespread breakout of Sudden Acute
Respiratory Syndrome (SARS);
. capital rationing and cutbacks in business spending in a number of
industries; and
. additional revelations of aggressive accounting deceptions and a
perceived loss of confidence in financial statements and businesses.
All three segments of the domestic stock market in which the Fund invests
suffered double-digit losses for the entire 12-month period. While the latter
half of the period was generally more positive for the market, the moderate
gains registered were offset by the large losses suffered in the first half.
Specifically, the Large-Cap segment of the market, as measured by the Russell
1000 Growth Index, returned a loss of -17.87% for the first six months of the
period and a gain of 4.28% for the second half. The Mid-Cap segment, as
represented by the S&P MidCap 400 Index, returned a loss of -20.66% for the
first half, but registered a gain of 3.98% for the second half. The most
dramatic shift in performance during the period came in the Small-Cap sector of
the market, as measured by the Russell 2000 Growth Index, which had both the
largest loss during the first half of the period, -28.95%, and the largest gain
in the second half, returning 7.68% for the six months ended April 30, 2003.
Portfolio Update
The largest contributor to the Fund's overall performance for the period was
online retailer Amazon.com, Inc. in the Consumer Discretionary sector. Coach,
Inc., a producer of premium leather goods, luggage, accessories and related
products, also in the Consumer Discretionary sector, was the second largest
positive contributor to Fund performance for the 12 months ended April 30,
2003. In the Healthcare sector, biotechnology firm Amgen Inc. was the third
largest contributor to positive performance for the period.
Despite positive performance from a number of stocks in various sectors,
detractors from performance outweighed contributors for the period. The most
significant detractor from Fund performance during the period was the home
improvement chain The Home Depot, Inc., also in the Consumer Discretionary
sector. In the Consumer Staples sector, soft-drink giant The Coca-Cola Co. was
the second-largest detractor from overall Fund performance during the period.
Wireless communications technology manufacturer Motorola, Inc., in the
Information Technology sector, was the third biggest detractor overall from
Fund performance during the period.
2 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
At the end of the period, the Fund's most heavily weighted holding was in The
Gillette Co., a producer of shaving supplies, toiletries and other related
consumer products. Pharmaceutical company Merck & Co. Inc. held the second
largest weighting in the Fund's portfolio, followed by the Fund's holdings in
Amazon.com, Inc.
Thank you for your investment in the Smith Barney Premier Selections All Cap
Growth Fund. We appreciate that you have entrusted us to manage your money and
value our relationship with you.
Sincerely,
/s/ Lawrence Weissman
/s/ Alan Blake Lawrence B. Weissman, CFA
Alan J. Blake Vice President and Investment
Vice President and Investment Officer Officer
/s/ Timothy Woods
Timothy Woods, CFA
Vice President and Investment Officer
May 15, 2003
The information provided in this letter by the Manager 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.
Portfolio holdings and breakdowns are as of April 30, 2003 and are subject to
change. Please refer to pages 6 through 9 for a list and percentage breakdown
of the Fund's holdings.
- --------
/i/The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Please note that an investor cannot invest directly in an index.
/ii/The S&P MidCap 400 Index is a market-value weighted index consists of 400
domestic stocks chosen for market size, liquidity, and industry group
representation. Please note that an investor cannot invest directly in an
index.
/iii/The Russell 2000 Growth Index measures the performance of those Russell
2000 Index companies with higher price-to-book ratios and higher
forecasted growth values. Please note that an investor cannot invest
directly in an index.
3 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
--------------------------
Class A Class B Class L
- -------------------------------------------------------------------------------
Twelve Months Ended 4/30/03 (19.90)% (20.57)% (20.44)%
- ----------------------------------------------------------------------------
Inception* through 4/30/03 (18.80) (19.44) (19.39)
- -------------------------------------------------------------------------------
With Sales Charges/(2)/
--------------------------
Class A Class B Class L
- -----------------------------------------------------------------------------
Twelve Months Ended 4/30/03 (23.95)% (24.54)% (22.03)%
- ----------------------------------------------------------------------------
Inception* through 4/30/03 (20.26) (20.30) (19.69)
- -----------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
- ----------------------------------------------------------------------------------
Class A (Inception* through 4/30/03) (44.56)%
- --------------------------------------------------------------------------------
Class B (Inception* through 4/30/03) (45.79)
- --------------------------------------------------------------------------------
Class L (Inception* through 4/30/03) (45.70)
- ----------------------------------------------------------------------------------
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to Class
B and L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 5.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 5.00% CDSC, which
applies if shares are redeemed within one year from purchase. Thereafter,
the CDSC declines by 1.00% per year until no CDSC is incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which applies if shares
are redeemed within the first year of purchase.
+ The returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
* Inception date for Class A, B and L shares is June 30, 2000.
