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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3275
Smith Barney Investment Funds Inc.
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(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
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(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 451-2010
Date of fiscal year end: APRIL 30
Date of reporting period: APRIL 30, 2004
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ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
SMITH BARNEY
MULTIPLE DISCIPLINE FUNDS
LARGE CAP GROWTH AND VALUE FUND
MULTIPLE DISCIPLINE SERIES | ANNUAL REPORT | APRIL 30, 2004
[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
Manager Overview...................................................... 3
Fund Performance...................................................... 5
Historical Performance................................................ 6
Schedule of Investments............................................... 7
Statement of Assets and Liabilities................................... 11
Statement of Operations............................................... 12
Statements of Changes in Net Assets................................... 13
Notes to Financial Statements......................................... 14
Financial Highlights.................................................. 19
Report of Independent Registered Public Accounting Firm............... 21
Additional Information................................................ 22
Tax Information....................................................... 24
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
R. JAY GERKEN, CFA
Chairman, President and Chief Executive Officer
Dear Shareholder,
Over the 12-month period ended April 30, 2004, most broad U.S. stock and bond
market indexes posted moderate gains. Stocks generally continued to outpace
bonds, with large-capitalization stocks typically outperforming small- and
mid-cap stocks and international stock markets generally outperforming the
domestic stock market. The economic environment was dominated by uncertainty
surrounding the sustainability of the domestic economic recovery, a continued
focus on new job growth and a geopolitical environment centering on news from
Iraq and new acts of terrorism.
Since the start of 2004, markets have been in a holding pattern -- volatility
declined and returns were relatively muted. Equity markets seem to have priced
in prospects of continued economic recovery and, in general, they were not
disappointed. Both bond market and stock market participants were a bit
unnerved by prospects for U.S. Federal Reserve tightening of key interest rates
at some unknown future date, the continuing turmoil in Iraq, and the March 2004
bombings in Spain. Each of these elements had a negative influence on the stock
market. Despite these concerns, however, the underlying economic and corporate
earnings picture continued to improve through the end of the period.
So far this year, the economy overall has appeared to be growing at a pace
similar to last year's rate. The ongoing recovery has been broad-based, with
strength in the consumer sector, exports and business investment. Soaring
corporate profit growth has led to vastly improved balance-sheet fundamentals
in general, while highly stimulative monetary and fiscal policy continued to
provide support, although the stimulative effects of fiscal policy could wane
after tax-refund season ends this spring. Following a period of mixed
employment news through the end of last year, job growth picked up
substantially in the first calendar quarter of 2004.
Signs of increasing inflation have begun to mount in recent weeks. Fiscal and
monetary policymakers have been stimulating the economy since 2000. The Fed has
more or less said it prefers inflation to deflation in the current environment.
However, we believe the recent pick-up in inflationary signals has increased
the possibility that the Fed may raise interest rates sooner than anticipated,
perhaps as early as this summer. Accordingly, the recent debate in the market
has focused on the timing and magnitude of prospective rate increases.
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.
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 fund's 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 fund's response to market timing and
shareholder exchange activity, including compliance with prospectus disclosure
related to these subjects. The fund has been informed that the 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.
1 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
As always, thank you for your confidence in our stewardship of your assets. We
look forward to helping you continue to meet your financial goals.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
May 20, 2004
2 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
MANAGER OVERVIEW
Special Shareholder Notice
On January 21, 2004, many changes took place affecting the fund's name,
investment strategy and portfolio management team. The fund's name changed from
Smith Barney Premier Selections Large Cap Fund to Smith Barney Multiple
Discipline Funds -- Large Cap Growth and Value Fund. In addition, the fund is
now coordinated by overlay portfolio managers who purchase and sell securities
for the fund on the basis of recommendations received from each segment's
portfolio managers. The overlay portfolio managers essentially utilize the
recommendations of each segment manager in a manner that is appropriate for the
fund. For instance, the overlay managers identify and analyze duplicate
positions that may occur if different segment managers recommend the same
security for their respective segment, and they determine whether the size of
each position is appropriate for the fund. Upon consultation with a fund's
segment managers, the overlay portfolio managers may make adjustments if one of
the segments become over- or underweighted as a result of market appreciation
or depreciation. The overlay portfolio managers of the fund are Roger Paradiso
and Kirstin Mobyed.
In addition, effective April 29, 2004, Smith Barney Class L shares were renamed
Class C Shares. On February 2, 2004, initial sales charges on these shares were
eliminated.
Market Overview
For the period, we were focused on building a portfolio of companies that we
believe demonstrated sustainable solid earnings and cash flow growth. The
momentum built by strong U.S. economic growth in 2003 was maintained during the
period. Business confidence continued to strengthen as managements of
financially strong large capitalization companies increased budgets for
corporate spending, furthering innovation, growth, and eventually, the creation
of new jobs.
PERFORMANCE SNAPSHOT*
AS OF APRIL 30, 2004
(excluding sales charges)
6 Months 12 Months
Class A Shares 6.54% 25.09%
Russell 1000 Index 6.11% 23.90%
Lipper Large Cap Core Funds Category
Average 4.52% 19.51%
*Prior to January 21, 2004, the fund followed different investment strategies
under the name "Premier Selections Large Cap Fund."
The performance shown represents past performance. Past performance is no
guarantee of future results and current performance may be higher or lower
than the performance shown above. Principal value and investment returns will
fluctuate and investors' shares, when redeemed, may be worth more or less
than their original cost. To obtain performance data current to the most
recent month-end, please visit our website at www.smithbarneymutualfunds.com.
Class A share returns assume the reinvestment of income dividends and capital
gains distributions at net asset value and the deduction of all fund
expenses. Returns have not been adjusted to include sales charges that may
apply when shares are purchased or the deduction of taxes that a shareholder
would pay on fund distributions. Excluding sales charges, Class B shares
returned 6.09% and Class C shares returned 6.10% over the six months ended
April 30, 2004. Excluding sales charges, Class B shares returned 24.14% and
Class C shares returned 24.15% over the 12 months ended April 30, 2004.
Effective April 29, 2004, Smith Barney Class L shares were renamed Class C
shares. On February 2, 2004, initial sales charges on these shares were
eliminated.
All index performance reflects no deduction for fees, expenses or taxes. 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.
Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the period ended April 30, 2004, calculated among the
1052 funds for the six-month period and among the 1020 funds for the 12-month
period, in the fund's Lipper category including the reinvestment of dividends
and capital gains, if any, and excluding sales charges.
