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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 811-8372
TRAVELERS SERIES FUND 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: OCTOBER 31
Date of reporting period: APRIL 30, 2004
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ITEM 1. REPORT TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders is filed herewith.
TRAVELERS SERIES FUND INC.
SMITH BARNEY LARGE CAP
VALUE PORTFOLIO
STRATEGIC EQUITY
PORTFOLIO
VAN KAMPEN
ENTERPRISE PORTFOLIO
SEMI-ANNUAL REPORT | APRIL 30, 2004
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NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
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WHAT'S INSIDE
Letter from the Chairman............ 1
Schedules of Investments............ 9
Statements of Assets and Liabilities 26
Statements of Operations............ 27
Statements of Changes in Net Assets. 28
Notes to Financial Statements....... 31
Financial Highlights................ 38
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
R. JAY GERKEN, CFA
Chairman, President and Chief Executive Officer
Dear Shareholder,
Over the six months ended April 30, 2004, most broad U.S. stock and bond market
indices 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 global 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 Board ("Fed") 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 data 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 investments. 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 increased inflation have begun to mount in recent weeks. Fiscal and
monetary policymakers have been stimulating the economy since 2000. The Fed has
suggested that it prefers inflation to deflation in the current environment.
However, the recent pickup in inflationary signals has increased the
possibility that the Fed may raise interest rates sooner than anticipated,
perhaps as early as this summer. In the equity market, stock returns were mixed
during the period.
1 Travelers Series Fund Inc. | 2004 Semi-Annual Report
The broader market, as measured by the S&P 500 Index, posted strong gains, due
to strong corporate earnings, positive economic news and continued low interest
rates. However, sluggish job growth, high-energy prices and geopolitical
concerns made many investors cautious about some sectors of the market. These
conditions benefited some of the more defensive industries, such as consumer
staples and utilities, and hampered some of last year's better-performing
sectors, such as basic materials.
Within this environment, the funds performed as follows on the next page:/1/
/1/The fund is an underlying investment option of various variable annuity
products. A variable annuity product is a contract issued by an insurance
company where the annuity premium (a set amount of dollars) is immediately
turned into units of a portfolio of securities. Upon retirement, the
policyholder is paid according to accumulated units whose dollar value
varies according to the performance of the securities within the sub
accounts. Its objective is to preserve, through investment, the purchasing
value of the annuity, which otherwise is subject to erosion through
inflation. The fund's performance returns do not reflect the deduction of
initial sales 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 no guarantee of future results.
2 Travelers Series Fund Inc. | 2004 Semi-Annual Report
PERFORMANCE OF THE FUNDS
AS OF APRIL 30, 2004
6 Months
Smith Barney Large Cap Value Portfolio 7.77%
S&P 500/Barra Value Index/2/ 7.98%
S&P 500 Index/3/ 6.27%
Lipper Equity Income Variable Funds Category Average/6/ 7.76%
Strategic Equity Portfolio (formerly known as Alliance Growth Portfolio) 6.20%
S&P 500 Index/3/ 6.27%
Russell 1000 Index/4/ 6.11%
Lipper Multi-Cap Core Variable Funds Category Average/7/ 4.77%
Van Kampen Enterprise Portfolio 0.14%
Russell 1000 Growth Index/5/ 4.14%
S&P 500 Index/3/ 6.27%
Lipper Multi-Cap Core Variable Funds Category Average/7/ 4.77%
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.
The performance returns set forth above do not reflect the reduction of initial
charges and expenses imposed in connection with investing in variable annuity
contracts such as administrative fees, account charges and surrender charges,
which if reflected, would reduce the performance of the funds.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
/2/The S&P 500/Barra Value Index is a market-capitalization weighted index of
stocks in the S&P 500 having lower price-to-book ratios relative to the S&P
500 Index as a whole. (A price-to-book ratio is the price of a stock
compared to the difference between a company's assets and liabilities.) The
fund has determined that the S&P 500/Barra Value Index more appropriately
reflects the fund's investment strategy and will no longer use the S&P 500
Index as a performance benchmark.
/3/The S&P 500 Index is a market capitalization-weighted index of 500 widely
held common stocks.
/4/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 fund has
determined that the Russell 1000 Index more appropriately reflects the
fund's investment strategy and will no longer use the S&P 500 Index as a
performance benchmark.
/5/The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. The fund has determined that the Russell 1000 Growth Index more
appropriately reflects the fund's investment strategy and will no longer use
the S&P 500 Index as a performance benchmark.
Lipper, Inc. is a major independent mutual-fund tracking organization. Returns
are based on the six-month period ended April 30, 2004 and include the
reinvestment of dividends and capital gains, if any.
/6/Returns were calculated among the 633 funds in the equity income variable
funds category.
/7/Returns were calculated among the 1,154 funds in the multi-cap core variable
funds category.
3 Travelers Series Fund Inc. | 2004 Semi-Annual Report
Smith Barney Large Cap Value Portfolio
Special Shareholder Notice
As of July 1, 2003, John B. Cunningham is responsible for the day-to-day
management of the fund.
Effective June 18, 2003, the fund changed its performance benchmark to the S&P
500/Barra Value Index. The fund will no longer use the S&P 500 Index as a
performance benchmark and it will not appear in future reporting.
For the six months ended April 30, 2004, shares of the Smith Barney Large Cap
Value Portfolio returned 7.77%. In comparison, the fund's unmanaged benchmark,
the S&P 500/Barra Value Index,/i/ returned 7.98% and the fund's previous
benchmark, the S&P 500 Index,/ii/ returned 6.27%. The fund essentially matched
its Lipper equity income variable funds category average, which returned 7.76%
for the same period./2/
The fund slightly lagged it's benchmark index, the S&P 500/Barra Value Index,
due partly to its greater exposure to healthcare stocks, as the large-cap
pharmaceutical group suffered from some industry-specific issues, such as
declining product pipelines and the uncertainty of cheaper drug imports from
Canada. The fund also suffered from the sub-par performance of some of its
investments in consumer discretionary stocks, as some media companies failed to
experience an expected increase in advertising revenues/iii/.
Strategic Equity Portfolio (formerly known as Alliance Growth Portfolio)
Special Shareholder Notice
Please note that the fund's sub-adviser changed from Alliance Capital
Management L.P. to Fidelity Management & Research Company, effective September
15, 2003. In accordance with this change, the fund's name is now Strategic
Equity Portfolio. The fund seeks capital appreciation. The fund normally
invests at least 80% of its assets in equity securities. The sub-adviser
normally invests the fund's assets primarily in common stocks. The fund may
invest in securities of foreign issuers, in addition to securities of domestic
issuers.
In the future, the fund's performance will be compared to the S&P 500 Index,
instead of the Russell 1000 Index, due to a change in the fund's investment
objective and principal investment strategies resulting from the sub-adviser
change.
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004, calculated
among the 633 funds in the fund's Lipper category including the reinvestment
of dividends and capital gains, if any.
4 Travelers Series Fund Inc. | 2004 Semi-Annual Report
For the six months ended April 30, 2004, shares of the Strategic Equity
Portfolio returned 6.20%. In comparison, the fund's unmanaged benchmark, the
S&P 500 Index/ii/, returned 6.27%. The fund outperformed its previous benchmark
index, the Russell 1000 Index,/iv/ which returned 6.11% for the same period.
The fund outperformed its Lipper multi-cap core variable funds category
average, which returned 4.77% for the same period./3/
The fund slightly lagged the S&P 500 Index because of both weak stock selection
as well as negative industry selection, particularly in the consumer
discretionary sector./v/ An overweighting in the poorly performing media
industry was a drag on performance amid concerns about a slow recovery in
advertising spending, as well as increased scrutiny of indecency over the
airwaves. Stockpicking and an overweighting in healthcare also hampered
performance. Branded pharmaceutical companies suffered from concerns about weak
product pipelines, generic competition and foreign prescription drug imports.
Security selection within telecommunication services also hurt performance
during the period. While many wireless-related stocks in the sector made
considerable gains during the period due to merger activity, top-ten portfolio
holding SBC Communications declined after its Cingular subsidiary announced its
plans to acquire competitor AT&T Wireless.
On the bright side, the fund had positive security selection in the materials
and financials sectors. The fund was able to avoid the overall decline within
the materials sector, as that sector retreated during the first quarter of 2004
due to sluggish job creation and the rising cost of energy. In financials,
top-ten portfolio holding Sallie Mae posted strong gains after announcing
higher-than-expected fourth-quarter earnings./vi/
Van Kampen Enterprise Portfolio
Special Shareholder Notice
As of September 30, 2003, Stephen Boyd, Thomas Cooper and Mary Jayne Maly of
Van Kampen Asset Management Inc. are responsible for the day-to-day management
of the fund.
