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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 811-21128
Smith Barney Multiple Discipline Trust
(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: December 31
Date of reporting period: December 31, 2003
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ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
SMITH BARNEY
MULTIPLE DISCIPLINE TRUST
ANNUAL REPORT | DECEMBER 31, 2003
Multiple Discipline Portfolio -- All Cap Growth and Value
Multiple Discipline Portfolio -- Large Cap Growth and Value
Multiple Discipline Portfolio -- Global All Cap Growth and Value
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
[LOGO]
Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed./R/
Your Serious Money. Professionally Managed./R/ is a registered service mark of
Citigroup Global Markets Inc.
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
WHAT'S INSIDE
Letter from the Chairman.............................................. 1
Multiple Discipline Portfolio -- All Cap Growth and Value
Manager Overview ................................................. 4
Fund Performance.................................................. 6
Multiple Discipline Portfolio -- Large Cap Growth and Value
Manager Overview.................................................. 7
Fund Performance.................................................. 9
Multiple Discipline Portfolio -- Global All Cap Growth and Value
Manager Overview.................................................. 10
Fund Performance.................................................. 12
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
Manager Overview.................................................. 13
Fund Performance.................................................. 16
Schedules of Investments.............................................. 17
Statements of Assets and Liabilities.................................. 35
Statements of Operations.............................................. 36
Statements of Changes in Net Assets................................... 37
Notes to Financial Statements......................................... 39
Financial Highlights.................................................. 43
Independent Auditors' Report.......................................... 47
Additional Information................................................ 48
Tax Information....................................................... 51
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer
Dear Shareholder,
Last year, U.S. equity investors responded favorably to continued signs of
economic growth, and strong corporate profits. As the year began, investor
expectations were relatively low, as many investors seemed to have focused on
the dual concerns of domestic security and the potential conflict in Iraq, both
of which held down consumer sentiment and in turn, the willingness to own
equities.
Two important determinants in the valuation of growth stocks have been interest
rates and the trajectory of earnings. The Fed's low interest rate policy helped
to jump-start -- and continued to fuel -- the economic recovery. As a result,
borrowing costs have been kept down, validating higher multiples for equities
as well as signaling the beginning of a real increase in corporate spending.
Many of the companies held by the funds took advantage of the low interest rate
environment to strengthen their balance sheets by refinancing debt or by
borrowing when it made financial sense.
The funds' performance was driven, in general, by many companies' experiencing
better corporate earnings than expected. Earnings generally bottomed in the
third quarter of 2002, and have improved sequentially since then. Please see
the table on the next page for the funds' performance.
Please read on for a more detailed look at prevailing economic and market
conditions during the fund's fiscal year and to learn how those conditions and
changes made to the portfolio during this time may have affected fund
performance.
Special Shareholder Notice
On December 3, 2003, the Trust's Board of Trustees approved a change in the
performance benchmarks of each of the following funds from the S&P 500 Index,
effective January 2, 2004, to the following:
. All Cap Portfolio -- Russell 3000 Index
. Large Cap Portfolio -- Russell 1000 Index
. Global Portfolio -- Russell 3000 Index; MSCI EAFE Index and MSCI World
Index
The Russell 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization. The Russell 1000 Index consists
of the 1,000 largest U.S. companies by market capitalization. The MSCI EAFE
Index is an unmanaged index of common stocks of companies located in Europe,
Australia, New Zealand and the Far East. The return for each country is
weighted on the basis of its market capitalization. The MSCI World Index is a
free float-adjusted market capitalization index that is designed to measure
global developed market equity performance.
Management believes these benchmark indices more accurately reflect the
universe of stocks available to the funds for investment.
1 Smith Barney Multiple Discipline Trust | 2003 Annual Report
PERFORMANCE OF THE FUNDS
AS OF DECEMBER 31, 2003
6 Months 12 Months
Multiple Discipline Portfolio - All Cap Growth and Value 15.50% 31.44%
S&P 500 Index 15.14% 28.67%
Russell 3000 Index 16.28% 31.06%
Lipper Multi-Cap Core Variable Funds Category Average 15.82% 31.84%
Multiple Discipline Portfolio - Large Cap Growth and Value 14.20% 29.00%
S&P 500 Index 15.14% 28.67%
Russell 1000 Index 15.63% 29.89%
Lipper Large-Cap Core Variable Funds Category Average 13.96% 26.42%
Multiple Discipline Portfolio - Global All Cap
Growth and Value 15.39% 31.55%
S&P 500 Index 15.14% 28.67%
Russell 3000 Index 16.28% 31.06%
MSCI EAFE Index 26.59% 38.59%
MSCI World Index 19.79% 33.11%
Lipper Large-Cap Core Variable Funds Category Average 13.96% 26.42%
Multiple Discipline Portfolio - Balanced All Cap
Growth and Value 10.58% 21.93%
Russell 1000 Index 15.63% 29.89%
Russell 3000 Growth Index 15.41% 30.97%
Russell 3000 Value Index 17.18% 31.14%
Lehman Brothers Intermediate Treasury Bond Index -0.28% 2.11%
S&P 500 Index 15.14% 28.67%
Lipper Balanced Variable Funds Category Average 9.27% 18.93%
All figures represent past performance and are not a guarantee of future
results. The performance returns set forth above do not reflect the deduction
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.
All index performance reflects no deduction for fees, expenses or taxes. The
S&P 500 Index is a market capitalization-weighted index of 500 widely held
common stocks. The Russell 3000 Index measures the performance of the 3,000
largest U.S. companies based on total market capitalization. The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The MSCI EAFE Index is an unmanaged
index of common stocks of companies located in Europe, Australia, New Zealand
and the Far East. The return for each country is weighted on the basis of its
market capitalization. The MSCI World Index is a free float-adjusted market
capitalization index that is designed to measure global developed market
equity performance. The Russell 3000 Growth Index measures the performance of
those Russell 3000 Index companies with higher price-to-book ratios and
higher forecasted growth values. (A price-to-book ratio is the price of a
stock compared to the difference between a company's assets and liabilities).
The Russell 3000 Value Index measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values. The Lehman Brothers Intermediate Treasury Bond Index is an unmanaged
index of U.S. Treasury bonds with maturities between one and ten years.
Please note that an investor cannot invest directly in an index.
Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the period ended December 31, 2003 and include the
reinvestment of dividends and capital gains, if any. Returns were calculated
among the 124 funds for the six-month period and among the 121 funds for the
12-month period in the multi-cap core variable funds category. Returns were
calculated among the 230 funds for the six-month period and among the 224
funds for the 12-month period in the large-cap core variable funds category.
Returns were calculated among the 86 funds for the six-month period and among
the 84 funds for the 12-month period in the balanced variable funds category.
2 Smith Barney Multiple Discipline Trust | 2003 Annual Report
Information About Your Fund
In recent months several issues in the mutual fund industry have come under the
scrutiny of federal and state regulators. The funds' Adviser and some of its
affiliates have received requests for information from various government
regulators regarding market timing, late trading, fees and other mutual fund
issues in connection with various investigations. The regulators appear to be
examining, among other things, the funds' response to market timing and
shareholder exchange activity, including compliance with prospectus disclosure
related to these subjects. The funds have been informed that the Adviser and
its affiliates are responding to those information requests, but are not in a
position to predict the outcome of these requests and investigations.
As always, thank you for your confidence in our stewardship of your assets. We
look forward to helping you continue to meet your financial goals.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
January 12, 2004
3 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- ALL CAP GROWTH AND VALUE
Target Asset Allocation
[CHART]
All Cap Growth 50%
All Cap Value 50%
The Target Asset Allocation set forth above represents an approximate mix of
investments for the All Cap Growth and Value. The allocation and investment mix
of the fund may vary depending upon market conditions, cash flows in and out of
the fund and other factors. In addition, the allocation and investment ranges
of the fund may be changed, from time to time, upon the approval of the Smith
Barney Multiple Discipline Trust's Board of Trustees.
Investment Strategy
The Multiple Discipline Portfolio -- All Cap Growth and Value seeks long-term
growth of capital and invests primarily in equity securities within all market
capitalization ranges. The All Cap Growth segment seeks to combine the
long-term growth potential of small-to-medium size companies with the relative
stability of high quality large company growth stocks. The All Cap Value
segment seeks to structure high quality portfolios by investing in large-,
medium- and small company stocks whose market prices are attractive in relation
to their business fundamentals.
Performance Update/1/
During its fiscal year ended December 31, 2003, the fund returned 31.44%. In
comparison, the fund outperformed both its old unmanaged benchmark, the S&P 500
Index,/i/ and its new unmanaged benchmark, the Russell 3000 Index,/ii/ which
returned 28.67% and 31.06%, respectively, for the same period. The fund
underperformed its Lipper multi-cap core variable funds category average, which
was 31.84% for the same period./2/
What Affected Fund Performance
For the period, our investment strategies remained unchanged. Our focus is on
owning those companies that we believe demonstrate sustainable solid earnings
and cash flow growth. For the period, all sectors of the fund posted positive
returns. Leading sectors included information technology, biotechnology,
materials and consumer discretionary; lagging sectors included utilities,
consumer staples and healthcare -- specifically large cap pharmaceuticals.
For the period, information technology stocks contributed positively to returns
as semiconductor chip makers Intel Corp. and Texas Instruments Inc. recovered
sharply in 2003 as business technology spending improved. Biotechnology
companies such as Genentech, Inc. also contributed positively to returns, as
they continued to benefit from stronger pipeline development, increased
earnings growth, and from changes made to the regulatory approval process.
For the period, investments that detracted from the performance included
pharmaceutical stocks, such as Merck & Co. Inc. and Schering-Plough Corp. This
group lagged the market by a wide margin over the period as regulatory and
legislative concerns pressured the sector for much of 2003. The earnings growth
potential of maturing product lines continued to weigh on the valuation of
/1/The fund's performance returns do not reflect the deduction 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 fund. Past
performance is not indicative of future results.
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended December 31, 2003, calculated
among the 121 funds in the multi-cap core variable funds category including
the reinvestment of dividends and capital gains, if any.
4 Smith Barney Multiple Discipline Trust | 2003 Annual Report
pharmaceutical stocks. During the period, we continued to add to the fund's
healthcare position as our long-term outlook for both sectors, as well as for
dividend-yielding stocks remains attractive. However, the biggest single
detractor from fund performance for the period was a consumer discretionary
stock, Eastman Kodak Co., the film and photography equipment producer.
We continue to believe that global insurance and telecommunication sectors,
despite their underperformance in the fund in 2003, were appropriate
investments for the fund. We maintained the fund's position in American
International Group, Inc. ("AIG"), and have added to its position in Verizon
Communications Inc. in recent months. AIG underperformed, as multiple
macroeconomic concerns cast a shadow over the insurance sector for much of
2003. However, we believe that the operating environment for AIG continued to
improve with a stronger economy, and improved fundamentals for AIG from
increases in casualty insurance prices as well as continued improvement in air
travel.
Thank you for your investment in the Smith Barney Multiple Discipline Trust. We
appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/s/ Roger Paradiso /s/ Kirstin Mobyed
Roger Paradiso Kirstin Mobyed
Coordinating Portfolio Manager Co-Coordinating Portfolio Manager
January 14, 2004
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 December 31, 2003 and are subject
to change. The fund's top ten holdings as of this date were: Intel Corp.
(2.74%); American International Group, Inc. (2.49%); Texas Instruments Inc.
(2.43%); Pfizer Inc. (2.42%); Merck & Co. Inc. (2.16%); Comcast Corp. (1.98%);
Liberty Media Corp. (1.95%); The Walt Disney Co. (1.89%); PepsiCo, Inc.
(1.77%); The Coca-Cola Co. (1.49%). Please refer to pages 17 through 20 for a
list and percentage breakdown of the fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes.
RISK: The fund may invest in derivatives, such as options and futures, which
can be illiquid and harder to value, especially in declining markets. A small
investment in certain derivatives may have a potentially large impact on the
fund's performance. Derivatives can disproportionately increase losses as
stated in the prospectus. The fund invests in small and medium capitalization
companies that may involve a higher degree of risk and volatility than
investments in larger, more established companies. Foreign securities are
subject to certain risks of overseas investing including currency fluctuations
and changes in political and economic conditions, which could result in
significant market fluctuations.
/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 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represent
approximately 98% of the U.S. equity market. Please note that an investor
cannot invest directly in an index.
5 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- ALL CAP GROWTH AND VALUE
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the Multiple Discipline Portfolio -- All
Cap Growth and Value
vs. S&P 500 Index and Russell 3000 Index+
- --------------------------------------------------------------------------------
October 2002 -- December 2003
[CHART]
Multiple Discipline
Portfolio -- All Cap S&P 500 Russell
Date Growth and Value Index++ 3000 Index++
- -------- -------------------- ------- ------------
Oct 1, 2002 $10,000 $10,000 $10,000
Dec 2002 10,650 10,843 10,802
Mar 2003 10,530 10,501 10,474
Jun 2003 12,120 12,118 12,175
Sep 2003 12,603 12,439 12,592
Dec 31, 2003 13,999 13,953 14,157
+ Hypothetical illustration of $10,000 invested in shares of the Multiple
Discipline Portfolio -- All Cap Growth and Value on October 1, 2002
(commencement of operations), assuming reinvestment of dividends and capital
gains at net asset value through December 31, 2003. The S&P 500 Index is an
index composed of 500 widely held common stocks listed on the New York Stock
Exchange, American Stock Exchange and over-the-counter markets. Figures for
the Index include reinvestment of dividends. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represent approximately 98% of the U.S. equity market.
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. Performance figures may reflect fee waivers and/or expense
reimbursements. In the absence of fee waivers and/or expense reimbursements,
the total return would be reduced.
++ It is the opinion of the management that the Russell 3000 Index more
accurately reflects the current composition of the Multiple Discipline
Portfolio -- All Cap Growth and Value than the S&P 500 Index. In future
reporting, the Russell 3000 Index will be used as the basis of comparison of
total return performance rather than the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 12/31/03 31.44%
- -----------------------------------------
10/1/02* through 12/31/03 30.90
- -----------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
10/1/02* through 12/31/03 39.99%
- -----------------------------------------
+ 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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
* Commencement of operations.
6 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- LARGE CAP GROWTH AND VALUE
Target Asset Allocation
[CHART]
Large Cap Growth 50%
Large Cap Value 50%
The Target Asset Allocation set forth above represents an approximate mix of
investments for the Large Cap Growth and Value. The allocation and investment
mix of the fund may vary depending upon market conditions, cash flows in and
out of the fund and other factors. In addition, the allocation and investment
ranges of the fund may be changed, from time to time, upon the approval of the
Smith Barney Multiple Discipline Trust's Board of Trustees.