4 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Class A, B and L Shares of the Smith Barney
Premier Selections All Cap Growth Fund vs. Russell 1000 Growth Index, Russell
2000 Growth Index and S&P MidCap 400 Index+
- --------------------------------------------------------------------------------
June 2000 -- April 2003
[CHART]
Smith Barney Smith Barney Smith Barney
Premier Premier Premier
Selections Selections Selections
All Cap All Cap All Cap Russell 1000 Russell 2000 S&P
Growth Fund -- Growth Fund -- Growth Fund -- Growth Growth MidCap
Class A Shares Class B Shares Class L Shares Index Index 400 Index
-------------- -------------- -------------- ------------ ------------- -----------
Jun 30, 2000 9,500 10,000 9,896 10,000 10,000 10,000
Oct 2000 9,208 9,675 9,575 9,014 8,823 10,836
Apr 2001 7,692 8,053 7,969 6,632 7,293 10,684
Oct 2001 6,267 6,526 6,458 5,414 6,043 9,487
Apr 2002 6,575 6,825 6,753 5,298 6,671 11,388
Oct 2002 5,133 5,307 5,252 4,352 4,740 9,035
Apr 30, 2003 5,267 5,258 5,373 4,538 5,104 9,395
+ Hypothetical illustration of $10,000 invested in Class A, B and L shares on
June 30, 2000 (inception date), assuming deduction of the maximum 5.00% and
1.00% sales charge at the time of investment for Class A and L shares,
respectively, and the deduction of the maximum 5.00% and 1.00% CDSC for Class
B and L shares, respectively. It also assumes reinvestment of dividends and
capital gains, if any, at net asset value through April 30, 2003. The Russell
1000 Growth Index is a capitalization weighted total return index which is
comprised of 1,000 of some of the larger-capitalized U.S.-domiciled companies
whose common stock is traded in the United States on the New York Stock
Exchange, American Stock Exchange and NASDAQ National Market. The Russell
2000 Growth Index is a capitalization weighted total return index which is
compromised of 2,000 of the smallest capitalized U.S. domiciled companies
with less than average growth orientation whose common stock is traded in the
United States on the New York Stock Exchange, American Stock Exchange and
NASDAQ National Market. The S&P MidCap 400 Index is a widely recognized index
of 400 medium-capitalization stocks. Figures for the Russell 1000 Growth,
Russell 2000 Growth and S&P MidCap 400 Indices include the reinvestment of
dividends. The Indexes are unmanaged and are not subject to the same
management and trading expenses as a mutual fund. Please note that an
investor cannot invest directly in an index. The returns shown do not reflect
the deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares.
All figures represent past performance and are not a guarantee of future
results. The performance data represents past performance including the
investment return and principal value of an investment, which will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.
5 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
SCHEDULE OF INVESTMENTS APRIL 30, 2003
SHARES SECURITY VALUE
- ----------------------------------------------------------------------------
COMMON STOCK -- 99.4%
Advertising Services -- 0.4%
30,000 Getty Images, Inc.* $ 1,015,500
- ----------------------------------------------------------------------------
Aerospace/Defense -- 0.5%
20,845 Alliant Techsystems Inc.* 1,119,793
- ----------------------------------------------------------------------------
Airlines -- 0.5%
37,500 JetBlue Airways Corp.* 1,178,625
- ----------------------------------------------------------------------------
Apparel Manufacturer -- 2.3%
128,900 Coach, Inc.* 5,608,439
- ----------------------------------------------------------------------------
Automotive -- 1.5%
93,200 Lear Corp.* 3,703,768
- ----------------------------------------------------------------------------
Biotechnology/Drugs -- 10.2%
110,000 Amgen Inc.* 6,744,100
32,050 Gilead Sciences, Inc.* 1,478,787
36,100 Martek Biosciences Corp.* 1,228,483
144,700 Merck & Co. Inc. 8,418,646
27,200 Mylan Laboratories Inc. 768,944
138,300 Pfizer Inc. 4,252,725
19,400 Teva Pharmaceutical Industries Ltd., Sponsored ADR 905,980
21,600 Trimeris, Inc.* 958,824
- ----------------------------------------------------------------------------
24,756,489
- ----------------------------------------------------------------------------
Broadcasting and Cable TV -- 4.0%
144,500 AOL Time Warner Inc.* 1,976,760
15,650 The E.W. Scripps Co., Class A Shares 1,240,263
38,500 Entercom Communications Corp.* 1,870,715
51,800 Lin TV Corp., Class A Shares* 1,238,538
100,800 Regal Entertainment Group, Class A Shares 1,975,680
41,500 Univision Communications Inc., Class A Shares* 1,256,620
- ----------------------------------------------------------------------------
9,558,576
- ----------------------------------------------------------------------------
Building Products - Air and Heating -- 0.5%
17,500 American Standard Cos. Inc.* 1,245,825
- ----------------------------------------------------------------------------
Building Residential/Commerical -- 0.3%
14,900 Lennar Corp., Class A Shares 808,176
- ----------------------------------------------------------------------------
Casino Hotels -- 1.1%
127,400 Station Casinos, Inc.* 2,753,114
- ----------------------------------------------------------------------------
Chemicals -- 1.6%
30,750 Ecolab Inc. 1,571,017
35,100 International Flavors & Fragrances Inc. 1,115,478
18,700 Praxair, Inc. 1,086,096
- ----------------------------------------------------------------------------
3,772,591
- ----------------------------------------------------------------------------
Computer Hardware -- 0.5%
42,000 Dell Computer Corp.* 1,222,402
- ----------------------------------------------------------------------------
Computer Software -- 6.8%
144,600 Borland Software Corp.* 1,311,522
12,000 Electronic Arts Inc.* 711,240
41,100 Hyperion Solutions Corp.* 1,162,308
24,425 Intuit Inc.* 947,201
62,200 J.D. Edwards & Co.* 745,156
See Notes to Financial Statements.
