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)
Robert I. Frenkel, Esq.
Smith Barney Fund Management LLC
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: October 31, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
TRAVELERS SERIES FUND INC.
AIM CAPITAL
APPRECIATION PORTFOLIO
SMITH BARNEY LARGE
CAPITALIZATION GROWTH
PORTFOLIO
ANNUAL REPORT | OCTOBER 31, 2003
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
WHAT'S INSIDE
Letter from the Chairman........................... 1
Manager Overview:
AIM Capital Appreciation Portfolio................ 3
Smith Barney Large Capitalization Growth Portfolio 5
Fund Performance:
AIM Capital Appreciation Portfolio................ 7
Smith Barney Large Capitalization Growth Portfolio 9
Schedules of Investments........................... 11
Statements of Assets and Liabilities............... 19
Statements of Operations........................... 20
Statements of Changes in Net Assets................ 21
Notes to Financial Statements...................... 23
Financial Highlights............................... 32
Independent Auditors' Report....................... 34
Additional Information............................. 35
Tax Information.................................... 38
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
R. JAY GERKEN, CFA
Chairman, President and Chief Executive Officer
Dear Shareholder,
The funds' fiscal year was a time of heightened market volatility. As the
period began last November, the economic environment was dominated by
geopolitical tension, corporate scandals, declining consumer confidence and
concerns regarding the general strength of the global economy. The months
leading up to the war in Iraq were times of apprehension and cautiousness.
Businesses and consumers alike chose to slow their spending due to war-related
uncertainty. Consequently, the U.S. economy and the stock market in general
remained weak through the first quarter of 2003.
However, when the U.S.-led coalition entered Iraq in late March and investors
turned their attention to a pending stabilization in the outlook for corporate
earnings, the U.S. stock market rebounded. Unlike previous rallies over the
past three years, this one proved sustainable, and stock prices generally rose
through the end of the funds' fiscal year in October.
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, CFA
Chairman, President and Chief Executive Officer
November 18, 2003
1 Travelers Series Fund Inc. | 2003 Annual Report
2 Travelers Series Fund Inc. | 2003 Annual Report
PERFORMANCE OF THE FUNDS
AS OF OCTOBER 31, 2003/1/
6 Months 12 Months
AIM Capital Appreciation Portfolio 18.30% 19.78%
S&P 500 Index/2/ 15.62% 20.79%
Average of Lipper variable multi-cap
growth funds/3/ 21.85% 27.50%
Smith Barney Large Capitalization
Growth Portfolio 27.76% 39.16%
Russell 1000 Growth Index/4/ 16.81% 21.81%
S&P 500 Index/2/ 15.62% 20.79%
Average of Lipper variable large-cap
growth funds/5/ 15.86% 19.61%
/1/The performance returns set forth above do not reflect the reduction of
initial charges and expenses imposed in connection with investing in
variable annuity contracts, such as administrative fees, account charges and
surrender charges which if reflected, would reduce the performance of the
funds. Past performance is not indicative of future results.
/2/The S&P 500 Index is a market capitalization-weighted index of 500 widely
held common stocks. Please note that an investor cannot invest directly in
an index.
/3/Lipper Inc. is a major independent mutual-fund tracking organization.
Returns are based on the period ended October 31, 2003, calculated among 105
funds for the six-month period and 104 funds for the 12-month period, in the
fund's Lipper peer group including the reinvestment of dividends and capital
gains.
/4/Effective June 11, 2003, management of the fund determined that the Russell
1000 Growth Index, rather than the S&P 500 Index, was a more appropriate
index reflecting more closely the composition of the portfolio's securities.
The Russell 1000 Growth Index is an unmanaged index considered indicative of
the growth-oriented domestic stock market in general and is comprised of
stocks in the Russell 1000 Index that have higher price-to-book ratios and
higher forecasted growth values. Please note that an investor cannot invest
directly in an index.
/5/Returns are based on the period ended October 31, 2003, calculated among 156
funds for the six-month period and 153 funds for the 12-month period, in the
fund's Lipper peer group including the reinvestment of dividends and capital
gains.
MANAGER OVERVIEW
AIM Capital Appreciation Portfolio
Performance Update
For the 12 months ended October 31, 2003, the fund returned 19.78%. In
comparison, the fund underperformed its unmanaged benchmark, the S&P 500
Index,/i/ which returned 20.79% for the same period. The fund also
underperformed its Lipper peer group of variable multi-cap growth funds, which
had an average return of 27.50%, for the same period./6/ The fund's
underperformance we believe was mainly attributed to stock selection as well as
to the fund's underweighting of the technology sector, which experienced
significant price appreciation during the period.
Contributors to Fund Performance/7/
The broad market posted gains during the year ended October 31, 2003, as the
economic recovery continued at a somewhat choppy pace. Many of the major
financial indices rallied during the fourth quarter of 2002 and experienced
volatility in the first half of 2003 as geopolitical tensions escalated in
Iraq. In the final months of the period, the markets continued to advance in
response to the strengthening economy and better-than-expected earnings reports
from numerous corporations. Against this backdrop, the fund underperformed the
broad market as represented by the S&P 500 Index.
Relative to its benchmark, the fund benefited from the performance of the
health care and financial sectors due to generally good stock selection. In
particular, the health care sector was helped by the pharmaceutical stock, Teva
Pharmaceutical Industries Ltd., which produces drugs in all major treatment
categories. We also continued to decrease interest rate sensitivity, and in
turn added more economically sensitive and market sensitive stocks, such as
those of credit card companies.
/6/Lipper Inc. is a major independent mutual-fund tracking organization.
Returns are based on the period ended October 31, 2003, calculated among 104
funds for the 12-month period, in the fund's Lipper peer group including the
reinvestment of dividends and capital gains.
/7/The fund's top 10 holdings as of October 31, 2003 were: Microsoft Corp.
(2.80%), Microchip Technology Inc. (2.11%), Fiserv, Inc. (1.79%), Dell Inc.
(1.72%), Biomet, Inc. (1.72%), CDW Corp. (1.70%), Analog Devices, Inc.
(1.69%), Teva Pharmaceutical Industries Ltd. (1.63%), Cisco Systems, Inc.
(1.60%), Merrill Lynch & Co., Inc. (1.52%).
3 Travelers Series Fund Inc. | 2003 Annual Report
Relative performance was negatively impacted by the industrials sector.
Lockheed Martin Corp. and L-3 Communications Holdings, Inc., two
defensive stocks that deal with various military equipment such as aircrafts,
information services and specialized communication systems, detracted from
performance.
The fund's weighting in the information technology sector was basically
unchanged during the period. However, we made selected adjustments within
various information technology sub-sectors. Specifically, we sold Citrix
Systems, Inc. and Nokia Oyj and added Agilent Technologies, Inc., Corning Inc.
and Foundry Networks, Inc.
As of October 31, 2003, the fund was positioned with approximately 60% of its
assets in stocks we believe have earnings momentum and 40% in companies we
classify as core growth. This position contrasts considerably with the previous
year, in which its investments were in approximately 60% core-growth and 40%
earnings-momentum stocks. We emphasized earnings-momentum securities in the
past in anticipation of a market turnaround.
Thank you for your investment in the AIM Capital Appreciation Portfolio. We
appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/s/ Kenneth A. Zschappel
Kenneth A. Zschappel
Lead Portfolio Manager
AIM Capital Management, Inc.