3 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
Performance Review
For the 12 months ended April 30, 2004, Class A shares of the Smith Barney
Multiple Discipline Funds -- Large Cap Growth and Value Fund, excluding sales
charges, returned 25.09%. For the period, these shares outperformed the fund's
benchmark, the Russell 1000 Index,/i/ which returned 23.90%, and the fund's
Lipper large cap core funds category average, which returned 19.51%./ii /
Factors That Affected Fund Performance
The fund's performance during the period was fueled by positive returns from a
number of holdings in a range of sectors, including the consumer staples,
energy, telecommunication service and utilities sectors. Sectors that detracted
from performance included the consumer discretionary, financials, healthcare,
information technology, industrial, and material sectors.
Consumer staples stocks contributed positively overall to returns as the
earnings growth of companies such as The Gillette Co. and PepsiCo, Inc.
benefited from the continued strength in consumer spending and by a weaker U.S.
dollar, which helped increase sales in overseas markets. The energy sector also
contributed positively overall to the performance of the portfolio. The
earnings growth of companies such as BP PLC and Exxon Mobil continued to
improve as oil prices increased during the period. In addition, certain
biotechnology companies, such as Genentech, Inc. and Biogen Idec Inc. also
contributed positively to the portfolio's return due in part to increased
earnings strength.
For the period, investments that detracted from the performance included some
information technology stocks such as Intel Corp. and Texas Instruments Inc. In
addition, our positions in certain financials, such as Berkshire Hathaway Inc.
and Merrill Lynch, detracted from performance for the period. In our view,
weakness in financials was due in part to investors focusing on the direction
of interest rates and a growing concern earlier in the year regarding the
sustainability of economic growth. We added to our position in Merrill Lynch
during the period and increased our weighting in the brokerage industry because
of current market valuations and prospects for stronger earnings and economic
growth.
Thank you for your investment in the Smith Barney Multiple Discipline Funds --
Large Cap Growth and Value Fund. 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
Co-coordinating Co-coordinating
Portfolio Manager Portfolio Manager
May 20, 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 April 30, 2004 and are subject to
change and may not be representative of the portfolio manager's current or
future investments. The fund's top ten holdings as of this date were: American
International Group, Inc. (4.51%), Berkshire Hathaway Inc. (4.42%), Pfizer Inc.
(4.01%), Microsoft Corp. (3.77%), The Gillette Co. (2.92%), The Coca-Cola Co.
(2.86%), Intel Corp. (2.72%), Merck & Co. Inc. (2.68%), Johnson & Johnson
(2.64%), Texas Instruments Inc. (2.64%). Please refer to pages 7 through 10 for
a list and percentage breakdown of the fund's holdings.
The mention of sector breakdowns is for informational purposes only and should
not be construed as a recommendation to purchase or sell any securities. The
information provided regarding such sectors is not a sufficient basis upon
which to make an investment decision. Investors seeking financial advice
regarding the appropriateness of investing in any securities or investment
strategies discussed should consult their financial professional. Portfolio
holdings are subject to change at any time and may not be representative of the
portfolio manager's current or future investments. The fund's top five sector
holdings as of April 30, 2004 were: Financials (19.09%); Health Care (17.41%);
Consumer Staples (16.26%); Information Technology (15.85%); Consumer
Discretionary (11.12%). The fund's portfolio composition is subject to change
at any time.
RISKS: The fund may use derivatives, such as options and futures, which can be
illiquid, may disproportionately increase losses, and may have a potentially
large impact on fund performance. Foreign stocks are subject to certain risks
of overseas investing not associated with domestic investing such as currency
fluctuations and changes in political and economic conditions, which could
result in significant market fluctuations. These risks are magnified in
emerging markets.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
/i/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.
/ii/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended April 30, 2004, calculated
among the 1020 funds in the fund's Lipper category including the
reinvestment of dividends and capital gains, if any, and excluding sales
charges.
4 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
----------------------------------------------
Class A Class B Class C/(2)/
- -------------------------------------------------------------------------------------
Twelve Months Ended 4/30/04 25.09% 24.14% 24.15%
- ----------------------------------------------------------------------------------
Inception* through 4/30/04 (5.57) (6.28) (6.28)
- ----------------------------------------------------------------------------------
With Sales Charges/(3)/
----------------------------------------------
Class A Class B Class C/(2)/
- -------------------------------------------------------------------------------------
Twelve Months Ended 4/30/04 18.88% 19.14% 23.15%
- ----------------------------------------------------------------------------------
Inception* through 4/30/04 (6.60) (6.48) (6.28)
- ----------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS+ (UNAUDITED)
Without Sales Charges/(1)/
- -------------------------------------------------------------------------------------
Class A (Inception* through
4/30/04) (23.45)%
- ----------------------------------------------------------------------------------
Class B (Inception* through
4/30/04) (26.12)
- ----------------------------------------------------------------------------------
Class C (Inception* through
4/30/04)/(2)/ (26.12)
- ----------------------------------------------------------------------------------
(1)Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charge with respect to Class A shares or the applicable contingent
deferred sales charges ("CDSC") with respect to Class B and C shares.
(2)On April 29, 2004, Class L shares were renamed as Class C shares.
(3)Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 5.00%; Class B shares reflect the
deduction of a 5.00% CDSC, which applies if shares are redeemed within one
year from purchase payment. Thereafter, the CDSC declines by 1.00% per year
until no CDSC is incurred. Class C shares also reflect the deduction of a
1.00% CDSC which applies if shares are redeemed within one year from
purchase payment. The 1.00% initial sales charge on Class C shares is no
longer imposed, effective February 2, 2004.
+ All figures represent past performance and are not a guarantee of future
results. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. The returns shown do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the redemption
of fund shares.
* Inception date for Class A, B and C shares is August 31, 1999.
5 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
HISTORICAL PERFORMANCE (UNAUDITED)
Value of $10,000 Invested in Class A, B and C Shares of the
Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value Fund vs.
Russell 1000 Index+
- --------------------------------------------------------------------------------
August 1999 -- April 2004
[CHART]
Smith Barney Multiple Smith Barney Multiple Smith Barney Multiple
Discipline Funds - Discipline Funds - Discipline Funds -
Large Cap Growth Large Cap Growth Large Cap Growth
and Value Fund - and Value Fund - and Value Fund -
Class A Shares Class B Shares Class C Shares Russell 1000 Index
--------------------- --------------------- --------------------- ------------------
Aug 31, 1999 $ 9,500 $10,000 $10,000 $10,000
Apr 2000 10,283 10,772 10,772 11,388
Apr 2001 9,365 9,735 9,735 9,773
Apr 2002 8,057 8,305 8,305 8,602
Apr 2003 5,813 5,951 5,951 7,444
Apr 30, 2004 7,272 7,315 7,388 9,223
+Hypothetical illustration of $10,000 invested in Class A, B and C shares on
August 31, 1999 (inception date), assuming deduction of the maximum 5.00%
sales charge at the time of investment for Class A shares; and the deduction
of the maximum 5.00% CDSC for Class B shares. It also assumes reinvestment of
dividends and capital gains, if any, at net asset value through April 30,
2004. The Russell 1000 Index is a capitalization weighted total return index
which is comprised of 1,000 of some of the larger-capitalized U.S.-domiciled
companies whose common stock is traded in the United States on the New York
Stock Exchange, American Stock Exchange and NASDAQ National Market. The Index
is unmanaged and is not subject to the same management and trading expenses as
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. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The returns shown do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares.