6 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2003
SHARES SECURITY VALUE
- -----------------------------------------------------------------------
Computer Software -- 6.8% (continued)
30,350 Mercury Interactive Corp.* $ 1,030,079
269,000 Microsoft Corp. 6,878,330
333,100 Quest Software, Inc.* 3,564,170
- -----------------------------------------------------------------------
16,350,006
- -----------------------------------------------------------------------
Consumer Products and Services -- 7.0%
32,900 Alberto-Culver Co., Class A Shares 1,568,672
62,300 ARAMARK Corp., Class B Shares* 1,430,408
50,300 Career Education Corp.* 3,024,539
361,300 The Gillette Co. 11,001,585
- -----------------------------------------------------------------------
17,025,204
- -----------------------------------------------------------------------
Containers -- 0.5%
84,000 Smurfit-Stone Container Corp.* 1,181,880
- -----------------------------------------------------------------------
Distribution/Wholesale -- 0.6%
30,900 W.W. Grainger, Inc. 1,426,035
- -----------------------------------------------------------------------
Electronics -- 0.5%
24,900 Benchmark Electronics, Inc.* 646,155
30,600 Jabil Circuit, Inc.* 572,220
- -----------------------------------------------------------------------
1,218,375
- -----------------------------------------------------------------------
Energy -- 3.5%
36,400 Murphy Oil Corp. 1,516,060
33,000 Nabors Industries, Inc.* 1,293,600
21,500 Pioneer Natural Resources Co.* 514,280
20,300 Smith International, Inc.* 721,868
60,250 Stone Energy Corp.* 2,116,583
59,000 Weatherford International Ltd.* 2,373,570
- -----------------------------------------------------------------------
8,535,961
- -----------------------------------------------------------------------
Engineering/Construction -- 0.5%
26,700 Jacobs Engineering Group Inc.* 1,098,705
- -----------------------------------------------------------------------
Entertainment and Leisure -- 1.8%
60,400 Royal Caribbean Cruises Ltd. 1,121,628
172,900 The Walt Disney Co. 3,226,314
- -----------------------------------------------------------------------
4,347,942
- -----------------------------------------------------------------------
Financial Services -- 9.6%
30,000 Affiliated Managers Group, Inc.* 1,389,300
37,860 Ambac Financial Group, Inc. 2,209,131
59,400 Banknorth Group, Inc. 1,418,472
78,100 The BISYS Group, Inc.* 1,318,328
43,500 Compass Bancshares, Inc. 1,466,820
96,300 Eaton Vance Corp. 2,869,740
90,500 Merrill Lynch & Co., Inc. 3,715,025
19,900 M&T Bank Corp. 1,680,953
75,000 The South Financial Group, Inc. 1,837,500
39,500 Southwest Bancorp. of Texas, Inc.* 1,342,210
89,900 Waddell & Reed Financial, Inc., Class A Shares 1,798,000
48,000 Westamerica Bancorporation 2,068,800
- -----------------------------------------------------------------------
23,114,279
- -----------------------------------------------------------------------
See Notes to Financial Statements.
7 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2003
SHARES SECURITY VALUE
- ----------------------------------------------------------------------------
Food and Beverage -- 5.4%
190,300 The Coca-Cola Co. $ 7,688,120
49,500 Dean Foods Co.* 2,154,735
64,700 Hormel Foods Corp. 1,488,747
45,800 The Pepsi Bottling Group, Inc. 940,732
21,300 Performance Food Group Co.* 747,204
- ----------------------------------------------------------------------------
13,019,538
- ----------------------------------------------------------------------------
Healthcare -- 5.5%
122,000 Coventry Health Care, Inc.* 4,980,040
103,200 Johnson & Johnson 5,816,352
14,000 St. Jude Medical, Inc.* 734,440
45,650 Universal Health Services, Inc., Class B Shares* 1,765,285
- ----------------------------------------------------------------------------
13,296,117
- ----------------------------------------------------------------------------
Human Resources -- 0.3%
24,330 Manpower Inc. 799,970
- ----------------------------------------------------------------------------
Industrial Equipment and Supplies -- 0.4%
32,210 IDEX Corp. 1,025,889
- ----------------------------------------------------------------------------
Insurance -- 4.7%
97,100 American International Group, Inc. 5,626,945
25 Berkshire Hathaway Inc., Class A Shares* 1,750,025
27,300 Nationwide Financial Services, Inc., Class A Shares 768,495
18,200 PartnerRe Ltd. 973,700
27,500 StanCorp Financial Group, Inc. 1,476,750
22,300 Willis Group Holdings Ltd. 695,537
- ----------------------------------------------------------------------------
11,291,452
- ----------------------------------------------------------------------------
Medical Equipment and Supplies -- 2.1%
46,100 Advanced Neuromodulation Systems, Inc.* 1,930,207
32,200 DENTSPLY International Inc. 1,205,890
50,400 ResMed Inc.* 1,848,672
- ----------------------------------------------------------------------------
4,984,769
- ----------------------------------------------------------------------------
Multi-Industry -- 1.6%
23,700 Carlisle Cos. Inc. 1,075,032
99,100 General Electric Co. 2,918,495
- ----------------------------------------------------------------------------
3,993,527
- ----------------------------------------------------------------------------
Real Estate -- 0.6%
51,150 The St. Joe Co. 1,498,695
- ----------------------------------------------------------------------------
Restaurants -- 2.0%
81,700 Brinker International, Inc.* 2,593,975
39,900 Outback Steakhouse, Inc. 1,426,026
22,500 Panera Bread Co., Class A Shares* 765,675
- ----------------------------------------------------------------------------
4,785,676
- ----------------------------------------------------------------------------
Retail -- 8.3%
276,800 Amazon.com, Inc.* 7,935,856
90,100 American Eagle Outfitters, Inc.* 1,576,750
54,800 Barnes & Noble, Inc.* 1,079,560
103,200 Hollywood Entertainment Corp.* 1,831,800
170,400 The Home Depot, Inc. 4,793,352
See Notes to Financial Statements.