November 18, 2003
4 Travelers Series Fund Inc. | 2003 Annual Report
Smith Barney Large Capitalization Growth Portfolio
Special Shareholder Notice
Effective June 11, 2003, fund management determined that the Russell 1000
Growth Index,/ii/ rather than the S&P 500 Index,/i/ was a more appropriate
benchmark index, reflecting more closely the composition of the fund's
securities.
Performance Update/8/
For the 12 months ended October 31, 2003, the fund returned 39.16%. In
comparison, the fund outperformed both its unmanaged benchmarks, the Russell
1000 Growth Index and the S&P 500 Index, which returned 21.81% and 20.79%,
respectively, for the same period. The fund also outperformed its Lipper peer
group of variable large-cap growth funds, which had an average return of
19.61%, for the same period./9/ The fund's outperformance was mainly due to
judicious stock choices and select sector overweightings.
When the period began, rising tensions and the eventual armed conflict between
U.S.-led coalition forces and Iraq, the sudden and rapid spread of Severe Acute
Respiratory Syndrome ("SARS"), as well as ongoing revelations of misdeeds by a
number of corporations and their officers had a profoundly negative impact on
business, consumer and investor confidence and on an already fragile global
economy. The end of major hostilities in Iraq removed some of the uncertainties
that had slowed economic recovery in the U.S.
Throughout the period, the Fed continued its highly accommodative monetary
policy, maintaining key interest rates at four-decade lows as additional tax
relief measures worked their way through the U.S. Congress. Toward the end of
the period, this accommodative policy and improving investor confidence buoyed
the equity markets, offering some measure of relief for equity investors.
By the end of the third quarter of 2003, for the first time since 1999, many of
the major U.S. stock indexes had posted back-to-back quarterly gains.
/8/The fund's top ten holdings as of October 31, 2003 were: Amazon.com, Inc.
(7.04%), Intel Corp. (5.42%), Berkshire Hathaway Inc., Class A Shares
(4.57%), The Home Depot, Inc. (4.34%), Merrill Lynch & Co., Inc. (4.28%),
Genentech, Inc. (4.08%), Dell Inc. (4.03%), The Gillette Co. (3.74%), Texas
Instruments Inc. (3.56%), Pfizer Inc. (3.55%).
/9/Lipper Inc. is a major independent mutual-fund tracking organization.
Returns are based on the period ended October 31, 2003, calculated among 153
funds for the 12-month period, in the fund's Lipper peer group including the
reinvestment of dividends and capital gains.
5 Travelers Series Fund Inc. | 2003 Annual Report
MANAGER OVERVIEW
Amidst this environment, the fund experienced positive returns due mainly to
prudent stock selection. The fund's overweighting, relative to the Russell 1000
Growth Index, of the technology and consumer discretionary sectors positively
affected performance, as many stocks in these sectors have experienced marked
price appreciation over the past year. Specifically, fund holdings in Intel
Corp., Texas Instruments Inc., Amazon.com, Inc., and The Home Depot, Inc. have
all contributed positively to the portfolio during its most recent fiscal year.
Although the fund's slight overweighting of the financial services sector
detracted from fund performance versus the Index, stock picks, particularly
financial services giant, Merrill Lynch & Co., Inc., positively contributed to
performance. Exposure to the biotechnology firm, Genentech, Inc., also
dramatically contributed to fund's performance, as positive news regarding
several of its drugs buoyed growth in its stock.
Thank you for your investment in the Smith Barney Large Capitalization Growth
Portfolio. We appreciate that you have entrusted us to manage your money and
value our relationship with you.
Sincerely,
/s/ Alan J. Blake
Alan J. Blake
Portfolio Manager
November 18, 2003
The information provided is not intended to be a forecast of future events, a
guarantee of future results or investment advice. Views expressed may differ
from those of the firm as a whole.
Portfolio holdings and breakdowns are as of October 31, 2003 and are subject to
change. Please refer to pages 11 through 18 for a list and percentage breakdown
of the funds' holdings.
/i/ The S&P 500 Index is a market capitalization-weighted index of 500 widely
held common stocks. Please note that an investor cannot invest directly in
an index.
/ii/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.
Additional Information About Your Fund
The Funds' Manager and some of its affiliates have received requests for
information from various government regulators regarding market timing, late
trading, fees and other mutual fund issues in connection with various
investigations. The Manager and its affiliates are responding to those
information requests, but are not in a position to predict the outcome of these
requests and investigations.
6 Travelers Series Fund Inc. | 2003 Annual Report
AIM CAPITAL APPRECIATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 10/31/03 19.78%
- -----------------------------------------------------------------------
Five Years Ended 10/31/03 1.59
- -----------------------------------------------------------------------
10/10/95* through 10/31/03 3.67
- -----------------------------------------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
10/10/95* through 10/31/03 33.68%
- -------------------------------------------------------------------------
+ Assumes the reinvestment of all dividends and capital gain distributions.
Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which, if
reflected, would reduce the total returns for all periods shown.
* Commencement of operations.
7 Travelers Series Fund Inc. | 2003 Annual Report
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the
AIM Capital Appreciation Portfolio vs.
S&P 500 Index and Lipper Variable Multi-Cap Growth Funds Average+
- --------------------------------------------------------------------------------
October 1995 -- October 2003
[CHART]
AIM Capital Lipper Variable
Appreciation S&P Multi-Cap
Portfolio 500 Index Growth Funds Average
------------ --------- --------------------
10/10/95 $10,000 $10,000 $10,000
10/95 9,990 10,076 10,202
10/96 10,771 12,502 11,932
10/97 12,706 16,516 15,003
10/98 12,351 20,151 16,004
10/99 16,355 25,321 22,370
10/00 22,329 26,861 28,367
10/01 12,646 20,175 16,440
10/02 11,161 17,130 13,116
10/31/03 13,368 20,691 16,723
+ Hypothetical illustration of $10,000 invested in shares of the AIM Capital
Appreciation Portfolio on October 10, 1995 (commencement of operations),
assuming reinvestment of dividends and capital gains at net asset value
through October 31, 2003. The S&P 500 Index is an index composed of widely
held common stocks listed on the New York Stock Exchange, American Stock
Exchange and over-the-counter markets. Figures for the Index includes
reinvestment of dividends. The Index is unmanaged and is not subject to the
same management and trading expenses of a mutual fund. Please note that an
investor cannot invest directly in an index. The unmanaged Lipper Variable
Multi-Cap Growth Funds Average represents an average of the performance of
the 104 largest multi-cap growth mutual funds tracked by Lipper Inc., an
independent mutual-fund performance monitor, for the 12 months ended October
31, 2003.
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. The graph does not reflect expenses associated with the
separate account such as administrative fees, account charges and surrender
charges which, if reflected, would reduce the total returns for all periods
shown.
8 Travelers Series Fund Inc. | 2003 Annual Report
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 10/31/03 39.16%
- ---------------------------------------------------------------------------------
Five Years Ended 10/31/03 6.98
- ---------------------------------------------------------------------------------
5/1/98* through 10/31/03 6.13
- ---------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
5/1/98* through 10/31/03 38.74%
- -----------------------------------------------------------------------------------
+ Assumes the reinvestment of all dividends and capital gain distributions.
Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected, would reduce the total returns for all periods shown.
* Commencement of operations.
9 Travelers Series Fund Inc. | 2003 Annual Report
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the Smith Barney Large Capitalization
Growth Portfolio vs. S&P 500 Index and Russell 1000 Growth Index+
- --------------------------------------------------------------------------------
May 1998 -- October 2003
[CHART]
Smith Barney Large
Capitalization Russell 1000 S&P
Growth Portfolio Growth Index++ 500 Index++
------------------ -------------- -----------
5/1/98 $10,000 $10,000 $10,000
10/98 9,900 10,128 9,959
10/99 14,541 13,597 12,514
10/00 16,106 14,865 13,274
10/01 11,909 8,927 9,970
10/02 9,970 7,175 8,466
10/31/03 13,874 8,740 10,226
+ Hypothetical illustration of $10,000 invested in shares of the Smith Barney
Large Capitalization Growth Portfolio on May 1, 1998 (commencement of
operations), assuming reinvestment of dividends and capital gains at net
asset value through October 31, 2003. The S&P 500 Index is an index composed
of widely held common stocks listed on the New York Stock Exchange, American
Stock Exchange and over-the-counter markets. The Russell 1000 Growth Index is
considered indicative of the growth-oriented domestic stock market in general
and is comprised of stocks in the Russell 1000 that have higher price-to-book
ratios and higher forecasted growth values. Figures for the Indexes include
reinvestment of dividends. The Indexes are unmanaged and are not subject to
the same management and trading expenses of a mutual fund. Please note that
an investor cannot invest directly in an index.
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. The graph does not reflect expenses associated with the
separate account such as administrative fees, account charges and surrender
charges which, if reflected, would reduce the total returns for all periods
shown.
++It is the opinion of the management that the Russell 1000 Growth Index more
accurately reflects the current composition of the Smith Barney Large
Capitalization Growth Portfolio than the S&P 500 Index. In future reporting,
the Russell 1000 Growth Index will be used as the basis of comparison of
total return performance rather than the S&P 500 Index.
10 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------
COMMON STOCK -- 97.1%
Aerospace & Defense -- 1.3%
17,200 L-3 Communications Holdings, Inc.+++ $ 803,928
34,200 Lockheed Martin Corp. 1,585,512
- --------------------------------------------------------------------
2,389,440
- --------------------------------------------------------------------
Air Freight & Couriers -- 0.6%
11,000 Expeditors International of Washington, Inc. 412,940
9,600 FedEx Corp. 727,296
- --------------------------------------------------------------------
1,140,236
- --------------------------------------------------------------------
Airlines -- 1.0%
90,800 Southwest Airlines Co. 1,761,520
- --------------------------------------------------------------------
Automobiles -- 0.9%
34,100 Harley-Davidson, Inc. 1,616,681
- --------------------------------------------------------------------
Banks -- 1.3%
11,400 Bank of America Corp. 863,322
16,700 Northern Trust Corp. 775,715
11,400 Wells Fargo & Co. 642,048
- --------------------------------------------------------------------
2,281,085
- --------------------------------------------------------------------
Biotechnology -- 2.1%
27,200 Amgen Inc.+ 1,679,872
30,500 Genzyme Corp.+ 1,399,950
12,400 Gilead Sciences, Inc.+ 676,792
- --------------------------------------------------------------------
3,756,614
- --------------------------------------------------------------------
Commercial Services & Supplies -- 3.1%
15,900 Apollo Group, Inc., Class A Shares+ 1,010,127
90,200 Fiserv, Inc.+ 3,185,864
61,700 Robert Half International Inc.+ 1,456,737
- --------------------------------------------------------------------
5,652,728
- --------------------------------------------------------------------
Communications Equipment -- 4.7%
44,500 Avaya Inc.+ 575,830
136,200 Cisco Systems, Inc.+ 2,857,476
89,200 Corning Inc.+ 979,416
55,700 Foundry Networks, Inc.+ 1,295,582
45,400 Juniper Networks, Inc.+++ 816,746
283,800 Nortel Networks Corp.+++ 1,262,910
11,600 Scientific-Atlanta, Inc. 343,360
8,700 UTStarcom, Inc.+++ 274,050
- --------------------------------------------------------------------
8,405,370
- --------------------------------------------------------------------
See Notes to Financial Statements.
11 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- -------------------------------------------------------
Computers & Peripherals -- 2.8%
85,100 Dell Inc.+ $ 3,073,812
116,500 EMC Corp.+ 1,612,360
30,800 Western Digital Corp.+ 414,260
- -------------------------------------------------------
5,100,432
- -------------------------------------------------------
Diversified Financials -- 7.2%
50,600 American Express Co. 2,374,658
6,400 The Bear Stearns Cos. Inc. 488,000
24,400 The Goldman Sachs Group, Inc. 2,291,160
69,700 MBNA Corp. 1,725,075
45,900 Merrill Lynch & Co., Inc. 2,717,280
17,400 Moody's Corp. 1,006,242
34,500 SLM Corp. 1,351,020
16,800 State Street Corp. 879,648
- -------------------------------------------------------
12,833,083
- -------------------------------------------------------
Electrical Equipment -- 0.4%
24,800 Molex Inc. 778,472
- -------------------------------------------------------
Electronic Equipment & Instruments -- 0.5%
33,100 Agilent Technologies, Inc.+ 824,852
- -------------------------------------------------------
Energy Equipment & Services -- 3.0%
26,600 BJ Services Co.+ 872,746
34,500 ENSCO International Inc. 909,075
22,700 Nabors Industries, Ltd.+ 858,060
22,700 Noble Corp.+ 779,291
20,400 Smith International, Inc.+ 759,492
28,400 Transocean Inc.+ 544,996
17,000 Weatherford International Ltd.+ 590,750
- -------------------------------------------------------
5,314,410
- -------------------------------------------------------
Food & Drug Retailing -- 1.7%
28,400 Sysco Corp. 955,944
39,900 Walgreen Co. 1,389,318
11,400 Whole Foods Market, Inc.+ 675,336
- -------------------------------------------------------
3,020,598
- -------------------------------------------------------
Health Care Equipment & Supplies -- 5.3%
85,600 Biomet, Inc. 3,069,616
24,200 Boston Scientific Corp.+ 1,638,824
11,000 Guidant Corp. 561,110
38,700 Medtronic, Inc. 1,763,559
11,300 St. Jude Medical, Inc.+ 657,208
27,200 Zimmer Holdings, Inc.+ 1,735,632
- -------------------------------------------------------
9,425,949
- -------------------------------------------------------
See Notes to Financial Statements.
