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 811-8372
Travelers Series Fund 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: October 31
Date of reporting period: April 30, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders is filed herewith.
TRAVELERS SERIES FUND INC.
AIM CAPITAL
APPRECIATION PORTFOLIO
SMITH BARNEY LARGE
CAPITALIZATION GROWTH
PORTFOLIO
SEMI-ANNUAL REPORT | APRIL 30, 2003
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
WHAT'S INSIDE
Letter From the Chairman......................................... 1
Schedules of Investments......................................... 2
Statements of Assets and Liabilities............................. 8
Statements of Operations......................................... 9
Statements of Changes in Net Assets.............................. 10
Notes to Financial Statements.................................... 12
Financial Highlights............................................. 18
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 and we will be reflecting
other changes in future reports. 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.
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.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken
Chairman, President and Chief Executive Officer
May 27, 2003
1 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- ---------------------------------------------------------------------------
COMMON STOCK -- 95.3%
Aerospace/Defense -- 3.2%
67,700 Lockheed Martin Corp. $ 3,388,385
18,900 Northrop Grumman Corp. 1,662,255
- -------------------------------------------------------------------------
5,050,640
- -------------------------------------------------------------------------
Broadcasting and Cable TV -- 2.0%
44,400 Clear Channel Communications, Inc.+ 1,736,484
16,800 Hispanic Broadcasting Corp.+ 430,920
33,700 Univision Communications Inc., Class A Shares+++ 1,020,436
- -------------------------------------------------------------------------
3,187,840
- -------------------------------------------------------------------------
Business Services -- 3.1%
67,700 Lamar Advertising Co., Class A Shares+ 2,431,784
28,200 Moody's Corp. 1,361,778
67,700 Robert Half International Inc.+ 1,102,156
- -------------------------------------------------------------------------
4,895,718
- -------------------------------------------------------------------------
Communications Services -- 1.2%
46,200 Nextel Communications, Inc.+ 683,298
617,100 Vodafone Group PLC 1,219,047
- -------------------------------------------------------------------------
1,902,345
- -------------------------------------------------------------------------
Energy -- 4.8%
11,865 Apache Corp. 679,271
25,800 BJ Services Co.+ 941,958
15,600 Devon Energy Corp. 737,100
33,400 ENSCO International Inc.++ 848,360
20,700 Exxon Mobil Corp. 728,640
22,500 Nabors Industries, Ltd.+ 882,000
22,400 Noble Corp.+ 693,280
20,200 Smith International, Inc.+ 718,312
28,100 Transocean Inc.+ 535,305
16,800 Weatherford International Ltd.+ 675,864
- -------------------------------------------------------------------------
7,440,090
- -------------------------------------------------------------------------
Financial -- 11.6%
9,200 Aetna Inc. 458,160
24,200 AFLAC Inc. 791,582
39,500 American Express Co. 1,495,470
33,600 American International Group, Inc. 1,947,120
11,400 Bank of America Corp. 844,170
11,400 Fannie Mae 825,246
11,300 Freddie Mac 654,270
24,400 The Goldman Sachs Group, Inc. 1,851,960
44,800 Merrill Lynch & Co., Inc. 1,839,040
See Notes to Financial Statements.