6 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
SCHEDULE OF INVESTMENTS APRIL 30, 2004
SHARES SECURITY VALUE
- -------------------------------------------------------------------------
COMMON STOCK -- 100.0%
CONSUMER DISCRETIONARY -- 11.1%
Household Durables -- 0.7%
75,000 Newell Rubbermaid Inc. $ 1,773,000
- -----------------------------------------------------------------------
Internet & Catalog Retail -- 2.0%
148,000 InterActiveCorp+ 4,716,760
- -----------------------------------------------------------------------
Media -- 5.5%
80,000 Comcast Corp., Class A Shares+ 2,408,000
228,000 Liberty Media Corp., Series A Shares+ 2,494,320
25,000 The News Corp. Ltd., Preferred Sponsored ADR 843,750
212,800 Time Warner Inc.+ 3,579,296
160,100 The Walt Disney Co. 3,687,103
- -----------------------------------------------------------------------
13,012,469
- -----------------------------------------------------------------------
Multi-Line Retail -- 0.6%
30,000 Target Corp. 1,301,100
- -----------------------------------------------------------------------
Specialty Retail -- 2.3%
156,600 The Home Depot, Inc. 5,510,754
- -----------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 26,314,083
- -----------------------------------------------------------------------
CONSUMER STAPLES -- 16.2%
Beverages -- 4.2%
134,000 The Coca-Cola Co. 6,776,380
58,000 PepsiCo, Inc. 3,160,420
- -----------------------------------------------------------------------
9,936,800
- -----------------------------------------------------------------------
Food & Drug Retailing -- 2.8%
109,690 The Kroger Co.+ 1,919,575
205,900 Safeway Inc.+ 4,725,405
- -----------------------------------------------------------------------
6,644,980
- -----------------------------------------------------------------------
Food Products -- 2.8%
75,000 Kraft Foods Inc. 2,468,250
67,600 Wm. Wrigley Jr. Co. 4,170,920
- -----------------------------------------------------------------------
6,639,170
- -----------------------------------------------------------------------
Household Products -- 1.7%
62,300 Kimberly-Clark Corp. 4,077,535
- -----------------------------------------------------------------------
Personal Products -- 2.9%
168,900 The Gillette Co. 6,911,388
- -----------------------------------------------------------------------
Tobacco -- 1.8%
76,700 Altria Group, Inc. 4,247,646
- -----------------------------------------------------------------------
TOTAL CONSUMER STAPLES 38,457,519
- -----------------------------------------------------------------------
ENERGY -- 5.1%
Oil & Gas -- 5.1%
52,000 BP PLC, Sponsored ADR 2,750,800
40,800 ChevronTexaco Corp. 3,733,200
60,000 Royal Dutch Petroleum Co., New York Shares 2,919,600
28,000 Total SA, Sponsored ADR 2,579,360
- -----------------------------------------------------------------------
TOTAL ENERGY 11,982,960
- -----------------------------------------------------------------------
See Notes to Financial Statements.
7 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2004
SHARES SECURITY VALUE
- -------------------------------------------------------------------------
FINANCIALS -- 19.1%
Banks -- 3.3%
16,659 Bank of America Corp. $ 1,340,883
119,600 The Bank of New York Co., Inc. 3,485,144
46,000 Wachovia Corp. 2,104,500
20,000 Washington Mutual, Inc. 787,800
- -------------------------------------------------------------------------
7,718,327
- -------------------------------------------------------------------------
Diversified Financials -- 5.5%
50,000 American Express Co. 2,447,500
9,500 Capital One Financial Corp. 622,535
10,000 The Goldman Sachs Group, Inc. 967,500
42,500 J.P. Morgan Chase & Co. 1,598,000
100,100 Merrill Lynch & Co., Inc. 5,428,423
23,500 Morgan Stanley 1,207,665
35,000 Waddell & Reed Financial, Inc., Class A Shares 778,050
- -------------------------------------------------------------------------
13,049,673
- -------------------------------------------------------------------------
Insurance -- 10.3%
148,900 American International Group, Inc. 10,668,685
112 Berkshire Hathaway Inc., Class A Shares+ 10,459,680
28,600 The Hartford Financial Services Group, Inc. 1,746,888
37,000 The St. Paul Travelers Cos., Inc. 1,504,790
- -------------------------------------------------------------------------
24,380,043
- -------------------------------------------------------------------------
TOTAL FINANCIALS 45,148,043
- -------------------------------------------------------------------------
HEALTH CARE -- 17.4%
Biotechnology -- 4.2%
102,800 Amgen Inc.+ 5,784,556
40,000 Biogen Idec Inc.+ 2,360,000
15,000 Genentech, Inc.+ 1,842,000
- -------------------------------------------------------------------------
9,986,556
- -------------------------------------------------------------------------
Health Care Providers & Services -- 0.5%
30,000 HCA Inc. 1,218,900
- -------------------------------------------------------------------------
Pharmaceuticals -- 12.7%
43,000 GlaxoSmithKline PLC, ADR 1,806,000
115,600 Johnson & Johnson 6,245,868
134,700 Merck & Co., Inc. 6,330,900
265,120 Pfizer Inc. 9,480,691
236,900 Schering-Plough Corp. 3,963,337
56,800 Wyeth 2,162,376
- -------------------------------------------------------------------------
29,989,172
- -------------------------------------------------------------------------
TOTAL HEALTH CARE 41,194,628
- -------------------------------------------------------------------------
INDUSTRIALS -- 5.2%
Aerospace & Defense -- 0.8%
43,000 The Boeing Co. 1,835,670
- -------------------------------------------------------------------------
Commercial Services & Supplies -- 0.8%
30,100 Avery Dennison Corp. 1,933,323
- -------------------------------------------------------------------------
See Notes to Financial Statements.