12 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- -------------------------------------------------------------------------
Health Care Providers & Services -- 4.6%
24,700 AdvancePCS+ $ 1,271,309
13,400 Aetna, Inc. 769,294
17,950 Cardinal Health, Inc. 1,065,153
46,100 Caremark Rx, Inc.+ 1,154,805
38,700 Health Management Associates Inc., Class A Shares 857,205
30,000 UnitedHealth Group Inc. 1,526,400
18,400 WellPoint Health Networks Inc.+ 1,635,760
- -------------------------------------------------------------------------
8,279,926
- -------------------------------------------------------------------------
Hotels, Restaurants & Leisure -- 4.9%
34,100 Brinker International, Inc.+ 1,085,403
22,400 Carnival Corp. 781,984
11,200 Marriott International, Inc., Class A Shares 483,840
45,900 McDonald's Corp. 1,147,959
34,400 MGM MIRAGE+ 1,221,200
27,500 Outback Steakhouse, Inc. 1,155,000
15,900 P.F. Chang's China Bistro, Inc.+++ 774,966
28,000 Royal Caribbean Cruises Ltd.++ 831,880
16,400 Starwood Hotels & Resorts Worldwide, Inc. 553,172
22,700 Wendy's International, Inc. 841,035
- -------------------------------------------------------------------------
8,876,439
- -------------------------------------------------------------------------
Household Products -- 0.8%
14,300 The Procter & Gamble Co. 1,405,547
- -------------------------------------------------------------------------
Industrial Conglomerates -- 0.5%
11,600 3M Co. 914,892
- -------------------------------------------------------------------------
Insurance -- 1.5%
22,600 American International Group, Inc. 1,374,758
15,900 The Chubb Corp. 1,062,279
5,000 Marsh & McLennan Cos., Inc. 213,750
- -------------------------------------------------------------------------
2,650,787
- -------------------------------------------------------------------------
Internet & Catalog Retail -- 1.4%
16,400 Amazon.com, Inc.+ 892,488
15,000 eBay Inc.+ 839,100
20,000 InterActiveCorp+ 734,200
- -------------------------------------------------------------------------
2,465,788
- -------------------------------------------------------------------------
Internet Software & Services -- 0.4%
15,800 Yahoo! Inc.+ 690,460
- -------------------------------------------------------------------------
IT Consulting & Services -- 1.2%
30,000 Accenture Ltd., Class A Shares+ 702,000
52,200 SunGard Data Systems Inc.+ 1,464,210
- -------------------------------------------------------------------------
2,166,210
- -------------------------------------------------------------------------
See Notes to Financial Statements.
13 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------
Machinery -- 3.4%
15,900 Caterpillar Inc. $ 1,165,152
11,400 Danaher Corp. 944,490
22,300 Deere & Co. 1,351,826
8,900 Eaton Corp. 892,136
27,800 Ingersoll-Rand Co., Class A Shares 1,679,120
- --------------------------------------------------------------------------
6,032,724
- --------------------------------------------------------------------------
Media -- 6.1%
56,100 Clear Channel Communications, Inc. 2,290,002
11,200 Gannett Co., Inc. 942,032
68,100 Lamar Advertising Co.+ 2,063,430
8,300 Omnicom Group Inc. 662,340
11,400 Pixar, Inc.+++ 784,434
48,550 Univision Communications Inc., Class A Shares+ 1,648,272
45,000 Viacom Inc., Class B Shares 1,794,150
22,200 Westwood One, Inc.+ 664,446
- --------------------------------------------------------------------------
10,849,106
- --------------------------------------------------------------------------
Multiline Retail -- 3.1%
33,200 Dollar General Corp. 746,004
34,300 Family Dollar Stores, Inc. 1,495,823
22,400 Nordstrom, Inc. 682,976
45,200 Wal-Mart Stores, Inc. 2,664,540
- --------------------------------------------------------------------------
5,589,343
- --------------------------------------------------------------------------
Oil & Gas -- 0.4%
15,900 Devon Energy Corp. 771,150
- --------------------------------------------------------------------------
Personal Products -- 0.5%
28,400 The Gillette Co. 905,960
- --------------------------------------------------------------------------
Pharmaceuticals -- 5.6%
2,800 Allergan, Inc. 211,736
14,500 Eli Lilly & Co. 965,990
11,500 Forest Laboratories, Inc.+ 575,115
15,500 Medco Health Solutions, Inc.+ 514,600
22,900 Medicis Pharmaceutical Corp., Class A Shares 1,450,715
58,500 Pfizer Inc. 1,848,600
51,000 Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,901,390
34,100 Wyeth 1,505,174
- --------------------------------------------------------------------------
9,973,320
- --------------------------------------------------------------------------
Semiconductor Equipment & Products -- 11.3%
68,100 Analog Devices, Inc.+ 3,018,873
97,300 Applied Materials, Inc.+ 2,273,901
39,500 KLA-Tencor Corp.+++ 2,264,535
90,800 Lam Research Corp.+ 2,609,592
See Notes to Financial Statements.
14 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------------
Semiconductor Equipment & Products -- 11.3% (continued)
45,400 Linear Technology Corp. $ 1,934,494
22,100 Marvell Technology Group Ltd.+ 969,527
39,700 Maxim Integrated Products, Inc. 1,973,487
115,043 Microchip Tehnology Inc. 3,763,057
54,972 Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR+ 607,990
35,000 Teradyne, Inc.+ 797,300
- --------------------------------------------------------------------------------
20,212,756
- --------------------------------------------------------------------------------
Software -- 5.9%
15,100 Adobe Systems Inc. 661,984
6,900 Electronic Arts Inc.+ 683,376
28,400 Intuit Inc.+ 1,419,432
19,100 Mercury Interactive Corp.+ 887,004
191,400 Microsoft Corp. 5,005,110
55,800 Oracle Corp.+ 667,368
34,100 VERITAS Software Corp.+ 1,232,715
- --------------------------------------------------------------------------------
10,556,989
- --------------------------------------------------------------------------------
Specialty Retail -- 6.5%
53,300 Bed Bath & Beyond Inc.+ 2,251,392
27,700 Best Buy Co., Inc. 1,615,187
21,800 Chico's FAS, Inc.+ 818,372
114,000 The Gap, Inc. 2,175,120
27,000 Lowe's Cos., Inc. 1,591,110
56,000 Staples, Inc.+ 1,501,920
45,600 The TJX Cos., Inc. 957,144
22,000 Williams-Sonoma, Inc.+ 777,260
- --------------------------------------------------------------------------------
11,687,505
- --------------------------------------------------------------------------------
Textiles & Apparel -- 0.1%
6,500 Coach, Inc.+ 230,555
- --------------------------------------------------------------------------------
Trading Companies & Distributors -- 1.7%
50,500 CDW Corp. 3,032,525
- --------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.3%
41,900 Nextel Communications, Inc., Class A Shares+ 1,013,980
620,800 Vodafone Group PLC 1,302,897
- --------------------------------------------------------------------------------
2,316,877
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $145,541,688) 173,910,329
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
15 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
AIM CAPITAL APPRECIATION PORTFOLIO
FACE
AMOUNT SECURITY VALUE
- ----------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.9%
$5,191,000 State Street Bank and Trust Co., 0.940% due 11/3/03;
Proceeds at maturity -- $5,191,407; (Fully collateralized
by U.S. Treasury Bonds, 5.250% due 2/15/29; Market
value -- $5,294,863) (Cost -- $5,191,000) $ 5,191,000
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $150,732,688*) $179,101,329
- ----------------------------------------------------------------------------------
+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 $152,243,645.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
LOANED SECURITIES COLLATERAL OCTOBER 31, 2003
FACE
AMOUNT SECURITY VALUE
- -------------------------------------------------------------------------------------
$5,242,859 State Street Navigator Securities Lending Trust Prime Portfolio
(Cost -- $5,242,859) $5,242,859
- -------------------------------------------------------------------------------------
See Notes to Financial Statements.