2 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------
Financial -- 11.6% (continued)
38,300 Morgan Stanley $ 1,713,925
1,100 New York Community Bancorp, Inc. 38,192
11,500 SLM Corp. 1,288,000
14,800 UnitedHealth Group, Inc.+ 1,363,524
28,500 Washington Mutual, Inc. 1,125,750
18,400 WellPoint Health Networks Inc.+ 1,397,296
11,200 Wells Fargo & Co. 540,512
- --------------------------------------------------------------------------
18,174,217
- --------------------------------------------------------------------------
Food and Beverage -- 1.0%
17,300 General Mills, Inc. 780,403
28,100 Sysco Corp. 807,313
- --------------------------------------------------------------------------
1,587,716
- --------------------------------------------------------------------------
Healthcare -- 18.5%
24,100 AdvancePCS+++ 724,446
6,400 Allergan, Inc. 449,600
44,900 Amgen Inc.+ 2,752,819
85,100 Biomet, Inc. 2,592,146
18,800 Boston Scientific Corp.+ 809,340
23,850 Cardinal Health, Inc. 1,318,428
19,400 Forest Laboratories, Inc.+ 1,003,368
15,400 Genzyme Corp. -- General Division+ 620,312
20,900 Gilead Sciences, Inc.+ 964,326
37,500 Health Management Associates, Inc., Class A Shares 639,750
33,500 IDEC Pharmaceuticals Corp.+++ 1,097,125
16,000 Johnson & Johnson 901,760
44,200 Medicis Pharmaceutical Corp., Class A Shares+++ 2,547,688
46,100 Medtronic, Inc. 2,200,814
130,600 Pfizer Inc. 4,015,950
27,100 St. Jude Medical, Inc.+ 1,421,666
50,400 Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,353,680
44,600 Wyeth 1,941,438
13,000 Zimmer Holdings, Inc.+ 609,700
- --------------------------------------------------------------------------
28,964,356
- --------------------------------------------------------------------------
Hotels/Motels -- 0.8%
44,400 MGM MIRAGE+ 1,261,848
- --------------------------------------------------------------------------
Leisure -- 2.8%
50,800 Harley Davidson, Inc. 2,257,552
11,000 Pixar, Inc.+++ 642,290
33,600 Viacom Inc., Class B Shares+ 1,458,576
- --------------------------------------------------------------------------
4,358,418
- --------------------------------------------------------------------------
See Notes to Financial Statements.
3 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------------
Personal and Household Products -- 2.1%
16,900 The Clorox Co. $ 764,218
28,100 The Gillette Co. 855,645
18,400 The Procter & Gamble Co. 1,653,240
- -----------------------------------------------------------------
3,273,103
- -----------------------------------------------------------------
Printing and Publishing -- 0.6%
11,200 Gannett Co., Inc. 848,064
- -----------------------------------------------------------------
Restaurants -- 2.9%
59,600 Brinker International, Inc.+ 1,892,300
29,900 Outback Steakhouse, Inc. 1,068,626
15,700 P.F. Chang's China Bistro, Inc.+++ 657,830
29,800 Wendy's International, Inc. 865,392
- -----------------------------------------------------------------
4,484,148
- -----------------------------------------------------------------
Retail -- 13.4%
21,800 Abercrombie & Fitch Co., Class A Shares+ 716,784
52,200 Bed Bath & Beyond Inc.+ 2,062,422
90,700 Caremark Rx, Inc.+ 1,805,837
61,700 CDW Computer Centers, Inc.+++ 2,630,888
7,500 eBay Inc.+ 695,775
34,300 Family Dollar Stores, Inc. 1,172,717
135,000 The Gap, Inc. 2,245,050
13,400 Kohl's Corp.+ 761,120
33,300 Lowe's Cos., Inc. 1,461,537
16,500 Nike Inc., Class B Shares 883,245
10,200 Ross Stores, Inc. 386,580
49,800 Staples, Inc.+ 948,192
67,700 The TJX Cos., Inc. 1,303,225
44,900 Wal-Mart Stores, Inc. 2,528,768
45,100 Walgreen Co. 1,391,786
- -----------------------------------------------------------------
20,993,926
- -----------------------------------------------------------------
Technology -- 26.0%
66,500 Analog Devices, Inc.+ 2,202,480
111,000 Applied Materials, Inc.+ 1,620,600
180,500 Cisco Systems, Inc.+ 2,714,720
43,600 Citrix Systems, Inc.+ 826,656
11,200 Danaher Corp. 772,576
84,400 Dell Computer Corp.+ 2,440,004
19,300 Electronic Arts Inc.+ 1,143,911
116,500 EMC Corp.+ 1,058,985
100,800 Fiserv, Inc.+ 2,967,552
67,700 Intel Corp. 1,245,680
33,400 Intuit Inc.+ 1,295,252
See Notes to Financial Statements.