Effective December 16, 2003, Van Kampen Enterprise Portfolio's benchmark
changed from the S&P 500 Index to the Russell 1000 Growth Index.
For the six months ended April 30, 2004, shares of the Van Kampen Enterprise
Portfolio returned 0.14%. In comparison the fund's unmanaged benchmark, the
/3/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004, calculated
among the 1,154 funds in the fund's Lipper category including the
reinvestment of dividends and capital gains, if any.
5 Travelers Series Fund Inc. | 2004 Semi-Annual Report
Russell 1000 Growth Index/vii/ returned 4.14% and the fund's previous
benchmark, the S&P 500 Index,/ii/ returned 6.27%. The fund's Lipper multi-cap
core variable funds category average returned 4.77% for the same period./4/
Both stock selection and sector allocations hampered the fund's performance
versus the Russell 1000 Growth Index during the period. Stock selection in the
information technology sector had the most significant negative impact on
performance relative to the benchmark. Additional negative factors included
underweight positions and stock selection in the healthcare and consumer
staples sectors, as well as stock selection among financial and industrial
companies. An underweight in telecommunications services also detracted from
relative return./viii/
The fund benefited from stock selection among consumer discretionary companies.
An overweight allocation in the strong energy sector compared with the Russell
1000 Growth Index also added to relative return, as did an underweight in
technology stocks, which were poor performers in the growth stock universe.
Late in the semi-annual period, we trimmed the fund's healthcare position due
to potentially unfavorable legislation for pharmaceutical companies and because
we sought to reduce the fund's more defensive holdings overall. We also pared
the fund's industrial holdings because we preferred to seek earnings growth
through a more diversified stake in sectors, such as consumer discretionary and
information technology. We continue to focus on companies with an
earnings-growth outlook that is, in our view, at least commensurate with their
valuations.
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 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.
/4/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004, calculated
among the 1,154 funds in the fund's Lipper category including the
reinvestment of dividends and capital gains, if any.
6 Travelers Series Fund Inc. | 2004 Semi-Annual Report
As always, thank you for your continued 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 19, 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. Please refer to pages 9 through 25 for a list and percentage breakdown
of the funds' holdings.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
RISKS:
Van Kampen Enterprise Portfolio: The fund may invest in foreign securities.
Investing in foreign securities is subject to certain risks not associated with
domestic investing, such as currency fluctuations, and changes in political and
economic conditions. These risks are magnified in emerging or developing
markets. The fund may use derivatives, such as options and futures, which can
be illiquid, may disproportionately increase losses, and have a potentially
large impact on fund performance. The fund may invest in small capitalization
companies. Small capitalization companies may involve a higher degree of risk
and volatility than investments in larger, more established companies. The fund
may invest in medium capitalization companies. Medium capitalization companies
may involve a higher degree of risk and volatility than investments in larger,
more established companies.
Strategic Equity Portfolio: The fund may invest in foreign securities.
Investing in foreign securities is subject to certain risks not associated with
domestic investing, such as currency fluctuations, and changes in political and
economic conditions. The fund may use derivatives, such as options and futures,
which can be illiquid, may disproportionately increase losses, and have a
potentially, large impact on fund performance.
Smith Barney Large Cap Value Portfolio: Keep in mind, common stocks are subject
to market fluctuations. 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. The
fund may use derivatives, such as options and futures, which can be illiquid,
may disproportionately increase losses, and have a potentially large impact on
fund performance.
/i/The S&P 500/Barra Value is a market-capitalization weighted index of stocks
in the S&P 500 having lower price-to-book ratios relative to the S&P 500 as
a whole. (A price-to-book ratio is the price of a stock compared to the
difference between a company's assets and liabilities).
/ii/The S&P 500 Index is a market capitalization-weighted index of 500 widely
held common stocks.
/iii/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 (24.7%); Consumer Discretionary (12.8%); Information
Technology (10.9%); Energy (10.1%); Healthcare (9.6%). The fund's
portfolio composition is subject to change at any time.
7 Travelers Series Fund Inc. | 2004 Semi-Annual Report
/iv/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.
/v/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:
Consumer Discretionary (19.4%); Healthcare (17.2%); Industrials (16.3%);
Telecommunication Services (14.1%); Consumer Staples (8.4%). The fund's
portfolio composition is subject to change at any time.
/vi/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:
Verizon Communications (5.8%), SBC Communications Inc. (5.1%), SLM Corp.
(4.0%), Viacom Inc., Class B Shares (3.5%), The Procter & Gamble Co.
(3.5%), Northrop Grumman Corp. (3.4%), Microsoft Corp. (3.4%), Lockheed
Martin Corp. (3.0%), ITT Industries, Inc. (2.8%), Roche Holding AG (2.8%).
/vii/The Russell 1000 Growth Index measures the performance of those Russell
1000 companies with higher price-to-book ratios and higher forecasted
growth values.
/viii/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: Information Technology (23.0%); Consumer Discretionary
(22.0%); Healthcare (20.2%); Industrials (10.0%) and Financials (8.2%).
The fund's portfolio composition is subject to change at any time.
8 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) APRIL 30, 2004
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------------
COMMON STOCK -- 97.5%
CONSUMER DISCRETIONARY -- 12.7%
Hotels, Restaurants and Leisure -- 1.7%
228,600 McDonald's Corp. $ 6,224,778
- -----------------------------------------------------------------
Household Durables -- 1.0%
157,700 Newell Rubbermaid Inc. 3,728,028
- -----------------------------------------------------------------
Media -- 6.4%
Comcast Corp.:
91,800 Class A Shares* 2,763,180
99,700 Special Class A Shares* 2,890,303
487,600 Liberty Media Corp., Series A Shares* 5,334,344
165,900 The News Corp. Ltd., Sponsored Preferred ADR 5,599,125
298,000 Time Warner Inc.* 5,012,360
65,900 Viacom Inc., Class B Shares 2,547,035
- -----------------------------------------------------------------
24,146,347
- -----------------------------------------------------------------
Multi-Line Retail -- 2.6%
66,900 Costco Wholesale Corp.* 2,505,405
41,400 Federated Department Stores, Inc. 2,028,600
121,500 Target Corp. 5,269,455
- -----------------------------------------------------------------
9,803,460
- -----------------------------------------------------------------
Specialty Retail -- 1.0%
107,900 The Home Depot, Inc. 3,797,001
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TOTAL CONSUMER DISCRETIONARY 47,699,614
- -----------------------------------------------------------------
CONSUMER STAPLES -- 8.7%
Food and Drug Retailing -- 3.2%
357,600 The Kroger Co.* 6,258,000
242,700 Safeway Inc.* 5,569,965
- -----------------------------------------------------------------
11,827,965
- -----------------------------------------------------------------
Food Products -- 1.3%
147,000 Kraft Foods Inc. 4,837,770
- -----------------------------------------------------------------
Household Products -- 1.7%
99,300 Kimberly-Clark Corp. 6,499,185
- -----------------------------------------------------------------
Tobacco -- 2.5%
170,900 Altria Group, Inc. 9,464,442
- -----------------------------------------------------------------
TOTAL CONSUMER STAPLES 32,629,362
- -----------------------------------------------------------------
ENERGY -- 9.9%
Energy Equipment and Services -- 3.0%
169,000 ENSCO International Inc. 4,625,530
97,900 GlobalSantaFe Corp. 2,581,623
89,500 Nabors Industries Ltd.* 3,970,220
- -----------------------------------------------------------------
11,177,373
- -----------------------------------------------------------------
See Notes to Financial Statements.
9 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
- -------------------------------------------------------------------
Oil and Gas -- 6.9%
127,300 BP PLC, Sponsored ADR $ 6,734,170
78,300 ChevronTexaco Corp. 7,164,450
99,700 Royal Dutch Petroleum Co., New York Shares 4,851,402
80,900 Total SA, Sponsored ADR 7,452,508
- -------------------------------------------------------------------
26,202,530
- -------------------------------------------------------------------
TOTAL ENERGY 37,379,903
- -------------------------------------------------------------------
FINANCIALS -- 24.4%
Banks -- 8.0%
124,020 Bank of America Corp. 9,982,370
154,000 The Bank of New York Co., Inc. 4,487,560
171,200 U.S. Bancorp 4,389,568
87,300 Wachovia Corp. 3,993,975
85,300 Washington Mutual, Inc. 3,359,967
68,600 Wells Fargo & Co. 3,873,156
- -------------------------------------------------------------------
30,086,596
- -------------------------------------------------------------------
Diversified Financials -- 8.6%
95,600 American Express Co. 4,679,620
40,700 Capital One Financial Corp. 2,667,071
44,600 The Goldman Sachs Group, Inc. 4,315,050
110,700 J.P. Morgan Chase & Co. 4,162,320
179,200 MBNA Corp. 4,368,896
92,800 Merrill Lynch & Co., Inc. 5,032,544
76,000 Morgan Stanley 3,905,640
144,100 Waddell & Reed Financial, Inc., Class A Shares 3,203,343
- -------------------------------------------------------------------
32,334,484
- -------------------------------------------------------------------
Insurance -- 5.9%
104,800 American International Group, Inc. 7,508,920
51,000 The Hartford Financial Services Group, Inc. 3,115,080
91,400 Loews Corp. 5,302,114
86,200 The St. Paul Travelers Cos., Inc. 3,505,754
37,800 XL Capital Ltd., Class A Shares 2,886,030
- -------------------------------------------------------------------
22,317,898
- -------------------------------------------------------------------
Real Estate -- 1.9%
159,400 Equity Office Properties Trust 4,012,098
111,100 Equity Residential 3,050,806
- -------------------------------------------------------------------
7,062,904
- -------------------------------------------------------------------
TOTAL FINANCIALS 91,801,882
- -------------------------------------------------------------------
HEALTHCARE -- 9.5%
Healthcare Providers and Services -- 1.3%
121,400 HCA Inc. 4,932,482
- -------------------------------------------------------------------
See Notes to Financial Statements.