8 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2003
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------
Retail -- 8.3% (continued)
69,800 Hot Topic, Inc.* $ 1,706,610
41,600 Williams-Sonoma, Inc.* 1,076,608
- ----------------------------------------------------------------------------------------
20,000,536
- ----------------------------------------------------------------------------------------
Semiconductors -- 8.2%
96,425 ATMI, Inc.* 2,034,471
74,800 Cymer, Inc.* 2,135,540
225,000 Cypress Semiconductor Corp.* 1,962,000
182,400 Intel Corp. 3,356,160
160,200 Lam Research Corp.* 2,327,706
117,700 Micrel, Inc.* 1,378,267
22,400 Microchip Technology Inc. 465,696
73,000 Semtech Corp.* 1,160,700
78,900 Teradyne, Inc.* 915,240
195,000 Texas Instruments Inc. 3,605,550
33,000 Zoran Corp.* 587,070
- ----------------------------------------------------------------------------------------
19,928,400
- ----------------------------------------------------------------------------------------
Technology -- 3.4%
54,800 CACI International Inc., Class A Shares* 1,914,164
118,000 Cisco Systems, Inc.* 1,774,720
121,900 Emulex Corp.* 2,497,731
249,100 Motorola, Inc. 1,970,381
- ----------------------------------------------------------------------------------------
8,156,996
- ----------------------------------------------------------------------------------------
Toys -- 0.9%
80,000 Leapfrog Enterprises, Inc.* 2,136,000
- ----------------------------------------------------------------------------------------
Utilities -- 1.8%
60,800 KeySpan Corp. 2,059,296
59,700 Pepco Holdings, Inc. 1,025,646
48,100 Wisconsin Energy Corp. 1,266,473
- ----------------------------------------------------------------------------------------
4,351,415
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $286,765,751) 240,310,665
- ----------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- -----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.6%
$1,410,000 Merrill Lynch & Co., Inc., 1.250% due 5/1/03; Proceeds at
maturity -- $1,410,049; (Fully collateralized by various U.S.
government agency obligations, 0.000% to 4.875% due 5/9/03 to
11/15/07; Market value -- $1,438,204) (Cost -- $1,410,000) 1,410,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100% (Cost -- $288,175,751**) $241,720,665
- ----------------------------------------------------------------------------------------
*Non-income producing security.
**Aggregate cost for Federal income tax purposes is $288,253,491.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
9 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2003
ASSETS:
Investments, at value (Cost -- $288,175,751) $ 241,720,665
Cash 262
Receivable for securities sold 6,068,045
Dividends and interest receivable 139,262
Receivable for Fund shares sold 65,316
- --------------------------------------------------------------------------
Total Assets 247,993,550
- --------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 6,048,412
Payable for Fund shares purchased 359,851
Management fee payable 144,872
Distribution fees payable 77,833
Accrued expenses 184,615
- --------------------------------------------------------------------------
Total Liabilities 6,815,583
- --------------------------------------------------------------------------
Total Net Assets $ 241,177,967
- --------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 38,901
Capital paid in excess of par value 528,050,141
Accumulated net realized loss from security transactions (240,455,989)
Net unrealized depreciation of investments (46,455,086)
- --------------------------------------------------------------------------
Total Net Assets $ 241,177,967
- --------------------------------------------------------------------------
Shares Outstanding:
Class A 4,000,871
- ---------------------------------------------------------------------------
Class B 6,378,268
- ---------------------------------------------------------------------------
Class L 28,521,636
- ---------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $6.32
- ---------------------------------------------------------------------------
Class B * $6.18
- ---------------------------------------------------------------------------
Class L ** $6.19
- ---------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value) $6.65
- ---------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value) $6.25
- --------------------------------------------------------------------------
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if shares
are redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase (See Note 2).
See Notes to Financial Statements.
10 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
STATEMENT OF OPERATIONS FOR THE YEAR ENDED APRIL 30, 2003
INVESTMENT INCOME:
Dividends $ 2,285,596
Interest 23,807
- ---------------------------------------------------------------------------
Total Investment Income 2,309,403
- ---------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 7) 2,597,119
Management fee (Note 2) 2,102,788
Shareholder servicing fees (Note 7) 313,515
Shareholder communications (Note 7) 58,002
Audit and legal 37,442
Custody 34,620
Registration fees 29,561
Directors' fees 25,200
Other 8,949
- ---------------------------------------------------------------------------
Total Expenses 5,207,196
- ---------------------------------------------------------------------------
Net Investment Loss (2,897,793)
- ---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized Loss From Security Transactions (excluding
short-term securities):
Proceeds from sales 200,886,678
Cost of securities sold 301,141,979
- ---------------------------------------------------------------------------
Net Realized Loss (100,255,301)
- ---------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments:
Beginning of year (68,764,106)
End of year (46,455,086)
- ---------------------------------------------------------------------------
Decrease in Net Unrealized Depreciation 22,309,020
- ---------------------------------------------------------------------------
Net Loss on Investments (77,946,281)
- ---------------------------------------------------------------------------
Decrease in Net Assets From Operations $ (80,844,074)
- ---------------------------------------------------------------------------
See Notes to Financial Statements.