4 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- -------------------------------------------------------------------------------------------------
Technology -- 26.0% (continued)
39,000 KLA-Tencor Corp.+++ $ 1,599,000
41,100 L-3 Communications Holdings, Inc.+++ 1,824,840
90,200 Lam Research Corp.+ 1,310,606
44,600 Linear Technology Corp. 1,537,362
38,900 Maxim Integrated Products, Inc. 1,528,381
18,800 Mercury Interactive Corp.+++ 638,072
113,843 Microchip Technology Inc. 2,366,796
213,200 Microsoft Corp. 5,451,524
34,000 Molex Inc. 793,560
29,600 Nokia Oyj 491,395
280,000 Nortel Networks Corp.+ 722,400
22,400 Novellus Systems, Inc.+ 628,096
51,800 SunGard Data Systems, Inc.+ 1,113,700
50,000 Taiwan Semiconductor Manufacturing Co. Ltd.+ 418,500
66,800 Teradyne, Inc.+ 774,880
33,000 VERITAS Software Corp. 726,330
35,500 Vishay Intertechnology, Inc.+ 443,750
- -------------------------------------------------------------------------------------------------
40,657,608
- -------------------------------------------------------------------------------------------------
Transportation -- 1.3%
9,100 FedEx Corp. 544,908
89,200 Southwest Airlines Co. 1,423,632
- -------------------------------------------------------------------------------------------------
1,968,540
- -------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $152,837,344) 149,048,577
- -------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- -------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.7%
$ 7,362,000 State Street Bank and Trust Co., 1.200% due 5/1/03; Proceeds at maturity
-- $7,362,245; (Fully collateralized by U.S. Treasury Bonds, 8.000%
due 11/15/21; Market value -- $7,510,938) (Cost -- $7,362,000) 7,362,000
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $160,199,344*) $156,410,577
- -------------------------------------------------------------------------------------------------
+Non-income producing security.
++All or a portion of this security is on loan (See Note 4).
*Aggregate cost for Federal income tax purposes is substantially the same.
LOANED SECURITIES COLLATERAL (UNAUDITED) APRIL 30, 2003
FACE
AMOUNT SECURITY VALUE
- ---------------------------------------------------------------------------------------
$10,338,732 State Street Navigator Securities Lending Trust Prime Portfolio
(Cost -- $10,338,732) $10,338,732
- ---------------------------------------------------------------------------------------
See Notes to Financial Statements.
5 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------
COMMON STOCK -- 99.4%
Capital Goods -- 1.7%
137,120 General Electric Co. $ 4,038,184
- ----------------------------------------------------------------
Computer Software -- 3.9%
370,000 Microsoft Corp. 9,460,900
- ----------------------------------------------------------------
Consumer Cyclicals -- 13.6%
462,800 Amazon.com, Inc.+ 13,268,476
414,450 The Home Depot, Inc. 11,658,479
268,700 USA Interactive+ 8,047,565
- ----------------------------------------------------------------
32,974,520
- ----------------------------------------------------------------
Consumer Staples -- 12.8%
231,290 The Coca-Cola Co. 9,344,116
400,795 The Gillette Co. 12,204,208
165,640 Wm. Wrigley Jr. Co. 9,393,444
- ----------------------------------------------------------------
30,941,768
- ----------------------------------------------------------------
Financial Services -- 15.0%
123,456 American International Group, Inc. 7,154,275
191 Berkshire Hathaway Inc., Class A Shares+ 13,334,665
247,030 Merrill Lynch & Co., Inc. 10,140,581
130,170 Morgan Stanley 5,825,107
- ----------------------------------------------------------------
36,454,628
- ----------------------------------------------------------------
Healthcare -- 20.9%
192,680 Amgen Inc.+ 11,813,211
115,750 Eli Lilly & Co. 7,387,165
177,400 Genentech, Inc.+ 6,739,426
114,570 Johnson & Johnson 6,457,165
107,940 Merck & Co. Inc. 6,279,949
385,770 Pfizer Inc. 11,862,428
- ----------------------------------------------------------------
50,539,344
- ----------------------------------------------------------------
Multi-Media -- 6.0%
539,820 AOL Time Warner Inc.+ 7,384,738
385,415 The Walt Disney Co. 7,191,844
- ----------------------------------------------------------------
14,576,582
- ----------------------------------------------------------------
Technology -- 17.5%
385,600 Dell Computer Corp.+ 11,147,696
555,100 Intel Corp. 10,213,840
421,160 Texas Instruments Inc. 7,787,248
267,000 VERITAS Software Corp.+ 5,876,670
268,480 Xilinx, Inc.+ 7,267,754
- ----------------------------------------------------------------
42,293,208
- ----------------------------------------------------------------
See Notes to Financial Statements.