Investment Strategy
The Multiple Discipline Portfolio -- Large Cap Growth and Value seeks long term
growth of capital and invests at least 80% of net assets in equity securities
of companies with large market capitalizations -- those with total market
capitalizations of $5 billion or more at the time of investment. The Large Cap
Growth segment seeks to invest in growth stocks with consistent, long-term
operating histories. The Large Cap Value segment seeks to invest in
established, undervalued companies, which look to be experiencing a
fundamental, positive change that is not reflected in the stock price.
Performance Update/1/
During its fiscal year ended December 31, 2003, the fund returned 29.00%. In
comparison, the fund outperformed its old unmanaged benchmark, the S&P 500
Index,/i/ but underperformed its new unmanaged benchmark, the Russell 1000
Index,/ii/ which returned 28.67% and 29.89%, respectively, for the same period.
The fund outperformed its Lipper large-cap core variable funds category
average, which was 26.42% for the same period./2/
What Affected Fund Performance
For the period, all sectors of the fund posted positive returns. Leading
sectors included information technology, biotechnology, materials and
industrials; lagging sectors included utilities, consumer staples and
healthcare, specifically large-cap pharmaceuticals.
Information technology stocks such as semiconductor chip makers Intel Corp. and
Texas Instruments Inc. recovered sharply in 2003 as business technology
spending improved, and both holdings contributed positively to fund performance
for the period. Biotechnology stocks, including Genentech, Inc., also
contributed positively to returns. Biotechnology companies such as Genentech
continued to benefit from stronger pipeline development, increased earnings
growth and improvements implemented to the regulatory approval process.
For the period, investments that detracted from fund performance included
large-cap pharmaceutical stocks, such as Merck & Co. Inc. and Schering-Plough
Corp. This group lagged the market by a wide margin over the last year, as
regulatory and legislative concerns pressured the sector for much of the year.
The earnings growth potential of maturing product lines continued to weigh on
the
/1/The fund's performance returns do not reflect the deduction 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 fund. Past
performance is not indicative of future results.
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended December 31, 2003, calculated
among the 224 funds in the large-cap core variable funds category including
the reinvestment of dividends and capital gains, if any.
7 Smith Barney Multiple Discipline Trust | 2003 Annual Report
valuation of many companies in the pharmaceutical sector. The biggest detractor
from fund performance for the period was telecommunications giant AT&T Corp.
During the period, we continued to add to several of the fund's healthcare
positions. We also continued to believe that the global insurance sector,
despite underperformance in stocks such as American International Group, Inc.
("AIG"), might recover soon. Multiple macroeconomic concerns pressured the
global insurance sector for much of 2003. Its operating environment continued
to improve, along with stronger economic growth and continued increases in
casualty insurance prices. During the year we continued to add to the fund's
position in AIG. An additional stock that underperformed in 2003 that the fund
continued to own is grocery retailer Safeway Inc. The stock's weakness over the
past few months has been due, in part, to labor strikes and competitive pricing
pressures. We continued to like the stock and have added to the fund's existing
position. We believe that Safeway's valuation is attractive, and that its cash
flow is strong. As the economy improves, we believe Safeway and other food
retailers should benefit. We are also beginning to see some modest food
inflation, which should help boost top-line growth. Given our favorable view of
the economy, we have increased cyclical exposure in the portfolio. We also
continued to focus on what we believe are high-quality stocks that lagged in
2003, which led us to increase the fund's weighting in the consumer staples and
healthcare sectors, particularly the pharmaceutical stocks.
Thank you for your investment in the Smith Barney Multiple Discipline Trust. We
appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/s/ Roger Paradiso /s/ Kirstin Mobyed
Roger Paradiso Kirstin Mobyed
Coordinating Portfolio Manager Co-Coordinating Portfolio Manager
January 14, 2004
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 December 31, 2003 and are subject
to change. The fund's top ten holdings as of this date were: American
International Group, Inc. (4.05%); Pfizer Inc. (3.94%); Intel Corp. (3.11%);
Amgen Inc. (2.81%); Johnson & Johnson (2.77%); Merrill Lynch & Co., Inc.
(2.64%); Texas Instruments Inc. (2.53%); The Coca-Cola Co. (2.52%); The Home
Depot, Inc. (2.51%); Berkshire Hathaway Inc., Class B Shares (2.47%). Please
refer to pages 21 through 24 for a list and percentage breakdown of the fund's
holdings.
All index performance reflects no deduction for fees, expenses or taxes.
RISK: The fund may invest in derivatives, such as options and futures, which
can be illiquid and harder to value, especially in declining markets. A small
investment in certain derivatives may have a potentially large impact on the
fund's performance. Derivatives can disproportionately increase losses as
stated in the prospectus. Foreign securities are subject to certain risks of
overseas investing including currency fluctuations and changes in political and
economic conditions, which could result in significant market fluctuations.
/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 Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of
the total market capitalization of the Russell 3000 Index. Please note that
an investor cannot invest directly in an index.
8 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- LARGE CAP GROWTH AND VALUE
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the Multiple Discipline Portfolio --
Large Cap Growth and Value
vs. S&P 500 Index and Russell 1000 Index+
- --------------------------------------------------------------------------------
October 2002 -- December 2003
[CHART]
Multiple Discipline
Portfolio -- Large Cap S&P 500 Russell
Date Growth and Value Index++ 1000 Index++
- -------- ---------------- ------- ------------
Oct 1, 2002 $10,000 $10,000 $10,000
Dec 2002 10,730 10,843 10,816
Mar 2003 10,450 10,501 10,498
Jun 2003 12,120 12,118 12,150
Sep 2003 12,454 12,439 12,515
Dec 31, 2003 13,841 13,953 14,049
+ Hypothetical illustration of $10,000 invested in shares of the Multiple
Discipline Portfolio -- Large Cap Growth and Value on October 1, 2002
(commencement of operations), assuming reinvestment of dividends and capital
gains at net asset value through December 31, 2003. The S&P 500 Index is an
index composed of 500 widely held common stocks listed on the New York Stock
Exchange, American Stock Exchange and over-the-counter markets. Figures for
the Index include reinvestment of dividends. The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 Index,
which represents approximately 92% of the total market capitalization of the
Russell 3000 Index. 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. Performance figures may reflect fee waivers and/or expense
reimbursements. In the absence of fee waivers and/or expense reimbursements,
the total return would be reduced.
++ It is the opinion of the management that the Russell 1000 Index more
accurately reflects the current composition of the Multiple Discipline
Portfolio -- Large Cap Growth and Value than the S&P 500 Index. In future
reporting, the Russell 1000 Index will be used as the basis of comparison of
total return performance rather than the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 12/31/03 29.00%
- -----------------------------------------
10/1/02* through 12/31/03 29.72
- -----------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
10/1/02* through 12/31/03 38.41%
- -----------------------------------------
+ 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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
* Commencement of operations.
9 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- GLOBAL ALL CAP GROWTH AND VALUE
Target Asset Allocation
[CHART]
Large Cap Value 30%
Large Cap Growth 30%
Multi-Cap Growth 20%
International ADR 20%
The Target Asset Allocation set forth above represents an approximate mix of
investments for the Global All Cap Growth and Value. The allocation and
investment mix of the fund may vary depending upon market conditions, cash
flows in and out of the fund and other factors. In addition, the allocation and
investment ranges of the fund may be changed, from time to time, upon the
approval of the Smith Barney Multiple Discipline Trust's Board of Trustees.
Foreign stocks are subject to certain risks of overseas investing including
currency fluctuations and changes in political and economic conditions, which
could result in significant market fluctuations. These risks are magnified in
emerging or developing markets.
Investment Strategy
The Multiple Discipline Portfolio -- Global All Cap Growth and Value seeks
long-term growth of capital and invests primarily in equity securities across a
broad range of management disciplines, seeking to optimize results and reduce
volatility. The fund seeks to reduce company-specific risk by minimizing
overlap of securities across equity styles and to reduce industry specific risk
by minimizing overlap concentration in a particular industry group across
equity styles.
Performance Update/1/
During its fiscal year ended December 31, 2003, the fund returned 31.55%. In
comparison, the fund outperformed its old unmanaged benchmark, the S&P 500
Index/i/ and one of its three new unmanaged benchmarks, the Russell 3000
Index,/ii/ which returned 28.67% and 31.06%, respectively, for the same period,
but underperformed its other two unmanaged benchmarks, the MSCI EAFE Index/iii/
and the MSCI World Index,/iv/ which returned 38.59% and 33.11%, respectively,
for the same period. The fund outperformed its Lipper large-cap core variable
funds category average, which was 26.42% for the same period./2/
What Affected Fund Performance
The fourth quarter of 2003 was a positive one for the equities markets in
general, helping to make 2003 a strong year. Signs of global economic recovery,
uncertain six months ago, appeared increasingly evident during the last three
months of 2003. During the period, U.S. equity investors responded favorably to
continued signs of economic growth and strong corporate profits. For the
period, all sectors of the fund posted positive returns. Leading sectors
included information technology, biotechnology, materials and industrials;
lagging sectors included utilities, consumer staples and
healthcare -- specifically large cap pharmaceuticals.
Information technology stocks such as semiconductor chip makers Intel Corp. and
Texas Instruments Inc. recovered sharply in 2003 as business technology
spending improved. Biotechnology stocks, including Genentech, Inc., also
contributed positively to returns. Biotechnology companies such as Genentech
continued to benefit from stronger pipeline development, increased earnings
growth and improvements implemented to the regulatory approval process.
For the period, investments that detracted from the performance included
large-cap pharmaceutical stocks, including Merck & Co. Inc. and Schering-Plough
Corp. This group lagged the market by a wide margin over the last year, as
regulatory and
/1/The fund's performance returns do not reflect the deduction 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 fund. Past
performance is not indicative of future results.
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended December 31, 2003, calculated
among the 224 funds in the large-cap core variable funds category including
the reinvestment of dividends and capital gains, if any.
10 Smith Barney Multiple Discipline Trust | 2003 Annual Report
legislative concerns pressured the sector for much of the year. The earnings
growth potential of maturing product lines continued to weigh on the valuation
of many companies in the pharmaceutical sector. The biggest detractor from fund
performance for the period was the leading consumer electronics producer Sony
Corp. in the consumer discretionary sector.
During the period, we continued to add to the fund's healthcare position, as
our long-term outlook for the sector remained attractive. The global insurance
sector, despite underperformance in stocks such as American International
Group, Inc. ("AIG") and Allianz AG Holding, continued to hold our interest.
Multiple macroeconomic concerns weighed on the global insurance sector for much
of 2003. However, we believe that the operating environment for the insurance
industry continued to improve along with stronger economic growth and
additional increases in casualty insurance prices. We maintained the fund's
position in AIG but sold Allianz.
Thank you for your investment in the Smith Barney Multiple Discipline Trust. We
appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/s/ Roger Paradiso /s/ Kirstin Mobyed
Roger Paradiso Kirstin Mobyed
Coordinating Portfolio Manager Co-Coordinating Portfolio Manager
January 14, 2004
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 December 31, 2003 and are subject
to change. The fund's top ten holdings as of this date were: Pfizer Inc.
(2.38%); American International Group, Inc. (2.33%); Intel Corp. (1.80%); Amgen
Inc. (1.67%); Johnson & Johnson (1.62%); Liberty Media Corp. (1.57%); Merrill
Lynch & Co., Inc. (1.57%); Texas Instruments Inc. (1.49%); The Home Depot, Inc.
(1.49%); Berkshire Hathaway Inc. (1.49%). Please refer to pages 25 through 29
for a list and percentage breakdown of the fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes.
RISK: The fund may invest in derivatives, such as options and futures, which
can be illiquid and harder to value, especially in declining markets. A small
investment in certain derivatives may have a potentially large impact on the
fund's performance. Derivatives can disproportionately increase losses as
stated in the prospectus. The fund invests in small and medium capitalization
companies that may involve a higher degree of risk and volatility than
investments in larger, more established companies. Foreign securities are
subject to certain risks of overseas investing including currency fluctuations
and changes in political and economic conditions, which could result in
significant market fluctuations.
/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 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represent
approximately 98% of the U.S. equity market. Please note that an investor
cannot invest directly in an index.
/iii/The MSCI EAFE Index is an unmanaged index of common stocks of companies
located in Europe, Australasia and the Far East. Please note that an
investor cannot invest directly in an index.
/iv/The MSCI World Index is a free float-adjusted market capitalization index
that is designed to measure global developed market equity performance.
Please note that an investor cannot invest directly in an index.
11 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- GLOBAL ALL CAP GROWTH AND VALUE
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the Multiple Discipline Portfolio --
Global All Cap Growth and Value
vs. S&P 500 Index, Russell 3000 Index, MSCI EAFE Index and MSCI World Index+
- --------------------------------------------------------------------------------
October 2002 -- December 2003
[CHART]
Multiple
Discipline
Portfolio --
Global All MSCI
Cap Growth S&P 500 Russell MSCI EAFE World
Date and Value Index++ 3000 Index++ Index++ Index++
- -------- -------------- ------- ------------ ------- ---------
Oct 1, 2002 $10,000 $10,000 $10,000 $10,000 $10,000
Dec 2002 10,780 10,843 10,802 10,645 10,764
Mar 2003 10,400 10,501 10,474 9,771 10,219
Jun 2003 12,290 12,118 12,175 11,654 11,961
Sep 2003 12,689 12,439 12,592 12,601 12,540
Dec 31, 2003 14,181 13,953 14,157 14,754 14,328
+ Hypothetical illustration of $10,000 invested in shares of the Multiple
Discipline Portfolio -- Global All Cap Growth and Value on October 1, 2002
(commencement of operations), assuming reinvestment of dividends and capital
gains at net asset value through December 31, 2003. The S&P 500 Index is an
index composed of 500 widely held common stocks listed on the New York Stock
Exchange, American Stock Exchange and over-the-counter markets. Figures for
the Index include reinvestment of dividends. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represent approximately 98% of the U.S. equity market.
The MSCI EAFE Index is an unmanaged index of common stocks of companies
located in Europe, Australasia and the Far East. The MSCI World Index is a
free float-adjusted market capitalization index that is designed to measure
global developed market equity performance. 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. Performance figures may reflect fee waivers and/or expense
reimbursements. In the absence of fee waivers and/or expense reimbursements,
the total return would be reduced.
++ It is the opinion of the management that the Russell 3000 Index, MSCI EAFE
Index and MSCI World Index more accurately reflect the current composition
of the Multiple Discipline Portfolio -- Global All Cap Growth and Value than
the S&P 500 Index. In future reporting, the Russell 3000 Index, MSCI EAFE
Index and MSCI World Index will be used as the bases of comparison of total
return performance rather than the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 12/31/03 31.55%
- -----------------------------------------
10/1/02* through 12/31/03 32.26
- -----------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
10/1/02* through 12/31/03 41.81%
- -----------------------------------------
+ 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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
* Commencement of operations.