16 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------
COMMON STOCK -- 98.6%
Beverages -- 3.5%
265,790 The Coca-Cola Co. $ 12,332,656
- ----------------------------------------------------------------
Biotechnology -- 9.0%
198,180 Amgen Inc.+ 12,239,597
32,000 Biogen, Inc.+++ 1,295,040
175,900 Genentech, Inc.+ 14,418,523
112,000 IDEC Pharmaceuticals Corp.+++ 3,934,560
- ----------------------------------------------------------------
31,887,720
- ----------------------------------------------------------------
Communications Equipment -- 9.9%
793,900 CIENA Corp.+ 5,088,899
446,008 Cisco Systems, Inc.+ 9,357,248
394,900 Juniper Networks, Inc.+ 7,104,251
1,180,500 Lucent Technologies Inc.+ 3,777,600
704,180 Motorola, Inc. 9,527,555
- ----------------------------------------------------------------
34,855,553
- ----------------------------------------------------------------
Computers & Peripherals -- 4.0%
394,600 Dell Inc.+ 14,252,952
- ----------------------------------------------------------------
Diversified Financials -- 6.9%
255,530 Merrill Lynch & Co., Inc. 15,127,376
166,670 Morgan Stanley 9,145,183
- ----------------------------------------------------------------
24,272,559
- ----------------------------------------------------------------
Food Products -- 2.7%
170,640 Wm. Wrigley Jr. Co. 9,624,096
- ----------------------------------------------------------------
Industrial Conglomerates -- 2.0%
242,120 General Electric Co. 7,023,901
- ----------------------------------------------------------------
Insurance -- 7.4%
166,456 American International Group, Inc. 10,125,518
208 Berkshire Hathaway Inc., Class A Shares+ 16,184,480
- ----------------------------------------------------------------
26,309,998
- ----------------------------------------------------------------
Internet & Catalog Retail -- 10.0%
457,800 Amazon.com, Inc.+ 24,913,476
288,200 InterActiveCorp+ 10,579,822
- ----------------------------------------------------------------
35,493,298
- ----------------------------------------------------------------
Media -- 7.1%
750,320 Time Warner Inc.+ 11,472,393
110,000 Viacom Inc., Class B Shares 4,385,700
402,915 The Walt Disney Co. 9,121,996
- ----------------------------------------------------------------
24,980,089
- ----------------------------------------------------------------
See Notes to Financial Statements.
17 Travelers Series Fund Inc. | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------
Personal Products -- 3.7%
414,295 The Gillette Co. $ 13,216,010
- ------------------------------------------------------------------------------------------------
Pharmaceuticals -- 10.7%
151,750 Eli Lilly & Co. 10,109,585
170,570 Johnson & Johnson 8,584,788
151,940 Merck & Co. Inc. 6,723,345
397,270 Pfizer Inc. 12,553,732
- ------------------------------------------------------------------------------------------------
37,971,450
- ------------------------------------------------------------------------------------------------
Semiconductor Equipment & Products -- 11.5%
580,600 Intel Corp. 19,188,830
435,160 Texas Instruments Inc. 12,584,827
276,480 Xilinx, Inc.+ 8,764,416
- ------------------------------------------------------------------------------------------------
40,538,073
- ------------------------------------------------------------------------------------------------
Software -- 5.8%
388,000 Microsoft Corp. 10,146,200
289,000 VERITAS Software Corp.+ 10,447,350
- ------------------------------------------------------------------------------------------------
20,593,550
- ------------------------------------------------------------------------------------------------
Specialty Retail -- 4.4%
414,450 The Home Depot, Inc. 15,363,662
- ------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $296,895,327) 348,715,567
- ------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.4%
$5,090,000 Merrill Lynch & Co., Inc., 0.990% due 11/3/03; Proceeds at maturity --
$5,090,420; (Fully collateralized by U.S. Treasury Inflationary Indexed
Notes and Bonds, 1.875% to 3.625% due 7/15/12 to 4/15/28; Market
value -- $5,191,833) (Cost -- $5,090,000) 5,090,000
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $301,985,327*) $353,805,567
- ------------------------------------------------------------------------------------------------
+ Non-income producing security.
++Subsequent to the reporting period, the company changed its name to Biogen
Idec Inc. due to a merger.
* Aggregate cost for Federal income tax purposes is $320,778,628.
See Notes to Financial Statements.
18 Travelers Series Fund Inc. | 2003 Annual Report
STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 2003
AIM Capital Smith Barney Large
Appreciation Capitalization
Portfolio Growth Portfolio
----------------------------------------------------------------------------
ASSETS:
Investments, at value
(Cost -- $150,732,688 and
$301,985,327, respectively) $179,101,329 $353,805,567
Loaned securities collateral, at
value (Cost -- $5,242,859) (Note 4) 5,242,859 --
Cash 31 877
Receivable for securities sold 488,224 --
Dividends and interest receivable 72,188 177,431
Receivable for Fund shares sold 250 78,844
Other receivables 12,592 39,569
---------------------------------------------------------------------------
Total Assets 184,917,473 354,102,288
---------------------------------------------------------------------------
LIABILITIES:
Payable for loaned securities collateral
(Note 4) 5,242,859 --
Payable for securities purchased 1,014,490 --
Management fees payable 119,325 217,634
Payable for Fund shares reacquired 48,147 --
Accrued expenses 39,109 49,056
---------------------------------------------------------------------------
Total Liabilities 6,463,930 266,690
---------------------------------------------------------------------------
Total Net Assets $178,453,543 $353,835,598
---------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 185 $ 257
Capital paid in excess of par value 228,467,883 367,449,769
Undistributed net investment income -- 23,939
Accumulated net realized loss from
investment transactions and options (78,383,166) (65,458,607)
Net unrealized appreciation of
investments 28,368,641 51,820,240
---------------------------------------------------------------------------
Total Net Assets $178,453,543 $353,835,598
---------------------------------------------------------------------------
Shares Outstanding 18,522,851 25,714,124
---------------------------------------------------------------------------
Net Asset Value $9.63 $13.76
---------------------------------------------------------------------------
See Notes to Financial Statements.
19 Travelers Series Fund Inc. | 2003 Annual Report
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2003
AIM Capital Smith Barney Large
Appreciation Capitalization
Portfolio Growth Portfolio
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 923,906 $ 2,212,515
Interest 70,831 27,060
Less: Foreign withholding tax (5,483) --
- ------------------------------------------------------------------------------
Total Investment Income 989,254 2,239,575
- ------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,325,641 1,971,543
Audit and legal 32,148 31,323
Custody 23,939 19,180
Shareholder communications 15,975 29,654
Shareholder servicing fees 5,446 5,050
Directors' fees 4,719 8,095
Other 3,777 8,266
- ------------------------------------------------------------------------------
Total Expenses 1,411,645 2,073,111
- ------------------------------------------------------------------------------
Net Investment Income (Loss) (422,391) 166,464
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND
OPTIONS (NOTES 3, 6 AND 7):
Realized Gain (Loss) From:
Investment transactions (11,823,712) (13,016,040)
Options written 33,322 --
Foreign currency transactions 14,857 --
- ------------------------------------------------------------------------------
Net Realized Loss (11,775,533) (13,016,040)
- ------------------------------------------------------------------------------
Change in Net Unrealized Appreciation From:
Investments 42,305,164 103,011,731
Foreign currencies 396 --
- ------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 42,305,560 103,011,731
- ------------------------------------------------------------------------------
Net Gain on Investments, Foreign Currencies
and Options 30,530,027 89,995,691
- ------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 30,107,636 $ 90,162,155
- ------------------------------------------------------------------------------
See Notes to Financial Statements.