6 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- ---------------------------------------------------------------------------------------------
Telecommunications -- 8.0%
771,400 CIENA Corp.+ $ 3,756,718
415,508 Cisco Systems, Inc.+ 6,249,240
381,900 Juniper Networks, Inc.+ 3,903,018
695,180 Motorola, Inc. 5,498,874
- ---------------------------------------------------------------------------------------------
19,407,850
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $262,431,980) 240,686,984
- ---------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ---------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.6%
$1,467,000 Merrill Lynch & Co., Inc., 1.250% due 5/1/03; Proceeds at maturity --
$1,467,051; (Fully collateralized by various U.S. government agency
obligations, 0.000% to 4.875% due 5/9/03 to 11/15/07;
Market value -- $1,496,344) (Cost -- $1,467,000) 1,467,000
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $263,898,980*) $242,153,984
- ---------------------------------------------------------------------------------------------
+Non-income producing security.
*Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
7 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
AIM Capital Smith Barney Large
Appreciation Capitalization
Portfolio Growth Portfolio
----------------------------------------------------------------------------
ASSETS:
Investments, at value
(Cost -- $160,199,344 and
$263,898,980, respectively) $156,410,577 $242,153,984
Loaned securities collateral, at
value (Cost -- $10,338,732) (Note 4) 10,338,732 --
Cash 243 533
Receivable for securities sold 4,348,673 --
Dividends and interest receivable 46,194 111,059
Receivable for Fund shares sold 5,625 43,103
Other receivables 12,592 39,569
---------------------------------------------------------------------------
Total Assets 171,162,636 242,348,248
---------------------------------------------------------------------------
LIABILITIES:
Payable for securities on loan (Note 4) 10,338,732 --
Payable for securities purchased 1,500,804 1,260,450
Management fees payable 115,045 143,444
Accrued expenses 39,497 43,863
---------------------------------------------------------------------------
Total Liabilities 11,994,078 1,447,757
---------------------------------------------------------------------------
Total Net Assets $159,168,558 $240,900,491
---------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 195 $ 224
Capital paid in excess of par value 238,024,349 325,237,586
Undistributed net investment income -- 80,715
Accumulated net investment loss (160,769) --
Accumulated net realized loss from
security transactions and options (74,906,450) (62,673,038)
Net unrealized depreciation of
investments and foreign currencies (3,788,767) (21,744,996)
---------------------------------------------------------------------------
Total Net Assets $159,168,558 $240,900,491
---------------------------------------------------------------------------
Shares Outstanding 19,542,207 22,374,316
---------------------------------------------------------------------------
Net Asset Value $8.14 $10.77
---------------------------------------------------------------------------
See Notes to Financial Statements.
8 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Six Months Ended April 30, 2003
AIM Capital Smith Barney Large
Appreciation Capitalization
Portfolio Growth Portfolio
- ---------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 479,708 $ 1,108,072
Interest 38,237 14,723
Less: Foreign withholding tax (1,888) --
- -------------------------------------------------------------------------------------------
Total Investment Income 516,057 1,122,795
- -------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 640,277 843,466
Audit and legal 15,637 18,756
Custody 15,632 9,703
Shareholder communications 9,493 15,876
Directors' fees 3,112 5,249
Shareholder servicing fees 2,673 2,480
Other 3,176 4,025
- -------------------------------------------------------------------------------------------
Total Expenses 690,000 899,555
- -------------------------------------------------------------------------------------------
Net Investment Income (Loss) (173,943) 223,240
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND
OPTIONS (NOTES 3, 6 AND 7):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) (8,329,498) (10,230,471)
Foreign currency transactions 13,174 --
Options written 15,824 --
- -------------------------------------------------------------------------------------------
Net Realized Loss (8,300,500) (10,230,471)
- -------------------------------------------------------------------------------------------
Change in Net Unrealized Depreciation From:
Security transactions 10,147,756 29,446,495
Foreign currency transactions 396 --
- -------------------------------------------------------------------------------------------
Decrease in Net Unrealized Depreciation 10,148,152 29,446,495
- -------------------------------------------------------------------------------------------
Net Gain on Investments, Foreign Currencies
and Options 1,847,652 19,216,024
- -------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 1,673,709 $ 19,439,264
- -------------------------------------------------------------------------------------------
See Notes to Financial Statements.