12 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- BALANCED ALL CAP GROWTH AND VALUE
Target Asset Allocation
[CHART]
All Cap Growth 35%
All Cap Value 35%
Government Securities Management 30%
The Target Asset Allocation set forth above represents an approximate mix of
investments for the Balanced All Cap Growth and Value. The allocation and
investment mix of the fund may vary depending upon market conditions, cash
flows in and out of the fund and other factors. In addition, the allocation and
investment ranges of the fund may be changed, from time to time, upon the
approval of the Smith Barney Multiple Discipline Trust's Board of Trustees.
Investment Strategy
The Multiple Discipline Portfolio -- Balanced All Cap Growth and Value seeks a
balance between long-term growth of capital and principal preservation and
invests in a mix of equity securities within all market capitalization ranges
and fixed-income securities in the short- to intermediate-average maturity
ranges to help reduce market volatility.
Performance Update/1/
During its fiscal year ended December 31, 2003, the fund returned 21.93%. In
comparison, the fund underperformed its unmanaged equity benchmarks, the S&P
500 Index,/i/ the Russell 1000 Index,/ii/ the Russell 3000 Growth Index,/iii/
and the Russell 3000 Value Index,/iv/ which returned 28.67%, 29.89%, 30.97% and
31.14%, respectively, for the same period. The fund outperformed its unmanaged
fixed-income benchmark, the Lehman Brothers Intermediate Treasury Bond
Index,/v/ which returned 2.11% for the same period. It also outperformed its
Lipper balanced variable funds category average, which was 18.93% for the same
period./2/
What Affected Fund Performance
For the period, our investment strategies remained unchanged. Our focus is on
owning those companies that we believe demonstrate sustainable solid earnings
and cash flow growth. For the period, all sectors of the fund posted positive
returns. Leading sectors included information technology, biotechnology,
materials and consumer discretionary; lagging sectors included utilities,
consumer staples and healthcare-specifically large cap pharmaceuticals.
Information technology stocks, such as semiconductor chip makers Intel Corp.
and Texas Instruments Inc., recovered sharply in 2003 as business technology
spending improved, and both holdings contributed positively to fund performance
for the period. Biotechnology stocks, including Genentech, Inc., also
contributed positively to returns. Biotechnology companies such as Genentech
continued to benefit from stronger pipeline development, increased earnings
growth and improvements implemented to the regulatory approval process.
For the period, investments that detracted from the performance included
pharmaceutical stocks, such as Merck & Co. Inc. and Schering-Plough Corp. This
group lagged the market by a wide margin over the period as regulatory and
legislative concerns pressured the sector for much of 2003. The earnings growth
potential of maturing product lines continued to weigh on the valuation of
/1/The fund's performance returns do not reflect the deduction 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 fund. Past
performance is not indicative of future results.
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended December 31, 2003, calculated
among the 84 funds in the balanced variable funds category including the
reinvestment of dividends and capital gains, if any.
13 Smith Barney Multiple Discipline Trust | 2003 Annual Report
pharmaceutical stocks. During the period, we continued to add to the fund's
healthcare position, as our long-term outlook for both the sectors, as well as
for dividend yielding stock, remained attractive. However, the biggest single
detractor from fund performance for the period was a consumer discretionary
stock, Eastman Kodak Co., the film and photography equipment producer.
We continue to believe that global insurance and telecommunication sectors,
despite their underperformance in the fund in 2003, were appropriate
investments for the fund. We maintained the fund's position in American
International Group, Inc. ("AIG"), and have in recent months added to its
position in Verizon Communications Inc. AIG underperformed, as multiple
macroeconomic concerns cast a shadow over the insurance sector for much of
2003. We believe that the operating environment for AIG continued to improve
with a stronger economy, and improved fundamentals for AIG from increases in
casualty insurance prices as well as continued improvement in air travel.
In the bond market, the year began with the major debate centered on the timing
of an anticipated rise in interest rates, expected by many to begin sometime in
2003. Interest rates declined dramatically during the first half of 2003 until
they reached historical lows in the middle of June. Indeed, most of the year's
total returns in the bond market were realized during the first half of the
year. Additionally, the three-year trend in which the bond market outperformed
the stock market came to an end during 2003, as signs of an economic recovery
grew and the equity market gained strength in a range of sectors and
capitalizations.
As conservative bond managers facing cyclical lows in the interest rate
environment, we began the year looking to don our defense hats. Preservation of
principal for the fund's fixed-income portfolio became paramount at this point
of the cycle, although the fund's slightly defensive posture caused it to miss
out on some of the upside returns in the first half. In the second half of
2003, the combination of new federal tax cuts and a 45-year low in interest
rates resulted in economic growth shifting into a higher gear, causing many
analysts to declare that a robust sustainable recovery was at hand. At the
close of the period, we now believe the critical question for the fixed-income
market is when will inflation reappear.
The fund's fixed-income holdings during the period consisted largely of U.S.
Treasury notes with some holdings in government agencies, specifically,
mortgage-backed securities. While the fixed-income segment of the portfolio
generated positive returns for the period, the returns were not as strong as
those for the equity segment, reducing the fund's overall returns for the
period.
Thank you for your investment in the Smith Barney Multiple Discipline Trust. We
appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/s/ Roger Paradiso /s/ Kirstin Mobyed
Roger Paradiso Kirstin Mobyed
Coordinating Portfolio Manager Co-Coordinating Portfolio Manager
January 14, 2004
14 Smith Barney Multiple Discipline Trust | 2003 Annual Report
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 December 31, 2003 and are subject
to change. The fund's top ten holdings as of this date were: U.S. Treasury
Notes, 3.250% due 8/15/07 (7.19%); U.S. Treasury Notes, 2.000% due 5/15/06
(5.39%); Federal National Mortgage Association (3.59%); U.S. Treasury Notes,
6.500% due 10/15/06 (2.89%): U.S. Treasury Notes, 1.250% due 5/31/05 (2.63%);
U.S. Treasury Notes, 2.625% due 11/15/06 (2.59%); Intel Corp. (1.96%); American
International Group, Inc. (1.76%); Texas Instruments Inc. (1.73%); Pfizer Inc.
(1.72%). Please refer to pages 30 through 34 for a list and percentage
breakdown of the fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes.
RISK: The fund may invest in derivatives, such as options and futures, which
can be illiquid and harder to value, especially in declining markets. A small
investment in certain derivatives may have a potentially large impact on the
fund's performance. Derivatives can disproportionately increase losses as
stated in the prospectus. The fund invests in small and medium capitalization
companies that may involve a higher degree of risk and volatility than
investments in larger, more established companies.
/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 Index measures the performance of the 1000 largest
companies in the Russell 3000 Index, which represents approximately 92% of
the total market capitalization of the Russell 3000 Index. Please note that
an investor cannot invest directly in an index.
/iii/The Russell 3000 Growth Index measures the performance of those Russell
3000 Index companies with higher price-to-book ratios and higher
forecasted growth values. (A price-to-book ratio is the price of a stock
compared to the difference between a company's assets and liabilities.)
Please note that an investor cannot invest directly in an index.
/iv/The Russell 3000 Value Index measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values. Please note that an investor cannot invest directly in an index.
/v/The Lehman Brothers Intermediate Treasury Bond Index is a market value
weighted performance benchmark for government and corporate fixed-rate debt
issues (rated Baa/BBB or higher) with maturities between one and ten years.
Please note that an investor cannot invest directly in an index.
15 Smith Barney Multiple Discipline Trust | 2003 Annual Report
MULTIPLE DISCIPLINE PORTFOLIO -- BALANCED ALL CAP GROWTH AND VALUE
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Shares of the Multiple Discipline Portfolio --
Balanced All Cap Growth and Value vs. S&P 500 Index, Russell 1000 Index,
Russell 3000 Growth Index, Russell 3000 Value Index and Lehman Brothers
Intermediate Treasury Bond Index+
- --------------------------------------------------------------------------------
October 2002 -- December 2003
[CHART]
Multiple Discipline Lehman Brothers
Portfolio -- Balanced S&P 500 Russell Russell 3000 Russell 3000 Intermediate
Date All Cap Growth and Value Index++ 1000 Index++ Growth Index++ Value Index++ Treasury Bond Index++
- -------- ------------------------ ------- ------------ -------------- ------------- ---------------------
Oct 1, 2002 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Dec 2002 10,420 10,843 10,816 10,717 10,891 10,073
Mar 2003 10,360 10,501 10,498 10,583 10,360 10,153
Jun 2003 11,490 12,118 12,150 12,162 12,188 10,314
Sep 2003 11,823 12,439 12,515 12,694 12,489 10,312
Dec 31, 2003 12,705 13,953 14,049 14,036 14,281 10,285
+Hypothetical illustration of $10,000 invested in shares of the Multiple
Discipline Portfolio -- Balanced All Cap Growth and Value on October 1, 2002
(commencement of operations), assuming reinvestment of dividends and capital
gains at net asset value through December 31, 2003. The S&P 500 Index is an
index composed of 500 widely held common stocks listed on the New York Stock
Exchange, American Stock Exchange and over-the-counter markets. Figures for
the Index include reinvestment of dividends. The Russell 1000 Index measures
the performance of the 1,000 largest companies in the Russell 3000 Index,
which represents approximately 92% of the total market capitalization of the
Russell 3000 Index. The Russell 3000 Growth Index measures the performance of
those Russell 3000 Index companies with higher price-to-book ratios and higher
forecasted growth values. (A price-to-book ratio is the price of a stock
compared to the difference between a company's assets and liabilities). The
Russell 3000 Value Index measures the performance of those Russell 3000 Index
companies with lower price-to-book ratios and lower forecasted growth values.
The Lehman Brothers Intermediate Treasury Bond Index is an unmanaged index of
U.S. Treasury bonds with maturities between one and ten years. 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. Performance figures may reflect fee waivers and/or expense
reimbursements. In the absence of fee waivers and/or expense reimbursements,
the total return would be reduced.
++It is the opinion of the management that the Russell 1000 Index, Russell 3000
Growth Index, Russell 3000 Value Index and Lehman Brothers Intermediate
Treasury Bond Index more accurately reflect the current composition of the
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value than the
S&P 500 Index. In future reporting, the Russell 1000 Index, Russell 3000
Growth Index, Russell 3000 Value Index and Lehman Brothers Intermediate
Treasury Bond Index will be used as the bases of comparison of total return
performance rather than the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Twelve Months Ended 12/31/03 21.93%
- -----------------------------------------
10/1/02* through 12/31/03 21.12
- -----------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED)
10/1/02* through 12/31/03 27.05%
- --------------------------------------------------
+ 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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
* Commencement of operations.
16 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS DECEMBER 31, 2003
Multiple Discipline Portfolio -- All Cap Growth and Value
SHARES SECURITY VALUE
- ----------------------------------------------------------
COMMON STOCK -- 87.4%
Aerospace and Defense -- 1.4%
15,086 L-3 Communications Holdings, Inc.* $ 774,817
25,310 Raytheon Co. 760,312
- ----------------------------------------------------------
1,535,129
- ----------------------------------------------------------
Banks -- 2.1%
21,910 The Bank of New York Co., Inc. 725,659
21,590 Bank One Corp. 984,288
8,940 Wells Fargo & Co. 526,477
- ----------------------------------------------------------
2,236,424
- ----------------------------------------------------------
Beverages -- 3.2%
30,493 The Coca-Cola Co. 1,547,520
39,353 PepsiCo, Inc. 1,834,637
- ----------------------------------------------------------
3,382,157
- ----------------------------------------------------------
Biotechnology -- 6.6%
2,746 Alkermes, Inc.* 37,071
24,485 Amgen Inc.* 1,513,173
27,065 Biogen Idec Inc.* 995,451
25,310 Chiron Corp.* 1,442,417
9,746 Genentech, Inc.* 911,933
29,180 Genzyme Corp.* 1,439,741
33,100 Millennium Pharmaceuticals, Inc.* 617,977
- ----------------------------------------------------------
6,957,763
- ----------------------------------------------------------
Chemicals -- 0.9%
32,590 Engelhard Corp. 976,070
- ----------------------------------------------------------
Commercial Services and Supplies -- 0.7%
34,320 Sabre Holdings Corp. 740,969
- ----------------------------------------------------------
Communications Equipment -- 2.7%
25,910 3Com Corp.* 211,685
36,465 Cisco Systems, Inc.* 885,735
54,380 Motorola, Inc. 765,127
57,180 Nokia Oyj, Sponsored ADR 972,060
- ----------------------------------------------------------
2,834,607
- ----------------------------------------------------------
Computers and Peripherals -- 2.9%
35,430 Dell Inc.* 1,203,203
2,310 Electronics for Imaging, Inc.* 60,106
21,950 Hewlett-Packard Co. 504,192
4,915 International Business Machines Corp. 455,522
44,943 Maxtor Corp.* 498,867
5,870 SanDisk Corp.* 358,892
- ----------------------------------------------------------
3,080,782
- ----------------------------------------------------------
Construction and Engineering -- 0.5%
12,330 Fluor Corp. 488,761
- ----------------------------------------------------------
Construction Materials -- 0.1%
1,740 Vulcan Materials Co. 82,772
- ----------------------------------------------------------
See Notes to Financial Statements.