8 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2004
SHARES SECURITY VALUE
- ----------------------------------------------------------------
Industrial Conglomerates -- 3.6%
141,400 General Electric Co. $ 4,234,930
121,400 Honeywell International Inc. 4,198,012
- ----------------------------------------------------------------
8,432,942
- ----------------------------------------------------------------
TOTAL INDUSTRIALS 12,201,935
- ----------------------------------------------------------------
INFORMATION TECHNOLOGY -- 15.8%
Communications Equipment -- 2.9%
130,000 Cisco Systems, Inc.+ 2,713,100
80,000 Comverse Technology, Inc.+ 1,308,800
197,400 Nokia Oyj, Sponsored ADR 2,765,574
- ----------------------------------------------------------------
6,787,474
- ----------------------------------------------------------------
Computers & Peripherals -- 3.8%
127,600 Dell Inc.+ 4,428,996
140,000 Hewlett-Packard Co. 2,758,000
19,600 International Business Machines Corp. 1,728,132
50,000 Sun Microsystems, Inc.+ 195,000
- ----------------------------------------------------------------
9,110,128
- ----------------------------------------------------------------
Semiconductor Equipment & Products -- 5.3%
249,800 Intel Corp. 6,427,354
248,700 Texas Instruments Inc. 6,242,370
- ----------------------------------------------------------------
12,669,724
- ----------------------------------------------------------------
Software -- 3.8%
343,700 Microsoft Corp. 8,925,889
- ----------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 37,493,215
- ----------------------------------------------------------------
MATERIALS -- 2.4%
Metals & Mining -- 1.2%
91,500 Alcoa Inc. 2,813,625
- ----------------------------------------------------------------
Paper & Forest Products -- 1.2%
73,000 International Paper Co. 2,943,360
- ----------------------------------------------------------------
TOTAL MATERIALS 5,756,985
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 4.9%
Diversified Telecommunication Services -- 3.4%
63,000 AT&T Corp. 1,080,450
117,600 SBC Communications Inc. 2,928,240
107,900 Verizon Communications Inc. 4,072,146
- ----------------------------------------------------------------
8,080,836
- ----------------------------------------------------------------
Wireless Telecommunication Services -- 1.5%
250,000 AT&T Wireless Services, Inc.+ 3,452,500
- ----------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES 11,533,336
- ----------------------------------------------------------------
UTILITIES -- 2.8%
Electric Utilities -- 1.0%
55,000 Progress Energy, Inc. 2,352,350
- ----------------------------------------------------------------
Gas Utilities -- 0.8%
52,000 KeySpan Corp. 1,879,800
- ----------------------------------------------------------------
See Notes to Financial Statements.
9 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
SCHEDULE OF INVESTMENTS (CONTINUED) APRIL 30, 2004
SHARES SECURITY VALUE
- ------------------------------------------------
Multi-Utilities -- 1.0%
114,580 NiSource Inc. $ 2,309,933
- ------------------------------------------------
TOTAL UTILITIES 6,542,083
- ------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $231,976,175*) $236,624,787
- ------------------------------------------------
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is $232,737,387.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
10 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2004
ASSETS:
Investments, at value (Cost -- $231,976,175) $ 236,624,787
Receivable for securities sold 488,687
Dividends receivable 344,209
Receivable for Fund shares sold 216,614
Prepaid expenses 19,584
- ---------------------------------------------------------------------------
Total Assets 237,693,881
- ---------------------------------------------------------------------------
LIABILITIES:
Bank overdraft 375,457
Payable for securities purchased 296,106
Management fee payable 149,532
Payable for Fund shares reacquired 148,465
Distribution plan fees payable 81,273
Accrued expenses 85,868
- ---------------------------------------------------------------------------
Total Liabilities 1,136,701
- ---------------------------------------------------------------------------
Total Net Assets $ 236,557,180
- ---------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 28,280
Capital paid in excess of par value 400,169,318
Accumulated net realized loss from investment transactions (168,289,030)
Net unrealized appreciation of investments 4,648,612
- ---------------------------------------------------------------------------
Total Net Assets $ 236,557,180
- ---------------------------------------------------------------------------
Shares Outstanding:
Class A 6,656,967
- ---------------------------------------------------------------------------
Class B 12,574,182
- ---------------------------------------------------------------------------
Class C 9,048,362
- ---------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $8.55
- ---------------------------------------------------------------------------
Class B * $8.31
- ---------------------------------------------------------------------------
Class C * $8.31
- ---------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of net asset value
per share) $9.00
- ---------------------------------------------------------------------------
* Redemption price is NAV of Class B and C shares reduced by a 5.00% and 1.00%
CDSC, respectively, if shares are redeemed within one year from purchase
payment (See Note 2).
See Notes to Financial Statements.
11 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
STATEMENT OF OPERATIONS FOR THE YEAR ENDED APRIL 30, 2004
INVESTMENT INCOME:
Dividends $ 3,527,907
Interest 40,683
Less: Foreign withholding tax (24,295)
- -------------------------------------------------------------------------
Total Investment Income 3,544,295
- -------------------------------------------------------------------------
EXPENSES:
Distribution plan fees (Note 5) 2,023,174
Management fee (Note 2) 1,837,233
Transfer agency services (Note 5) 232,496
Shareholder communications (Note 5) 55,032
Audit and legal 37,250
Custody 28,523
Registration fees 27,660
Directors' fees 16,634
Other 7,678
- -------------------------------------------------------------------------
Total Expenses 4,265,680
- -------------------------------------------------------------------------
Net Investment Loss (721,385)
- -------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized Gain From Investment Transactions (excluding
short-term investments):
Proceeds from sales 182,272,664
Cost of securities sold 167,940,587
- -------------------------------------------------------------------------
Net Realized Gain 14,332,077
- -------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of
Investments:
Beginning of year (34,975,271)
End of year 4,648,612
- -------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 39,623,883
- -------------------------------------------------------------------------
Net Gain on Investments 53,955,960
- -------------------------------------------------------------------------
Increase in Net Assets From Operations $ 53,234,575
- -------------------------------------------------------------------------
See Notes to Financial Statements.
12 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED APRIL 30,
2004 2003
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ (721,385) $ 640,600
Net realized gain (loss) 14,332,077 (163,812,830)
Increase in net unrealized appreciation 39,623,883 46,264,265
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Operations 53,234,575 (116,907,965)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 6):
Net investment income (641,438) --
- --------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to
Shareholders (641,438) --
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 10,263,570 4,981,902
Net asset value of shares issued for
reinvestment of dividends 589,713 --
Cost of shares reacquired (58,552,566) (84,009,286)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share
Transactions (47,699,283) (79,027,384)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 4,893,854 (195,935,349)
NET ASSETS:
Beginning of year 231,663,326 427,598,675
- --------------------------------------------------------------------------------
End of year* $236,557,180 $ 231,663,326
- --------------------------------------------------------------------------------
* Includes undistributed net investment income of: -- $640,600
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
13 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
The Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value Fund
("Fund") (formerly known as Smith Barney Premier Selections Large Cap Fund), a
separate non-diversified investment fund of the Smith Barney Investment Funds
Inc. ("Company"), a Maryland corporation, is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Company consists of this Fund and eight other separate investment funds:
Smith Barney Investment Grade Bond Fund, Smith Barney Government Securities
Fund, Smith Barney Small Cap Growth Fund, Smith Barney Hansberger Global Value
Fund, Smith Barney Small Cap Value Fund, Smith Barney Multiple Discipline Funds
- -- All Cap Growth and Value Fund (formerly known as Smith Barney Premier
Selections All Cap Growth Fund), Smith Barney Multiple Discipline Funds --
Global All Cap Growth and Value Fund (formerly known as Smith Barney Premier
Selections Global Growth Fund) and Smith Barney Group Spectrum Fund. The
financial statements and financial highlights for the other funds are presented
in separate shareholder reports.