9 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 2003 (unaudited)
and the Year Ended October 31, 2002
AIM Capital Appreciation Portfolio 2003 2002
- ----------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (173,943) $ (589,855)
Net realized loss (8,300,500) (26,798,033)
Decrease in net unrealized depreciation 10,148,152 4,341,849
- ---------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 1,673,709 (23,046,039)
- ---------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 2,283,758 65,014,704
Cost of shares reacquired (16,977,860) (93,735,313)
- ---------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (14,694,102) (28,720,609)
- ---------------------------------------------------------------------------------
Decrease in Net Assets (13,020,393) (51,766,648)
NET ASSETS:
Beginning of period 172,188,951 223,955,599
- ---------------------------------------------------------------------------------
End of period* $159,168,558 $172,188,951
- ---------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $(160,769) --
- ---------------------------------------------------------------------------------
See Notes to Financial Statements.
10 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Six Months Ended April 30, 2003 (unaudited)
and the Year Ended October 31, 2002
Smith Barney Large Capitalization Growth Portfolio 2003 2002
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 223,240 $ 359,070
Net realized loss (10,230,471) (41,360,220)
(Increase) decrease in net unrealized depreciation 29,446,495 (9,512,917)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 19,439,264 (50,514,067)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (501,211) (415,332)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to
Shareholders (501,211) (415,332)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 8,551,494 34,322,507
Net asset value of shares issued for reinvestment
of dividends 501,211 415,332
Cost of shares reacquired (12,238,657) (38,267,567)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (3,185,952) (3,529,728)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 15,752,101 (54,459,127)
NET ASSETS:
Beginning of period 225,148,390 279,607,517
- --------------------------------------------------------------------------------
End of period* $240,900,491 $225,148,390
- --------------------------------------------------------------------------------
* Includes undistributed net investment income of: $80,715 $358,686
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
11 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Significant Accounting Policies
The AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization
Growth Portfolio ("Fund(s)") are separate investment funds of the Travelers
Series Fund Inc. ("Series"). The Series, a Maryland corporation, is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company and consists of these Funds and twelve other separate
investment funds: Smith Barney Large Cap Value, Alliance Growth, Van Kampen
Enterprise, Smith Barney International All Cap Growth, Travelers Managed
Income, Putnam Diversified Income, Salomon Brothers Strategic Total Return
Bond, Smith Barney High Income, MFS Total Return, Smith Barney Money Market,
Smith Barney Mid Cap Core and Smith Barney Aggressive Growth Portfolios. Shares
of the Series are offered only to insurance company separate accounts that fund
certain variable annuity and variable life insurance contracts. The financial
statements and financial highlights for the other funds are presented in
separate shareholder reports.
The significant accounting policies followed by the Funds 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; securities
for which no sales price was reported and U.S. government agencies and
obligations 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; (c) securities maturing
within 60 days are valued at cost plus accreted discount or minus amortized
premium, which approximates value; (d) securities for which market quotations
are not available will be valued in good faith at fair value by or under the
direction of the Board of Directors; (e) interest income, adjusted for
amortization of premium and accretion of discount, is recorded on an accrual
basis; (f ) dividend income is recorded on the ex-dividend date; foreign
dividends are recorded on the ex-dividend date or as soon as practical after
the Funds determine the existence of a dividend declaration after exercising
reasonable due diligence; (g) dividends and distributions to shareholders are
recorded on the ex-dividend date; the Funds distribute dividends and capital
gains, if any, annually; (h) gains or losses on the sale of securities are
calculated by using the specific identification method; (i) the accounting
records of the Funds are maintained in U.S. dollars. All assets and liabilities
12 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
denominated in foreign currencies are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, and income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income or expense amounts
recorded and collected or paid are adjusted when reported by the custodian;
( j) 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; (k) the Funds
intend 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; and (l) 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 Transactions with Affiliated Persons
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment manager of the Smith Barney
Large Capitalization Growth Portfolio ("SBLCG"). SBLCG pays SBFM a management
fee calculated at an annual rate of 0.75% on the average daily net assets of
SBLCG. This fee is calculated daily and paid monthly.