10 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------------
Pharmaceuticals -- 8.2%
116,200 GlaxoSmithKline PLC, ADR $ 4,880,400
67,300 Johnson & Johnson 3,636,219
108,600 Merck & Co., Inc. 5,104,200
283,300 Pfizer Inc. 10,130,808
220,600 Schering-Plough Corp. 3,690,638
87,400 Wyeth 3,327,318
- -----------------------------------------------------------------
30,769,583
- -----------------------------------------------------------------
TOTAL HEALTHCARE 35,702,065
- -----------------------------------------------------------------
INDUSTRIALS -- 7.0%
Aerospace and Defense -- 3.5%
108,000 The Boeing Co. 4,610,520
103,900 Lockheed Martin Corp. 4,956,030
42,100 United Technologies Corp. 3,631,546
- -----------------------------------------------------------------
13,198,096
- -----------------------------------------------------------------
Commercial Services and Supplies -- 1.9%
64,300 Avery Dennison Corp. 4,129,989
108,400 Waste Management, Inc. 3,078,560
- -----------------------------------------------------------------
7,208,549
- -----------------------------------------------------------------
Industrial Conglomerates -- 1.6%
176,600 Honeywell International Inc. 6,106,828
- -----------------------------------------------------------------
TOTAL INDUSTRIALS 26,513,473
- -----------------------------------------------------------------
INFORMATION TECHNOLOGY -- 10.8%
Communications Equipment -- 3.6%
211,100 3Com Corp.* 1,300,376
134,000 Comverse Technology, Inc.* 2,192,240
548,100 Lucent Technologies Inc.* 1,847,097
262,600 Nokia Oyj, Sponsored ADR 3,679,026
1,187,700 Nortel Networks Corp.* 4,441,998
- -----------------------------------------------------------------
13,460,737
- -----------------------------------------------------------------
Computers and Peripherals -- 3.4%
315,500 Hewlett-Packard Co. 6,215,350
35,400 International Business Machines Corp. 3,121,218
918,700 Sun Microsystems, Inc.* 3,582,930
- -----------------------------------------------------------------
12,919,498
- -----------------------------------------------------------------
Electronic Equipment and Instruments -- 1.6%
168,600 Celestica Inc., Subordinate Voting Shares* 2,963,988
576,400 Solectron Corp.* 2,824,360
- -----------------------------------------------------------------
5,788,348
- -----------------------------------------------------------------
See Notes to Financial Statements.
11 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------
Software -- 2.2%
252,500 Microsoft Corp. $ 6,557,425
180,600 Novell, Inc.* 1,740,984
- ----------------------------------------------------------
8,298,409
- ----------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 40,466,992
- ----------------------------------------------------------
MATERIALS -- 3.4%
Chemicals -- 0.6%
55,600 The Dow Chemical Co. 2,206,764
- ----------------------------------------------------------
Metals and Mining -- 1.5%
179,200 Alcoa Inc. 5,510,400
- ----------------------------------------------------------
Paper and Forest Products -- 1.3%
122,400 International Paper Co. 4,935,168
- ----------------------------------------------------------
TOTAL MATERIALS 12,652,332
- ----------------------------------------------------------
TELECOMMUNICATION SERVICES -- 5.6%
Diversified Telecommunication Services -- 4.0%
172,500 AT&T Corp. 2,958,375
225,500 SBC Communications Inc. 5,614,950
176,300 Verizon Communications Inc. 6,653,562
- ----------------------------------------------------------
15,226,887
- ----------------------------------------------------------
Wireless Telecommunication Services -- 1.6%
424,500 AT&T Wireless Services, Inc.* 5,862,345
- ----------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES 21,089,232
- ----------------------------------------------------------
UTILITIES -- 5.5%
Electric Utilities -- 3.5%
62,400 Ameren Corp. 2,728,128
122,200 FirstEnergy Corp. 4,778,020
68,100 PG&E Corp.* 1,874,112
83,000 Progress Energy, Inc. 3,549,910
- ----------------------------------------------------------
12,930,170
- ----------------------------------------------------------
Gas Utilities -- 0.8%
440,900 El Paso Corp. 3,090,709
- ----------------------------------------------------------
Multi -- Utilities -- 1.2%
228,200 NiSource Inc. 4,600,512
- ----------------------------------------------------------
TOTAL UTILITIES 20,621,391
- ----------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $339,707,096) 366,556,246
- ----------------------------------------------------------
See Notes to Financial Statements.
12 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.5%
$9,349,000 UBS Securities LLC dated 4/30/04, 0.920% due 5/3/04; Proceeds at
maturity -- $9,349,717; (Fully collateralized by U.S. Treasury
Inflationary Index Notes, 3.000% due 7/15/12; Market value --
$9,536,039) (Cost -- $9,349,000) $ 9,349,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $349,056,096**) $375,905,246
- ----------------------------------------------------------------------------------------
* 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.
13 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------
COMMON STOCK -- 94.7%
CONSUMER DISCRETIONARY -- 19.6%
Auto Components -- 0.0%
260 Gentex Corp. (a) $ 10,226
5,000 Johnson Controls, Inc. 274,300
- --------------------------------------------------------------------------
284,526
- --------------------------------------------------------------------------
Distributors -- 0.0%
9,200 CarMax, Inc. (a)* 238,464
- --------------------------------------------------------------------------
Hotels, Restaurants and Leisure -- 0.7%
17,200 International Game Technology 649,128
40,800 McDonald's Corp. 1,110,984
56,350 Shuffle Master, Inc. (a)* 1,845,463
- --------------------------------------------------------------------------
3,605,575
- --------------------------------------------------------------------------
Household Durables -- 0.0%
1,150 Garmin Ltd. (a) 36,984
- --------------------------------------------------------------------------
Media -- 17.2%
777,800 British Sky Broadcasting Group PLC 9,190,624
107,689 Cumulus Media Inc., Class A Shares (a)* 2,263,623
376,381 The DIRECTV Group, Inc.* 6,737,220
355,600 Fox Entertainment Group, Inc., Class A Shares* 9,903,460
133,700 Lamar Advertising Co., Class A Shares (a)* 5,489,722
753,000 Liberty Media Corp., Series A Shares* 8,237,820
The News Corp. Ltd.:
249,400 Sponsored ADR (a) 9,118,064
75,961 Sponsored Preferred ADR 2,563,684
121,506 Pixar, Inc. (a)* 8,298,860
8,500 Playboy Enterprises, Inc., Class B Shares (a)* 110,925
15,864 Radio One, Inc., Class D Shares (a)* 300,781
103,185 Sogecable, S.A. (a)* 4,414,263
274,100 Time Warner Inc.* 4,610,362
488,923 Viacom Inc., Class B Shares 18,896,874
82,400 The Walt Disney Co. 1,897,672
400 XM Satellite Radio Holdings Inc., Class A Shares (a)* 9,584
- --------------------------------------------------------------------------
92,043,538
- --------------------------------------------------------------------------
Multi-Line Retail -- 0.7%
61,700 Wal-Mart Stores, Inc. 3,516,900
- --------------------------------------------------------------------------
Specialty Retail -- 1.0%
217,300 Dixons Group PLC 598,541
90,800 The Home Depot, Inc. 3,195,252
54,095 Monro Muffler Brake, Inc.* 1,285,838
1,700 Staples, Inc. 43,792
- --------------------------------------------------------------------------
5,123,423
- --------------------------------------------------------------------------
See Notes to Financial Statements.