The following are significant accounting policies consistently followed by the
Fund and are in conformity with generally accepted accounting principles
("GAAP"): (a) security transactions are accounted for on trade date; (b)
securities traded on national securities markets are valued at the closing
prices on such markets or, in the absence of sales, at the mean between the
closing bid and asked prices; over-the-counter securities for which no sales
were reported on that date are valued at the mean between the bid and asked
prices; securities listed on the NASDAQ National Market System for which market
quotations are available are valued at the official closing price or, if there
is no official closing price on that day, at the last sale price; securities
for which market quotations are not available will be valued in good faith at
fair value by or under the direction of the Board of Directors; (c) securities
maturing within 60 days are valued at cost plus accreted discount, or minus
amortized premium, which approximates value; (d) dividend income is recorded on
the ex-dividend date and interest income, adjusted for amortization of premium
and accretion of discount, is recorded on an accrual basis; foreign dividends
are recorded on the ex-dividend date or as soon as practical after the Fund
determines the existence of a dividend declaration after exercising reasonable
due diligence; (e) gains or losses on the sale of securities are calculated by
using the specific identification method; (f ) class specific expenses are
charged to each class; management fees and general fund expenses are allocated
on the basis of relative net assets of each class or on another reasonable
basis; (g) dividends and distributions to shareholders are recorded on the
ex-dividend date; the Fund distributes dividends and capital gains, if any, at
least annually; (h) the accounting records of the Fund 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; (i) the character of income and gains to
be distributed is determined in accordance with income tax regulations which
may differ from U.S. generally accepted accounting principles. At April 30,
2004, reclassifications were made to the Fund's capital accounts to reflect
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Accordingly, a portion of accumulated net
investment loss and overdistributed net investment income amounting to $721,385
and $838, respectively, were reclassified to paid-in-capital. Net investment
income, net realized gains and net assets were not affected by this change; (j)
the Fund intends to comply with the applicable provisions of the Internal
Revenue Code of 1986, as amended, pertaining to regulated investment companies
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes; and (k) 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.
14 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Management Agreement and Other Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment manager to the Fund. The
Fund pays SBFM a management fee calculated at an annual rate of 0.75% of the
Fund's average daily net assets. This fee is calculated daily and paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Fund's transfer agent. PFPC Inc. ("PFPC") and Primerica Shareholder Services
("PSS"), another subsidiary of Citigroup, act as the Fund's sub-transfer
agents. CTB receives account fees and asset-based fees that vary according to
the size and type of account. PFPC and PSS are responsible for shareholder
recordkeeping and financial processing for all shareholder accounts and are
paid by CTB. For the year ended April 30, 2004, the Fund paid transfer agent
fees of $246,808 to CTB.
Citigroup Global Markets Inc. ("CGM") and PFS Distributors, Inc., both of which
are subsidiaries of Citigroup, act as the Fund's distributors.
On April 29, 2004, the Fund's Class L shares were renamed as Class C shares. On
February 2, 2004, initial sales charges on these shares were eliminated.
There is a maximum initial sales charge of 5.00% for Class A shares. There is a
contingent deferred sales charge ("CDSC") of 5.00% on Class B shares, which
applies if redemption occurs within one year from purchase payment and declines
thereafter by 1.00% per year until no CDSC is incurred. Class C shares also
have a 1.00% CDSC, which applies if redemption occurs within one year from
purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which
applies if redemption occurs within one year from purchase payment. This CDSC
only applies to those purchases of Class A shares, which, when combined with
current holdings of Class A shares, equal or exceed $1,000,000 in the
aggregate. These purchases do not incur an initial sales charge.
For the year ended April 30, 2004, CGM and its affiliates received sales
charges of approximately $65,000 and $9,000 on sales of the Fund's Class A and
C shares, respectively. In addition, for the year ended April 30, 2004, CDSCs
paid to CGM and its affiliates were approximately $192,000 for Class B shares.
For the year ended April 30, 2004, CGM and its affiliates received brokerage
commissions of $17,423.
All officers and one Director of the Company are employees of Citigroup or its
affiliates.
3. Investments
During the year ended April 30, 2004, 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:
- -----------------------------------------------
Purchases $138,334,897
- -----------------------------------------------
Sales 182,272,664
- -----------------------------------------------
At April 30, 2004, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were as follows:
- ------------------------------------------------
Gross unrealized appreciation $ 25,315,051
Gross unrealized depreciation (21,427,651)
- ------------------------------------------------
Net unrealized appreciation $ 3,887,400
- ------------------------------------------------
15 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Repurchase Agreements
When entering into repurchase agreements, it is the Fund's policy that a
custodian takes possession of the underlying collateral securities, the value
of which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market to
ensure the adequacy of the collateral. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited.
5. Class Specific Expenses
Pursuant to a Rule 12b-1 Distribution Plan, the Fund pays a service fee with
respect to its Class A, B and C shares calculated at the annual rate of 0.25%
of the average daily net assets of each respective class. The Fund also pays a
distribution fee with respect to Class B and C shares calculated at the annual
rate of 0.75% of the average daily net assets of each class, respectively. For
the year ended April 30, 2004, total Rule 12b-1 Distribution Plan fees, which
are accrued daily and paid monthly, were as follows:
Class A Class B Class C
- ----------------------------------------------------------------
Rule 12b-1 Distribution Plan Fees $142,157 $1,101,599 $779,418
- ---------------------------------------------------------------
For the year ended April 30, 2004, total Transfer Agency Service expenses were
as follows:
Class A Class B Class C
- ------------------------------------------------------------
Transfer Agency Service Expenses $52,761 $100,489 $79,246
- -----------------------------------------------------------
For the year ended April 30, 2004, total Shareholder Communication expenses
were as follows:
Class A Class B Class C
- -----------------------------------------------------------
Shareholder Communication Expenses $10,834 $26,121 $18,077
- ----------------------------------------------------------
6. Distributions Paid to Shareholders by Class
Year Ended Year Ended
April 30, 2004 April 30, 2003
- -----------------------------------------------------------------
Net Investment Income
Class A $467,949 --
Class B 96,873 --
Class C 76,616 --
- ----------------------------------------------------------------
Total $641,438 --
- ----------------------------------------------------------------
7. Capital Shares
At April 30, 2004, the Company had 10 billion shares of capital stock
authorized with a par value of $0.001 per share. The Fund has the ability to
issue multiple classes of shares. Each share of a class represents an identical
interest and has the same rights, except that each class bears certain
expenses, including those specifically related to the distribution of its
shares. Effective April 29, 2004, the Fund renamed Class L shares as Class C
shares.
