SMITH BARNEY SMALL CAP VALUE FUND

FORM OF 
INVESTMENT MANAGEMENT AGREEMENT




July 23, 1998

Mutual Management Corp.
388 Greenwich Street
New York, New York 10013


Dear Sirs:

	This Investment Management Agreement (the "Agreement") is made on 
this 23rd day of July, 1998, by and between Smith Barney Investment Funds 
Inc. , a corporation organized under the laws of the State of Maryland 
(the "Corporation"), in respect of its new series, Smith Barney Small Cap 
Value Fund (the "Fund"), and Mutual Management Corp. ("MMC") as follows:

1.	Investment Description; Appointment

	The Fund desires to employ its capital by investing and reinvesting 
in investments of the kind and in accordance with the limitations 
specified in: (i) the Corporation's Charter as amended from time to 
time (the "Charter of the Corporation"); (ii) the Fund's Prospectus 
(the "Prospectus"); and (iii) the Fund's Statement of Additional 
Information (the "Statement") filed with the Securities and 
Exchange Commission (the "SEC") as part of the Fund's Registration 
Statement on Form N-1A, as amended from time to time, and in such 
manner and to such extent as may from time to time be approved by 
the Board of Directors of the Corporation (the "Board").  Copies of 
the Fund's Prospectus and the Statement and the Charter of the 
Corporation have been or will be submitted to MMC.  The Corporation 
desires to employ and hereby appoints MMC to act as investment 
manager for the Fund. MMC accepts the appointment and agrees to 
furnish the services for the compensation set forth below. MMC is 
hereby authorized to retain third parties and is hereby authorized 
to delegate some or all of its duties and obligations hereunder to 
such persons, provided such persons shall remain under the general 
supervision of MMC.


2.	Services as Investment Manager

	Subject to the supervision and direction of the Board, MMC will: 
(a) assist in supervising all aspects of the Fund's operations; 
(b) supply the Fund with office facilities (which may be in MMC's 
own offices), statistical and research data, data processing 
services, clerical, accounting and bookkeeping services, 
including, but not limited to, the calculation of (i) the net 
asset value of shares of the Fund, (ii) applicable contingent 
deferred sales charges and similar fees and charges and (iii) 
distribution fees, internal auditing and legal services, internal 
executive and administrative services, and stationery and office 
supplies; and (c) prepare reports to shareholders of the Fund, tax 
returns and reports to and filings with the SEC and state blue sky 
authorities.

3.	Compensation

	In consideration of the services rendered pursuant to this 
Agreement, the Corporation will pay MMC, on the first business day 
of each month, a fee for the previous month at an annual rate of [     
]% of the Fund's average daily net assets.  The fee for the period 
from the date the Fund commences its investment operations to the 
end of the month during which the Fund commences its investment 
operations shall be pro-rated according to the proportion that such 
period bears to the full monthly period.  Upon any termination of 
this Agreement before the end of any month, the fee for such part 
of that month shall be pro-rated according to the proportion that 
such period bears to the full monthly period and shall be payable 
upon the date of termination of this Agreement.  For the purpose of 
determining fees payable to MMC, the value of the Fund's net assets 
shall be computed at the times and in the manner specified in the 
Fund's Prospectus and/or the Statement, as from time to time in 
effect.

4.	Expenses

	MMC will bear all expenses in connection with the performance of 
its services under this Agreement.  The Fund will bear certain 
other expenses to be incurred in its operation, including: 
investment advisory and administration fees; charges of custodians 
and transfer and dividend disbursing agents; fees for necessary 
professional services, such as the Fund's and Board members' 
proportionate share of insurance premiums, professional 
associations, dues and/or assessments; and brokerage services, 
including taxes, interest and commissions; costs attributable to 
investor services, including without limitation, telephone and 
personnel expenses; costs of preparing and printing prospectuses 
and statements of additional information for regulatory purposes 
and for distribution to existing shareholders; the costs of 
regulatory compliance, such as SEC fees and state blue sky 
qualifications fees; outside auditing and legal expenses and costs 
associated with maintaining the Fund's legal existence; costs of 
shareholders' reports and meetings of the officers or Board; fees 
of the members of the Board who are not officers, directors or 
employees of Smith Barney, Inc. or its affiliates or any person who 
is an affiliate of any person to whom duties may be delegated 
hereunder and any extraordinary expenses.  In addition, the Fund 
will pay all service and distribution fees pursuant to a Services 
and Distribution Plan adopted under Rule 12b-1 of the Investment 
Company Act of 1940, as amended (the "1940 Act").

5.	Reimbursement to the Fund

	If in any fiscal year the aggregate expenses of the Fund (including 
fees pursuant to this Agreement, but excluding distribution fees, 
interest, taxes, brokerage and, if permitted by state securities 
commissions, extraordinary expenses) exceed the expense limitations 
of any state having jurisdiction over the Fund, MMC will reimburse 
the Fund for that excess expense to the extent required by state 
law in the same proportion as its respective fees bear to the 
combined fees for investment advice and administration. The expense 
reimbursement obligation of MMC will be limited to the amount of 
its fees hereunder.  Such expense reimbursement, if any, will be 
estimated, reconciled and paid on a monthly basis.