14 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------
Textiles and Apparel -- 0.0%
1,200 NIKE, Inc., Class B Shares $ 86,340
- ----------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 104,935,750
- ----------------------------------------------------------------
CONSUMER STAPLES -- 8.5%
Beverages -- 1.3%
126,800 PepsiCo, Inc. 6,909,332
- ----------------------------------------------------------------
Food Products -- 3.6%
17,700 Bunge Ltd. (a) 655,785
90,310 Hormel Foods Corp. 2,753,552
71,200 Kellogg Co. 3,054,480
235,400 Kraft Foods Inc., Class A Shares 7,747,014
108,700 McCormick & Co., Inc., Non-Voting Shares 3,713,192
32,200 Smithfield Foods, Inc. (a)* 856,520
55,900 SunOpta Inc. (a)* 524,901
- ----------------------------------------------------------------
19,305,444
- ----------------------------------------------------------------
Household Products -- 3.5%
178,100 The Procter & Gamble Co. 18,834,075
- ----------------------------------------------------------------
Personal Products -- 0.1%
3,800 Avon Products, Inc. 319,200
- ----------------------------------------------------------------
TOTAL CONSUMER STAPLES 45,368,051
- ----------------------------------------------------------------
ENERGY -- 1.6%
Energy Equipment and Services -- 1.2%
122,931 Pride International, Inc.* 2,073,846
71,000 Rowan Cos., Inc.* 1,583,300
43,000 Schlumberger Ltd. 2,516,790
- ----------------------------------------------------------------
6,173,936
- ----------------------------------------------------------------
Oil and Gas -- 0.4%
8,600 AO Siberian Oil Co., Sponsored ADR 263,590
9,520 Apache Corp. 398,602
35,300 Exxon Mobil Corp. 1,502,015
- ----------------------------------------------------------------
2,164,207
- ----------------------------------------------------------------
TOTAL ENERGY 8,338,143
- ----------------------------------------------------------------
FINANCIALS -- 7.9%
Banks -- 1.4%
100 Bank of America Corp. 8,049
96,200 Boston Private Financial Holdings, Inc. (a) 2,241,460
130,551 Sovereign Bancorp, Inc. (a) 2,608,409
53,000 Wintrust Financial Corp. (a) 2,516,970
- ----------------------------------------------------------------
7,374,888
- ----------------------------------------------------------------
See Notes to Financial Statements.
15 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
- ------------------------------------------------------
Diversified Financials -- 4.3%
1,300 American Express Co. $ 63,635
21,500 Capital One Financial Corp. 1,408,895
100 The Goldman Sachs Group, Inc. 9,675
200 Morgan Stanley 10,278
563,950 SLM Corp. 21,604,925
- ------------------------------------------------------
23,097,408
- ------------------------------------------------------
Insurance -- 2.2%
Berkshire Hathaway Inc.:
62 Class A Shares* 5,790,180
1,857 Class B Shares* 5,791,983
26,040 Scottish Re Group Ltd. (a) 569,755
- ------------------------------------------------------
12,151,918
- ------------------------------------------------------
TOTAL FINANCIALS 42,624,214
- ------------------------------------------------------
HEALTHCARE -- 17.3%
Biotechnology -- 3.6%
19,600 Biogen Idec Inc.* 1,156,400
112,003 Dendreon Corp. (a)* 1,456,039
86,400 Genentech, Inc.* 10,609,920
40,800 Gilead Sciences, Inc.* 2,481,864
158,400 Millennium Pharmaceuticals, Inc.* 2,374,416
13,700 OSI Pharmaceuticals, Inc. (a)* 1,010,923
- ------------------------------------------------------
19,089,562
- ------------------------------------------------------
Healthcare Equipment and Supplies -- 1.5%
205,300 Biomet, Inc. 8,109,350
2,200 Medtronic, Inc. 111,012
- ------------------------------------------------------
8,220,362
- ------------------------------------------------------
Healthcare Providers and Services -- 4.3%
318,500 Caremark Rx, Inc.* 10,781,225
27,700 Covance Inc. (a)* 934,598
31,600 Lincare Holdings Inc.* 1,097,468
168,400 UnitedHealth Group Inc. 10,353,232
- ------------------------------------------------------
23,166,523
- ------------------------------------------------------
Pharmaceuticals -- 7.9%
144,450 Barr Pharmaceuticals, Inc.* 5,983,119
94,300 Johnson & Johnson 5,095,029
95,500 Merck & Co., Inc. 4,488,500
34,300 Novartis AG, Sponsored ADR 1,536,640
See Notes to Financial Statements.
16 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------
Pharmaceuticals -- 7.9% (continued)
286,200 Pfizer Inc. $ 10,234,512
144,676 Roche Holding AG (a) 15,156,905
- ----------------------------------------------------------------
42,494,705
- ----------------------------------------------------------------
TOTAL HEALTHCARE 92,971,152
- ----------------------------------------------------------------
INDUSTRIALS -- 16.4%
Aerospace and Defense -- 8.7%
78,100 General Dynamics Corp. 7,311,722
336,600 Lockheed Martin Corp. 16,055,820
187,200 Northrop Grumman Corp. 18,579,600
34,700 Raytheon Co. 1,119,422
103,700 United Defense Industries, Inc.* 3,593,205
- ----------------------------------------------------------------
46,659,769
- ----------------------------------------------------------------
Air Freight and Couriers -- 0.0%
4,400 United Parcel Service, Inc., Class B Shares 308,660
- ----------------------------------------------------------------
Airlines -- 0.3%
123,100 AirTran Holdings, Inc. (a)* 1,503,051
- ----------------------------------------------------------------
Commercial Services and Supplies -- 0.0%
900 NDCHealth Corp. 20,583
- ----------------------------------------------------------------
Electrical Equipment -- 0.0%
100 Nitto Denko Corp. 5,554
- ----------------------------------------------------------------
Industrial Conglomerates -- 4.1%
3,300 3M Co. 285,384
184,900 General Electric Co. 5,537,755
317,300 Honeywell International Inc. 10,972,234
183,100 Tyco International Ltd. 5,026,095
- ----------------------------------------------------------------
21,821,468
- ----------------------------------------------------------------
Machinery -- 3.3%
38,700 Cummins Inc. 2,314,647
192,000 ITT Industries, Inc. 15,223,680
- ----------------------------------------------------------------
17,538,327
- ----------------------------------------------------------------
Road and Rail -- 0.0%
100 Union Pacific Corp. 5,893
- ----------------------------------------------------------------
TOTAL INDUSTRIALS 87,863,305
- ----------------------------------------------------------------
INFORMATION TECHNOLOGY -- 6.2%
Communications Equipment -- 1.1%
900 Alcatel SA, Sponsored ADR (a) 13,194
372,400 CIENA Corp.* 1,541,736
43,000 Cisco Systems, Inc.* 897,410
See Notes to Financial Statements.
17 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
- ---------------------------------------------------------------------------------------
Communications Equipment -- 1.1% (continued)
67,900 Harris Corp. $ 3,058,895
7,300 Scientific-Atlanta, Inc. 236,447
- ---------------------------------------------------------------------------------------
5,747,682
- ---------------------------------------------------------------------------------------
Computers and Peripherals -- 0.1%
110 Dell Inc.* 3,818
47,000 EMC Corp.* 524,520
- ---------------------------------------------------------------------------------------
528,338
- ---------------------------------------------------------------------------------------
Electronic Equipment and Instruments -- 1.1%
133,900 Diebold, Inc. 6,171,451
- ---------------------------------------------------------------------------------------
Internet Software and Services -- 0.1%
9,400 Yahoo! Inc.* 474,324
- ---------------------------------------------------------------------------------------
IT Consulting and Services -- 0.0%
1,600 Computer Sciences Corp.* 65,456
- ---------------------------------------------------------------------------------------
Semiconductor Equipment and Products -- 0.2%
7 Conexant Systems, Inc.* 30
4,300 PMC-Sierra, Inc.* 52,245
100 Semiconductor Manufacturing International Corp., Sponsored ADR (a)* 1,169
34,500 Xilinx, Inc. 1,160,235
- ---------------------------------------------------------------------------------------
1,213,679
- ---------------------------------------------------------------------------------------
Software -- 3.6%
33,200 BEA Systems, Inc. (a)* 378,812
712,500 Microsoft Corp. 18,503,625
17,800 NDS Group PLC, Sponsored ADR* 456,926
- ---------------------------------------------------------------------------------------
19,339,363
- ---------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 33,540,293
- ---------------------------------------------------------------------------------------
MATERIALS -- 2.1%
Chemicals -- 0.2%
25,000 The Dow Chemical Co. 992,250
- ---------------------------------------------------------------------------------------
Containers and Packaging -- 0.2%
51,947 Smurfit-Stone Container Corp.* 892,969
- ---------------------------------------------------------------------------------------
Metals and Mining -- 1.7%
105,000 Apex Silver Mines Ltd.* 1,717,800
112,800 Goldcorp Inc. 1,252,474
135,400 Newmont Mining Corp. 5,063,960
2,000 Nucor Corp. (a) 118,800
20,900 Peabody Energy Corp. (a) 980,001
- ---------------------------------------------------------------------------------------
9,133,035
- ---------------------------------------------------------------------------------------
TOTAL MATERIALS 11,018,254
- ---------------------------------------------------------------------------------------
See Notes to Financial Statements.