16 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Transactions in shares of each class were as follows:
Year Ended Year Ended
April 30, 2004 April 30, 2003
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------
Class A
Shares sold 569,345 $ 4,587,553 220,131 $ 1,586,505
Shares issued on
reinvestment 50,532 428,516 -- --
Shares reacquired (1,422,081) (11,522,230) (2,559,537) (18,400,445)
- -----------------------------------------------------------------------
Net Decrease (802,204) $ (6,506,161) (2,339,406) $(16,813,940)
- -----------------------------------------------------------------------
Class B
Shares sold 307,509 $ 2,491,973 266,264 $ 1,881,304
Shares issued on
reinvestment 10,773 88,986 -- --
Shares reacquired (3,615,492) (28,183,207) (5,171,677) (36,515,921)
- -----------------------------------------------------------------------
Net Decrease (3,297,210) $(25,602,248) (4,905,413) $(34,634,617)
- -----------------------------------------------------------------------
Class C+
Shares sold 389,549 $ 3,184,044 214,031 $ 1,514,093
Shares issued on
reinvestment 8,742 72,211 -- --
Shares reacquired (2,403,096) (18,847,129) (4,092,649) (29,092,920)
- -----------------------------------------------------------------------
Net Decrease (2,004,805) $(15,590,874) (3,878,618) $(27,578,827)
- -----------------------------------------------------------------------
+ On April 29, 2004, Class L shares were renamed as Class C shares.
8. Capital Loss Carryforward
At April 30, 2004, the Fund had, for Federal income tax purposes, approximately
$167,528,000 of unused capital loss carryforwards available to offset future
capital gains. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
The amount and year of expiration for each carryforward loss is indicated
below. Expiration occurs on April 30 of the year indicated:
2010 2011 2012
- --------------------------------------------------------
Carryforward Amounts $18,808,000 $88,347,000 $60,373,000
- --------------------------------------------------------
9. Income Tax Information and Distributions to Shareholders
At April 30, 2004, the tax basis components of distributable earnings were:
- -------------------------------------------------
Accumulated capital losses $(167,527,818)
- -------------------------------------------------
Unrealized appreciation 3,887,400
- -------------------------------------------------
At April 30, 2004, the difference between book basis and tax basis unrealized
appreciation and depreciation was attributable primarily to wash sale loss
deferrals.
The tax character of distributions paid during the years ended April 30, 2004
and 2003 was:
2004 2003
- -------------------------------------------------
Ordinary income $641,438 --
- ------------------------------------------------
17 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10.Additional Information
The Fund has received the following information from Citigroup Asset Management
("CAM"), the Citigroup business unit which includes the Fund's 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. 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.
11.Legal Matters
Class action lawsuits have been filed against Citigroup Global Markets Inc.
(the "Distributor") and a number of its affiliates, including Smith Barney Fund
Management LLC and Salomon Brothers Asset Management Inc (the "Advisers"),
substantially all of the mutual funds managed by the Advisers (the "Funds"),
and directors or trustees of the Funds. The complaints allege, among other
things, that the Distributor created various undisclosed incentives for its
brokers to sell Smith Barney and Salomon Brothers funds. In addition, according
to the complaints, the Advisers caused the Funds to pay excessive brokerage
commissions to the Distributor for steering clients towards proprietary funds.
The complaints also allege that the defendants breached their fiduciary duty to
the Funds by improperly charging Rule 12b-1 fees and by drawing on Fund assets
to make undisclosed payments of soft dollars and excessive brokerage
commissions. The complaints seek injunctive relief and compensatory and
punitive damages, rescission of the Funds' contracts with the Advisers,
recovery of all fees paid to the Advisers pursuant to such contracts and an
award of attorneys' fees and litigation expenses. Citigroup Asset Management
believes that the suits are without merit and intends to defend the cases
vigorously.
Additional lawsuits arising out of these circumstances and presenting similar
allegations and requests for relief may be filed against the defendants in the
future. Neither Citigroup Asset Management nor the Funds believe that any of
the pending actions will have a material adverse effect on the Funds or the
ability of the Distributor or the Advisers to perform under their respective
contracts with the Funds.
18 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
FINANCIAL HIGHLIGHTS
For a share of each class of capital stock outstanding throughout each year
ended April 30, unless otherwise noted:
Class A Shares 2004/(1)/ 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)(2)/
- ------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $6.89 $9.55 $11.10 $12.34 $11.40
- ------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.02 0.06 0.03 0.03 0.02
Net realized and unrealized gain (loss) 1.71 (2.72) (1.58) (1.12) 0.92
- ------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.73 (2.66) (1.55) (1.09) 0.94
- ------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.07) -- -- -- --
Net realized gains -- -- -- (0.15) --
Capital -- -- -- (0.00)* --
- ------------------------------------------------------------------------------------------------
Total Distributions (0.07) -- -- (0.15) --
- ------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $8.55 $6.89 $9.55 $11.10 $12.34
- ------------------------------------------------------------------------------------------------
Total Return 25.09% (27.85)% (13.96)% (8.93)% 8.25%++
- ------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $56,898 $51,360 $93,551 $132,618 $172,141
- ------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.16% 1.19% 1.18% 1.16% 1.17%+
Net investment income 0.29 0.81 0.34 0.27 0.29+
- ------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 55% 37% 10% 15%
- ------------------------------------------------------------------------------------------------
Class B Shares 2004/(1)/ 2003/(1)/ 2002/(1)/ 2001/(1)/ 2000/(1)(2)/
- ------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $6.70 $9.35 $10.96 $12.28 $11.40
- ------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.04) 0.00* (0.04) (0.06) (0.04)
Net realized and unrealized gain (loss) 1.66 (2.65) (1.57) (1.11) 0.92
- ------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.62 (2.65) (1.61) (1.17) 0.88
- ------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) -- -- -- --
Net realized gains -- -- -- (0.15) --
Capital -- -- -- (0.00)* --
- ------------------------------------------------------------------------------------------------
Total Distributions (0.01) -- -- (0.15) --
- ------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $8.31 $6.70 $9.35 $10.96 $12.28
- ------------------------------------------------------------------------------------------------
Total Return 24.14% (28.34)% (14.69)% (9.63)% 7.72%++
- ------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $104,478 $106,276 $194,364 $278,048 $348,987
- ------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.91% 1.94% 1.92% 1.93% 1.94%+
Net investment income (loss) (0.47) 0.06 (0.41) (0.51) (0.48)+
- ------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 55% 37% 10% 15%
- ------------------------------------------------------------------------------------------------
(1)Per share amounts have been calculated using the monthly average shares
method.