11 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED APRIL 30,
2003 2002
- ----------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (2,897,793) $ (6,090,427)
Net realized loss (100,255,301) (62,382,496)
(Increase) decrease in net unrealized depreciation 22,309,020 (13,472,222)
- ----------------------------------------------------------------------------------
Decrease in Net Assets From Operations (80,844,074) (81,945,145)
- ----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 11,811,251 39,692,486
Cost of shares reacquired (88,493,435) (126,474,706)
- ----------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (76,682,184) (86,782,220)
- ----------------------------------------------------------------------------------
Decrease in Net Assets (157,526,258) (168,727,365)
NET ASSETS:
Beginning of year 398,704,225 567,431,590
- ----------------------------------------------------------------------------------
End of year $ 241,177,967 $ 398,704,225
- ----------------------------------------------------------------------------------
See Notes to Financial Statements.
12 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
The Smith Barney Premier Selections All Cap Growth Fund ("Fund"), a separate
investment fund of the Smith Barney Investment Funds Inc. ("Series"), a
Maryland corporation, is registered under the Investment Company Act of 1940,
as amended, as a non-diversified, open-end management investment company. The
Series consists of this Fund and eight other separate investment funds: Smith
Barney Investment Grade Bond Fund, Smith Barney Government Securities Fund,
Smith Barney Small Cap Growth Fund, Smith Barney Small Cap Value Fund, Smith
Barney Hansberger Global Value Fund, Smith Barney Premier Selections Large Cap
Fund, Smith Barney Premier Selections Global Growth Fund and Smith Barney Group
Spectrum Fund. The financial statements and financial highlights for the other
funds are presented in separate shareholder reports.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities traded on
national securities markets are valued at the closing prices on such markets
or, in the absence of sales, at the mean between the closing bid and asked
prices; over-the-counter securities are valued at the mean between the bid and
asked prices; securities listed on the NASDAQ National Market System for which
market quotations are available are valued at the official closing price or, if
there is no official closing price on that day, at the last sale price;
Investments in securities for which market quotations are not available are
valued at fair value as determined in good faith by the Board of Directors; (c)
securities maturing within 60 days are valued at cost plus accreted discount,
or minus amortized premium, which approximates value; (d) dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis; (e) gains or losses on the sale of securities are calculated by using
the specific identification method; (f ) direct expenses are charged to each
class; management fees and general Fund expenses are allocated on the basis of
relative net assets by class; (g) dividends and distributions to shareholders
are recorded on the ex-dividend date; the Fund distributes dividends and
capital gains, if any, annually; (h) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; (i) the character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
accounting principles generally accepted in the United States of America. At
April 30, 2003, reclassifications were made to the Fund's capital accounts to
reflect permanent book/tax differences and income and gains available for
distributions under income tax regulations. Accordingly, a portion of
accumulated investment loss amounting to $2,897,793 was reclassified to paid-in
capital. Net investment income, net realized gains and net assets were not
affected by this change; and (j) 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.
2. Management Agreement and Other Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment manager to the Fund. The
Fund pays SBFM a management fee calculated at an annual rate of 0.75% of the
average daily net assets. This fee is calculated daily and paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), formerly known as Travelers Bank & Trust
fsb., another subsidiary of Citigroup, acts as the Fund's transfer agent. PFPC
Global Fund Services ("PFPC") and Primerica Shareholder Services ("PSS"),
another subsidiary of Citigroup, act as the Fund's sub-transfer agents. CTB
receives account fees and asset-based fees that vary according to the size and
type of account. PFPC and PSS are responsible for shareholder recordkeeping and
financial processing for all shareholder accounts and are paid by CTB. For the
year ended April 30, 2003, the Fund paid transfer agent fees of $284,875 to CTB.
13 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Citigroup Global Markets Inc. ("CGM"), formerly known as Salomon Smith Barney
Inc. and PFS Distributors, Inc., both of which are subsidiaries of Citigroup,
act as the Fund's distributors. In addition, CGM and certain other
broker-dealers, continue to sell Fund shares to the public as members of the
selling group. For the year ended April 30, 2003, CGM and its affiliates
received brokerage commissions of $21,932.
There are maximum initial sales charges of 5.00% and 1.00% for Class A and L
shares, respectively. There is a contingent deferred sales charge ("CDSC") of
5.00% on Class B shares, which applies if redemption occurs within one year
from initial purchase and declines thereafter by 1.00% per year until no CDSC
is incurred. Class L shares also have a 1.00% CDSC, which applies if redemption
occurs within the first year of purchase. In certain cases, Class A shares have
a 1.00% CDSC, which applies if redemption occurs within the first year of
purchase. 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 year ended April 30, 2003, CGM and its affiliates received sales
charges of approximately $68,000 and $47,000 on sales of the Fund's Class A and
L shares, respectively. In addition, for the year ended April 30, 2003, CDSCs
paid to CGM and its affiliates were approximately:
Class B Class L
- -------------------------------------------------------------------------
CDSCs $223,000 $8,000
- ------------------------------------------------------------------------
All officers and one Director of the Series are employees of Citigroup or its
affiliates.