18 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) (UNAUDITED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
SHARES SECURITY VALUE
------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 14.2%
Diversified Telecommunication Services -- 14.2%
508,500 BellSouth Corp. $ 13,124,385
315,800 Citizens Communications Co. (a)* 4,118,032
1,111,600 SBC Communications Inc. 27,678,840
831,500 Verizon Communications Inc. 31,380,810
------------------------------------------------------------------------------
76,302,067
------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.0%
400 Vodafone Group PLC, Sponsored ADR 9,816
------------------------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES 76,311,883
------------------------------------------------------------------------------
UTILITIES -- 0.9%
Electric Utilities -- 0.9%
48,800 Entergy Corp. 2,664,480
50,800 Public Service Enterprise Group Inc. 2,179,320
------------------------------------------------------------------------------
4,843,800
------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $497,875,869) 507,814,845
------------------------------------------------------------------------------
PREFERRED STOCK -- 0.2%
ENERGY -- 0.2%
Oil and Gas -- 0.2%
12,900 Chesapeake Energy Corp., 6.000% Cumulative Convertible
(Cost -- $770,517) 977,175
------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
------------------------------------------------------------------------------
CONVERTIBLE BONDS -- 0.4%
INFORMATION TECHNOLOGY -- 0.4%
Communications Equipment -- 0.4%
$2,550,000 CIENA Corp., Notes, 3.750% due 2/1/08
(Cost -- $2,291,609) 2,368,312
------------------------------------------------------------------------------
See Notes to Financial Statements.
19 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) (UNAUDITED) APRIL 30, 2004
STRATEGIC EQUITY PORTFOLIO
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.7%
$25,295,000 State Street Bank and Trust Co. dated 4/30/04, 0.870% due 5/3/04;
Proceeds at maturity -- $25,296,834; (Fully collateralized by
U.S. Treasury Bonds, 8.000% due 11/15/21; Market
value -- $25,804,010) (Cost -- $25,295,000) $ 25,295,000
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $526,232,995**) $536,455,332
- ------------------------------------------------------------------------------------------
LOANED SECURITIES COLLATERAL
50,617,009 State Street Navigator Securities Lending Trust Prime Portfolio
(Cost -- $50,617,009) $ 50,617,009
- ------------------------------------------------------------------------------------------
(a) All or a portion of this security is on loan (See Note 6).
* 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 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------------
COMMON STOCK -- 97.2%
CONSUMER DISCRETIONARY -- 22.0%
Hotels, Restaurants and Leisure -- 10.6%
20,900 Brinker International, Inc.* $ 803,814
43,700 Carnival Corp. 1,864,679
22,400 Harrah's Entertainment, Inc. 1,191,232
20,000 International Game Technology 754,800
32,300 Marriott International, Inc., Class A Shares 1,523,268
11,600 Outback Steakhouse, Inc. 509,588
34,000 Royal Caribbean Cruises Ltd. (a) 1,378,020
26,500 Starwood Hotels & Resorts Worldwide, Inc. 1,054,435
- -----------------------------------------------------------------
9,079,836
- -----------------------------------------------------------------
Media -- 3.7%
27,000 EchoStar Communications Corp., Class A Shares* 896,130
The News Corp. Ltd.:
13,800 Sponsored ADR (a) 504,528
37,200 Sponsored Preferred ADR 1,255,500
24,500 The Walt Disney Co. 564,235
- -----------------------------------------------------------------
3,220,393
- -----------------------------------------------------------------
Multi-Line Retail -- 3.4%
34,700 Target Corp. 1,504,939
24,900 Wal-Mart Stores, Inc. 1,419,300
- -----------------------------------------------------------------
2,924,239
- -----------------------------------------------------------------
Specialty Retail -- 3.2%
23,400 Bed Bath & Beyond Inc.* 868,608
26,800 The Home Depot, Inc. 943,092
35,700 Staples, Inc. 919,632
- -----------------------------------------------------------------
2,731,332
- -----------------------------------------------------------------
Textiles and Apparel -- 1.1%
23,000 Coach, Inc.* 979,800
- -----------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 18,935,600
- -----------------------------------------------------------------
CONSUMER STAPLES -- 7.6%
Beverages -- 2.7%
9,800 Brown-Forman Corp., Class B Shares 459,228
33,900 PepsiCo, Inc. 1,847,211
- -----------------------------------------------------------------
2,306,439
- -----------------------------------------------------------------
Food and Drug Retailing -- 0.6%
12,700 CVS Corp. 490,601
- -----------------------------------------------------------------
See Notes to Financial Statements.
21 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------
Household Products -- 3.3%
18,500 The Clorox Co. $ 957,930
15,000 Colgate-Palmolive Co. 868,200
9,600 The Procter & Gamble Co. 1,015,200
- -----------------------------------------------------
2,841,330
- -----------------------------------------------------
Personal Products -- 1.0%
21,900 The Gillette Co. 896,148
- -----------------------------------------------------
TOTAL CONSUMER STAPLES 6,534,518
- -----------------------------------------------------
ENERGY -- 4.4%
Energy Equipment and Services -- 2.2%
26,800 Halliburton Co. 798,640
18,600 Schlumberger Ltd. 1,088,658
- -----------------------------------------------------
1,887,298
- -----------------------------------------------------
Oil and Gas -- 2.2%
27,200 BP PLC, Sponsored ADR 1,438,880
5,100 Total SA, Sponsored ADR (a) 469,812
- -----------------------------------------------------
1,908,692
- -----------------------------------------------------
TOTAL ENERGY 3,795,990
- -----------------------------------------------------
FINANCIALS -- 8.2%
Banks -- 1.5%
22,700 Wells Fargo & Co. 1,281,642
- -----------------------------------------------------
Diversified Financials -- 5.0%
26,400 American Express Co. 1,292,280
9,500 Fannie Mae 652,840
26,450 J.P. Morgan Chase & Co. 994,520
26,200 Merrill Lynch & Co., Inc. 1,420,826
- -----------------------------------------------------
4,360,466
- -----------------------------------------------------
Insurance -- 1.7%
20,425 American International Group, Inc. 1,463,451
- -----------------------------------------------------
TOTAL FINANCIALS 7,105,559
- -----------------------------------------------------
HEALTHCARE -- 20.2%
Biotechnology -- 3.0%
15,700 Amgen Inc.* 883,439
21,100 Biogen Idec Inc.* 1,244,900
7,100 ImClone Systems Inc. (a)* 474,848
- -----------------------------------------------------
2,603,187
- -----------------------------------------------------
See Notes to Financial Statements.
22 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------------
Healthcare Equipment and Supplies -- 2.2%
7,400 Guidant Corp. $ 466,274
6,800 St. Jude Medical, Inc.* 518,568
11,400 Zimmer Holdings, Inc.* 910,290
- ----------------------------------------------------------------------
1,895,132
- ----------------------------------------------------------------------
Healthcare Providers and Services -- 4.9%
16,300 Anthem, Inc. (a)* 1,443,854
42,700 Caremark Rx, Inc.* 1,445,395
20,800 UnitedHealth Group Inc. 1,278,784
- ----------------------------------------------------------------------
4,168,033
- ----------------------------------------------------------------------
Pharmaceuticals -- 10.1%
9,700 Allergan, Inc. 854,085
2,450 Barr Pharmaceuticals, Inc.* 101,479
13,200 Eli Lilly and Co. 974,292
8,800 Johnson & Johnson 475,464
25,400 King Pharmaceuticals, Inc.* 438,150
103,650 Pfizer Inc. 3,706,524
22,300 Teva Pharmaceutical Industries Ltd., Sponsored ADR 1,372,788
22,600 Watson Pharmaceuticals, Inc.* 804,786
- ----------------------------------------------------------------------
8,727,568
- ----------------------------------------------------------------------
TOTAL HEALTHCARE 17,393,920
- ----------------------------------------------------------------------
INDUSTRIALS -- 10.0%
Industrial Conglomerates -- 6.3%
119,000 General Electric Co. 3,564,050
67,000 Tyco International Ltd. 1,839,150
- ----------------------------------------------------------------------
5,403,200
- ----------------------------------------------------------------------
Machinery -- 3.7%
8,000 Danaher Corp. 740,160
19,400 Deere & Co. 1,319,976
7,900 Ingersoll-Rand Co., Class A Shares 509,945
26,600 Pall Corp. 632,548
- ----------------------------------------------------------------------
3,202,629
- ----------------------------------------------------------------------
TOTAL INDUSTRIALS 8,605,829
- ----------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 23.0%
Communications Equipment -- 3.6%
120,700 Cisco Systems, Inc.* 2,519,009
37,400 Comverse Technology, Inc.* 611,864
- ----------------------------------------------------------------------
3,130,873
- ----------------------------------------------------------------------
See Notes to Financial Statements.