Travelers Investment Adviser, Inc. ("TIA"), an affiliate of SBFM, acts as the
investment manager of the AIM Capital Appreciation Portfolio ("AIMCAP"). AIMCAP
pays TIA a management fee calculated at an annual rate of 0.80% on the average
daily net assets of AIMCAP. This fee is calculated daily and paid monthly.
TIA has also entered into a sub-advisory agreement with AIM Capital Management,
Inc. ("AIM"). Pursuant to the sub-advisory agreement, AIM is responsible for
the day-to-day portfolio operations and investment decisions and is compensated
by TIA for such services at the annual rate of 0.375% of AIMCAP's average daily
net assets.
13 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
TIA has also entered into a Sub-Administrative Services Agreement with SBFM.
TIA pays SBFM, as sub-administrator, a fee calculated at an annual rate of
0.10% of each Fund's average daily net assets.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Funds' transfer agent. PFPC Global Fund Services ("PFPC") acts as the Funds'
sub-transfer agent. CTB receives account fees and asset-based fees that vary
according to the size and type of account. PFPC is responsible for shareholder
recordkeeping and financial processing for all shareholder accounts and is paid
by CTB. For the six months ended April 30, 2003, each Fund paid transfer agent
fees of $2,500 to CTB.
During the six months ended April 30, 2003, Citigroup Global Markets Inc.,
formerly known as Salomon Smith Barney Inc., another indirect wholly-owned
subsidiary of Citigroup, received brokerage commissions in the amount of $2,970
for AIMCAP.
Most of the officers and one Director of the Series are employees of Citigroup
or its affiliates.
3. Investments
During the six months 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:
AIMCAP SBLCG
- ----------------------------------------------------------------
Purchases $36,276,077 $26,648,017
- ---------------------------------------------------------------
Sales 56,578,410 29,556,425
- ---------------------------------------------------------------
At April 30, 2003, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
AIMCAP SBLCG
- ---------------------------------------------------------------
Gross unrealized appreciation $ 13,748,700 $ 16,986,099
Gross unrealized depreciation (17,537,467) (38,731,095)
- --------------------------------------------------------------
Net unrealized depreciation $ (3,788,767) $(21,744,996)
- --------------------------------------------------------------
14 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. Lending of Portfolio Securities
Each Fund has an agreement with its custodian whereby the custodian may lend
securities owned by the Funds to brokers, dealers and other financial
organizations. Fees earned by the Funds on securities lending are recorded as
interest income. Loans of securities by the Funds are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin which may vary depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account.
At April 30, 2003, AIMCAP loaned common stocks having a market value of
$9,860,462 and received cash collateral amounting to $10,338,732 which was
invested in the State Street Navigator Securities Lending Trust Prime Portfolio.
For the six months ended April 30, 2003, income earned from securities on loan
by AIMCAP was $4,937.
At April 30, 2003, SBLCG did not have any securities on loan.
5. Repurchase Agreements
The Funds purchase (and their 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 Funds require continual
maintenance of the market value of the collateral (plus accrued interest) in
amounts at least equal to the repurchase price.
6. Forward Foreign Currency Contracts
The Funds may from time to time enter into forward foreign currency contracts.
A forward foreign currency contract is an agreement between two parties to buy
and sell a currency at a set price on a future date. The contract is
marked-to-market daily and the change in value is recorded by the Funds as an
unrealized gain or loss. When a forward foreign currency contract is
extinguished, through either delivery or offset by entering into another
forward foreign currency con-
15 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
tract, the Fund records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value of the
contract at the time it was extinguished or offset.