17 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- All Cap Growth and Value
SHARES SECURITY VALUE
- --------------------------------------------------------------
Diversified Financials -- 3.4%
20,535 American Express Co. $ 990,403
12,812 Lehman Brothers Holdings Inc. 989,343
15,024 Merrill Lynch & Co., Inc. 881,158
14,340 State Street Corp. 746,827
- --------------------------------------------------------------
3,607,731
- --------------------------------------------------------------
Diversified Telecommunication Services -- 2.1%
30,310 Nippon Telegraph & Telephone Corp., ADR 744,414
28,710 SBC Communications Inc. 748,470
22,180 Verizon Communications Inc. 778,074
- --------------------------------------------------------------
2,270,958
- --------------------------------------------------------------
Electrical Equipment -- 1.0%
15,725 Emerson Electric Co. 1,018,194
- --------------------------------------------------------------
Electronic Equipment and Instruments -- 0.9%
9,290 Agilent Technologies, Inc.* 271,640
106,590 Solectron Corp.* 629,947
- --------------------------------------------------------------
901,587
- --------------------------------------------------------------
Energy Equipment and Services -- 1.7%
19,490 GlobalSantaFe Corp. 483,937
28,296 Grant Prideco, Inc.* 368,414
27,030 Weatherford International Ltd.* 973,080
- --------------------------------------------------------------
1,825,431
- --------------------------------------------------------------
Food and Drug Retailing -- 0.5%
23,940 Safeway Inc.* 524,525
- --------------------------------------------------------------
Food Products -- 0.8%
15,830 Wm. Wrigley Jr. Co. 889,804
- --------------------------------------------------------------
Health Care Providers and Services -- 1.8%
15,380 McKesson Corp. 494,621
24,850 UnitedHealth Group Inc. 1,445,773
- --------------------------------------------------------------
1,940,394
- --------------------------------------------------------------
Hotels, Restaurants and Leisure -- 0.6%
24,205 McDonald's Corp. 601,010
- --------------------------------------------------------------
Industrial Conglomerates -- 2.8%
39,690 General Electric Co. 1,229,596
21,920 Honeywell International Inc. 732,786
37,341 Tyco International Ltd. 989,536
- --------------------------------------------------------------
2,951,918
- --------------------------------------------------------------
Insurance -- 8.5%
23,695 The Allstate Corp. 1,019,359
14,865 Ambac Financial Group, Inc. 1,031,482
38,915 American International Group, Inc. 2,579,286
546 Berkshire Hathaway Inc., Class B Shares* 1,536,990
13,175 The Chubb Corp. 897,217
13,095 MBIA Inc. 775,617
See Notes to Financial Statements.
18 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- All Cap Growth and Value
SHARES SECURITY VALUE
- -------------------------------------------------------------------------
Insurance -- 8.5% (continued)
17,665 MGIC Investment Corp. $ 1,005,845
3,965 The St. Paul Cos., Inc. 157,212
- -------------------------------------------------------------------------
9,003,008
- -------------------------------------------------------------------------
Internet and Catalog Retail -- 1.2%
36,300 InterActiveCorp* 1,231,659
- -------------------------------------------------------------------------
IT Consulting and Services -- 0.6%
39,620 Unisys Corp.* 588,357
- -------------------------------------------------------------------------
Leisure Equipment and Products -- 0.7%
33,910 Hasbro, Inc. 721,605
- -------------------------------------------------------------------------
Machinery -- 1.9%
11,651 Caterpillar Inc. 967,266
2,775 PACCAR Inc. 236,208
30,250 Pall Corp. 811,607
- -------------------------------------------------------------------------
2,015,081
- -------------------------------------------------------------------------
Media -- 8.5%
33,930 Cablevision Systems New York Group, Class A Shares* 793,623
65,655 Comcast Corp., Special Class A Shares* 2,053,688
169,999 Liberty Media Corp., Class A Shares* 2,021,288
21,655 The News Corp., Ltd., Sponsored ADR 781,746
75,745 Time Warner Inc.* 1,362,653
84,250 The Walt Disney Co. 1,965,552
- -------------------------------------------------------------------------
8,978,550
- -------------------------------------------------------------------------
Metals and Mining -- 2.0%
25,685 Alcoa Inc. 976,030
51,060 Allegheny Technologies, Inc. 675,013
10,520 Newmont Mining Corp. 511,377
- -------------------------------------------------------------------------
2,162,420
- -------------------------------------------------------------------------
Multi-Utilities -- 0.4%
45,960 The Williams Cos., Inc. 451,327
- -------------------------------------------------------------------------
Office Electronics -- 0.5%
48,150 IKON Office Solutions, Inc. 571,059
- -------------------------------------------------------------------------
Oil and Gas -- 2.3%
1,190 Amerada Hess Corp. 63,272
9,240 Anadarko Petroleum Corp. 471,332
15,500 BP PLC, Sponsored ADR 764,925
7,130 ConocoPhillips 467,514
11,590 Exxon Mobil Corp. 475,190
3,410 Murphy Oil Corp. 222,707
- -------------------------------------------------------------------------
2,464,940
- -------------------------------------------------------------------------
Paper and Forest Products -- 1.0%
16,015 Weyerhaeuser Co. 1,024,960
- -------------------------------------------------------------------------
Personal Products -- 1.5%
41,825 The Gillette Co. 1,536,232
- -------------------------------------------------------------------------
See Notes to Financial Statements.
19 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- All Cap Growth and Value
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 10.2%
21,040 Abbott Laboratories $ 980,464
36,350 Bristol-Myers Squibb Co. 1,039,610
16,390 Forest Laboratories, Inc.* 1,012,902
23,774 Johnson & Johnson 1,228,165
48,589 Merck & Co. Inc. 2,244,812
70,996 Pfizer Inc. 2,508,289
44,375 Schering-Plough Corp. 771,681
23,950 Wyeth 1,016,678
- ------------------------------------------------------------------------------------------------------------------
10,802,601
- ------------------------------------------------------------------------------------------------------------------
Semiconductor Equipment and Products -- 7.0%
829 Cabot Microelectronics Corp.* 40,621
21,396 Cree, Inc.* 378,495
88,315 Intel Corp. 2,843,743
64,402 Micron Technology, Inc.* 867,495
73,150 Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR* 749,056
85,690 Texas Instruments Inc. 2,517,572
- ------------------------------------------------------------------------------------------------------------------
7,396,982
- ------------------------------------------------------------------------------------------------------------------
Software -- 2.0%
21,500 Advent Software, Inc.* 374,745
22,710 Autodesk, Inc. 558,212
41,830 Microsoft Corp. 1,151,998
- ------------------------------------------------------------------------------------------------------------------
2,084,955
- ------------------------------------------------------------------------------------------------------------------
Specialty Retail -- 1.7%
116,160 Charming Shoppes, Inc.* 627,264
33,604 The Home Depot, Inc. 1,192,606
- ------------------------------------------------------------------------------------------------------------------
1,819,870
- ------------------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.7%
29,470 Vodafone Group PLC, Sponsored ADR 737,929
- ------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $80,860,283) 92,438,521
- ------------------------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 12.6%
$13,288,000 State Street Bank and Trust Co., 0.800% due 1/2/04; Proceeds at maturity -- $13,288,591;
(Fully collateralized by U.S. Treasury Bonds, 9.125% due 5/15/18; Market
value -- $13,559,081) (Cost -- $13,288,000) 13,288,000
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $94,148,283**) $ 105,726,521
- ------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
**Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
20 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Large Cap Growth and Value
SHARES SECURITY VALUE
- --------------------------------------------------------------------
COMMON STOCK -- 95.2%
Aerospace and Defense -- 0.8%
2,010 The Boeing Co. $ 84,701
- --------------------------------------------------------------------
Banks -- 4.9%
4,000 The Bank of New York Co., Inc. 132,480
65 Bank One Corp. 2,963
2,785 FleetBoston Financial Corp. 121,565
2,240 Wachovia Corp. 104,362
2,240 Washington Mutual, Inc. 89,869
1,550 Wells Fargo & Co. 91,279
- --------------------------------------------------------------------
542,518
- --------------------------------------------------------------------
Beverages -- 3.9%
5,360 The Coca-Cola Co. 272,020
3,240 PepsiCo, Inc. 151,049
- --------------------------------------------------------------------
423,069
- --------------------------------------------------------------------
Biotechnology -- 4.2%
4,920 Amgen Inc.* 304,056
1,735 Genentech, Inc.* 162,344
- --------------------------------------------------------------------
466,400
- --------------------------------------------------------------------
Commercial Services and Supplies -- 0.7%
1,430 Avery Dennison Corp. 80,109
- --------------------------------------------------------------------
Communications Equipment -- 2.4%
6,475 Cisco Systems, Inc.* 157,278
515 Comverse Technology, Inc.* 9,059
5,855 Nokia Oyj, Sponsored ADR 99,535
- --------------------------------------------------------------------
265,872
- --------------------------------------------------------------------
Computers and Peripherals -- 4.1%
6,390 Dell Inc.* 217,004
5,735 Hewlett-Packard Co. 131,733
820 International Business Machines Corp. 75,998
4,785 Sun Microsystems, Inc.* 21,485
- --------------------------------------------------------------------
446,220
- --------------------------------------------------------------------
Diversified Financials -- 6.9%
1,685 American Express Co. 81,267
1,015 The Goldman Sachs Group, Inc. 100,211
2,475 J.P. Morgan Chase & Co. 90,907
4,875 Merrill Lynch & Co., Inc. 285,919
1,995 Morgan Stanley 115,451
3,565 Waddell & Reed Financial, Inc., Class A Shares 83,635
- --------------------------------------------------------------------
757,390
- --------------------------------------------------------------------
Diversified Telecommunication Services -- 2.3%
361 AT&T Corp. 7,328
4,685 SBC Communications, Inc. 122,138
3,540 Verizon Communications Inc. 124,183
- --------------------------------------------------------------------
253,649
- --------------------------------------------------------------------
See Notes to Financial Statements.
21 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Large Cap Growth and Value
SHARES SECURITY VALUE
- -----------------------------------------------------------------
Electric Utilities -- 0.9%
2,250 Progress Energy, Inc. $ 101,835
- -----------------------------------------------------------------
Energy Equipment and Services -- 1.2%
5,560 Transocean Inc.* 133,496
- -----------------------------------------------------------------
Food and Drug Retailing -- 1.4%
7,070 Safeway Inc.* 154,904
- -----------------------------------------------------------------
Food Products -- 2.4%
3,260 Kraft Foods, Inc., Class A Shares 105,037
2,770 Wm. Wrigley Jr. Co. 155,702
- -----------------------------------------------------------------
260,739
- -----------------------------------------------------------------
Gas Utilities -- 0.7%
2,090 KeySpan Corp. 76,912
- -----------------------------------------------------------------
Health Care Providers and Services -- 0.7%
1,760 HCA Inc. 75,610
- -----------------------------------------------------------------
Hotels, Restaurants and Leisure -- 1.9%
5,040 McDonald's Corp. 125,143
2,320 MGM MIRAGE* 87,255
- -----------------------------------------------------------------
212,398
- -----------------------------------------------------------------
Household Durables -- 0.8%
3,700 Newell Rubbermaid Inc. 84,249
- -----------------------------------------------------------------
Household Products -- 1.2%
2,265 Kimberly-Clark Corp. 133,839
- -----------------------------------------------------------------
Industrial Conglomerates -- 3.2%
6,930 General Electric Co. 214,691
4,105 Honeywell International Inc. 137,230
- -----------------------------------------------------------------
351,921
- -----------------------------------------------------------------
Insurance -- 7.9%
6,610 American International Group, Inc. 438,111
95 Berkshire Hathaway Inc., Class B Shares* 267,425
1,295 The Hartford Financial Services Group, Inc. 76,444
2,010 The St. Paul Cos., Inc. 79,696
- -----------------------------------------------------------------
861,676
- -----------------------------------------------------------------
Internet and Catalog Retail -- 2.2%
6,960 InterActiveCorp* 236,153
- -----------------------------------------------------------------
Media -- 6.0%
3,250 Comcast Corp., Class A Shares* 106,828
9,780 Liberty Media Corp., Class A Shares* 116,284
12,130 Time Warner Inc.* 218,219
9,190 The Walt Disney Co. 214,403
- -----------------------------------------------------------------
655,734
- -----------------------------------------------------------------
Metals and Mining -- 1.2%
3,400 Alcoa Inc. 129,200
- -----------------------------------------------------------------
See Notes to Financial Statements.
22 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Large Cap Growth and Value
SHARES SECURITY VALUE
- ---------------------------------------------------------------------------
Multiline Retail -- 1.3%
1,015 Federated Department Stores, Inc. $ 47,837
2,615 Target Corp. 100,416
- ---------------------------------------------------------------------------
148,253
- ---------------------------------------------------------------------------
Multi-Utilities -- 1.0%
4,950 NiSource Inc. 108,603
- ---------------------------------------------------------------------------
Oil and Gas -- 3.9%
2,290 BP PLC, Sponsored ADR 113,011
1,965 ChevronTexaco Corp. 169,756
115 Exxon Mobil Corp. 4,715
1,535 Total SA, Sponsored ADR 142,003
- ---------------------------------------------------------------------------
429,485
- ---------------------------------------------------------------------------
Paper and Forest Products -- 1.3%
3,255 International Paper Co. 140,323
- ---------------------------------------------------------------------------
Personal Products -- 2.4%
7,275 The Gillette Co. 267,211
- ---------------------------------------------------------------------------
Pharmaceuticals -- 10.5%
5,800 Johnson & Johnson 299,628
4,915 Merck & Co. Inc. 227,073
12,068 Pfizer Inc. 426,362
7,150 Schering-Plough Corp. 124,339
1,800 Wyeth 76,410
- ---------------------------------------------------------------------------
1,153,812
- ---------------------------------------------------------------------------
Semiconductor Equipment and Products -- 5.6%
10,445 Intel Corp. 336,329
9,320 Texas Instruments Inc. 273,821
- ---------------------------------------------------------------------------
610,150
- ---------------------------------------------------------------------------
Software -- 2.3%
9,140 Microsoft Corp. 251,716
- ---------------------------------------------------------------------------
Specialty Retail -- 2.5%
7,640 The Home Depot, Inc. 271,143
- ---------------------------------------------------------------------------
Tobacco -- 1.6%
3,220 Altria Group, Inc. 175,232
- ---------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.9%
12,785 AT&T Wireless Services Inc.* 102,152
- ---------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $9,271,474) 10,446,674
- ---------------------------------------------------------------------------
PREFERRED STOCK -- 0.5%
Media -- 0.5%
1,800 The News Corp., Ltd., Sponsored ADR (Cost -- $43,516) 54,450
- ---------------------------------------------------------------------------
SUB-TOTAL INVESTMENTS
(Cost -- $9,314,990) 10,501,124
- ---------------------------------------------------------------------------
See Notes to Financial Statements.
23 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Large Cap Growth and Value
FACE
AMOUNT SECURITY VALUE
- ---------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.3%
$474,000 State Street Bank and Trust Co., 0.800% due 1/2/04; Proceeds at maturity -- $474,021;
(Fully collateralized by U.S. Treasury Bonds, 7.125% to 10.375% due 11/15/09 to 2/15/23;
Market value -- $492,088) (Cost -- $474,000) $ 474,000
- ---------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $9,788,990**) $10,975,124
- ---------------------------------------------------------------------------------------------------------------
* Non-income producing security.
**Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
24 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Global All Cap Growth and Value
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------
COMMON STOCK -- 89.9%
Aerospace and Defense -- 1.2%
1,130 The Boeing Co. $ 47,618
1,700 L-3 Communications Holdings, Inc.* 87,312
- -----------------------------------------------------------------------------
134,930
- -----------------------------------------------------------------------------
Automobiles -- 0.4%
1,980 Honda Motor Co., Ltd., Sponsored ADR 44,550
- -----------------------------------------------------------------------------
Banks -- 5.5%
1,210 Bank of Ireland, Sponsored ADR 66,477
2,175 The Bank of New York Co., Inc. 72,036
210 Bank One Corp. 9,574
1,615 FleetBoston Financial Corp. 70,495
540 HSBC Holdings PLC, Sponsored ADR 42,563
1,640 Lloyds TSB Group PLC, Sponsored ADR 53,382
5,810 Mitsubishi Tokyo Financial Group, Inc., Sponsored ADR 45,492
800 UBS AG, Registered Shares 54,392
2,870 United Overseas Bank Ltd., Sponsored ADR 44,614
1,405 Wachovia Corp. 65,459
1,425 Washington Mutual, Inc. 57,171
850 Wells Fargo & Co. 50,056
- -----------------------------------------------------------------------------
631,711
- -----------------------------------------------------------------------------
Beverages -- 2.8%
3,210 The Coca-Cola Co. 162,908
1,230 Diageo PLC, Sponsored ADR 65,018
2,075 PepsiCo, Inc. 96,736
- -----------------------------------------------------------------------------
324,662
- -----------------------------------------------------------------------------
Biotechnology -- 6.7%
730 Alkermes, Inc.* 9,855
2,960 Amgen Inc.* 182,928
2,885 Biogen Idec Inc.* 106,110
2,680 Chiron Corp.* 152,733
995 Genentech, Inc.* 93,102
3,115 Genzyme Corp.* 153,694
3,530 Millennium Pharmaceuticals, Inc.* 65,905
- -----------------------------------------------------------------------------
764,327
- -----------------------------------------------------------------------------
Chemicals -- 0.8%
760 BASF AG, Sponsored ADR 42,370
1,760 BOC Group PLC, Sponsored ADR 54,718
- -----------------------------------------------------------------------------
97,088
- -----------------------------------------------------------------------------
Commercial Services and Supplies -- 0.4%
880 Avery Dennison Corp. 49,298
- -----------------------------------------------------------------------------
Communications Equipment -- 2.0%
4,050 Cisco Systems, Inc.* 98,374
630 Comverse Technology, Inc.* 11,082
7,105 Nokia Oyj, Sponsored ADR 120,785
- -----------------------------------------------------------------------------
230,241
- -----------------------------------------------------------------------------
See Notes to Financial Statements.
25 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Global All Cap Growth and Value
SHARES SECURITY VALUE
- ----------------------------------------------------------------------
Computers and Peripherals -- 2.9%
3,800 Dell Inc.* $ 129,048
3,245 Hewlett-Packard Co. 74,538
520 International Business Machines Corp. 48,194
4,130 Maxtor Corp.* 45,843
400 SanDisk Corp.* 24,456
3,475 Sun Microsystems, Inc.* 15,603
- ----------------------------------------------------------------------
337,682
- ----------------------------------------------------------------------
Construction Materials -- 0.4%
2,170 CRH PLC, Sponsored ADR 43,856
- ----------------------------------------------------------------------
Diversified Financials -- 5.9%
1,080 American Express Co. 52,088
580 The Goldman Sachs Group, Inc. 57,263
1,900 ING Groep N.V., Sponsored ADR 44,479
1,555 J.P. Morgan Chase & Co. 57,115
1,425 Lehman Brothers Holdings Inc. 110,039
2,930 Merrill Lynch & Co., Inc. 171,844
1,155 Morgan Stanley 66,840
3,960 Nomura Holdings, Inc., ADR 67,043
1,980 Waddell & Reed Financial, Inc., Class A Shares 46,451
- ----------------------------------------------------------------------
673,162
- ----------------------------------------------------------------------
Diversified Telecommunication Services -- 2.1%
401 AT&T Corp. 8,140
1,785 Nippon Telegraph and Telephone Corp., ADR 43,840
2,860 SBC Communications Inc. 74,560
976 Telefonica, S.A., Sponsored ADR 43,129
2,130 Verizon Communications Inc. 74,720
- ----------------------------------------------------------------------
244,389
- ----------------------------------------------------------------------
Electric Utilities -- 0.9%
2,230 Endesa, S.A., Sponsored ADR 42,593
1,430 Progress Energy, Inc. 64,722
- ----------------------------------------------------------------------
107,315
- ----------------------------------------------------------------------
Electronics Equipment and Instruments -- 0.6%
1,525 Mettler-Toledo International Inc.* 64,370
- ----------------------------------------------------------------------
Energy Equipment and Services -- 1.9%
3,245 Grant Prideco, Inc.* 42,250
2,980 Transocean Inc.* 71,550
2,945 Weatherford International Ltd.* 106,020
- ----------------------------------------------------------------------
219,820
- ----------------------------------------------------------------------
Food and Drug Retailing -- 1.5%
4,090 Safeway Inc.* 89,612
1,440 Seven Eleven Japan Co., Ltd., Unsponsored ADR 43,669
3,220 Tesco PLC, Sponsored ADR 44,573
- ----------------------------------------------------------------------
177,854
- ----------------------------------------------------------------------
Food Products -- 2.4%
1,480 Groupe Danone, Sponsored ADR 48,085
2,040 Kraft Foods, Inc., Class A Shares 65,729
See Notes to Financial Statements.
26 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Global All Cap Growth and Value
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------
Food Products -- 2.4% (continued)
1,060 Nestle S.A., Sponsored ADR $ 66,210
1,750 Wm. Wrigley Jr. Co. 98,368
- ------------------------------------------------------------------------------
278,392
- ------------------------------------------------------------------------------
Gas Utilities -- 0.8%
28,410 Hong Kong & China Gas Co. Ltd., Sponsored ADR 43,365
1,310 KeySpan Corp. 48,208
- ------------------------------------------------------------------------------
91,573
- ------------------------------------------------------------------------------
Healthcare Providers and Services -- 1.8%
1,120 HCA Inc. 48,115
2,650 UnitedHealth Group Inc. 154,177
- ------------------------------------------------------------------------------
202,292
- ------------------------------------------------------------------------------
Hotels, Restaurants and Leisure -- 1.1%
2,800 McDonald's Corp. 69,524
1,360 MGM MIRAGE* 51,150
- ------------------------------------------------------------------------------
120,674
- ------------------------------------------------------------------------------
Household Durables -- 0.8%
1,480 Koninklijke (Royal) Philips Electronics N.V. 43,053
2,080 Newell Rubbermaid Inc. 47,362
- ------------------------------------------------------------------------------
90,415
- ------------------------------------------------------------------------------
Household Products -- 0.6%
1,215 Kimberly-Clark Corp. 71,794
- ------------------------------------------------------------------------------
Industrial Conglomerates -- 3.2%
4,175 General Electric Co. 129,342
2,445 Honeywell International, Inc. 81,736
1,180 Hutchison Whampoa Ltd., Unsponsored ADR 43,508
4,080 Tyco International Ltd. 108,120
- ------------------------------------------------------------------------------
362,706
- ------------------------------------------------------------------------------
Insurance -- 4.9%
3,850 American International Group, Inc. 255,178
2,035 Axa, Sponsored ADR 43,691
58 Berkshire Hathaway Inc., Class B Shares* 163,270
780 The Hartford Financial Services Group, Inc. 46,043
1,240 The St. Paul Cos., Inc. 49,166
- ------------------------------------------------------------------------------
557,348
- ------------------------------------------------------------------------------
Internet and Catalog Retail -- 1.1%
3,870 InterActiveCorp.* 131,309
- ------------------------------------------------------------------------------
Leisure Equipment and Products -- 0.6%
1,990 Fuji Photo Film Co., Ltd., Unsponsored ADR 65,272
- ------------------------------------------------------------------------------
Machinery -- 0.8%
3,210 Pall Corp. 86,124
- ------------------------------------------------------------------------------
Media -- 7.4%
3,760 Cablevision Systems -- New York Group, Class A Shares* 87,946
Comcast Corp.:
2,002 Class A Shares* 65,806
3,505 Special Class A Shares* 109,636
1,050 Grupo Televisa S.A., Sponsored ADR 41,853
See Notes to Financial Statements.
27 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Global All Cap Growth and Value
SHARES SECURITY VALUE
- --------------------------------------------------------------------
Media -- 7.4% (continued)
14,495 Liberty Media Corp., Class A Shares* $ 172,346
1,850 The News Corp., Ltd., Sponsored ADR 66,785
7,195 Time Warner Inc.* 129,438
5,535 The Walt Disney Co. 129,132
890 WPP Group PLC, Sponsored ADR 43,744
- ----------------------------------------------------------------
846,686
- ----------------------------------------------------------------
Metals and Mining -- 1.0%
1,825 Alcoa Inc. 69,350
380 Rio Tinto PLC, Sponsored ADR 42,298
- ----------------------------------------------------------------
111,648
- ----------------------------------------------------------------
Multiline Retail -- 1.1%
590 Federated Department Stores, Inc. 27,807
1,460 Target Corp. 56,064
1,470 Wal-Mart de Mexico S.A. de C.V., ADR 41,900
- ----------------------------------------------------------------
125,771
- ----------------------------------------------------------------
Multi-Utilities -- 0.5%
2,750 NiSource Inc. 60,335
- ----------------------------------------------------------------
Office Electronics -- 0.4%
930 CANON INC., Sponsored ADR 44,305
- ----------------------------------------------------------------
Oil and Gas -- 3.6%
2,580 BP PLC, Sponsored ADR 127,323
1,085 ChevronTexaco Corp. 93,733
1,230 Royal Dutch Petroleum Co. 64,440
1,355 Total SA, Sponsored ADR 125,351
- ----------------------------------------------------------------
410,847
- ----------------------------------------------------------------
Paper and Forest Products -- 0.7%
1,900 International Paper Co. 81,909
- ----------------------------------------------------------------
Personal Products -- 1.4%
4,415 The Gillette Co. 162,163
- ----------------------------------------------------------------
Pharmaceuticals -- 8.2%
1,720 Forest Laboratories, Inc.* 106,296
1,410 GlaxoSmithKline PLC, ADR 65,734
3,440 Johnson & Johnson 177,710
2,845 Merck & Co. Inc. 131,439
960 Novartis AG, ADR 44,054
1,050 Novo-Nordisk A/S, Sponsored ADR 43,008
7,392 Pfizer Inc. 261,159
4,260 Schering-Plough Corp. 74,081
1,010 Wyeth 42,874
- ----------------------------------------------------------------
946,355
- ----------------------------------------------------------------
Semiconductors Equipment and Products -- 4.4%
150 Cabot Microelectronics Corp.* 7,350
2,450 Cree, Inc.* 43,340
6,140 Intel Corp. 197,708
6,870 Micron Technology, Inc.* 92,539
See Notes to Financial Statements.
28 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Global All Cap Growth and Value
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------------------
Semiconductors Equipment and Products -- 4.4% (continued)
5,570 Texas Instruments Inc. $ 163,647
- ----------------------------------------------------------------------------------------------------------------------
504,584
- ----------------------------------------------------------------------------------------------------------------------
Software -- 2.8%
2,420 Advent Software, Inc.* 42,181
2,580 Autodesk, Inc. 63,417
5,400 Microsoft Corp. 148,716
1,530 SAP AG, Sponsored ADR 63,587
- ----------------------------------------------------------------------------------------------------------------------
317,901
- ----------------------------------------------------------------------------------------------------------------------
Specialty Retail -- 2.0%
12,390 Charming Shoppes, Inc.* 66,906
4,605 The Home Depot, Inc. 163,431
- ----------------------------------------------------------------------------------------------------------------------
230,337
- ----------------------------------------------------------------------------------------------------------------------
Tobacco -- 0.9%
1,940 Altria Group, Inc. 105,575
- ----------------------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.4%
7,110 AT&T Wireless Services Inc.* 56,809
2,310 SK Telecom Co., Ltd., ADR 43,082
2,645 Vodafone Group PLC, Sponsored ADR 66,231
- ----------------------------------------------------------------------------------------------------------------------
166,122
- ----------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $9,035,215) 10,317,692
- ----------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK -- 0.3%
Media -- 0.3%
1,090 The News Corp., Ltd., Sponsored ADR (Cost -- $25,915) 32,972
- ----------------------------------------------------------------------------------------------------------------------
SUB-TOTAL INVESTMENTS
(Cost -- $9,061,130) 10,350,664
- ----------------------------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 9.8%
$1,121,000 State Street Bank and Trust Co., 0.800% due 1/2/04; Proceeds at maturity -- $1,121,050; (Fully
collateralized by U.S. Treasury Notes and Bonds, 2.000% to 8.875% due 11/30/04 to 2/15/19;
Market value -- $1,160,513) (Cost -- $1,121,000) 1,121,000
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $10,182,130**) $ 11,471,664
- ----------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
**Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
29 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
SHARES SECURITY VALUE
- --------------------------------------------------------------------
COMMON STOCK -- 61.4%
Aerospace and Defense -- 1.0%
8,100 L-3 Communications Holdings, Inc.* $ 416,016
13,165 Raytheon Co. 395,477
- ------------------------------------------------------------------
811,493
- ------------------------------------------------------------------
Banks -- 1.6%
11,995 The Bank of New York Co., Inc. 397,274
11,310 Bank One Corp. 515,623
5,155 Wells Fargo & Co. 303,578
- ------------------------------------------------------------------
1,216,475
- ------------------------------------------------------------------
Beverages -- 2.1%
15,855 The Coca-Cola Co. 804,641
18,375 PepsiCo, Inc. 856,642
- ------------------------------------------------------------------
1,661,283
- ------------------------------------------------------------------
Biotechnology -- 4.7%
1,690 Alkermes, Inc.* 22,815
13,350 Amgen Inc.* 825,030
14,255 Biogen Idec Inc.* 524,299
13,235 Chiron Corp.* 754,263
4,935 Genentech, Inc.* 461,768
15,365 Genzyme Corp.* 758,109
17,060 Millennium Pharmaceuticals, Inc.* 318,510
- ------------------------------------------------------------------
3,664,794
- ------------------------------------------------------------------
Chemicals -- 0.7%
17,240 Engelhard Corp. 516,339
- ------------------------------------------------------------------
Commercial Services and Supplies -- 0.5%
18,610 Sabre Holdings Corp. 401,790
- ------------------------------------------------------------------
Communications Equipment -- 1.8%
15,140 3Com Corp.* 123,694
18,910 Cisco Systems, Inc.* 459,324
21,345 Motorola, Inc. 300,324
30,260 Nokia Oyj, Sponsored ADR 514,420
- ------------------------------------------------------------------
1,397,762
- ------------------------------------------------------------------
Computers and Peripherals -- 2.1%
18,770 Dell Inc.* 637,429
1,450 Electronics for Imaging, Inc.* 37,729
10,890 Hewlett-Packard Co. 250,143
2,760 International Business Machines Corp. 255,797
24,365 Maxtor Corp.* 270,452
3,650 SanDisk Corp.* 223,161
- ------------------------------------------------------------------
1,674,711
- ------------------------------------------------------------------
Construction Materials -- 0.1%
1,140 Vulcan Materials Co. 54,230
- ------------------------------------------------------------------
Diversified Financials -- 2.4%
10,625 American Express Co. 512,444
6,815 Lehman Brothers Holdings, Inc. 526,254
See Notes to Financial Statements.