23 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
VAN KAMPEN ENTERPRISE PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------------
Computers and Peripherals -- 4.8%
46,000 Dell Inc.* $ 1,596,660
86,200 EMC Corp.* 961,992
17,300 Lexmark International, Inc., Class A Shares* 1,564,958
- ----------------------------------------------------------------------
4,123,610
- ----------------------------------------------------------------------
Internet Software and Services -- 1.5%
25,300 Yahoo! Inc.* 1,276,638
- ----------------------------------------------------------------------
IT Consulting and Services -- 1.1%
36,500 SunGard Data Systems Inc.* 951,555
- ----------------------------------------------------------------------
Semiconductor Equipment and Products -- 4.2%
23,700 Analog Devices, Inc. 1,009,620
84,000 Intel Corp. 2,161,320
16,200 Texas Instruments Inc. 406,620
- ----------------------------------------------------------------------
3,577,560
- ----------------------------------------------------------------------
Software -- 7.8%
23,800 Adobe Systems Inc. 983,892
28,400 Amdocs Ltd.* 754,020
107,700 Microsoft Corp. 2,796,969
82,800 Oracle Corp.* 929,016
34,200 SAP AG, Sponsored ADR 1,274,976
- ----------------------------------------------------------------------
6,738,873
- ----------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 19,799,109
- ----------------------------------------------------------------------
MATERIALS -- 0.9%
Chemicals -- 0.9%
21,000 Rohm and Haas Co. 814,380
- ----------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.9%
Diversified Telecommunication Services -- 0.9%
28,900 Telefonaktiebolaget LM Ericsson, Sponsored ADR (a) 770,763
- ----------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $80,316,099) 83,755,668
- ----------------------------------------------------------------------
See Notes to Financial Statements.
24 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (CONTINUED) (UNAUDITED) APRIL 30, 2004
VAN KAMPEN ENTERPRISE PORTFOLIO
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 2.8%
$2,375,000 Federal Home Loan Bank, Discount Notes, due 5/3/04
(Cost -- $2,374,881) $ 2,374,881
- --------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $82,690,980**) $86,130,549
- --------------------------------------------------------------------------------------
LOANED SECURITIES COLLATERAL
4,553,386 State Street Navigator Securities Lending Trust Prime Portfolio
(Cost -- $4,553,386) $ 4,553,386
- --------------------------------------------------------------------------------------
(a) All or a portion of this security is on loan (See Note 6).
* 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.
25 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2004
Smith Barney
Large Cap Strategic Van Kampen
Value Equity Enterprise
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------
ASSETS:
Investments, at value
(Cost -- $349,056,096, $526,232,995
and $82,690,980, respectively) $375,905,246 $ 536,455,332 $ 86,130,549
Loaned securities collateral, at value
(Cost -- $0, $50,617,009 and
$4,553,386) (Note 6) -- 50,617,009 4,553,386
Cash 522 331 811
Dividends and interest receivable 541,498 1,003,282 43,248
Receivable for securities sold -- 16,469,465 2,090,564
Receivable for open forward foreign currency
contracts (Note 5) -- 1,646 --
Prepaid expenses 481 314 118
Other receivables 3,802 45,133 4,592
- -----------------------------------------------------------------------------------------
Total Assets 376,451,549 604,592,512 92,823,268
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 3,935,833 12,883,593 --
Payable for Fund shares reacquired 477,687 883,451 62,214
Management fees payable 205,725 346,682 53,405
Payable for loaned securities collateral
(Note 6) -- 50,617,009 4,553,386
Payable for open forward foreign currency
contracts (Note 5) -- 1,083 --
Accrued expenses 35,493 40,747 24,351
- -----------------------------------------------------------------------------------------
Total Liabilities 4,654,738 64,772,565 4,693,356
- -----------------------------------------------------------------------------------------
Total Net Assets $371,796,811 $ 539,819,947 $ 88,129,912
- -----------------------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 223 $ 335 $ 80
Capital paid in excess of par value 394,250,345 767,067,853 154,958,393
Undistributed net investment income 2,119,291 2,468,161 69,222
Accumulated net realized loss from
investment transactions (51,422,198) (239,938,903) (70,337,352)
Net unrealized appreciation of investments
and foreign currencies 26,849,150 10,222,501 3,439,569
- -----------------------------------------------------------------------------------------
Total Net Assets $371,796,811 $ 539,819,947 $ 88,129,912
- -----------------------------------------------------------------------------------------
Shares Outstanding 22,346,159 33,524,161 7,991,752
- -----------------------------------------------------------------------------------------
Net Asset Value $16.64 $16.10 $11.03
- -----------------------------------------------------------------------------------------
See Notes to Financial Statements.
26 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Six Months Ended April 30, 2004
Smith Barney
Large Cap Strategic Van Kampen
Value Equity Enterprise
Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 4,000,942 $ 4,385,071 $ 486,594
Interest 35,135 343,751 23,163
Less: Foreign withholding tax (49,695) (40,176) (6,831)
- ------------------------------------------------------------------------------------
Total Investment Income 3,986,382 4,688,646 502,926
- ------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 1,248,832 2,227,430 334,468
Shareholder communications 63,712 33,411 5,840
Audit and legal 18,630 32,138 17,320
Custody 14,326 48,342 11,060
Directors' fees 5,951 7,771 2,926
Transfer agency services 2,625 2,409 2,501
Other 4,203 4,171 2,493
- ------------------------------------------------------------------------------------
Total Expenses 1,358,279 2,355,672 376,608
Less: Expense reductions (Note 7) -- (125,762) --
- ------------------------------------------------------------------------------------
Net Expenses 1,358,279 2,229,910 376,608
- ------------------------------------------------------------------------------------
Net Investment Income 2,628,103 2,458,736 126,318
- ------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES
(NOTES 3 AND 5):
Realized Gain From:
Investment transactions 14,782,716 25,453,509 9,395,369
Foreign currency transactions -- 8,505 --
- ------------------------------------------------------------------------------------
Net Realized Gain 14,782,716 25,462,014 9,395,369
- ------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation From:
Investments 11,135,095 5,992,936 (9,099,242)
Foreign currencies -- 719 --
- ------------------------------------------------------------------------------------
Increase (Decrease) in Net Unrealized
Appreciation 11,135,095 5,993,655 (9,099,242)
- ------------------------------------------------------------------------------------
Net Gain on Investments and Foreign
Currencies 25,917,811 31,455,669 296,127
- ------------------------------------------------------------------------------------
Increase in Net Assets From Operations $28,545,914 $33,914,405 $ 422,445
- ------------------------------------------------------------------------------------
See Notes to Financial Statements.
27 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 2004 (unaudited)
and the Year Ended October 31, 2003
Smith Barney Large Cap Value Portfolio 2004 2003
- ---------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 2,628,103 $ 6,407,784
Net realized gain (loss) 14,782,716 (24,803,070)
Increase in net unrealized appreciation 11,135,095 85,797,301
- --------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 28,545,914 67,402,015
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (5,914,007) (8,408,520)
- --------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,914,007) (8,408,520)
- --------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 2,973,535 5,713,731
Net asset value of shares issued for reinvestment of dividends 5,914,007 8,408,520
Cost of shares reacquired (25,914,075) (53,330,305)
- --------------------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (17,026,533) (39,208,054)
- --------------------------------------------------------------------------------------------
Increase in Net Assets 5,605,374 19,785,441
NET ASSETS:
Beginning of period 366,191,437 346,405,996
- --------------------------------------------------------------------------------------------
End of period* $371,796,811 $366,191,437
- --------------------------------------------------------------------------------------------
* Includes undistributed net investment income of: $2,119,291 $5,405,195
- --------------------------------------------------------------------------------------------
See Notes to Financial Statements.
28 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Six Months Ended April 30, 2004 (unaudited)
and the Year Ended October 31, 2003
Strategic Equity Portfolio 2004 2003
- ---------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ 2,458,736 $ (1,010,341)
Net realized gain 25,462,014 43,899,096
Increase in net unrealized appreciation 5,993,655 53,566,083
- --------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 33,914,405 96,454,838
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (650,759)
- --------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders -- (650,759)
- --------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 782,888 6,126,116
Net asset value of shares issued for reinvestment of dividends -- 650,759
Cost of shares reacquired (44,428,178) (68,747,111)
- --------------------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (43,645,290) (61,970,236)
- --------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (9,730,885) 33,833,843
NET ASSETS:
Beginning of period 549,550,832 515,716,989
- --------------------------------------------------------------------------------------------
End of period* $539,819,947 $549,550,832
- --------------------------------------------------------------------------------------------
* Includes undistributed net investment income of: $2,468,161 $920
- --------------------------------------------------------------------------------------------
See Notes to Financial Statements.