At April 30, 2003, AIMCAP and SBLCG did not hold any forward foreign currency
contracts.
7. Option Contracts
SBLCG may from time to time purchase call or put option contracts. Premiums
paid when put or call options are purchased by the Fund represent investments
which are marked-to-market daily. When a purchased option expires, the Fund
will realize a loss in the amount of the premium paid. When the Fund enters
into a closing sales transaction, the Fund will realize a gain or loss
depending on whether the sales proceeds from the closing sales transaction are
greater or less than the premium paid for the option. When the Fund exercises a
put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When the Fund exercises a call option, the cost of the
security which the Fund purchases upon exercise will be increased by the
premium originally paid.
At April 30, 2003, SBLCG did not hold any purchased call or put option
contracts.
SBLCG may from time to time enter into written call or put option contracts.
AIMCAP may only enter into written covered call option contracts. When a Fund
writes a call or put option, an amount equal to the premium received by the
Fund is recorded as a liability, the value of which is marked-to-market daily.
When a written option expires, the Fund realizes a gain equal to the amount of
the premium received. When the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or loss if the cost of the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is eliminated. When a written call option is
exercised, the cost of the security sold will be reduced by the premium
originally received. When a written put option is exercised, the amount of the
premium received will reduce the cost of the security which the Fund purchased
upon exercise. When written index options are exercised, settlement is made in
cash.
16 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The risk associated with purchasing options is limited to the premium
originally paid. The Fund enters into options for hedging purposes. The risk in
writing a call option is that the Fund gives up the opportunity to participate
in any decrease in the price of the underlying security beyond the exercise
price. The risk in writing a put option is that the Fund is exposed to the risk
of loss if the market price of the underlying security declines. The risk in
writing a call option is that the Fund is exposed to the risk of loss if the
market price of the underlying security increases.
The written option transactions for AIMCAP which occurred during the six months
ended April 30, 2003, were as follows:
Number of
AIMCAP Contracts Premium
--------------------------------------------------------------------
Options written, outstanding at October 31, 2002 36 $ 9,252
Options written 31 6,572
Options expired (67) (15,824)
--------------------------------------------------------------------
Options written, outstanding at April 30, 2003 -- $ 0
--------------------------------------------------------------------
At April 30, 2003, SBLCG did not enter into any written covered call or put
option contracts.
8. Capital Shares
At April 30, 2003, the Series had six billion shares of capital stock
authorized with a par value of $0.00001 per share. Each share of a Fund
represents an equal proportionate interest in that Fund with each other share
of the same Fund and has an equal entitlement to any dividends and
distributions made by the Fund.
Transactions in shares of each Fund were as follows:
Six Months Ended Year Ended
April 30, 2003 October 31, 2002
--------------------------------------------------------------------
AIM Capital Appreciation Portfolio
Shares sold 291,730 6,822,913
Shares reacquired (2,179,125) (9,963,375)
--------------------------------------------------------------------
Net Decrease (1,887,395) (3,140,462)
--------------------------------------------------------------------
Smith Barney Large Capitalization Growth Portfolio
Shares sold 834,552 2,760,973
Shares issued on reinvestment 51,353 42,511
Shares reacquired (1,235,108) (3,657,809)
--------------------------------------------------------------------
Net Decrease (349,203) (854,325)
--------------------------------------------------------------------
17 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each year ended October 31,
unless otherwise noted:
AIM Capital Appreciation Portfolio 2003/(1)/ 2002 2001 2000 1999 1998
- --------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $8.04 $9.11 $ 21.73 $16.30 $12.31 $12.68
- -------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.01) (0.03) (0.02) (0.07) (0.03) (0.01)
Net realized and unrealized gain (loss) 0.11 (1.04) (8.72) 6.03 4.02 (0.34)
- -------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.10 (1.07) (8.74) 5.96 3.99 (0.35)
- -------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- -- -- -- (0.02)
Net realized gains -- -- (3.88) (0.53) -- --
- -------------------------------------------------------------------------------------------------------
Total Distributions -- -- (3.88) (0.53) -- (0.02)
- -------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.14 $8.04 $ 9.11 $21.73 $16.30 $12.31
- -------------------------------------------------------------------------------------------------------
Total Return 1.24%++ (11.75)% (43.36)% 36.53% 32.41% (2.79)%
- -------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $159 $172 $224 $435 $300 $226
- -------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.86%+ 0.85% 0.83% 0.83% 0.84% 0.85%
Net investment loss (0.22)+ (0.28) (0.20) (0.35) (0.18) (0.06)
- -------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 23% 65% 77% 91% 76% 75%
- -------------------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2003 (unaudited).