30 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
SHARES SECURITY VALUE
- --------------------------------------------------------------------
Diversified Financials -- 2.4% (continued)
7,870 Merrill Lynch & Co., Inc. $ 461,576
7,420 State Street Corp. 386,434
- ------------------------------------------------------------------
1,886,708
- ------------------------------------------------------------------
Diversified Telecommunication Services -- 1.5%
16,040 Nippon Telegraph & Telephone Corp. 393,942
14,880 SBC Communications, Inc. 387,922
11,330 Verizon Communications Inc. 397,456
- ------------------------------------------------------------------
1,179,320
- ------------------------------------------------------------------
Electrical Equipment -- 0.7%
7,895 Emerson Electric Co. 511,201
- ------------------------------------------------------------------
Electronic Equipment and Instruments -- 0.6%
5,275 Agilent Technologies, Inc.* 154,241
50,540 Solectron Corp.* 298,691
- ------------------------------------------------------------------
452,932
- ------------------------------------------------------------------
Energy Equipment and Services -- 0.9%
15,755 Grant Prideco, Inc.* 205,130
14,510 Weatherford International Ltd.* 522,360
- ------------------------------------------------------------------
727,490
- ------------------------------------------------------------------
Food and Drug Retailing -- 0.3%
12,000 Safeway, Inc.* 262,920
- ------------------------------------------------------------------
Food Products -- 0.6%
8,620 Wm. Wrigley Jr. Co. 484,530
- ------------------------------------------------------------------
Health Care Providers and Services -- 1.3%
7,830 McKesson Corp. 251,813
13,080 UnitedHealth Group Inc. 760,994
- ------------------------------------------------------------------
1,012,807
- ------------------------------------------------------------------
Hotels, Restaurants and Leisure -- 0.4%
13,700 McDonald's Corp. 340,171
- ------------------------------------------------------------------
Industrial Conglomerates -- 2.0%
20,620 General Electric Co. 638,808
12,660 Honeywell International, Inc. 423,224
19,180 Tyco International Ltd. 508,270
- ------------------------------------------------------------------
1,570,302
- ------------------------------------------------------------------
Insurance -- 5.9%
12,020 Allstate Corp. 517,100
7,465 Ambac Financial Group, Inc. 517,996
20,640 American International Group, Inc. 1,368,019
279 Berkshire Hathaway, Inc., Class B Shares* 785,385
6,830 The Chubb Corp. 465,123
4,925 MBIA, Inc. 291,708
9,185 MGIC Investment Corp. 522,994
2,500 The St. Paul Cos., Inc. 99,125
- ------------------------------------------------------------------
4,567,450
- ------------------------------------------------------------------
Internet and Catalog Retail -- 0.8%
19,480 InterActiveCorp* 660,956
- ------------------------------------------------------------------
See Notes to Financial Statements.
31 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
SHARES SECURITY VALUE
- ----------------------------------------------------------------------------
IT Consulting and Services -- 0.4%
21,060 Unisys Corp.* $ 312,741
- --------------------------------------------------------------------------
Leisure Equipment and Products -- 0.5%
18,200 Hasbro, Inc. 387,296
- --------------------------------------------------------------------------
Machinery -- 1.4%
6,345 Caterpillar Inc. 526,762
1,520 PACCAR Inc. 129,382
15,020 Pall Corp. 402,987
- --------------------------------------------------------------------------
1,059,131
- --------------------------------------------------------------------------
Media -- 6.0%
18,215 Cablevision Systems -- New York Group, Class A Shares* 426,049
33,590 Comcast Corp., Special Class A Shares* 1,050,696
91,245 Liberty Media Corp., Class A Shares* 1,084,903
10,870 The News Corp., Ltd., ADR 392,407
39,785 Time Warner Inc.* 715,732
43,380 The Walt Disney Co. 1,012,055
- --------------------------------------------------------------------------
4,681,842
- --------------------------------------------------------------------------
Metals and Mining -- 1.5%
14,305 Alcoa Inc. 543,590
28,380 Allegheny Technologies, Inc. 375,184
5,220 Newmont Mining Corp. 253,744
- --------------------------------------------------------------------------
1,172,518
- --------------------------------------------------------------------------
Multi-Utilities -- 0.3%
25,420 The Williams Cos., Inc. 249,624
- --------------------------------------------------------------------------
Office Electronics -- 0.4%
27,700 IKON Office Solutions, Inc. 328,522
- --------------------------------------------------------------------------
Oil and Gas -- 1.8%
830 Amerada Hess Corp. 44,131
5,250 Anadarko Petroleum Corp. 267,803
8,830 BP PLC, Sponsored ADR 435,760
4,070 ConocoPhillips 266,870
6,865 Exxon Mobil Corp. 281,465
1,910 Murphy Oil Corp. 124,742
- --------------------------------------------------------------------------
1,420,771
- --------------------------------------------------------------------------
Paper and Forest Products -- 0.7%
8,100 Weyerhaeuser Co. 518,400
- --------------------------------------------------------------------------
Personal Products -- 1.0%
21,130 The Gillette Co. 776,105
- --------------------------------------------------------------------------
Pharmaceuticals -- 7.3%
11,140 Abbott Laboratories 519,124
18,700 Bristol-Myers Squibb Co. 534,820
8,310 Forest Laboratories, Inc., Class A Shares* 513,558
12,255 Johnson & Johnson 633,093
26,205 Merck & Co. Inc. 1,210,672
37,883 Pfizer Inc. 1,338,406
22,970 Schering-Plough Corp. 399,448
See Notes to Financial Statements.
32 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------------------------------
Pharmaceuticals -- 7.3% (continued)
12,345 Wyeth $ 524,045
- ------------------------------------------------------------------------------------------------------
5,673,166
- ------------------------------------------------------------------------------------------------------
Semiconductor Equipment and Products -- 5.1%
505 Cabot Microelectronics Corp.* 24,745
11,715 Cree, Inc.* 207,238
47,410 Intel Corp. 1,526,602
34,240 Micron Technology, Inc.* 461,213
38,710 Taiwan Semiconductor Manufacturing Co. Ltd.* 396,390
45,780 Texas Instruments Inc. 1,345,016
- ------------------------------------------------------------------------------------------------------
3,961,204
- ------------------------------------------------------------------------------------------------------
Software -- 1.3%
11,540 Advent Software, Inc.* 201,142
12,990 Autodesk, Inc. 319,294
16,680 Microsoft Corp. 459,367
- ------------------------------------------------------------------------------------------------------
979,803
- ------------------------------------------------------------------------------------------------------
Specialty Retail -- 1.2%
61,160 Charming Shoppes* 330,264
17,765 The Home Depot, Inc. 630,480
- ------------------------------------------------------------------------------------------------------
960,744
- ------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.5%
16,400 Vodafone Group PLC, Sponsored ADR 410,656
- ------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $41,456,938) 47,948,187
- ------------------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 20.6%
U.S. Treasury Notes:
$2,050,000 1.250% due 5/31/05 2,045,197
4,190,000 2.000% due 5/15/06 4,192,129
2,015,000 6.500% due 10/15/06 2,245,073
2,000,000 2.625% due 11/15/06 2,018,282
5,485,000 3.250% due 8/15/07 5,596,631
- ------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost -- $16,124,134) 16,097,312
- ------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 3.6%
2,585,000 Federal National Mortgage Association, 5.500% due 3/15/11 (Cost -- $2,798,550) 2,791,852
- ------------------------------------------------------------------------------------------------------
SUB-TOTAL INVESTMENTS
(Cost -- $60,379,622) 66,837,351
- ------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
33 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) DECEMBER 31, 2003
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
FACE
AMOUNT SECURITY VALUE
- -----------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 14.4%
$11,254,000 State Street Bank and Trust Co., 0.800% due 1/2/04; Proceeds at maturity -- $11,254,500;
(Fully collateralized by U.S. Treasury Bonds, 9.125% due 5/15/18; Market
value -- $11,494,950) (Cost -- $11,254,000) $ 11,254,000
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $71,633,622**) $ 78,091,351
- -----------------------------------------------------------------------------------------------------------------
*Non-income producing security.
**Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
34 Smith Barney Multiple Discipline Trust | 2003 Annual Report
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2003
All Cap Large Cap Global All Cap Balanced All Cap
Growth and Value Growth and Value Growth and Value Growth and Value
- ---------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at cost $ 80,860,283 $ 9,314,990 $ 9,061,130 $60,379,622
Repurchase agreements, at cost 13,288,000 474,000 1,121,000 11,254,000
- ---------------------------------------------------------------------------------------------------------------
Investments, at value $ 92,438,521 $10,501,124 $10,350,664 $66,837,351
Repurchase agreements, at value 13,288,000 474,000 1,121,000 11,254,000
Cash 1,450 462 3,169 1,931
Receivable for Fund shares sold 168,378 17,443 1,280 201,500
Dividends and interest receivable 94,830 11,867 10,631 207,873
Receivable from Manager -- 3,970 5,432 --
- ---------------------------------------------------------------------------------------------------------------
Total Assets 105,991,179 11,008,866 11,492,176 78,502,655
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 2,114,077 164,323 486,638 621,622
Management fees payable 59,270 -- -- 39,903
Accrued expenses 49,152 33,837 31,714 53,119
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities 2,222,499 198,160 518,352 714,644
- ---------------------------------------------------------------------------------------------------------------
Total Net Assets $103,768,680 $10,810,706 $10,973,824 $77,788,011
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS:
Par value of shares of beneficial interest $ 7,420 $ 787 $ 778 $ 6,140
Capital paid in excess of par value 92,185,659 9,623,997 9,679,603 71,327,159
Undistributed (overdistributed) net
investment income 19,143 (212) 1,043 9,595
Accumulated net realized gain (loss) from
investment transactions (21,780) -- 2,866 (12,612)
Net unrealized appreciation of investments 11,578,238 1,186,134 1,289,534 6,457,729
- ---------------------------------------------------------------------------------------------------------------
Total Net Assets $103,768,680 $10,810,706 $10,973,824 $77,788,011
- ---------------------------------------------------------------------------------------------------------------
Shares Outstanding 7,419,654 786,720 778,005 6,140,426
- ---------------------------------------------------------------------------------------------------------------
Net Asset Value $13.99 $13.74 $14.11 $12.67
- ---------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
35 Smith Barney Multiple Discipline Trust | 2003 Annual Report
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003
All Cap Large Cap Global All Cap Balanced All Cap
Growth and Value Growth and Value Growth and Value Growth and Value
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 369,515 $ 62,477 $ 53,338 $ 208,151
Interest 66,124 4,695 4,574 295,784
Less: Foreign withholding tax (1,132) (228) (1,493) (682)
- --------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 434,507 66,944 56,419 503,253
- --------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 278,916 31,037 31,173 223,342
Distribution plan fees (Note 2) 92,972 10,346 10,391 74,447
Audit and legal 31,501 24,300 29,501 33,526
Custody 30,002 18,001 21,001 32,001
Shareholder communications 24,000 2,998 3,298 19,998
Trustees' fees 20,000 4,500 5,100 18,001
Shareholder servicing fees 5,000 5,000 5,000 5,000
Registration fees 4,999 499 500 5,000
Other 1,500 100 400 2,524
- --------------------------------------------------------------------------------------------------------------------------------
Total Expenses 488,890 96,781 106,364 413,839
Less: Management and distribution plan fee waivers and
expense reimbursements (Note 2) (117,002) (55,557) (64,800) (115,006)
- --------------------------------------------------------------------------------------------------------------------------------
Net Expenses 371,888 41,224 41,564 298,833
- --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 62,619 25,720 14,855 204,420
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized Gain (Loss) From Investment Transactions
(excluding short-term investments):
Proceeds from sales 1,116,110 183,318 218,481 9,933,400
Cost of securities sold 1,137,890 133,633 181,244 9,946,012
- --------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) (21,780) 49,685 37,237 (12,612)
- --------------------------------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of
Investments:
Beginning of year (35,813) (3,566) 335 (40,915)
End of year 11,578,238 1,186,134 1,289,534 6,457,729
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 11,614,051 1,189,700 1,289,199 6,498,644
- --------------------------------------------------------------------------------------------------------------------------------
Net Gain on Investments 11,592,271 1,239,385 1,326,436 6,486,032
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $11,654,890 $1,265,105 $1,341,291 $6,690,452
- --------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
36 Smith Barney Multiple Discipline Trust | 2003 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2003
All Cap Large Cap Global All Cap Balanced All Cap
Growth and Value Growth and Value Growth and Value Growth and Value
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 62,619 $ 25,720 $ 14,855 $ 204,420
Net realized gain (loss) (21,780) 49,685 37,237 (12,612)
Increase in net unrealized appreciation 11,614,051 1,189,700 1,289,199 6,498,644
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 11,654,890 1,265,105 1,341,291 6,690,452
- ---------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (45,236) (26,351) (14,356) (199,003)
Net realized gains (3,240) (50,067) (35,268) (902)
- ---------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to
Shareholders (48,476) (76,418) (49,624) (199,905)
- ---------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 89,366,294 10,042,627 8,994,045 68,161,729
Net asset value of shares issued for
reinvestment of dividends 48,476 76,418 49,624 199,905
Cost of shares reacquired (582,948) (932,855) (364,549) (298,649)
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share
Transactions 88,831,822 9,186,190 8,679,120 68,062,985
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets 100,438,236 10,374,877 9,970,787 74,553,532
NET ASSETS:
Beginning of year 3,330,444 435,829 1,003,037 3,234,479
- ---------------------------------------------------------------------------------------------------------------------
End of year* $103,768,680 $10,810,706 $10,973,824 $77,788,011
- ---------------------------------------------------------------------------------------------------------------------
* Includes undistributed (overdistributed) net
investment income of: $19,143 $(212) $1,043 $9,595
- ---------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
37 Smith Barney Multiple Discipline Trust | 2003 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE PERIOD ENDED DECEMBER
31, 2002 (A)
All Cap Large Cap Global All Cap Balanced All Cap
Growth and Value Growth and Value Growth and Value Growth and Value
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,760 $ 419 $ 544 $ 4,178
Net realized gain 3,240 382 897 902
Increase in net unrealized appreciation
(depreciation) (35,813) (3,566) 335 (40,915)
- ---------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Operations (30,813) (2,765) 1,776 (35,835)
- ---------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 3,382,276 442,809 1,206,376 3,272,612
Cost of shares reacquired (21,019) (4,215) (205,115) (2,298)
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share
Transactions 3,361,257 438,594 1,001,261 3,270,314
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets 3,330,444 435,829 1,003,037 3,234,479
NET ASSETS:
Beginning of period -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
End of period* $3,330,444 $435,829 $1,003,037 $3,234,479
- ---------------------------------------------------------------------------------------------------------------------
* Includes undistributed net investment income
of: $1,760 $419 $544 $4,178
- ---------------------------------------------------------------------------------------------------------------------
(a)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
See Notes to Financial Statements.