29 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Six Months Ended April 30, 2004 (unaudited)
and the Year Ended October 31, 2003
Van Kampen Enterprise Portfolio 2004 2003
- --------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 126,318 $ 120,944
Net realized gain (loss) 9,395,369 (6,797,326)
Increase (decrease) in net unrealized appreciation (9,099,242) 21,950,369
- -------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 422,445 15,273,987
- -------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (134,925) (471,638)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (134,925) (471,638)
- -------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 893,155 966,979
Net asset value of shares issued for reinvestment of dividends 134,925 471,638
Cost of shares reacquired (9,816,128) (19,790,502)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (8,788,048) (18,351,885)
- -------------------------------------------------------------------------------------------
Decrease in Net Assets (8,500,528) (3,549,536)
NET ASSETS:
Beginning of period 96,630,440 100,179,976
- -------------------------------------------------------------------------------------------
End of period* $88,129,912 $ 96,630,440
- -------------------------------------------------------------------------------------------
* Includes undistributed net investment income of: $69,222 $77,829
- -------------------------------------------------------------------------------------------
See Notes to Financial Statements.
30 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Significant Accounting Policies
The Smith Barney Large Cap Value Portfolio, Strategic Equity Portfolio and Van
Kampen Enterprise Portfolio ("Fund(s)") are separate diversified investment
funds of the Travelers Series Fund Inc. ("Company"). The Company, a Maryland
corporation, is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company and consists of these
Funds and twelve other separate investment funds: AIM Capital Appreciation
Portfolio, Smith Barney International All Cap Growth Portfolio, Travelers
Managed Income Portfolio, Pioneer Strategic Income Portfolio, Salomon Brothers
Strategic Total Return Bond Portfolio, Smith Barney High Income Portfolio, MFS
Total Return Portfolio, Smith Barney Money Market Portfolio, Smith Barney Large
Capitalization Growth Portfolio, Smith Barney Mid Cap Core Portfolio, Smith
Barney Aggressive Growth Portfolio and SB Adjustable Rate Income Portfolio.
Shares of the Funds are offered only to insurance company separate accounts
which fund certain variable annuity and variable life insurance contracts. The
financial statements and financial highlights for the other funds are presented
in separate shareholder reports.
The following are significant accounting policies consistently followed by the
Funds 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; securities for which no sales price was reported and
U.S. government agencies and obligations are valued at the mean between bid and
asked prices; securities listed on the NASDAQ National Market System for which
market quotations are available are valued at the official closing price or, if
there is no official closing price on that day, at the last sale price; (c)
securities 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; (d)
securities maturing within 60 days are valued at cost plus accreted discount,
or minus amortized premium, which approximates value; (e) dividend income is
recorded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Funds determine the
existence of a dividend declaration after exercising reasonable due diligence;
(f ) interest income, adjusted for amortization of premium and accretion of
discount, is recorded on an accrual basis; (g) dividends and distributions to
shareholders are recorded on the ex-dividend date; the
31 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Funds distribute dividends and capital gains, if any, at least annually; (h)
gains or losses on the sale of securities are calculated by using the specific
identification method; (i) the accounting records of the Funds are maintained
in U.S. dollars. All assets and liabilities denominated in foreign currencies
are translated into U.S. dollars based on the rate of exchange of such
currencies against U.S. dollars on the date of valuation. Purchases and sales
of securities, and income and expenses are translated at the rate of exchange
quoted on the respective date that such transactions are recorded. Differences
between income or expense amounts recorded and collected or paid are adjusted
when reported by the custodian bank; ( j) 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; (k) the Funds
intend to comply with the requirements of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal
income and excise taxes; and (l) estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Management Agreement and Transactions with Affiliated Persons
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as the investment manager of the Smith
Barney Large Cap Value Portfolio ("SBLCV"). SBLCV pays SBFM a management fee
calculated at an annual rate of 0.65% of the average daily net assets of SBLCV.
Travelers Investment Adviser, Inc. ("TIA"), an affiliate of SBFM, acts as the
investment manager of the Strategic Equity Portfolio ("SEP") and the Van Kampen
Enterprise Portfolio ("VKEP"). SEP and VKEP pay TIA a management fee calculated
at an annual rate of 0.80% and 0.70%, respectively, of the average daily net
assets of SEP and VKEP. These fees are calculated daily and paid monthly.
TIA has entered into a sub-advisory agreement with Fidelity Management &
Research Co. ("FMR"). Pursuant to the sub-advisory agreement, FMR is
responsible for the day-to-day portfolio operations and investment decisions and
32 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
is compensated by TIA for such services at an annual rate of 0.45% of the first
$250 million of SEP's average daily net assets, 0.40% on the next $500 million
of SEP's average daily net assets, and 0.35% of SEP's average daily net assets
in excess of $750 million.
In addition, TIA has entered into a sub-advisory agreement with Van Kampen
Asset Management Inc. ("VKAM"). Pursuant to the sub-advisory agreement, VKAM is
responsible for the day-to-day portfolio operations and investment decisions
and is compensated by TIA for such services at an annual rate of 0.325% of the
average daily net assets of VKEP.
TIA has entered into a sub-administrative services agreement with SBFM. TIA
pays SBFM, as sub-administrator, a fee calculated at an annual rate of 0.10% of
the average daily net assets of SEP and VKEP.
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 six months ended April 30, 2004, each Fund paid transfer agent fees of
$2,500 to CTB.
For the six months ended April 30, 2004, Citigroup Global Markets Inc., another
indirect wholly-owned subsidiary of Citigroup, and its affiliates received
brokerage commissions of $27,078 and $17,457 from SBLCV and VKEP, respectively.
Most of the officers and one Director of the Company are employees of Citigroup
or its affiliates.
3. Investments
During the six months 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:
SBLCV SEP VKEP
- ------------------------------------------------------------------------
Purchases $72,829,943 $548,054,552 $80,334,843
- ------------------------------------------------------------------------
Sales 91,599,125 557,952,906 87,569,837
- -----------------------------------------------------------------------
33 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
At April 30, 2004, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
SBLCV SEP VKEP
- ----------------------------------------------------------------------------
Gross unrealized appreciation $ 40,512,389 $ 22,242,303 $ 5,689,004
Gross unrealized depreciation (13,663,239) (12,019,966) (2,249,435)
- ----------------------------------------------------------------------------
Net unrealized appreciation $ 26,849,150 $ 10,222,337 $ 3,439,569
- ---------------------------------------------------------------------------
4. Repurchase Agreements
When entering into repurchase agreements, it is the Funds' 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 Funds may
be delayed or limited.
At April 30, 2004, VKEP did not have any repurchase agreements outstanding.
5. Forward Foreign Currency Contracts
SEP may from time to time enter into forward foreign currency contracts. A
forward foreign currency contract is an agreement between two parties to buy
and sell a currency at a set price on a future date. The contract is
marked-to-market daily and the change in value is recorded by the Fund as an
unrealized gain or loss. When a forward foreign currency contract is
extinguished, through either delivery or offset by entering into another
forward foreign currency contract, the Fund records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value of the contract at the time it was extinguished or offset.
The Fund bears the market risk that arises from changes in foreign currency
exchange rates and the credit risk should a counterparty be unable to meet the
terms of such contracts.
34 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
At April 30, 2004, SEP had open forward foreign currency contracts as described
below. The unrealized gain and loss on the contracts reflected in the
accompanying financial statements were as follows:
Local Market Settlement Unrealized
Foreign Currency Currency Value Date Gain (Loss)
-----------------------------------------------------------------------------
Contracts to Buy:
Swiss Franc 287,700 $221,623 5/3/04 $ 1,635
Swiss Franc 687,373 529,502 5/4/04 (1,083)
-----------------------------------------------------------------------------
552
-----------------------------------------------------------------------------
Contracts to Sell:
Japanese Yen 2,447,969 22,181 5/10/04 11
-----------------------------------------------------------------------------
Net Unrealized Gain on Open Forward
Foreign Currency Contracts $ 563
-----------------------------------------------------------------------------
6. Lending of Portfolio Securities
The Funds have an agreement with their custodian whereby the custodian may lend
securities owned by the Funds to brokers, dealers and other financial
organizations. Fees earned by the Funds on securities lending are recorded as
interest income. Loans of securities by the Funds are collateralized by cash,
U.S. government securities or high quality money market instruments that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities, plus a margin depending on the type of securities
loaned. The Funds maintain exposure for the risk of any losses in the
investment of amounts received as collateral.