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
18 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of capital stock outstanding throughout each year ended October
31, unless otherwise noted:
Smith Barney Large Capitalization
Growth Portfolio 2003/(1)/ 2002 2001 2000 1999 1998/(2)/
- --------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 9.91 $11.86 $16.04 $14.53 $ 9.90 $10.00
- --------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income/(3)/ 0.01 0.02 0.02 0.01 0.00* 0.01
Net realized and unrealized
gain (loss) 0.87 (1.95) (4.20) 1.55 4.64 (0.11)#
- --------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.88 (1.93) (4.18) 1.56 4.64 (0.10)
- --------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.02) (0.02) -- (0.01) (0.01) --
Net realized gains -- -- -- (0.02) -- --
Capital -- -- -- (0.02) -- --
- --------------------------------------------------------------------------------------------
Total Distributions (0.02) (0.02) -- (0.05) (0.01) --
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.77 $ 9.91 $11.86 $16.04 $14.53 $ 9.90
- --------------------------------------------------------------------------------------------
Total Return 8.92%++ (16.29)% (26.06)% 10.77% 46.88% (1.00)%++
- --------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $241 $225 $280 $324 $168 $21
- --------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)/ 0.80%+ 0.80% 0.78% 0.77% 0.86% 1.00%+
Net investment income 0.20+ 0.13 0.14 0.06 0.07 0.52+
- --------------------------------------------------------------------------------------------
Portfolio Turnover Rate 12% 19% 10% 7% 14% 1%
- --------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2003 (unaudited).
(2) For the period from May 1, 1998 (commencement of operations) to October 31,
1998.
(3) The Manager waived all or a portion of its fees for the period ended
October 31, 1998. If such fees were not waived, the per share decrease to
net investment income and the actual annualized expense ratio would have
been $0.02 and 1.77%, respectively.
* Amount represents less than $0.01 per share.
# The amount shown may not be consistent with the change in aggregate gains
and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares throughout the year.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
19 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders
TRAVELERS SERIES
FUND INC.
DIRECTORS INVESTMENT MANAGERS
A.E. Cohen Smith Barney Fund
Robert A. Frankel Management LLC
Michael E. Gellert Travelers Investment Adviser, Inc.
R. Jay Gerken,
Chairman CUSTODIAN
Rainer Greeven State Street Bank and
Susan M. Heilbron Trust Company
OFFICERS ANNUITY
R. Jay Gerken ADMINISTRATION
President and Chief Travelers Annuity Investor Services
Executive Officer 5 State House Square
1 Tower Square
Lewis E. Daidone Hartford, Connecticut 06183
Senior Vice President
and Chief Administrative
Officer
Richard L. Peteka
Chief Financial Officer
and Treasurer
Alan J. Blake
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Christina T. Sydor
Secretary
Travelers Series Fund Inc.
This report is submitted for the general information of the shareholders of
the Travelers Series Fund Inc. -- AIM Capital Appreciation and Smith Barney
Large Capitalization Growth Portfolios. It is not authorized for distribution
to prospective investors unless accompanied or preceded by a current
Prospectus for the Funds, which contains information concerning the Funds'
investment policies and expenses as well as other pertinent information.
TRAVELERS SERIES FUND INC.
125 Broad Street
10th Floor, MF-2
New York, New York 10004
IN0806 6/03 03-4964
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.
Travelers Series Fund Inc.
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Travelers Series Fund Inc.
Date: June 30, 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
Travelers Series Fund Inc.
Date: June 30, 2003
By: /s/ RICHARD PETEKA
Chief Financial Officer of
Travelers Series Fund Inc.
Date: June 30, 2003