3. Investments
During the year ended April 30, 2003, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
securities, but excluding short-term securities) were as follows:
- ------------------------------------------------------------------------------
Purchases $132,587,582
- ------------------------------------------------------------------------------
Sales 200,886,678
- ------------------------------------------------------------------------------
At April 30, 2003 the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were as follows:
- -----------------------------------------------------------------------------
Gross unrealized appreciation $ 17,187,001
Gross unrealized depreciation (63,719,827)
- -----------------------------------------------------------------------------
Net unrealized depreciation $(46,532,826)
- -----------------------------------------------------------------------------
4. Repurchase Agreements
The Fund purchases (and its custodian takes possession of ) U.S. government
securities from securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day),
at an agreed-upon higher repurchase price. The Fund requires continual
maintenance of the market value of the collateral (plus accrued interest) in
amounts at least equal to the repurchase price.
14 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Capital Loss Carryforward
At April 30, 2003, the Fund had, for Federal income tax purposes, approximately
$204,350,000 of unused capital loss carryforwards available to offset future
capital gains. To the extent that these carryforward losses are used to offset
capital gains, it is possible that the gains so offset will not be distributed.
The amount and expiration of the carryforwards are indicated below. Expiration
occurs on April 30 of the year indicated:
2009 2010 2011
- --------------------------------------------------------------------------------------
Carryforward amounts $22,370,000 $84,149,000 $97,831,000
- -------------------------------------------------------------------------------------
In addition, the Fund had $36,028,053 of capital losses realized after October
31, 2002, which were deferred for tax purposes to the first day of the
following fiscal year.
6. Income Tax Information and Distributions to Shareholders
At April 30, 2003, the tax basis components of distributable earnings were:
- ----------------------------------
Accumulated capital
loss $(204,350,196)
- ----------------------------------
Unrealized
depreciation (46,532,826)
- ----------------------------------
The difference between book basis and tax basis unrealized appreciation and
depreciation is attributable primarily to wash sales.
For the year ended April 30, 2003, the Fund did not make any distributions.
7. Class Specific Expenses
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
its Class A, B and L 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 Class B and L shares calculated at the annual
rate of 0.75% of the average daily net assets of each class, respectively. For
the year ended April 30, 2003, total Distribution Plan fees incurred, which are
accrued daily and paid monthly, were as follows:
Class A Class B Class L
- ------------------------------------------------
Distribution Plan
Fees $68,865 $444,363 $2,083,891
- -----------------------------------------------
For the year ended April 30, 2003, total Shareholder Servicing fees were as
follows:
Class A Class B Class L
- ---------------------------------------------
Shareholder
Servicing Fees $35,329 $61,475 $216,711
- --------------------------------------------
For the year ended April 30, 2003, total Shareholder Communication expenses
were as follows:
Class A Class B Class L
- --------------------------------------------
Shareholder
Communication
Expenses $6,001 $12,001 $40,000
- -------------------------------------------
15 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. Capital Shares
At April 30, 2003, the Series had 10 billion 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 and has the same rights, except that each class bears certain
expenses, including those specifically related to the distribution of its
shares.
Transactions in shares of each class were as follows:
Year Ended Year Ended
April 30, 2003 April 30, 2002
------------------------- -------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------
Class A
Shares sold 415,001 $ 2,649,325 874,279 $ 7,375,603
Shares reacquired (1,151,487) (7,329,039) (1,492,078) (12,531,840)
- -----------------------------------------------------------------------
Net Decrease (736,486) $ (4,679,714) (617,799) $ (5,156,237)
- -----------------------------------------------------------------------
Class B
Shares sold 561,634 $ 3,537,497 1,262,553 $ 10,593,703
Shares reacquired (2,109,673) (13,222,853) (2,280,126) (18,683,670)
- -----------------------------------------------------------------------
Net Decrease (1,548,039) $ (9,685,356) (1,017,573) $ (8,089,967)
- -----------------------------------------------------------------------
Class L
Shares sold 888,030 $ 5,624,429 2,600,207 $ 21,723,180
Shares reacquired (10,868,713) (67,941,543) (11,607,008) (95,259,196)
- -----------------------------------------------------------------------
Net Decrease (9,980,683) $(62,317,114) (9,006,801) $(73,536,016)
- -----------------------------------------------------------------------
16 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
FINANCIAL HIGHLIGHTS
For a share of each class of capital stock outstanding throughout each year
ended April 30, unless otherwise noted:
Class A Shares Class B Shares
--------------------------------- -----------------------------------
2003/(1)/ 2002/(1)/ 2001/(1)(2)/ 2003/(1)/ 2002/(1)/ 2001/(1)(2)/
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 7.89 $ 9.23 $11.40 $ 7.78 $ 9.18 $11.40