20 Travelers Series Fund Inc. | 2003 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS
For the Years
- - Ended October 31,
AIM Capital Appreciation Portfolio 2003 2002
- -------------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (422,391) $ (589,855)
Net realized loss (11,775,533) (26,798,033)
Increase in net unrealized appreciation 42,305,560 4,341,849
- ----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 30,107,636 (23,046,039)
- ----------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 5,082,394 65,014,704
Cost of shares reacquired (28,925,438) (93,735,313)
- ----------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (23,843,044) (28,720,609)
- ----------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 6,264,592 (51,766,648)
NET ASSETS:
Beginning of year 172,188,951 223,955,599
- ----------------------------------------------------------------------------------
End of year $ 178,453,543 $172,188,951
- ----------------------------------------------------------------------------------
See Notes to Financial Statements.
21 Travelers Series Fund Inc. | 2003 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Years
- - Ended October 31,
Smith Barney Large Capitalization Growth Portfolio 2003 2002
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 166,464 $ 359,070
Net realized loss (13,016,040) (41,360,220)
Increase (decrease) in net unrealized appreciation 103,011,731 (9,512,917)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 90,162,155 (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 54,577,683 34,322,507
Net asset value of shares issued for reinvestment
of dividends 501,211 415,332
Cost of shares reacquired (16,052,630) (38,267,567)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Fund Share
Transactions 39,026,264 (3,529,728)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 128,687,208 (54,459,127)
NET ASSETS:
Beginning of year 225,148,390 279,607,517
- -------------------------------------------------------------------------------
End of year* $353,835,598 $225,148,390
- -------------------------------------------------------------------------------
* Includes undistributed net investment income of: $23,939 $358,686
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
22 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
The AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization
Growth Portfolio ("Fund(s)") are separate diversified investment funds of the
Travelers Series Fund Inc. ("Company"). The Company, 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 thirteen other
separate investment funds: Smith Barney Large Cap Value, Strategic Equity
(formerly known as Alliance Growth), Van Kampen Enterprise, Smith Barney
International All Cap Growth, Travelers Managed Income, Pioneer Strategic
Income (formerly known as 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, Smith Barney Aggressive Growth
and SB Adjustable Rate Income Portfolios. Shares of the Company 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 consistently 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 in the primary
exchange on which they are traded; securities traded in the over-the-counter
market and listed 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-
23 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
dividend date; the Funds distribute dividends and capital gains, if any, at
least 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 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 is determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States of America. At October 31, 2003, reclassifications were made
to the capital accounts of AIM Capital Appreciation Portfolio to reflect
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Accordingly, accumulated net investment loss
amounting to $407,534 was reclassified to paid-in capital. Net investment
income, net realized gains and net assets were not affected by this change; (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").
24 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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 the average daily net assets of AIMCAP.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Funds' transfer agent. PFPC Inc. ("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 year ended October 31, 2003, each Fund paid transfer agent fees of $5,000
to CTB.
During the year ended October 31, 2003, Citigroup Global Markets Inc. (formerly
known as Salomon Smith Barney Inc.), another indirect wholly-owned subsidiary
of Citigroup, received brokerage commissions in the amounts of $3,884 and
$1,925 for AIMCAP and SBLCG, respectively.
Most of the officers and one Director of the Company are employees of Citigroup
or its affiliates.
3. Investments
During the year ended October 31, 2003, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
AIMCAP SBLCG
- -----------------------------------------------------------------
Purchases $ 78,870,958 $77,088,689
- ----------------------------------------------------------------
Sales 102,950,395 42,741,541
- ----------------------------------------------------------------
25 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At October 31, 2003, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were as follows:
AIMCAP SBLCG
- --------------------------------------------------------------
Gross unrealized appreciation $32,393,111 $ 68,330,602
Gross unrealized depreciation (5,535,427) (35,303,663)
- -------------------------------------------------------------
Net unrealized appreciation $26,857,684 $ 33,026,939
- -------------------------------------------------------------
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.
At October 31, 2003, AIMCAP loaned securities having a market value of
$5,087,131 and received cash collateral amounting to $5,242,859 which was
invested in the State Street Navigator Securities Lending Trust Prime Portfolio.
For the year ended October 31, 2003, income earned from securities lending by
AIMCAP was $9,916.
At October 31, 2003, SBLCG did not have any securities on loan.
5. Repurchase Agreements
The Funds purchase (and the 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 (plus accrued interest) of the collateral 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
26 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 contract, the Funds record 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.
The Funds bear the market risk that arises from changes in foreign currency
exchange rates and the credit risk should a counterparty be unable to meet the
terms of such contracts.
At October 31, 2003, AIMCAP and SBLCG did not have any open forward foreign
currency contracts.
7. Option Contracts
The Funds may from time to time purchase call or put option contracts. Premiums
paid when call or put options are purchased by the Funds represent investments
which are marked-to-market daily. When a purchased option expires, the Funds
will realize a loss in the amount of the premium paid. When the Funds enter
into a closing sales transaction, the Funds 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 Funds exercise 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 Funds exercise a call option, the cost of the
security which the Funds purchase upon exercise will be increased by the
premium originally paid.
At October 31, 2003, AIMCAP and 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 trans-
27 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
action 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.
The risk associated with purchasing options is limited to the premium
originally paid. The Funds enter into options for hedging purposes. The risk in
writing a covered call option is that the Fund gives up the opportunity to
participate in any increase 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 year ended
October 31, 2003 were as follows:
Number of
AIMCAP Contracts Premiums
--------------------------------------------------------------------
Options written, outstanding at October 31, 2002 36 $ 9,252
Options written 71 24,070
Options expired (67) (15,824)
Options exercised (40) (17,498)
--------------------------------------------------------------------
Options written, outstanding at October 31, 2003 -- $ 0
--------------------------------------------------------------------
During the year ended October 31, 2003, SBLCG did not enter into any written
covered call or put option contracts.
8. Capital Shares
At October 31, 2003, the Company 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.
28 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Transactions in shares of each Fund were as follows:
Year Ended Year Ended
October 31, 2003 October 31, 2002
--------------------------------------------------------------------
AIM Capital Appreciation Portfolio
Shares sold 610,791 6,822,913
Shares reacquired (3,517,542) (9,963,375)
--------------------------------------------------------------------
Net Decrease (2,906,751) (3,140,462)
--------------------------------------------------------------------
Smith Barney Large Capitalization Growth Portfolio
Shares sold 4,480,533 2,760,973
Shares issued on reinvestment 51,353 42,511
Shares reacquired (1,541,281) (3,657,809)
--------------------------------------------------------------------
Net Increase (Decrease) 2,990,605 (854,325)
--------------------------------------------------------------------
9. Capital Loss Carryforward
At October 31, 2003, AIMCAP and SBLCG had, for Federal income tax purposes,
approximately $76,872,000 and $46,665,000, respectively, 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 probable that
the gains so offset will not be distributed.