6.	Brokerage

	In selecting brokers or dealers to execute transactions on behalf 
of the Fund, MMC will seek the best overall terms available.  In 
assessing the best overall terms available for any transaction, MMC 
will consider factors it deems relevant, including, but not limited 
to, the breadth of the market in the security, the price of the 
security, the financial condition and execution capability of the 
broker or dealer and the reasonableness of the commission, if any, 
for the specific transaction and on a continuing basis.  In 
selecting brokers or dealers to execute a particular transaction, 
and in evaluating the best overall terms available, MMC is 
authorized to consider the brokerage and research services (as 
those terms are defined in Section 28(e) of the Securities Exchange 
Act of 1934, as amended) provided to the Fund and/or other accounts 
over which MMC or its affiliates exercise investment discretion.

7.	Information Provided to the Fund

	MMC will keep the Corporation informed of developments materially 
affecting the Fund's portfolio, and will, on its own initiative, 
furnish the Corporation from time to time with whatever information 
MMC believes is appropriate for this purpose.

8.	Standard of Care

	MMC shall exercise its best judgment in rendering the services 
listed in paragraph 2 above.  MMC shall not be liable for any error 
of judgment or mistake of law or for any loss suffered by the Fund 
in connection with the matters to which this Agreement relates, 
provided that nothing in this Agreement shall be deemed to protect 
or purport to protect MMC against any liability to the Corporation 
or to the Fund's shareholders to which MMC would otherwise be 
subject by reason of willful malfeasance, bad faith or gross 
negligence on its part in the performance of its duties or by 
reason of MMC 's reckless disregard of its obligations and duties 
under this Agreement.

9.	Services to Other Companies or Accounts

	The Corporation understands that MMC now acts, will continue to act 
and may act in the future as: investment adviser to fiduciary and 
other managed accounts, as well as to other investment companies; 
and the Corporation has no objection to MMC's so acting, provided 
that whenever the Fund and one or more other investment companies 
advised by MMC have available funds for investment, investments 
suitable and appropriate for each will be allocated in accordance 
with a formula believed to be equitable to each company.  The 
Corporation recognizes that in some cases this procedure may 
adversely affect the size of the position obtainable for the Fund.  
In addition, the Corporation understands that the persons employed 
by MMC to assist in the performance of MMC's duties under this 
Agreement will not devote their full time to such service and 
nothing contained in this Agreement shall be deemed to limit or 
restrict the right of MMC or any affiliate of MMC to engage in and 
devote time and attention to other businesses or to render services 
of whatever kind or nature.

l0.	Term of Agreement

	This Agreement shall become effective as of the date the Fund 
commences its investment operations and continue for an initial 
two-year term and shall continue thereafter so long as such 
continuance is specifically approved at least annually by (i) the 
Board or (ii) a vote of a "majority" (as defined in the 1940 Act) 
of the Fund's outstanding voting securities, provided that in 
either event the continuance is also approved by a majority of the 
Board members who are not "interested persons" (as defined in the 
1940 Act) of any party to this Agreement, by vote cast in person or 
by proxy at a meeting called for the purpose of voting on such 
approval.  This Agreement is terminable, without penalty, on 60 
days' written notice, by the Board or by vote of holders of a 
majority of the Fund's shares, or upon 90 days' written notice, by 
MMC. This Agreement will also terminate automatically in the event 
of its assignment (as defined in the 1940 Act).

11.	Representation by the Corporation

	The Corporation represents that a copy of the Charter of the 
Corporation is on file with the State of Maryland Department of 
Assessments and Taxation.

12.	Limitation of Liability

	The Corporation and MMC agree that the obligations of the 
Corporation under this Agreement shall not be binding upon any of 
the Board members, shareholders, nominees, officers, employees or 
agents, whether past, present or future, of the Corporation 
individually, but are binding only upon the assets and property of 
the Fund, as provided in the Charter of the Corporation.  The 
execution and delivery of this Agreement have been duly authorized 
by the Corporation and MMC, and signed by an authorized officer of 
each, acting as such. Neither the authorization by the Board 
members of the Corporation, nor the Corporation's execution and 
delivery by the officer of the Corporation shall be deemed to have 
been made by any of them individually or to impose any liability on 
any of them personally, but shall bind only the assets and property 
of the Fund as provided in the Charter of the Corporation.


	If the foregoing is in accordance with your understanding, kindly 
indicate your acceptance hereof by signing and returning the enclosed 
copy of this Agreement to us.

						Very truly yours,


						Smith Barney Investment Funds Inc.
							on behalf of 
						Smith Barney Small Cap Value Fund



					By:_________________________________
					Name: Heath B. McLendon
					Title: Chairman, President and Chief 
Executive Officer

Accepted:
Mutual Management Corp.



By:___________________________________
Name: Christina T. Sydor
Title: Secretary







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