- ----------------------------------------------------------------------------------------------------------
Loss From Operations:
Net investment loss (0.02) (0.05) (0.05) (0.07) (0.11) (0.11)
Net realized and unrealized loss (1.55) (1.29) (2.12) (1.53) (1.29) (2.11)
- ----------------------------------------------------------------------------------------------------------
Total Loss From Operations (1.57) (1.34) (2.17) (1.60) (1.40) (2.22)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 6.32 $ 7.89 $ 9.23 $ 6.18 $ 7.78 $ 9.18
- ----------------------------------------------------------------------------------------------------------
Total Return (19.90)% (14.52)% (19.04)%++ (20.57)% (15.25)% (19.47)%++
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $25,273 $37,371 $49,450 $39,445 $61,693 $82,069
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.20% 1.21% 1.18%+ 1.97% 1.93% 1.94%+
Net investment loss (0.37) (0.64) (0.55)+ (1.14) (1.36) (1.32)+
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 35% 53% 47% 35% 53%
- ----------------------------------------------------------------------------------------------------------
Class L Shares
-----------------------------------
2003/(1)/ 2002/(1)/ 2001/(1)(2)/
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $7.78 $9.18 $11.40
- -------------------------------------------------------------------------------------------------------------------
Loss From Operations:
Net investment loss (0.07) (0.11) (0.11)
Net realized and unrealized loss (1.52) (1.29) (2.11)
- -------------------------------------------------------------------------------------------------------------------
Total Loss From Operations (1.59) (1.40) (2.22)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $6.19 $7.78 $ 9.18
- -------------------------------------------------------------------------------------------------------------------
Total Return (20.44)% (15.25)% (19.47)%++
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $176,460 $299,640 $435,913
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.93% 1.93% 1.94%+
Net investment loss (1.10) (1.36) (1.29)+
- -------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 47% 35% 53%
- -------------------------------------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period from June 30, 2000 (inception date) to April 30, 2001.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
17 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
Smith Barney Investment Funds Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Smith Barney Premier Selections All Cap
Growth Fund ("Fund") of Smith Barney Investment Funds Inc. as of April 30,
2003, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
two-year period then ended and for the period from June 30, 2000 (commencement
of operations) to April 30, 2001. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of April 30, 2003, by
correspondence with the custodian. As to securities purchased or sold but not
received or delivered, we performed other appropriate auditing procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of April 30, 2003, and the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
two-year period then ended and for the period from June 30, 2000 to April 30,
2001, in conformity with accounting principles generally accepted in the United
States of America.
/s/ KPMG LLP
New York, New York
June 13, 2003
18 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
ADDITIONAL INFORMATION (UNAUDITED)
Information about Directors and Officers
The business and affairs of the Smith Barney Premier Selections All Cap Growth
Fund ("Fund") are managed under the direction of the Board of Directors of
Smith Barney Investment Funds Inc. ("Series"). Information pertaining to the
Directors and certain Officers of the Series is set forth below. The Statement
of Additional Information includes additional information about Series
Directors and is available, without charge, upon request by calling the Fund's
transfer agent (Citicorp Trust Bank, fsb. at 1-800-451-2010) or the Fund's
sub-transfer agent (Primerica Shareholder Services at 1-800-544-5445).
Number of
Term of Principal Portfolios in the
Office* and Occupation(s) Fund Complex Other
Position(s) Held Length of During Past Overseen Directorships
Name, Address and Age with Fund Time Served Five Years by Director Held by Director
- ----------------------------------------------------------------------------------------------------------------------------
Non-Interested Directors:
Paul R. Ades Director Since Law Firm of Paul R. Ades, 15 None
Paul R. Ades, PLLC 1994 PLLC; Partner in Law Firm
181 West Main Street, Suite C of Murov & Ades, Esqs.
Babylon, NY 11702
Age 62
Herbert Barg Director Since Retired 42 None
1460 Drayton Lane 1994
Wynnewood, PA 19096
Age 79
Dwight B. Crane Director Since Professor, Harvard 49 None
Harvard Business School 1981 Business School
Soldiers Field
Morgan Hall #375
Boston, MA 02163
Age 65
Frank G. Hubbard Director Since President of Avatar 15 None
Avatar International Inc. 1993 International Inc. (Business
87 Whittredge Road Development) (since
Summit, NJ 07901 1998); Vice President
Age 65 of S&S Industries (Chemical
Distribution) (1995-1998)
Jerome H. Miller Director Since Retired 15 None
c/o R. Jay Gerken 1998
Citigroup Global Markets Inc.
399 Park Avenue
New York, NY 10022
Age 64
Ken Miller Director Since President of Young Stuff 15 None
Young Stuff Apparel Group, Inc. 1994 Apparel Group, Inc. (since
930 Fifth Avenue 1963)
Suite 610
New York, NY 10021
Age 61
Interested Director:
R. Jay Gerken** Chairman, Since Managing Director of 225 None
CGM President and 2002 Citigroup Global Markets
399 Park Avenue, 4th Floor Chief Executive Inc. ("CGM"); Chairman,
New York, NY 10022 Officer President and Chief
Age 52 Executive Officer of Smith
Barney Fund Management
LLC ("SBFM"), Travelers
Investment Adviser, Inc.
("TIA") and Citi Fund
Management Inc.