38 Smith Barney Multiple Discipline Trust | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Multiple Discipline Portfolio -- All Cap Growth and Value ("All Cap Growth and
Value"), Multiple Discipline Portfolio -- Large Cap Growth and Value ("Large
Cap Growth and Value"), Multiple Discipline Portfolio -- Global All Cap Growth
and Value ("Global All Cap Growth and Value") and Multiple Discipline
Portfolio -- Balanced All Cap Growth and Value ("Balanced All Cap Growth and
Value") ("Funds") are separate investment funds of the Smith Barney Multiple
Discipline Trust ("Trust"). The Trust, a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as amended, ("1940 Act")
as a diversified open-end management investment company. The Trust is offered
exclusively for use with certain variable annuity and variable life insurance
contracts offered through the separate accounts of various life insurance
companies and qualified pension and retirement plans.
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 on such markets
or, if there were no sales during the day, at the mean between the current
quoted bid and asked price; securities primarily traded on foreign exchanges
are generally valued at the preceding closing values of such securities on
their respective exchanges, except that when a significant occurrence,
subsequent to the time a value was so established, is likely to have
significantly changed the value then, the fair value of those securities will
be determined by consideration of other factors by or under the direction of
the Board of Trustees or its delegates; over-the-counter securities are valued
on the basis of the bid price at the close of business on each day; U.S.
government and agency obligations are valued at the average between bid and
asked prices in the over-the-counter market; 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
Trustees; (e) interest income, adjusted for amortization of premium and
accretion of discount is recorded on the accrual basis; (f ) dividend income is
recorded on the ex-dividend date; foreign dividend income is recorded on the
ex-dividend date or as soon as practical after the Funds determine the
existence of a dividend declaration after exercising reasonable due diligence;
(g) gains or losses on the sale of securities are calculated by using the
specific identification method; (h) dividends and distributions to shareholders
are recorded by the Funds on the ex-dividend date; the Funds distribute
dividends and capital gains, if any, at least annually; (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 and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank; (j) realized gain and loss on foreign currency includes the net realized
amount from the sale of currency and the amount realized between trade date and
settlement date on security transactions; (k) 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; (l) each Fund intends to comply with the applicable provisions of
the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; and (m)
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.
In addition, the Funds may enter into forward exchange contracts in order to
hedge against foreign currency risk. These contracts are marked-to-market
daily, by recognizing the difference between the contract exchange rate and the
current market rate as an unrealized gain or loss. Realized gains or losses are
recognized when contracts are settled or offset by entering into another
forward exchange contract.
39 Smith Barney Multiple Discipline Trust | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Investment Management Agreement and Other Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as the investment manager to the Funds.
Each Fund pays SBFM a management fee calculated at an annual rate of 0.75% of
their respective average daily net assets. These fees are calculated daily and
paid monthly.
Citigroup Global Markets Inc. ("CGM") (formerly known as Salomon Smith Barney
Inc.), another indirect wholly-owned subsidiary of Citigroup, acts as the
Funds' distributor. Each Fund has adopted a distribution plan ("Plan") pursuant
to Rule 12b-1 under the 1940 Act. The Plan provides that each Fund shall pay a
distribution fee of 0.25% of the average daily net assets of each Fund,
respectively. These fees are calculated daily and paid monthly.
During the year ended December 31, 2003, the Funds had voluntary expense
limitations in place of 1.00% of the average daily net assets of each Fund,
respectively, resulting in the following fee waivers and expense reimbursements:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth and Growth and
and Value and Value Value Value
- ---------------------------------------------------------------------------------------
Management fee waiver $ 24,030 $31,037 $31,173 $ 40,559
Expense reimbursement -- 14,174 23,236 --
Distribution plan fee waiver 92,972 10,346 10,391 74,447
- --------------------------------------------------------------------------------------
Total $117,002 $55,557 $64,800 $115,006
- --------------------------------------------------------------------------------------
These expense limitations can be terminated at any time by SBFM or CGM.
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 December 31, 2003, each Fund paid transfer agent fees of $5,000
to CTB.
In addition, for the year ended December 31, 2003, CGM and its affiliates
received brokerage commissions of $1,507 for All Cap Growth and Value.
All officers and one Trustee of the Trust are employees of Citigroup or its
affiliates.
3. Investments
During the year ended December 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:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth and Growth and
and Value and Value Value Value*
- ------------------------------------------------------------------------------------------
Purchases $79,883,590 $9,132,239 $8,396,074 $68,178,614
- -----------------------------------------------------------------------------------------
Sales 1,116,110 183,318 218,481 9,933,400
- -----------------------------------------------------------------------------------------
* Includes purchases and sales of U.S. government obligations amounting to
$27,479,735 and $9,302,159, respectively.
At December 31, 2003, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth and Growth and
and Value and Value Value Value
- --------------------------------------------------------------------------------------------
Gross unrealized appreciation $11,749,484 $1,204,425 $1,302,504 $6,595,734
Gross unrealized depreciation (171,246) (18,291) (12,970) (138,005)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation $11,578,238 $1,186,134 $1,289,534 $6,457,729
- -------------------------------------------------------------------------------------------
40 Smith Barney Multiple Discipline Trust | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. 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.
5. Shares of Beneficial Interest
At December 31, 2003, the Trust had an unlimited number of shares authorized
with a par value of $0.001 per share.
Transactions in shares of each Fund were as follows:
Year Ended Period Ended
December 31, 2003 December 31, 2002 (a)
- ------------------------------------------------------------
All Cap Growth and
Value
Shares sold 7,152,555 314,555
Shares issued on
reinvestment 3,541 --
Shares reacquired (49,116) (1,881)
- -----------------------------------------------------------
Net Increase 7,106,980 312,674
- -----------------------------------------------------------
Large Cap Growth
and Value
Shares sold 812,304 40,980
Shares issued on
reinvestment 5,589 --
Shares reacquired (71,773) (380)
- -----------------------------------------------------------
Net Increase 746,120 40,600
- -------------------------------------
- ------------------------------------------------------------
Global All Cap
Growth and Value
Shares sold 713,459 111,473
Shares issued on
reinvestment 3,551 --
Shares reacquired (32,016) (18,462)
- -----------------------------------------------------------
Net Increase 684,994 93,011
- -------------------------------------
- ------------------------------------------------------------
Balanced All Cap
Growth and Value
Shares sold 5,842,368 310,541
Shares issued on
reinvestment 15,855 --
Shares reacquired (28,120) (218)
- -----------------------------------------------------------
Net Increase 5,830,103 310,323
- -------------------------------------
- ------------------------------------------------------------
(a)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
6. Capital Loss Carryforward
At December 31, 2003, All Cap Growth and Value and Balanced All Cap Growth and
Value had, for Federal income tax purposes, approximately $22,000 and $13,000,
respectively, of unused capital loss carryforwards available to offset future
capital gains expiring on December 31, 2011. 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.
7. Income Tax Information and Distributions to Shareholders
At December 31, 2003, the tax basis components of distributable earnings were:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth Growth
and Value and Value and Value and Value
- -------------------------------------------------------------------------------------------
Undistributed ordinary income $ 21,777 $ 237 $ 4,679 $ 11,989
- ------------------------------------------------------------------------------------------
Accumulated capital gains (losses) (21,780) -- 273 (12,612)
- ------------------------------------------------------------------------------------------
Unrealized appreciation 11,578,238 1,186,134 1,289,534 6,457,729
- ------------------------------------------------------------------------------------------
41 Smith Barney Multiple Discipline Trust | 2003 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The tax character of distributions paid during the year ended December 31, 2003
was:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth Growth
and Value and Value and Value and Value
- ---------------------------------------------------------------------------------------
Ordinary income $48,476 $76,418 $49,624 $199,905
- --------------------------------------------------------------------------------------
At December 31, 2002, the tax basis components of distributable earnings were:
All Cap Large Cap Global All Cap Balanced All Cap
Growth Growth Growth Growth
and Value and Value and Value and Value
- ---------------------------------------------------------------------------------------
Undistributed ordinary income $ 8,353 $ 1,372 $2,769 $ 8,127
- --------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) (35,813) (3,566) 335 (40,915)
- --------------------------------------------------------------------------------------
For the period ended December 31, 2002, the Funds did not make any
distributions.
8. Additional Information
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.
CAM has begun to take corrective actions. CAM will pay to the applicable funds
approximately $17 million (plus interest) that CAM and its affiliates received
from the Revenue Guarantee Agreement and its amendment. The Funds did not
implement the contractual arrangement described above and therefore will not
receive any portion of the payment. 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.
42 Smith Barney Multiple Discipline Trust | 2003 Annual Report
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:
All Cap Growth and Value 2003/(1)/ 2002/(1)(2)/
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $10.65 $10.00
- --------------------------------------------------------------------------------------------
Income From Operations:
Net investment income/(3)/ 0.02 0.01
Net realized and unrealized gain 3.33 0.64
- --------------------------------------------------------------------------------------------
Total Income From Operations 3.35 0.65
- --------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) --
Net realized gains (0.00)* --
- --------------------------------------------------------------------------------------------
Total Distributions (0.01) --
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Year $13.99 $10.65
- --------------------------------------------------------------------------------------------
Total Return/(4)/ 31.44% 6.50%++
- --------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $103,769 $3,330
- --------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)(5)/ 1.00% 1.00%+
Net investment income 0.17 0.49+
- --------------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 2%
- --------------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
(3)The Manager and Distributor waived all or a portion of its fees for the year
ended December 31, 2003 and for the period ended December 31, 2002. In
addition, the Manager has reimbursed the Fund for $69,157 in expenses for
the period ended December 31, 2002. If such fees were not waived and
expenses not reimbursed, the per share decreases to net investment income
and the actual expense ratios would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers and
to Net Investment Income Expense Reimbursements
------------------------ ----------------------
2003 2002 2003 2002
----- ----- ----- -----
All Cap Growth and
Value $0.04 $0.40 1.31% 21.24%+
(4)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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
(5)As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 1.00%.
* Amount represents less than $0.01 per share.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
43 Smith Barney Multiple Discipline Trust | 2003 Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:
Large Cap Growth and Value 2003 2002/(1)(2)/
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $10.73 $10.00
- ----------------------------------------------------------------------------------------
Income From Operations:
Net investment income/(3)/ 0.02 0.01
Net realized and unrealized gain 3.09 0.72
- ----------------------------------------------------------------------------------------
Total Income From Operations 3.11 0.73
- ----------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) --
Net realized gains (0.07) --
- ----------------------------------------------------------------------------------------
Total Distributions (0.10) --
- ----------------------------------------------------------------------------------------
Net Asset Value, End of Year $13.74 $10.73
- ----------------------------------------------------------------------------------------
Total Return/(4)/ 29.00% 7.30%++
- ----------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $10,811 $436
- ----------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)(5)/ 1.00% 1.00%+
Net investment income 0.62 0.69+
- ----------------------------------------------------------------------------------------
Portfolio Turnover Rate 5% 3%
- ----------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
(3)The Manager and Distributor waived all or a portion of its fees for the year
ended December 31, 2003 and for the period ended December 31, 2002. In
addition, the Manager has reimbursed the Fund for $14,174 and $72,138 in
expenses for the year ended December 31, 2003 and the period ended December
31, 2002, respectively. If such fees were not waived and expenses not
reimbursed, the per share decreases to net investment income and the actual
expense ratios would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers and
to Net Investment Income Expense Reimbursements
------------------------ ----------------------
2003 2002 2003 2002
----- ----- ----- ------
Large Cap Growth
and Value $0.16 $2.55 2.35% 119.99%+
(4)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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
(5)As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 1.00%.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
44 Smith Barney Multiple Discipline Trust | 2003 Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:
Global All Cap Growth and Value 2003/(1)/ 2002/(1)(2)/
- ----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $10.78 $10.00
- -------------------------------------------------------------------------------------------
Income From Operations:
Net investment income/(3)/ 0.04 0.01
Net realized and unrealized gain 3.36 0.77
- -------------------------------------------------------------------------------------------
Total Income From Operations 3.40 0.78
- -------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.02) --
Net realized gains (0.05) --
- -------------------------------------------------------------------------------------------
Total Distributions (0.07) --
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.11 $10.78
- -------------------------------------------------------------------------------------------
Total Return/(4)/ 31.55% 7.80%++
- -------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $10,974 $1,003
- -------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)(5)/ 1.00% 1.00%+
Net investment income 0.36 0.38+
- -------------------------------------------------------------------------------------------
Portfolio Turnover Rate 6% 2%
- -------------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
(3)The Manager and Distributor waived all or a portion of its fees for the year
ended December 31, 2003 and for the period ended December 31, 2002. In
addition, the Manager has reimbursed the Fund for $23,236 and $71,327 in
expenses for the year ended December 31, 2003 and the period ended
December 31, 2002, respectively. If such fees were not waived and expenses
not reimbursed, the per share decreases to net investment income and the
actual expense ratios would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers and
to Net Investment Income Expense Reimbursements
------------------------ ----------------------
2003 2002 2003 2002
----- ----- ----- -----
Global All Cap
Growth and Value $0.19 $1.10 2.56% 52.11%+
(4)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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
(5)As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 1.00%.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
45 Smith Barney Multiple Discipline Trust | 2003 Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:
Balanced All Cap Growth and Value 2003/(1)/ 2002/(1)(2)/
- ----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $10.42 $10.00
- -------------------------------------------------------------------------------------------
Income From Operations:
Net investment income/(3)/ 0.08 0.02
Net realized and unrealized gain 2.20 0.40
- -------------------------------------------------------------------------------------------
Total Income From Operations 2.28 0.42
- -------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.03) --
Net realized gains (0.00)* --
- -------------------------------------------------------------------------------------------
Total Distributions (0.03) --
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Year $12.67 $10.42
- -------------------------------------------------------------------------------------------
Total Return/(4)/ 21.93% 4.20%++
- -------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $77,788 $3,234
- -------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)(5)/ 1.00% 1.00%+
Net investment income 0.69 1.28+
- -------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 7%
- -------------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period October 1, 2002 (commencement of operations) to December 31,
2002.