(2)For the period August 31, 1999 (inception date) to April 30, 2000.
* 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.
19 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of capital stock outstanding throughout each year
ended April 30, unless otherwise noted:
Class C Shares/(1)/ 2004/(2)/ 2003/(2)/ 2002/(2)/ 2001/(2)/ 2000/(2)(3)/
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $6.70 $9.35 $10.96 $12.28 $11.40
- ----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) (0.04) 0.00* (0.04) (0.06) (0.04)
Net realized and unrealized gain (loss) 1.66 (2.65) (1.57) (1.11) 0.92
- ----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.62 (2.65) (1.61) (1.17) 0.88
- ----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.01) -- -- -- --
Net realized gains -- -- -- (0.15) --
Capital -- -- -- (0.00)* --
- ----------------------------------------------------------------------------------------------
Total Distributions (0.01) -- -- (0.15) --
- ----------------------------------------------------------------------------------------------
Net Asset Value, End of Year $8.31 $6.70 $9.35 $10.96 $12.28
- ----------------------------------------------------------------------------------------------
Total Return 24.15% (28.34)% (14.69)% (9.63)% 7.72%++
- ----------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $75,181 $74,027 $139,684 $207,209 $262,750
- ----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.92% 1.93% 1.92% 1.93% 1.93%+
Net investment income (loss) (0.48) 0.07 (0.41) (0.51) (0.48)+
- ----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 55% 37% 10% 15%
- ----------------------------------------------------------------------------------------------
(1)On April 29, 2004, Class L shares were renamed as Class C shares.
(2)Per share amounts have been calculated using the monthly average shares
method.
(3)For the period August 31, 1999 (inception date) to April 30, 2000.
* 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.
20 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Smith Barney Investment Funds Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Smith Barney Multiple Discipline Funds --
Large Cap Growth and Value Fund (formerly known as Smith Barney Premier
Selections Large Cap Fund) ("Fund'') of Smith Barney Investment Funds Inc. as
of April 30, 2004, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and financial highlights for each of the years in
the four-year period then ended and for the period from August 31, 1999
(commencement of operations) to April 30, 2000. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of April 30, 2004, by
correspondence with the custodian and broker. As to securities purchased or
sold but not yet received or delivered, we performed other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of April 30, 2004, and the results of its operations for the year then
ended, the changes in its net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
four-year period then ended and for the period from August 31, 1999 to April
30, 2000, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
June 18, 2004
21 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
ADDITIONAL INFORMATION (UNAUDITED)
Information about Directors and Officers
The business and affairs of the Smith Barney Multiple Discipline Funds -- Large
Cap Growth and Value Fund ("Fund") (formerly known as Smith Barney Premier
Selections Large Cap Fund) are managed under the direction of the Board of
Directors of Smith Barney Investment Funds Inc. ("Company"). Information
pertaining to the Directors and certain officers of the Company is set forth
below. The Statement of Additional Information includes additional information
about the Company's Directors and is available, without charge, upon request by
calling the Fund's transfer agent (Citicorp Trust Bank, fsb. at 1-800-451-2010)
or the Fund's sub-transfer agent (Primerica Shareholder Services at
1-800-544-5445).
Number of
Term of Portfolios in Other
Office* and Fund Complex Board
Name, Address and Position(s) Held Length of Principal Occupation(s) Overseen by Memberships
Age with Fund Time Served During Past Five Years Director Held by Director
- ------------------------------------------------------------------------------------------------------------------------------------
Non-Interested Directors:
Paul R. Ades Director Since Law Firm of Paul R. Ades, PLLC 15 None
Paul R. Ades, PLLC 1994 (from April 2000 to Present);
181 West Main Street Partner in Law Firm of Murov &
Suite C Ades, Esqs. (from November 1970
Babylon, NY 11702 to March 2000)
Age 63
Dwight B. Crane Director Since Professor, Harvard Business School 49 None
Harvard Business 1981
School
Soldiers Field
Morgan Hall #375
Boston, MA 02163
Age 66
Frank G. Hubbard Director Since President of Avatar International, Inc. 15 None
Avatar 1993 (business development) (since 1998);
International, Inc. Vice President of S&S Industries
87 Whittredge Road (chemical distribution) (from 1995 to
Summit, NJ 07901 1998)
Age 66
Jerome H. Miller Director Since Retired 15 None
c/o R. Jay Gerken 1998
Citigroup Asset Management ("CAM")
399 Park Avenue,
4th Floor
New York, NY 10022
Age 65
Ken Miller Director Since President of Young Stuff Apparel 15 None
Young Stuff Apparel 1994 Group, Inc. (since 1963)
Group, Inc.
930 Fifth Avenue
Suite 610
New York, NY 10021
Age 62
22 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Portfolios in Other
Office* and Fund Complex Board
Name, Address and Position(s) Held Length of Principal Occupation(s) Overseen by Memberships
Age with Fund Time Served During Past Five Years Director Held by Director
- ----------------------------------------------------------------------------------------------------------------------
Interested Director:
R. Jay Gerken, CFA** Chairman, Since Managing Director of Citigroup 221 None
CAM President 2002 Global Markets Inc. ("CGM");
399 Park Avenue, and Chief Chairman, President and Chief
4th Floor Executive Officer Executive Officer of Smith Barney
New York, NY 10022 Fund Management LLC ("SBFM"),
Age 52 Travelers Investment Adviser, Inc.