The amount and year of expiration for each carryforward loss is indicated
below. Expiration occurs on October 31 of the year indicated:
Fund 2008 2009 2010 2011
-----------------------------------------------------
AIMCAP -- $39,681,000 $25,304,000 $11,887,000
-----------------------------------------------------
SBLCG $2,019,000 5,454,000 30,604,000 8,588,000
-----------------------------------------------------
10. Income Tax Information and Distributions to
Shareholders
At October 31, 2003, the tax basis components of distributable earnings were:
AIMCAP SBLCG
---------------------------------------------------------
Undistributed ordinary income -- $ 23,939
---------------------------------------------------------
Accumulated capital losses $(76,872,209) (46,665,306)
---------------------------------------------------------
Unrealized appreciation 26,857,684 33,026,939
---------------------------------------------------------
29 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The difference between book basis and tax basis unrealized appreciation and
depreciation is attributable primarily to wash sale loss deferrals.
The tax character of distributions paid during the year ended October 31, 2003
was:
SBLCG
------------------------
Ordinary income $501,211
------------------------
For the year ended October 31, 2003, AIMCAP did not make any distributions.
11.Subsequent Event
The Funds have received the following information from Citigroup Asset
Management ("CAM"), the Citigroup business unit which includes the Funds'
Investment Manager and other investment advisory companies, all of which are
indirect, wholly-owned subsidiaries of Citigroup. CAM is reviewing its entry,
through an affiliate, into the transfer agent business in the period 1997-1999.
As CAM currently understands the facts, at the time CAM decided to enter the
transfer agent business, CAM sub-contracted for a period of five years certain
of the transfer agency services to a third party and also concluded a revenue
guarantee agreement with this sub-contractor providing that the sub-contractor
would guarantee certain benefits to CAM or its affiliates (the "Revenue
Guarantee Agreement"). In connection with the subsequent purchase of the
sub-contractor's business by an affiliate of the current sub-transfer agent
(PFPC Inc.) used by CAM on many of the funds it manages, this Revenue Guarantee
Agreement was amended eliminating those benefits in exchange for arrangements
that included a one-time payment from the sub-contractor.
The Boards of CAM-managed funds (the "Boards") were not informed of the Revenue
Guarantee Agreement with the sub-contractor at the time the Boards considered
and approved the transfer agent arrangements. Nor were the Boards informed of
the subsequent amendment to the Revenue Guarantee Agreement when that occurred.
30 Travelers Series Fund Inc. | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CAM has begun to take corrective actions. CAM will pay to the applicable funds
$16 million (plus interest) that CAM and its affiliates received from the
Revenue Guarantee Agreement and its amendment. CAM also plans an independent
review to verify that the transfer agency fees charged by CAM were fairly
priced as compared to competitive alternatives. CAM is instituting new
procedures and making changes designed to ensure no similar arrangements are
entered into in the future.
CAM has briefed the SEC, the New York State Attorney General and other
regulators with respect to this matter, as well as the U.S. Attorney who is
investigating the matter. CAM is cooperating with governmental authorities on
this matter, the ultimate outcome of which is not yet determinable.
31 Travelers Series Fund Inc. | 2003 Annual Report
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each year ended October 31,
unless otherwise noted:
AIM Capital Appreciation Portfolio 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $8.04 $9.11 $ 21.73 $16.30 $12.31
- -------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.02) (0.03) (0.02) (0.07) (0.03)
Net realized and unrealized gain (loss) 1.61 (1.04) (8.72) 6.03 4.02
- -------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.59 (1.07) (8.74) 5.96 3.99
- -------------------------------------------------------------------------------------------
Less Distributions From:
Net realized gains -- -- (3.88) (0.53) --
- -------------------------------------------------------------------------------------------
Total Distributions -- -- (3.88) (0.53) --
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Year $9.63 $8.04 $ 9.11 $21.73 $16.30
- -------------------------------------------------------------------------------------------
Total Return/(1)/ 19.78% (11.75)% (43.36)% 36.53% 32.41%
- -------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $178 $172 $224 $435 $300
- -------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.85% 0.85% 0.83% 0.83% 0.84%
Net investment loss (0.25) (0.28) (0.20) (0.35) (0.18)
- -------------------------------------------------------------------------------------------
Portfolio Turnover Rate 49% 65% 77% 91% 76%
- -------------------------------------------------------------------------------------------
(1) Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected, would reduce the total returns for all periods shown.
32 Travelers Series Fund Inc. | 2003 Annual Report
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 2002 2001 2000 1999
- ------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 9.91 $11.86 $16.04 $14.53 $ 9.90
- -----------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.01 0.02 0.02 0.01 0.00*
Net realized and unrealized gain (loss) 3.86 (1.95) (4.20) 1.55 4.64
- -----------------------------------------------------------------------------------
Total Income (Loss) From Operations 3.87 (1.93) (4.18) 1.56 4.64
- -----------------------------------------------------------------------------------
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 Year $13.76 $ 9.91 $11.86 $16.04 $14.53
- -----------------------------------------------------------------------------------
Total Return/(1)/ 39.16% (16.29)% (26.06)% 10.77% 46.88%
- -----------------------------------------------------------------------------------
Net Assets, End of Year (millions) $354 $225 $280 $324 $168
- -----------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.79% 0.80% 0.78% 0.77% 0.86%
Net investment income 0.06 0.13 0.14 0.06 0.07
- -----------------------------------------------------------------------------------
Portfolio Turnover Rate 16% 19% 10% 7% 14%
- -----------------------------------------------------------------------------------
(1) Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected, would reduce the total returns for all periods shown.
* Amount represents less than $0.01 per share.
33 Travelers Series Fund Inc. | 2003 Annual Report
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
Travelers Series Fund Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the AIM Capital Appreciation and
Smith Barney Large Capitalization Growth Portfolios ("Funds") of Travelers
Series Fund Inc. ("Company") as of October 31, 2003, and the related statements
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 five-year period then ended. These
financial statements and financial highlights are the responsibility of the
Company'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 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 October 31, 2003, by
correspondence with the custodian and brokers. As to securities purchased or
sold but not yet 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
Funds of the Company as of October 31, 2003, and the results of their
operations for the year then ended, the changes in their 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 five-year period then ended, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG
New York, New York
December 10, 2003
34 Travelers Series Fund Inc. | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED)
Information about Directors and Officers
The business and affairs of the Travelers Series Fund Inc. ("Company") are
managed under the direction of the Company's Board of Directors. Information
pertaining to the Directors and Officers of the Company is set forth below.
Number of
Term of Portfolios
Office* and Principal in Fund Other
Position(s) Length Occupation(s) Complex Directorships
Held with of Time During Past Overseen Held by
Name, Address and Age Fund Served Five Years by Director Director
- ---------------------------------------------------------------------------------------------------------
Non-Interested Directors:
A. E. Cohen Director Since Consultant to Chugai 17 Director of Agouron
444 Madison Avenue 1996 Pharmaceutical Pharmaceuticals,
Suite 1201 Co. Ltd. Inc., Akzo Nobel
New York, NY 10022 NV, Teva
Age 67 Pharmaceutical Inc.,
Ltd., Chugai
Pharmaceutical Co.