19 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Principal Portfolios in the
Office* and Occupation(s) Fund Complex Other
Position(s) Held Length of During Past Overseen Directorships
Name, Address and Age with Fund Time Served Five Years by Director Held by Director
- ------------------------------------------------------------------------------------------------------------------------------
Officers:
Lewis E. Daidone Senior Vice Since Managing Director of CGM N/A N/A
CGM President and 1993 and; Director and Senior
125 Broad Street, 11th Floor Chief Vice President of SBFM and
New York, NY 10004 Administrative TIA
Age 45 Officer
Richard L. Peteka Chief Since Director and Head of N/A N/A
CGM Financial 2002 Internal Control for
125 Broad Street, 11th Floor Officer and Citigroup Asset
New York, NY 10004 Treasurer Management U.S. Mutual
Age 41 Fund Administration from
1999-2002; Vice President,
Head of Mutual Fund
Administration and
Treasurer at Oppenheimer
Capital from 1996-1999
Alan J. Blake Vice President Since Managing Director of N/A N/A
CGM and 2000 CGM; Investment Officer of
399 Park Avenue, 4th Floor Investment SBFM
New York, NY 10022 Officer
Age 54
Lawrence B. Weissman, CFA Vice President Since Managing Director of N/A N/A
CGM and 2000 CGM; Investment Officer of
100 First Stamford Place, 7th Floor Investment SBFM; Former Portfolio
Stamford, CT 06902 Officer Manager at Neuberger
Age 42 Berman, LLC from 1995-
1997
Timothy Woods, CFA Vice President Since Managing Director of CGM N/A N/A
CGM and 2000 since 1999; Investment
100 First Stamford Place, 7th Floor Investment Officer of SBFM; Former
Stamford, CT 06902 Officer Portfolio Manager of
Age 42 Banker's Trust
Kaprel Ozsolak Controller Since Vice President of CGM N/A N/A
CGM 2002
125 Broad Street, 11th Floor
New York, NY 10004
Age 37
Christina T. Sydor Secretary Since Managing Director of N/A N/A
CGM 1993 CGM; General Counsel and
300 First Stamford Place, 4th Floor Secretary of SBFM and TIA
Stamford, CT 06902
Age 52
- --------
*Each Director and Officer serves until his or her successor has been duly
elected and qualified.
**Mr. Gerken is an "interested person" of the Fund as defined in the Investment
Company Act of 1940, as amended, because Mr. Gerken is an officer of SBFM and
of certain of its affiliates.
20 Smith Barney Premier Selections All Cap Growth Fund | 2003 Annual Report to
Shareholders
SMITH BARNEY
PREMIER SELECTIONS
ALL CAP GROWTH FUND
DIRECTORS INVESTMENT MANAGER
Paul R. Ades Smith Barney Fund Management LLC
Herbert Barg
Dwight B. Crane DISTRIBUTORS
R. Jay Gerken, Chairman Citigroup Global Markets Inc.
Frank G. Hubbard PFS Distributors, Inc.
Jerome H. Miller
Ken Miller CUSTODIAN
State Street Bank and
OFFICERS Trust Company
R. Jay Gerken
President and Chief TRANSFER AGENT
Executive Officer Citicorp Trust Bank, fsb.
125 Broad Street, 11th Floor
Lewis E. Daidone New York, New York 10004
Senior Vice President
and Chief Administrative Officer SUB-TRANSFER AGENTS
PFPC Global Fund Services
Richard L. Peteka P.O. Box 9699
Chief Financial Officer Providence, Rhode Island
and Treasurer 02940-9699
Alan J. Blake Primerica Shareholder Services
Vice President and P.O. Box 9662
Investment Officer Providence, Rhode Island
02940-9662
Lawrence B. Weissman, CFA
Vice President and
Investment Officer
Timothy Woods, CFA
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Christina T. Sydor
Secretary
Smith Barney Premier Selections All Cap Growth Fund
This report is submitted for the general information of shareholders of Smith
Barney Investment Funds Inc. -- Smith Barney Premier Selections All Cap Growth
Fund, but it may also be used as sales literature when preceded or accompanied
by the current Prospectus, which gives details about charges, expenses,
investment objectives and operating policies of the Fund. If used as sales
material after July 31, 2003, this report must be accompanied by performance
information for the most recently completed calendar quarter.
SMITH BARNEY PREMIER SELECTIONS
ALL CAP GROWTH FUND
Smith Barney Mutual Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004
For complete information on any Smith Barney Mutual Funds, including
management fees and expenses, call or write to your financial professional for
a free prospectus. Read it carefully before you invest or send money.
www.smithbarneymutualfunds.com
(C)2003 Citigroup Global Markets Inc.
Member NASD, SIPC
FD02330 6/03 03-4966
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. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. 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-2(c) under the
Investment Company Act of 1940, as amended) are effective based
on their evaluation of the disclosure controls and procedures as
of a date within 90 days of the filing date of this document.
(b) In the last 90 days, there have been no significant changes in
the Registrant's internal controls or in other factors that could
significantly affect these controls.
ITEM 10. 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.
Smith Barney Investment Funds Inc.
By: /s/ R. Jay Gerken R. Jay Gerken
Chief Executive Officer of
Smith Barney Investment Funds Inc.
Date: June 27, 2003
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
Smith Barney Investment Funds Inc.
Date: June 27, 2003
By: /s/ Richard Peteka
Chief Financial Officer of
Smith Barney Investment Funds Inc.
Date: June 27, 2003