("TIA") and Citi Fund Management
Inc. ("CFM"); President and Chief
Executive Officer of certain mutual
funds associated with Citigroup
Inc. ("Citigroup"); Formerly,
Portfolio Manager of Smith Barney
Allocation Series Inc. (from 1996 to
2001) and Smith Barney Growth
and Income Fund (from 1996
to 2000)
Officers:
Andrew B. Shoup Senior Vice Since Director of CAM; Senior Vice N/A N/A
CAM President 2003 President and Chief Administrative
125 Broad Street, and Chief Officer of mutual funds associated
11th Floor Administrative with Citigroup; Treasurer of certain
New York, NY 10004 Officer mutual funds associated with
Age 47 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)
Alan J. Blake CAM Vice President Since Managing Director of CGM; N/A N/A
399 Park Avenue, and Investment 1999 Investment Officer of SBFM
4th Floor New York, Officer
NY 10022 Age 55
John B. Cunningham, Vice President Since Managing Director of CGM and N/A N/A
CFA and Investment 2003 Salomon Brothers Asset
CAM Officer Management Inc; Investment
399 Park Avenue, Officer of SBFM
4th Floor
New York, NY 10022
Age 39
Kirstin Mobyed Vice President Since Director of CGM; Investment N/A N/A
CAM and Investment 2004 Officer of SBFM
399 Park Avenue, Officer
4th Floor
New York, NY 10022
Age 34
Roger Paradiso Vice President Since Managing Director of CGM; N/A N/A
CAM and Investment 2004 Investment Officer of SBFM
399 Park Avenue, Officer
4th Floor
New York, NY 10022
Age 37
23 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of
Term of Portfolios in Other
Office* and Fund Complex Board
Name, Address and Position(s) Held Length of Principal Occupation(s) Overseen by Memberships
Age with Fund Time Served During Past Five Years Director Held by Director
- --------------------------------------------------------------------------------------------------------------------
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, Compliance America, CAM (since 2000); Chief
4th Floor Officer Anti-Money Laundering
New York, NY 10022 Compliance Officer and Vice
Age 41 President of certain mutual funds
associated with Citigroup; Director
of Compliance, Europe, the Middle
East and Africa, CAM (from 1999
to 2000); Compliance Officer,
Salomon Brothers Asset
Management Limited, Smith Barney
Global Capital Management Inc.,
Salomon Brothers Asset
Management Asia Pacific Limited
(from 1997 to 1999)
Kaprel Ozsolak Controller Since Vice President of CGM; Controller N/A N/A
CAM 2002 of certain mutual funds associated
125 Broad Street, with Citigroup
11th Floor
New York, NY 10004
Age 38
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 Officer for CAM and its predecessor (since
Place, 4th Floor 1994); Secretary of CFM (from
Stamford, CT 06902 2001 to 2004); Secretary and Chief
Age 48 Legal Officer of certain mutual
funds associated with Citigroup
- --------
* Each Director and officer serves until his or her successor has been duly
elected and qualified.
**Mr. Gerken is an "interested person" of the Company as defined in the
Investment Company Act of 1940, as amended, because Mr. Gerken is an officer
of SBFM and certain of its affiliates.
24 Smith Barney Multiple Discipline Funds -- Large Cap Growth and Value
Fund | 2004 Annual Report
TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates for the fiscal year ended
April 30, 2004:
. For corporate shareholders, the percentage of ordinary dividends that
qualify for the dividends received deduction is 100.00%.
. For taxable non-corporate shareholders, the maximum amount allowable of
qualifying dividends for the reduced tax rate under The Jobs and Growth
Tax Relief Reconciliation Act of 2003. The amount of qualified dividend
income distributed by the Fund is provided to shareholders on their Form
1099-Div annually.
SMITH BARNEY
MULTIPLE DISCIPLINE FUNDS
LARGE CAP GROWTH AND VALUE FUND
DIRECTORS OFFICERS (continued)
Paul R. Ades Kaprel Ozsolak
Dwight B. Crane Controller
R. Jay Gerken, CFA
Chairman Robert I. Frenkel
Frank G. Hubbard Secretary and
Jerome H. Miller Chief Legal Officer
Ken Miller
INVESTMENT MANAGER
OFFICERS Smith Barney Fund
R. Jay Gerken, CFA Management LLC
President and Chief
Executive Officer DISTRIBUTORS
Citigroup Global Markets Inc.
Andrew B. Shoup PFS Distributors, Inc.
Senior Vice President and
Chief Administrative Officer CUSTODIAN
State Street Bank and
Alan J. Blake Trust Company
Vice President and
Investment Officer TRANSFER AGENT
Citicorp Trust Bank, fsb.
John B. Cunningham, CFA 125 Broad Street, 11th Floor
Vice President and New York, New York 10004
Investment Officer
SUB-TRANSFER AGENTS
Kirstin Mobyed PFPC Inc.
Vice President and P.O. Box 9699
Investment Officer Providence, Rhode Island
02940-9699
Roger Paradiso
Vice President and Primerica Shareholder Services
Investment Officer P.O. Box 9662
Providence, Rhode Island
Andrew Beagley 02940-9662
Chief Anti-Money Laundering
Compliance Officer
Smith Barney Investment Funds Inc.
Smith Barney Multiple Discipline Funds
Large Cap Growth and Value Fund
The Fund is a separate investment fund of the Smith Barney Investment Funds
Inc., a Maryland corporation.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by telephoning the Fund (toll-free) at 1-800-451-2010 and
by visiting the SEC's web site at www.sec.gov.
This report is submitted for the general information of the shareholders of
Smith Barney Investment Funds Inc. -- Smith Barney Multiple Discipline
Funds --Large Cap Growth and Value Fund, but it may also be used as sales
literature when preceded or accompanied by the current Prospectus.
SMITH BARNEY MULTIPLE DISCIPLINE FUNDS
LARGE CAP GROWTH AND VALUE FUND
Smith Barney Mutual Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004
This document must be preceded or accompanied by a free prospectus. Investors
should consider the fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other important
information about the fund. Please read the prospectus carefully before you
invest or send money.
www.smithbarneymutualfunds.com
(C)2004 Citigroup Global Markets Inc. Member NASD, SIPC
FD01903 6/04 04-6770
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that
Dwight B. Crane, a member 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. Crane as the Audit
Committee's financial expert. Mr. Crane is an "independent"
Director 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 Investment Funds Inc. were
$100,250 and $100,250 for the years ended 4/30/04 and
4/30/03.
(b) Audit-Related Fees for Smith Barney Investment Funds
Inc. were $0 and $0 for the years ended 4/30/04 and
4/30/03.
(c) Tax Fees for Smith Barney Investment Funds Inc. were
$9,900 and $9,500 for the years ended 4/30/04 and
4/30/03. 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
Investment Funds Inc.
(d) There were no all other fees for Smith Barney Investment
Funds Inc. for the years ended 4/30/04 and 4/30/03.
(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.
(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 Investment Funds Inc.'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 Investment Funds Inc. 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 Investment Funds Inc.
By: /s/ R. Jay Gerken
-----------------------------------
(R. Jay Gerken)
Chief Executive Officer of
Smith Barney Investment Funds Inc.
Date: July 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 Investment Funds Inc.
Date: July 8, 2004
By: /s/ Andrew B. Shoup
-----------------------------------
(Andrew B. Shoup)
Chief Administrative Officer of
Smith Barney Investment Funds Inc.
Date: July 8, 2004