At April 30, 2004, SEP and VKEP had loaned securities having a market value of
$48,852,620 and $4,390,071. SEP and VKEP received cash collateral amounting to
$50,617,009 and $4,553,386 which were invested in the State Street Navigator
Securities Lending Trust Prime Portfolio.
For the six months ended April 30, 2004, income earned from securities lending
by SEP and VKEP was $36,873 and $3,680, respectively.
At April 30, 2004, SBLCV did not have any securities on loan.
35 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
7. Expense Reductions
Many of the brokers with whom FMR places trades on behalf of certain funds
provided services to these funds in addition to trade execution. These services
included payments of expenses on behalf of each applicable fund. As a result of
the brokerage service arrangements, for the six months ended April 30, 2004,
SEP has expense reductions amounting to $125,762.
8. Capital Shares
At April 30, 2004, the Company had six billion shares authorized with a par
value of $0.00001 per share. Each share of a Fund represents an equal
proportionate interest in that Fund with each other share of the same Fund
and has an equal entitlement to any dividends and distributions made by
the Fund.
Transactions in shares of each Fund were as follows:
Six Months Ended Year Ended
April 30, 2004 October 31, 2003
------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio
Shares sold 176,546 401,980
Shares issued on reinvestment 357,126 639,431
Shares reacquired (1,534,968) (3,856,055)
------------------------------------------------------------------------
Net Decrease (1,001,296) (2,814,644)
------------------------------------------------------------------------
Strategic Equity Portfolio
Shares sold 48,440 470,412
Shares issued on reinvestment -- 53,826
Shares reacquired (2,769,330) (5,225,885)
------------------------------------------------------------------------
Net Decrease (2,720,890) (4,701,647)
------------------------------------------------------------------------
Van Kampen Enterprise Portfolio
Shares sold 77,638 93,737
Shares issued on reinvestment 11,815 51,943
Shares reacquired (859,309) (2,038,763)
------------------------------------------------------------------------
Net Decrease (769,856) (1,893,083)
------------------------------------------------------------------------
9. 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
36 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
37 Travelers Series Fund Inc. | 2004 Semi-Annual Report
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each year ended October 31,
unless otherwise noted:
Smith Barney
Large Cap Value Portfolio 2004/(1)/ 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.68 $13.24 $17.47 $20.74 $19.83 $18.94
- ----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.12 0.28 0.32 0.26 0.30 0.27
Net realized and unrealized gain (loss) 1.10 2.49 (4.24) (2.56) 1.34 1.38
- ----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 1.22 2.77 (3.92) (2.30) 1.64 1.65
- ----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.26) (0.33) (0.31) (0.27) (0.26) (0.24)
Net realized gains -- -- -- (0.70) (0.47) (0.52)
- ----------------------------------------------------------------------------------------------
Total Distributions (0.26) (0.33) (0.31) (0.97) (0.73) (0.76)
- ----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $16.64 $15.68 $13.24 $17.47 $20.74 $19.83
- ----------------------------------------------------------------------------------------------
Total Return/(2)/ 7.77%++ 21.38% (22.45)% (11.58)% 8.62% 8.52%
- ----------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $372 $366 $346 $504 $553 $544
- ----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.71%+ 0.69% 0.68% 0.67% 0.66% 0.67%
Net investment income 1.37+ 1.85 1.59 1.42 1.45 1.35
- ----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 19% 96% 68% 29% 23% 43%
- ----------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2004 (unaudited).
(2) 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.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
38 Travelers Series Fund Inc. | 2004 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of capital stock outstanding throughout each year ended October 31,
unless otherwise noted:
Strategic Equity Portfolio 2004/(1)/ 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.16 $12.59 $16.67 $28.63 $28.35 $22.14
- ----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) 0.07 (0.03) 0.04 0.07 0.05 0.02
Net realized and unrealized gain (loss) 0.87 2.62 (4.05) (8.60) 2.66 7.79
- ----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.94 2.59 (4.01) (8.53) 2.71 7.81
- ----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- (0.02) (0.07) (0.05) (0.03) (0.15)
Net realized gains -- -- -- (3.38) (2.40) (1.45)
- ----------------------------------------------------------------------------------------------
Total Distributions -- (0.02) (0.07) (3.43) (2.43) (1.60)
- ----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $16.10 $15.16 $12.59 $16.67 $28.63 $28.35
- ----------------------------------------------------------------------------------------------
Total Return/(2)/ 6.20%++ 20.57% (24.05)% (32.05)% 9.27% 35.51%
- ----------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $540 $550 $516 $845 $1,370 $1,166
- ----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.85%+ 0.84% 0.83% 0.82% 0.81% 0.82%
Net investment income (loss) 0.88+ (0.20) 0.19 0.31 0.17 0.14
- ----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 106% 167% 100% 46% 47% 54%
- ----------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2004 (unaudited).
(2) 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.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
39 Travelers Series Fund Inc. | 2004 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of capital stock outstanding throughout each year ended October 31,
unless otherwise noted:
Van Kampen Enterprise Portfolio 2004/(1)/ 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $11.03 $ 9.40 $11.81 $25.60 $25.52 $20.56
- -----------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss) 0.02 0.01 0.05 0.03 (0.06) 0.00*
Net realized and unrealized gain (loss) -- 1.67 (2.42) (9.05) 3.87 5.42
- -----------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.02 1.68 (2.37) (9.02) 3.81 5.42
- -----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.02) (0.05) (0.04) (0.00)* (0.00)* (0.07)
Net realized gains -- -- -- (4.77) (3.73) (0.39)
- -----------------------------------------------------------------------------------------------
Total Distributions (0.02) (0.05) (0.04) (4.77) (3.73) (0.46)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.03 $11.03 $ 9.40 $11.81 $25.60 $25.52
- -----------------------------------------------------------------------------------------------
Total Return/(2)/ 0.14%++ 17.93% (20.07)% (37.52)% 13.92% 26.48%
- -----------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $88 $97 $100 $165 $331 $313
- -----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.79%+ 0.80% 0.76% 0.74% 0.72% 0.73%
Net investment income (loss) 0.26+ 0.13 0.30 0.18 (0.22) 0.01
- -----------------------------------------------------------------------------------------------
Portfolio Turnover Rate 88% 123% 87% 107% 117% 120%
- -----------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2004 (unaudited).
(2) Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected, would reduce the total returns for all periods shown.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
40 Travelers Series Fund Inc. | 2004 Semi-Annual Report
TRAVELERS SERIES FUND INC.
DIRECTORS INVESTMENT MANAGERS
A. E. Cohen Smith Barney Fund Management LLC
Robert A. Frankel Travelers Investment Adviser, Inc.
Michael E. Gellert
R. Jay Gerken, CFA CUSTODIAN
Chairman State Street Bank and
Rainer Greeven Trust Company
Susan M. Heilbron
ANNUITY
OFFICERS ADMINISTRATION
R. Jay Gerken, CFA Travelers Annuity Investor Services
President and Chief One Cityplace
Executive Officer Hartford, CT 06103-3415
Andrew B. Shoup
Senior Vice President
and Chief Administrative
Officer
John B. Cunningham
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Andrew Beagley
Chief Anti-Money
Laundering Compliance
Officer
Robert I. Frenkel
Secretary and Chief
Legal Officer
Travelers Series Fund Inc.
Smith Barney Large Cap Value Portfolio
Strategic Equity Portfolio
Van Kampen Enterprise Portfolio
The Funds are separate investment funds of the Travelers Series Fund Inc., a
Maryland corporation.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by telephoning the Funds (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
Travelers Series Fund Inc. -- Smith Barney Large Cap Value Portfolio,
Strategic Equity Portfolio and Van Kampen Enterprise Portfolio.
TRAVELERS SERIES FUND INC.
125 Broad Street
10th Floor, MF-2
New York, New York 10004
IN0801 6/04 04-6760
ITEM 2. CODE OF ETHICS.
Not Applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and
principal financial officer have concluded that the
registrant's disclosure controls and procedures (as
defined in Rule 30a- 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) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to section 302
of the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this Report
to be signed on its behalf by the undersigned, there unto duly authorized.
TRAVELERS SERIES FUND INC.
By: /s/ R. Jay Gerken
--------------------------------
(R. Jay Gerken)
Chief Executive Officer of
Travelers Series Fund Inc.
Date: July 9, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ R. Jay Gerken
--------------------------------
(R. Jay Gerken)
Chief Executive Officer of
Travelers Series Fund Inc.
Date: July 9, 2004
By: /s/ Andrew B. Shoup
--------------------------------
(Andrew B. Shoup)
Chief Administrative Officer of
Travelers Series Fund Inc.
Date: July 9, 2004