(3)The Manager and Distributor waived all or a portion of its fees for the year
ended December 31, 2003 and for the period ended December 31, 2002. In
addition, the Manager has reimbursed the Fund for $69,485 in expenses for
the period ended December 31, 2002. If such fees were not waived and
expenses not reimbursed, the per share decreases to net investment income
and the actual expense ratios would have been as follows:
Expense Ratios
Per Share Decreases Without Fee Waivers and
to Net Investment Income Expense Reimbursements
------------------------ ----------------------
2003 2002 2003 2002
----- ----- ----- -------
Balanced All Cap
Growth and Value $0.04 $0.40 1.39% 23.28%+
(4)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. Performance
figures may reflect fee waivers and/or expense reimbursements. Past
performance is no guarantee of future results. In the absence of fee waivers
and/or expense reimbursements, the total return would be reduced.
(5)As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 1.00%.
* Amount represents less than $0.01 per share.
++Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
46 Smith Barney Multiple Discipline Trust | 2003 Annual Report
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of the Smith Barney Multiple Discipline Trust:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Multiple Discipline
Portfolio -- All Cap Growth and Value, Multiple Discipline Portfolio -- Large
Cap Growth and Value, Multiple Discipline Portfolio -- Global All Cap Growth
and Value and Multiple Discipline Portfolio -- Balanced All Cap Growth and
Value ("Funds") of the Smith Barney Multiple Discipline Trust ("Trust") as of
December 31, 2003, and the related statements of operations for the year then
ended, and the statements of changes in net assets and the financial highlights
for the year then ended and for the period from October 1, 2002 (commencement
of operations) to December 31, 2002. These financial statements and financial
highlights are the responsibility of the Trust'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 the 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 and the financial
highlights. Our procedures included confirmation of securities owned as of
December 31, 2003, by correspondence with the custodian and broker. As to
securities purchased, but not yet received, 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 Trust as of December 31, 2003, and the results of their operations
for the year then ended, and changes in their net assets and the financial
highlights for the year then ended and for the period from October 1, 2002
(commencement of operations) to December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
New York, New York
February 13, 2004
47 Smith Barney Multiple Discipline Trust | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED)
Information about Trustees and Officers
The business and affairs of the Multiple Discipline Portfolio -- All Cap Growth
and Value, Multiple Discipline Portfolio --Large Cap Growth and Value, Multiple
Discipline Portfolio -- Global All Cap Growth and Value and Multiple Discipline
Portfolio -- Balanced All Cap Growth and Value ("Funds") are managed under the
direction of the Smith Barney Multiple Discipline Trust's ("Trust") Board of
Trustees. Information pertaining to the Trustees and officers of the Trust is
set forth below. The Statement of Additional Information includes additional
information about the Trustees and is available without charge, upon request by
calling the Trust's transfer agent (Citicorp Trust Bank, fsb. at
1-800-451-2010).
Term of Number of
Office* and Principal Portfolios
Length Occupation(s) in Fund Complex Other
Name, Address and Position(s) Held of Time During Past Overseen Board Memberships
Age with Fund Served Five Years by Trustee Held by Trustee
- -------------------------------------------------------------------------------------------------------------------------------
Non-Interested Trustees:
H. John Ellis Trustee Since Retired 28 None
858 East Crystal 2002
Downs Drive
Frankfort, MI 49635
Age 76
Armon E. Kamesar Trustee Since Chairman, TEC 28 Inter Ocean Systems Inc.
7328 Country Club 2002 International; Trustee,
Drive U.S. Bankruptcy Court
LaJolla, CA 92037
Age 75
Stephen E. Kaufman Trustee Since Attorney 55 None
Stephen E. Kaufman 2002
PC Co.
277 Park Avenue,
47th Floor
New York, NY 10172
Age 71
John J. Murphy Trustee Since President, Murphy Capital 28 Barclays International
123 Prospect Street 2002 Management Funds Group Ltd. and
Ridgewood, NJ 07450 affiliated companies
Age 59
Interested Trustee:
R. Jay Gerken, CFA** Chairman, Since Managing Director of Citigroup 221 None
Citigroup Asset President and 2002 Global Markets Inc. ("CGM");
Management ("CAM") Chief Executive Chairman, President and Chief
399 Park Avenue, Officer Executive Officer of Smith Barney
4th Floor Fund Management LLC ("SBFM"),
New York, NY 10022 Travelers Investment Adviser, Inc.
Age 52 ("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 to
2001) and Smith Barney Growth
and Income Fund (from 1996 to
2000)
48 Smith Barney Multiple Discipline Trust | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Term of Number of
Office* and Principal Portfolios
Length Occupation(s) in Fund Complex Other
Position(s) Held of Time During Past Overseen Board Memberships
Name, Address and Age with Fund Served Five Years by Trustee Held by Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Officers:
Andrew B. Shoup Senior Vice Since Director of CAM; Senior Vice N/A N/A
CAM President and 2003 President and Chief Administrative
125 Broad Street, 10th Floor Chief Officer of mutual funds associated
New York, NY 10004 Administrative with Citigroup; Treasurer of certain
Age 47 Officer mutual funds associated with
Citigroup; Head of 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)
Roger Paradiso Investment Since Managing Director of CGM N/A N/A
CAM Officer 2003
100 First Stamford Place,
2nd Floor
Stamford, CT 06902
Age 37
Kirstin Mobyed Investment Since Director of CGM (since 2003); N/A N/A
CAM Officer 2003 Private Client Manager (since
100 First Stamford Place, 2001) and analyst at CGM and its
2nd Floor predecessor (since 1992)
Stamford, CT 06902
Age 34
Andrew Beagley Chief Anti-Money Since Director of CGM (since 2000); N/A N/A
CAM Laundering 2002 Director of Compliance, North
399 Park Avenue, 4th Floor Compliance America, CAM (since 2000); Chief
New York, NY 10022 Officer Anti-Money Laundering
Age 40 Compliance Officer and Vice
President of certain mutual funds
associated with Citigroup; Director
of Compliance, Europe, the
Middle East and Africa, Citigroup
Asset Management Limited,
Smith Barney Global Capital
Management Inc., Salomon
Brothers Asset Management
Asia Pacific Limited (from 1997
to 1999)
Frances M. Guggino Controller Since Vice President of CGM; Controller N/A N/A
CAM 2002 of certain mutual funds associated
125 Broad Street, 10th Floor with Citigroup
New York, NY 10004
Age 45
49 Smith Barney Multiple Discipline Trust | 2003 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Term of Number of
Office* and Principal Portfolios
Length Occupation(s) in Fund Complex Other
Position(s) Held of Time During Past Overseen Board Memberships
Name, Address and Age with Fund Served Five Years by Trustee Held by Trustee
- --------------------------------------------------------------------------------------------------------------------------------
Robert I. Frenkel Secretary and Since Managing Director and General N/A N/A
CAM Chief Legal 2003 Counsel of Global Mutual Funds
300 First Stamford Place, 4th Officer for CAM and its predecessor (since
Floor 1994); Secretary of CFM; Secretary
Stamford, CT 06902 and Chief Legal Officer of mutual
Age 48 funds associated with Citigroup
- --------
* Each Trustee and Officer serves until his or her successor has been duly
elected and qualified.
**Mr. Gerken is an "interested person" of the Trust as defined in the
Investment Company Act of 1940, as amended, because Mr. Gerken is an officer
of SBFM and certain of its affiliates.
50 Smith Barney Multiple Discipline Trust | 2003 Annual Report
TAX INFORMATION (UNAUDITED)
For Federal tax purposes, the Trust hereby designates for the fiscal year ended
December 31, 2003:
. For corporate shareholders, the percentages of ordinary dividends that
qualify for the dividends received deduction are:
Multiple Discipline Portfolio -- All Cap Growth and Value 87.78%
Multiple Discipline Portfolio -- Large Cap Growth and Value 79.17
Multiple Discipline Portfolio -- Global All Cap Growth and Value 71.33
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value 93.98
. A total of 36.50% of ordinary income distributions paid by Multiple
Discipline Portfolio -- Balanced All Cap Growth and Value have been
derived from investments in Federal obligations and may be exempt from
taxation at the state level.
51 Smith Barney Multiple Discipline Trust | 2003 Annual Report
SMITH BARNEY
MULTIPLE DISCIPLINE TRUST
TRUSTEES INVESTMENT MANAGER
H. John Ellis Smith Barney Fund Management LLC
R. Jay Gerken, CFA
Chairman DISTRIBUTOR
Armon E. Kamesar Citigroup Global Markets Inc.
Stephen E. Kaufman
John J. Murphy CUSTODIAN
State Street Bank and
OFFICERS Trust Company
R. Jay Gerken, CFA
President and TRANSFER AGENT
Chief Executive Officer Citicorp Trust Bank, fsb.
125 Broad Street, 11th Floor
Andrew B. Shoup New York, New York 10004
Senior Vice President and
Chief Administrative Officer SUB-TRANSFER AGENT
PFPC Inc.
Roger Paradiso P.O. Box 9699
Investment Officer Providence, Rhode Island
02940-9699
Kirstin Mobyed
Investment Officer
Andrew Beagley
Chief Anti-Money Laundering
Compliance Officer
Frances M. Guggino
Controller
Robert I. Frenkel
Secretary and
Chief Legal Officer
Smith Barney Multiple Discipline Trust
Multiple Discipline Portfolio -- All Cap Growth and Value
Multiple Discipline Portfolio -- Large Cap Growth and Value
Multiple Discipline Portfolio -- Global All Cap Growth and Value
Multiple Discipline Portfolio -- Balanced All Cap Growth and Value
The Funds are separate investment funds of the Smith Barney Multiple
Discipline Trust, a Massachusetts business trust.
This report is submitted for the general information of the shareholders of
the Smith Barney Multiple Discipline Trust: Multiple Discipline
Portfolio -- All Cap Growth and Value, Multiple Discipline Portfolio -- Large
Cap Growth and Value, Multiple Discipline Portfolio -- Global All Cap Growth
and Value and Multiple Discipline Portfolio -- Balanced All Cap Growth and
Value. It is not authorized for distribution to prospective investors unless
accompanied or preceded by a current Prospectus, which contains information
concerning the investment policies and expenses as well as other pertinent
information.
SMITH BARNEY MULTIPLE DISCIPLINE TRUST
Smith Barney Mutual Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004
For complete information on any Smith Barney Mutual Funds, including
management fees and expenses, call or write your financial professional for a
free prospectus. Read it carefully before you invest or send money.
(C)2003 Citigroup Global Markets Inc.
Member NASD, SIPC
FD02701 2/04
04-6102
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 Trustees of the registrant has determined that Armon E.
Kamesar, 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. Kamesar as the Audit Committee's financial expert. Mr.
Kamesar is an "independent" Trustee pursuant to paragraph (a)(2) of
Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees for Smith Barney Multiple Discipline Trust were
$83,000 and $51,000 for the years ended 12/31/03 and 12/31/02.
(b) Audit-Related Fees for Smith Barney Multiple Discipline Trust
were $0 and $0 for the years ended 12/31/03 and 12/31/02.
(c) Tax Fees for Smith Barney Multiple Discipline Trust were $9,900
and $0 for the years ended 12/31/03 and 12/31/02. These amounts
represent aggregate fees paid for tax compliance, tax advice and
tax planning services, which include (the filing and amendment of
federal, state and local income tax returns, timely RIC
qualification review and tax distribution and analysis planning)
rendered by the Accountant to Smith Barney Multiple Discipline
Trust.
(d) All Other Fees for Smith Barney Multiple Discipline Trust were $0
and $0 for the years ended 12/31/03 and 12/31/02.
(e) (1) Audit Committee's pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
The Charter for the Audit Committee (the "Committee") of the
Board of each registered investment company (the "Fund") advised
by Smith Barney Fund Management LLC or Salomon Brothers Asset
Management Inc or one of their affiliates (each, an "Adviser")
requires that the Committee shall approve (a) all audit and
permissible non-audit services to be provided to the Fund and (b)
all permissible non-audit services to be provided by the Fund's
independent auditors to the Adviser and any Covered Service
Providers if the engagement relates directly to the operations
and financial reporting of the Fund. The Committee may implement
policies and procedures by which such services are approved other
than by the full Committee.
The Committee shall not approve non-audit services that the
Committee believes may impair the independence of the auditors.
As of the date of the approval of this Audit Committee Charter,
permissible non-audit services include any professional services
(including tax services), that are not prohibited services as
described below, provided to the Fund by the independent
auditors, other than those provided to the Fund in connection
with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i)
bookkeeping or other services related to the accounting records
or financial statements of the Fund; (ii) financial information
systems design and implementation; (iii) appraisal or valuation
services, fairness opinions or contribution-in-kind reports; (iv)
actuarial services; (v) internal audit outsourcing services; (vi)
management functions or human resources; (vii) broker or dealer,
investment adviser or investment banking services; (viii) legal
services and expert services unrelated to the audit; and (ix) any
other service the Public Company Accounting Oversight Board
determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit
services is not required so long as: (i) the aggregate amount of
all such permissible non-audit services provided to the Fund, the
Adviser and any service providers controlling, controlled by or
under common control with the Adviser that provide ongoing
services to the Fund ("Covered Service Providers") constitutes
not more than 5% of the total amount of revenues paid to the
independent auditors during the fiscal year in which the
permissible non-audit services are provided to (a) the Fund, (b)
the Adviser and (c) any entity controlling, controlled by or
under common control with the Adviser that provides ongoing
services to the Fund during the fiscal year in which the services
are provided that would have to be approved by the Committee;
(ii) the permissible non-audit services were not recognized by
the Fund at the time of the engagement to be non-audit services;
and (iii) such services are promptly brought to the attention of
the Committee and approved by the Committee (or its delegate(s))
prior to the completion of the audit.
(2)
(f) N/A
(g) Non-audit fees billed - $100,000 and $1.2 million for the years ended
12/31/2003 and 12/31/2002.
(h) Yes. The Smith Barney Multiple Discipline Trust's Audit Committee has
considered whether the provision of non-audit services that were
rendered to Service Affiliates which were not pre-approved (not
requiring pre-approval) is compatible with maintaining the
Accountant's independence. All services provided by the Accountant to
the Smith Barney Multiple Discipline Trust or to Service Affiliates
which were required to be pre-approved were pre-approved as required.
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.
Smith Barney Multiple Discipline Trust
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Smith Barney Multiple Discipline Trust
Date: March 8, 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
Smith Barney Multiple Discipline Trust
Date: March 8, 2004
By: /s/ Andrew B. Shoup
Andrew B. Shoup
Chief Administrative Officer of
Smith Barney Multiple Discipline Trust
Date: March 8, 2004