Ltd., Pharmaceutical
Product Development,
Inc. and Axonyx
Inc.; Chairman of
Vasomedical, Inc.,
Neurobiological
Technologies Inc.
and Kramex Corp.
Robert A. Frankel Director Since Managing Partner of 24 None
1961 Deergrass Way 1999 Robert A. Frankel
Carlsbad, CA 92009 Managing Consultants;
Age 76 Former Vice President of
The Readers Digest
Association, Inc.
Michael E. Gellert Director Since General Partner of 17 Director of Dalet
122 East 42nd Street 1999 Windcrest Partners, a S.A., Devon Energy
47th Floor venture capital firm Corp., High Speed
New York, NY 10168 Access Corp.,
Age 72 Human, Inc.,
SEACOR Smit, Inc.
and Six Flags, Inc.
Rainer Greeven Director Since Attorney, Rainer Greeven 17 Director of
630 5th Avenue 1994 PC Continental
Suite 1905 Container Corp.
New York, NY 10111
Age 67
Susan M. Heilbron Director Since Owner/Consultant of 17 Director of National
P.O. Box 557 1994 Lacey & Heilbron, a public Multiple Sclerosis
Chilimark, MA 02535 relations firm Society, New York
Age 58 City Chapter
35 Travelers Series Fund Inc. | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Portfolios
Office* and Principal in Fund Other
Position(s) Length Occupation(s) Complex Directorships
Held with of Time During Past Overseen Held by
Name, Address and Age Fund Served Five Years by Director Director
- -----------------------------------------------------------------------------------------------------
Interested Director:
R. Jay Gerken, CFA** Chairman, Since Managing Director of 220 None
Citigroup Asset President and 2002 Citigroup Global Markets
Management ("CAM") Chief Inc. ("CGM"); Chairman,
399 Park Avenue Executive President and Chief
4th Floor Officer Executive Officer of Smith
New York, NY 10022 Barney Fund Management
Age 52 LLC ("SBFM"), Travelers
Investment Adviser, Inc.
("TIA") and Citi Fund
Management Inc.
("CFM"); President and
Chief Executive Officer of
certain mutual funds
associated with Citigroup
Inc. ("Citigroup");
Formerly, Portfolio
Manager of Smith Barney
Allocation Series Inc.
(from 1996-2001) and
Smith Barney Growth and
Income Fund (from 1996-
2000)
Officers:
Andrew B. Shoup*** Senior Vice Since Director of CAM; Senior N/A N/A
CAM President and 2003 Vice President and Chief
125 Broad Street Chief Administrative Officer of
10th Floor Administrative mutual funds associated
New York, NY 10004 Officer with Citigroup; Head of
Age 47 International Funds
Administration of CAM
from 2001 to 2003;
Director of Global Funds
Administration of CAM
from 2000 to 2001; Head
of U.S. Citibank Funds
Administration of CAM
from 1998 to 2000
Richard L. Peteka Chief Since Director of CGM; Chief N/A N/A
CAM Financial 2002 Financial Officer and
125 Broad Street Officer and Treasurer of certain
11th Floor Treasurer mutual funds associated
New York, NY 10004 with Citigroup; Director
Age 42 and Head of Internal
Control for CAM U.S.
Mutual Fund
Administration from
1999-2002; Vice
President, Head of Mutual
Fund Administration and
Treasurer at Oppenheimer
Capital from 1996-1999
36 Travelers Series Fund Inc. | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Portfolios
Office* and Principal in Fund Other
Position(s) Length Occupation(s) Complex Directorships
Held with of Time During Past Overseen Held by
Name, Address and Age Fund Served Five Years by Director Director
- ------------------------------------------------------------------------------------------------------------
Alan J. Blake Investment Since Managing Director of N/A N/A
CAM Officer 1998 CGM
399 Park Avenue
4th Floor
New York, NY 10022
Age 54
Kenneth A. Zschappel Investment Since Assistant Vice President N/A N/A
AIM Capital Management, Inc. Officer 1995 and Senior Portfolio
11 Greenway Plaza Manager of AIM Capital
Suite 100
Houston, TX 77046
Age 36
Kaprel Ozsolak Controller Since Vice President of CGM; N/A N/A
CAM 2002 Controller of certain funds
125 Broad Street associated with Citigroup
11th Floor
New York, NY 10004
Age 38
Robert I. Frenkel Secretary*** Since Managing Director and N/A N/A
CAM and Chief 2003 General Counsel of Global
300 First Stamford Place Legal Officer Mutual Funds for CAM
4th Floor and its predecessor (since
Stamford, CT 06902 1994); Secretary of CFM;
Age 48 Secretary and Chief Legal
Officer of mutual funds
associated with Citigroup
- --------
* Each Director and Officer serves until his or her successor has been duly
elected and qualified.
** Mr. Gerken is an "interested person" of the Company as defined in the
Investment Company Act of 1940, as amended, because Mr. Gerken is an
officer of SBFM and certain of its affiliates.
*** As of November 25, 2003.
37 Travelers Series Fund Inc. | 2003 Annual Report
TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Smith Barney Large Capitalization Growth
Portfolio hereby designates for the fiscal year ended October 31, 2003:
. For corporate shareholders, the percentage of ordinary dividends that
qualify for the dividends received deduction is 100%.
38 Travelers Series Fund Inc. | 2003 Annual Report
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, CFA
Chairman CUSTODIAN
Rainer Greeven State Street Bank and
Susan M. Heilbron Trust Company
OFFICERS ANNUITY
R. Jay Gerken, CFA ADMINISTRATION
President and Chief Travelers Annuity Investor Services
Executive Officer One Cityplace
Hartford, CT 06103-3415
Andrew B. Shoup*
Senior Vice President
and Chief
Administrative Officer
Richard L. Peteka
Chief Financial Officer
and Treasurer
Alan J. Blake
Investment Officer
Kaprel Ozsolak
Controller
Robert I. Frenkel
Secretary* and Chief
Legal Officer
* As of November 25, 2003.
Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
Smith Barney Large Capitalization Growth Portfolio
The Funds are separate investment funds of the Travelers Series Fund Inc., a
Maryland corporation.
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
IN0794 12/03 03-5774
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that Robert A.
Frankel, the Chairman of the Board's Audit Committee, possesses the
technical attributes identified in Instruction 2(b) of Item 3 to Form
N-CSR to qualify as an "audit committee financial expert," and has
designated Mr. Frankel as the Audit Committee's financial expert. Mr.
Frankel is an "independent" Director pursuant to paragraph (a)(2) of
Item 3 to Form N-CSR.
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- 3(c) under the
Investment Company Act of 1940, as amended (the "1940 Act")) are
effective as of a date within 90 days of the filing date of this
report that includes the disclosure required by this paragraph,
based on their evaluation of the disclosure controls and
procedures required by Rule 30a-3(b) under the 1940 Act and
15d-15(b) under the Securities Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940
Act) that occurred during the registrant's last fiscal half-year
(the registrant's second fiscal half-year in the case of an
annual report) that have materially affected, or are likely to
materially affect the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
(a) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(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: January 2, 2004
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: January 2, 2004
By: /s/ Richard L. Peteka
(Richard L. Peteka)
Chief Financial Officer of
Travelers Series Fund Inc.
Date: January 2, 2004